Clinton v. Aspinwall

Summary

The court held that the operating agreement's exculpatory clause limited liability for an established breach but did not create affirmative duties requiring the managers to avoid bad faith, gross negligence, or wilful misconduct. The trial court therefore gave materially misleading jury instructions, improperly shifted the burden of proof, and delegated contract-ambiguity determinations to the jury, requiring reversal and a new trial. The court upheld admission of the plaintiff's expert testimony concerning the company's capital reserve. Attorney's fees, costs, and interest awards were vacated.