Bay Center Apartments Owner, LLC v. Emery Bay PKI, LLC

Bay Center (plaintiff) and PKI (defendant) co-ventured a condominium project through a jointly formed LLC, Emery Bay, whose operating agreement made PKI the sole managing member and separately authorized PKI to compel its affiliate ETI to perform under a separate development-management agreement (the DMA) or else cause the services to be performed at no added cost. The same operating agreement stated in one clause that members owed each other the duties provided by the Delaware LLC Act, but in another clause that members owed 'no duty of any kind' beyond what the agreement itself imposed. After the project failed amid alleged gross mismanagement by PKI's controller, Nevis, and his entities, Bay Center sued for breach of contract, breach of the implied covenant of good faith and fair dealing, and breach of fiduciary duty; the defendants moved to dismiss the implied-covenant and fiduciary-duty claims.