Sued in the Wrong Name: What Freeman v. Pryor Teaches Every LLC Owner
Here’s a scary thought for LLC owners: even with a strong case, you can lose everything on appeal if you never had LLC member standing to sue in the first place. That’s exactly what happened in Freeman v. Law Office of J. Xavier Pryor, LLC, a Connecticut Appellate Court decision released in April 2026. On the surface, it’s a case about attorney’s fees. Underneath, it’s a lesson about when an LLC member’s right to sue actually exists, and why getting that piece wrong can undo years of litigation.
Two Lawyers, One Big Settlement, One Big Fight
Justin Freeman ran his own law practice. Eventually, he formed it as a single-member LLC — call it the Freeman office. Meanwhile, J. Xavier Pryor worked for Freeman as an associate. Pryor later left to start his own firm, the Pryor office.
Here’s where it gets interesting. Freeman had a personal injury case headed toward trial. So he asked Pryor to help. Pryor agreed. Together, they struck an oral deal: split the fee evenly if the case went to trial, or Pryor gets a reasonable fee if it settles first.
The case ultimately settled for $750,000. After costs and prior counsel’s cut, $165,000 remained to split. That’s when the deal — and the friendship — fell apart.
Pryor sent Freeman a check for $82,500. Half. Still, Freeman refused to cash it. He wanted more. So, instead of negotiating, he sued.
Why Freeman’s LLC Member Standing to Sue Was a Problem
Freeman filed the lawsuit in his own name. Not through the Freeman office. Just Justin Freeman, individually.
That, however, is a real problem. The contract for the legal work belonged to the Freeman office, the LLC. So any money owed under that contract was owed to the company, not to Freeman personally. Connecticut law generally limits an LLC member’s right to sue individually for money owed to the company. Instead, the company has to sue. Or someone has to file a derivative action on its behalf.
For example, picture your marketing agency landing a client. Then getting stiffed on an invoice. You, personally, didn’t get stiffed. Your agency did. As a result, you can’t sue that client in your own name and pocket a settlement. Your agency has to be the plaintiff, because standing to sue belongs to the company, not to you as an individual owner.
Naturally, Pryor’s team caught this. They moved to dismiss for lack of standing.
The Narrow Escape Hatch for LLC Member Standing to Sue
In response, Freeman fought back. He cited Saunders v. Briner, a 2019 Connecticut Supreme Court case. It created a narrow exception that recognizes an LLC member’s right to sue individually, even for an injury technically suffered by the company. Under Saunders, a solo owner can sometimes sue personally for a company injury. But a court has to find that doing so won’t:
- Expose the company or defendants to duplicate lawsuits,
- Materially harm any creditors of the company, or
- Interfere with a fair distribution of the recovery among interested parties.
Importantly, all three factors matter for establishing LLC member standing to sue. Not two out of three. All three.
Even so, the trial judge sided with Freeman. The case proceeded. Largely, that’s because the litigation had already eaten up significant time and resources. The judge treated the line between Freeman and his own LLC as a technicality. The case went to a two-day trial.
However, one glaring issue never got fully addressed. The Freeman office had already dissolved. It also had at least one outstanding creditor — the Pryor office. That firm had a separate pending lawsuit against the Freeman office over an unrelated fee dispute. So the very firm Freeman was suing was also owed money by his own company. Oddly, nobody flagged how strange that was until the appeal.
That matters enormously for any single-member LLC owner considering an LLC member’s right to sue on the company’s behalf. If Freeman recovers this money personally, he jumps to the front of the creditor line. Meanwhile, the Pryor office gets pushed back. Yet Freeman never proved this wouldn’t happen. He simply argued the harm wasn’t “material” enough. Ultimately, the trial court skipped the creditor question entirely.
How the Post-Trial Fix Failed to Restore His Standing to Sue
After trial, new evidence about the dissolution surfaced. So Freeman scrambled. He moved to add the Freeman office as a plaintiff, pointing to two arguments. First, that the company was his “alter ego.” Second, that the lawsuit was part of winding up its affairs. Surprisingly, the judge granted the motion.
Then came a strange twist. The trial court found that Pryor’s office hadn’t actually breached the fee agreement. After all, they’d paid exactly what the oral contract required. Rather than ruling for the defendants, though, the court called this a “minor quirk.” It awarded $82,500 to the Freeman office anyway. That’s the same check Freeman had refused to cash years earlier.
Not surprisingly, the Appellate Court wasn’t buying it. Here’s the key lesson: once a court determines a plaintiff never had LLC member standing to sue, it can’t patch that hole with a late amendment. Instead, the court should have dismissed the case at the motion to dismiss stage. Once that happens, there’s no lawsuit left to fix.
Connecticut law does offer a tool for this exact problem: General Statutes Section 52-109. It lets a court add or substitute the correct plaintiff. But only if the original case was filed in the wrong name by mistake. Freeman, however, never claimed mistake. Instead, he argued alter ego and winding-up procedures. Wrong theory, wrong statute. It didn’t satisfy the requirement.
As a result, the Appellate Court reversed the judgment. It sent the case back with instructions to dismiss it entirely.
The Takeaway on an LLC Member’s Right to Sue
If your business runs through an LLC, and someone owes your company money, your company needs to be the plaintiff. Not you. Waiting until trial to sort out LLC member standing to sue is a gamble. Freeman’s gamble cost him the entire case. It also cost him years of litigation, plus that original $82,500 check he could have simply cashed.
Additionally, if your LLC has dissolved with outstanding debts, questions about an LLC member’s right to sue become even higher stakes. Courts protect creditors for good reason. Dissolution rules exist so a company pays its debts before its owner walks away with the cash.
In the end, this case isn’t really about attorney’s fees or a narrow Saunders exception. It’s about confirming your standing to sue before you ever file suit. So sue in the right name. Structure the right party from day one.
Let’s Talk About Your LLC’s Right to Sue
If you’re wondering what Freeman v. Law Office of J. Xavier Pryor, LLC means for your operations as a single member LLC, give us a call. We’re good at translating what courts say into what it means for the way you run your business — and we genuinely enjoy the conversation.
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