Horsman

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

FORT MYERS DIVISION

HORSMAN HOLDINGS LLC,

Plaintiff,

v. Case No.: 2:23-cv-1205-SPC-DNF

MICHAEL COONEY,

Defendant.

OPINION AND ORDER

Before the Court are the parties’ cross-motions for summary judgment.

(Docs. 102, 104). Each party has responded to the other’s motion (Docs. 108,

109),1 and each party filed a reply (Docs. 110, 111). For the below reasons, the

Court grants Defendant Michael Cooney’s motion and denies Plaintiff

Horsman Holdings LLC’s motion.

Background

This action arises out of a business divorce. While the facts and issues

are somewhat convoluted, Plaintiff simplified this case by impermissibly

raising a new legal theory at summary judgment and simultaneously

1 Plaintiff Horsman Holdings LLC’s response to Defendant Michael Cooney’s motion was also

filed as a cross-motion for summary judgment. (Doc. 108). This is improper because Plaintiff

already filed a dispositive motion (Doc. 104) and is only permitted one such motion. (Doc. 25

at 4 (“Only one motion for summary judgment may be filed by a party . . . absent leave of

Court.”) (emphasis original)). So the Court treats it as a response.

abandoning the theories it alleged in the Third Amended Complaint. So the

Court need not dwell much on the facts and provides an abbreviated

background.

Patrick Horsman (“Horsman”), Defendant Michael Cooney, and Nelson

Cooney (Defendant’s brother)2 were the members of Blue Sand Securities LLC

(“Securities”), a third-party placement agent and broker-dealer that raises

capital for alternative investment funds, hedge funds, private equity funds,

real estate funds, and venture capital investments. In July 2020, the three

members changed the ownership structure of Securities. Rather than having

the three individual owners, Securities would be owned solely by Blue Sand

Capital LLC (“Capital” or “the Company”). In turn, Nelson Cooney, Defendant,

and Plaintiff3 owned Capital. Defendant held sixty percent of the membership

interest, Nelson Cooney held ten percent, and Plaintiff owned the remaining

thirty percent. Horsman and the Cooney brothers were managers of Capital.

The three members contemporaneously executed the Capital Operating

Agreement.

A few months later, the business’s reputation took a hit. On October 2,

2020, a group of investors in Integrated CBD—a company Horsman was

2 Michael and Nelson Cooney are collectively, the “Cooney brothers.”

3 Horsman is the sole member and manager of Plaintiff Horsman Holdings, LLC. (Doc. 105

¶ 4).

affiliated with—filed a lawsuit against Horsman (among others) in Arizona.

This lawsuit led to negative publicity for Horsman, resulting in reputational

damage to Securities and Capital (jointly, “Blue Sand”).

Given this reputational damage and to minimize further negative effects,

Horsman resigned as a registered representative of Securities and as a

manager of Capital so he could devote his time to defending the Arizona

litigation. (Doc. 102-11). Still, the Cooney brothers believed Plaintiff’s

continued equity ownership in Capital posed too great a risk to the Company

because of its association with Horsman. Unable to reach an agreement to buy

Plaintiff out of its membership interest, the Cooney brothers took another

approach. In March 2021, they used their combined seventy percent

membership interest to amend the Capital Operating Agreement by written

consent. (Doc. 102-19).

The amended version of the Capital Operating Agreement added section

10.6, which permitted the Company to repurchase a member’s membership

interest. This section allowed the Company to buy a member’s membership

interest at “fair market value” if the member “ceases to provide services to”

Blue Sand. But if the membership interest is repurchased for reasons

constituting “cause” (as defined in the section), then the purchase price is “the

lower of fair market value, book value, or the amount paid by [the terminated

member] with respect to such Interest being purchased.” (Doc. 102-19 at 6–7).

In August 2021, the Cooney brothers repurchased Plaintiff’s

membership interest by written consent. (Doc. 102-21). And because they

determined that cause existed, they paid Plaintiff $15,000—his capital

contribution into the company. (Id.; Doc. 102-1 ¶ 29).

Standard of Review

“The court shall grant summary judgment if the movant shows that

there is no genuine dispute as to any material fact and the movant is entitled

to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is “material” if it

“might affect the outcome of the suit under the governing law.” Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). And a material fact is in genuine

dispute “if the evidence is such that a reasonable jury could return a verdict

for the nonmoving party.” Id.

The moving party bears the initial burden to show a lack of genuinely

disputed material fact. Clark v. Coats & Clark, 929 F.2d 604, 608 (11th Cir.

1991). If carried, the burden shifts to the nonmoving party to point out a

genuine dispute. Id. At this stage, a court views all facts and draws all

reasonable inferences in the light most favorable to the nonmoving party.

Rojas v. Florida, 285 F.3d 1339, 1341–42 (11th Cir. 2002). That the parties

have cross-moved for summary judgment does not alter the standard. See

United States v. Oakley, 744 F.2d 1553, 1555 (11th Cir. 1984) (“Cross-motions

for summary judgment will not, in themselves, warrant the court in granting

summary judgment unless one of the parties is entitled to judgment as a

matter of law on facts that are not genuinely disputed[.]” (citation omitted)).

Analysis

Operative Complaint

The Court begins with the allegations in the Third Amended Complaint

(Doc. 74),4 which are crucial to the analysis. Plaintiff alleged Defendant

breached the Blue Sand Capital Operating Agreement in a variety of ways.

For instance, it claimed Defendant did not obtain the proper consent to amend

the operating agreement (section 13.4), and Defendant amended the operating

agreement and repurchase its membership interest without proper notice or a

proper vote (sections 5.1, 13.1). It claimed that, by not paying Plaintiff the net

profits to which it was entitled, Defendant misappropriated its net profits

(section 8.1, 8.2(a) and (b)). It also alleged Defendant failed to maintain

accurate records or provide records upon request (sections 5.7, 6.3, 9.2, and

9.3). And it alleged Defendant breached of an unspecified section by failing to

inform Plaintiff when any vote for the purported redemption of its membership

interest occurred, failing to identify the method of calculating the value of the

4 The Court dismissed much of the Third Amended Complaint because Plaintiff and Horsman

failed to state a claim, despite multiple attempts. (Doc. 92). All that remains is Plaintiff’s

breach of contract claim against Defendant (count I) as outlined below.

membership interest, and failing to provide the language of the amended

Operating Agreement.

Plaintiff also miscellaneously alleged Defendant sent a letter indicating

the Cooney brothers “fully intended to continue negotiations regarding the

redemption price to see if we can reach an agreement” but no further

negotiations took place. (Doc. 74 ¶¶ 188–218).

As recourse for these breaches, Plaintiff sought restoration of its

membership interest in Capital and recovery of all net profits and distributions

owed. (Id. ¶ 221).

Nowhere in the Third Amended Complaint did Plaintiff allege Defendant

breached section 10.6 or that Defendant failed to pay fair market value for the

repurchased membership interest. And Plaintiff never claimed entitlement to

the fair market value of its repurchased membership interest under section

10.6.

Plaintiff’s Motion for Summary Judgment

Plaintiff moves for summary judgment, not on any claim alleged in the

Third Amended Complaint, but on a new one. It argues that Defendant

breached the Capital Operating Agreement by failing to pay “fair market

value” or “fair value” for its repurchased membership interest. Defendant

responds that, apart from failing on the merits, Plaintiff’s argument is a new

legal theory that it cannot raise for the first time at summary judgment. The

Court agrees.

The crux of Plaintiff’s argument is that the $15,000 Defendant paid

Plaintiff for its repurchased membership interest was insufficient. It

maintains that section 10.6 is silent on the method for calculating the value of

Plaintiff’s shares. Given such silence, Plaintiff argues Delaware law entitles

it to the fair market value of its membership interest.5 (Doc. 104).

Plaintiff’s argument makes little sense. Citing Delaware authority, it

repeatedly argues that “when an LLC agreement is silent on the payout due to

a member who is forced out, the member is entitled to the fair market value of

their interest, just as equity would require.” (See, e.g., Doc. 104 at 11 (emphasis

added)). But section 10.6 is not silent on the payout. Rather, it unambiguously

states that a member is entitled to fair market value for its repurchased shares

unless such shares are repurchased for “cause.” (Doc. 102-19 at 6). If cause

exists, the purchase price is the lesser of fair market value, book value, or the

amount paid by the terminated member with respect to such interest being

purchased (in this case, Plaintiff’s capital contribution). (Id.). In repurchasing

Plaintiff’s shares, the Cooney brothers stated they were repurchasing the

shares for cause at the amount of Plaintiff’s capital contribution. (Doc. 102-

5 Delaware law applies to this dispute. (Doc. 92 at 12 n.7).

21). Plaintiff’s assertion that the Capital Operating Agreement is silent on the

payment owed to a terminated member or that nothing in section 10.6 specifies

an ousted member may only receive its capital contribution is bewildering.

Plaintiff also argues that section 10.6 allowed Defendant to “buy” its

membership interest, which requires providing value for the acquisition.

Defendant failed to provide any value, according to Plaintiff, because the

$15,000 was Plaintiff’s capital contribution and, thus, belonged to Plaintiff

anyway. (Doc. 104 at 9–10). As Plaintiff puts it, “[b]y treating the return of

capital as if it were the purchase price for the entire membership stake,

[Defendant] was effectively valuing [Plaintiff’s] equity interest at zero.” (Doc.

104 at 9 (emphasis original)). It believes this “zero-value redemption” was

improper. But it cites no authority supporting its position. And given section

10.6 authorized payment of its capital contribution because Defendant found

cause existed (something Plaintiff does not dispute anywhere in its motion or

reply), the Court is otherwise unconvinced. Cf. Metro Storage Int’l LLC v.

Harron, 275 A.3d 810, 878 (Del. Ch. 2022) (finding a terminated member for

cause was entitled to the lesser of his capital contribution or fair market value,

noting the LLC Act permits an LLC agreement to impose ‘specified penalties

or specified consequences’”); see also Robinson v. Kelly Cable of N.M., LLC, No.

N24C-11-037 CEB, 2025 WL 3516162, at *1 (Del. Super. Ct. Dec. 8, 2025)

(addressing an LLC agreement with a repurchasing section almost identical to

section 10.6).

All that said, the Court need not dwell on the merits (or lack thereof) of

Plaintiff’s puzzling theory because, as Defendant points out, Plaintiff

impermissibly raises it for the first time at summary judgment. “Despite the

liberal pleading standard for civil complaints, plaintiffs may not raise new

claims at the summary judgment stage.” Brown v. Jefferson Cnty. Sheriff’s

Dep’t, 806 F. App’x 698, 700 (11th Cir. 2020). Although a complaint “need not

specify in detail the precise theory giving rise to recovery,” it must provide the

defendant “notice as to the claim being asserted against him and the grounds

on which it rests.” MSP Recovery Claims, Series LLC v. United Auto. Ins. Co.,

60 F.4th 1314, 1319 (11th Cir. 2023) (citation omitted). In other words, a

plaintiff cannot make a “fundamental change” to the nature of its alleged

claims “in the midst of summary judgment[.]” See Hurlbert v. St. Mary’s

Health Care Sys., Inc., 439 F.3d 1286, 1297 (11th Cir. 2006).

In the Third Amended Complaint, Plaintiff alleged Defendant breached

the Capital Operating Agreement in a multitude of ways, including amending

the Capital Operating Agreement without proper consent, neglecting to pay

net distributions, and failing to provide access to documents and provide

various notices. Plaintiff disputed the validity of section 10.66 and Defendant’s

repurchasing of its membership interest, and it demanded backpay of its

unpaid net profits and distributions and reinstatement of its membership

interest. Now, Plaintiff not only recognizes section 10.6 and the repurchase, it

claims Defendant breached section 10.6 by providing insufficient compensation

when “buying” its membership interest. This is an entirely new legal theory

arising from a contractual provision Plaintiff previously ignored.7

To that end, Plaintiff now claims entitlement to the “fair market value”

or “fair value” of its membership interest.8 But it never alleged such recourse.

Indeed, the only mention of fair market value in the Third Amended Complaint

is buried in the (now dismissed) tortious-interference claim. Instead, Plaintiff

sought an award of all unpaid net distributions (as if its membership interest

was never repurchased). Net distributions are very different than the fair

6 Indeed, Plaintiff explicitly alleged: “[d]espite [Defendant’s] reference to ‘Section 10.6 of the

Operating Agreement as amended,’ neither the 2020 Amended [Securities] Operating

Agreement nor the 2020 Blue Sand Capital Operating Agreement contains a ‘Section 10.6.’”

(Doc. 74 ¶ 115).

7 Other than section 10.6, Plaintiff’s motion does not address any other section of the Capital

Operating Agreement that Defendant purportedly breached (apart from a few conclusory

references in its statement of material facts).

8 Plaintiff repeatedly uses the terms “fair market value” and “fair value” interchangeably.

But the two values are not the same. Cf. Ban v. Manheim, 339 A.3d 41, 76–77 (Del. Ch. 2025)

(distinguishing an award of fair value versus fair market value); see also VALUE, Black’s

Law Dictionary (12th ed. 2024). Section 10.6 only references fair market value, so fair value

is irrelevant.

market value Plaintiff now seeks.9 And given this surprise shift, Defendant

never had the opportunity to retain an expert to opine on the fair market value

of Plaintiff’s membership interest in August 2021, when Defendant

repurchased it. (Doc. 109 at 2 n.1). This sort of prejudice is why adding a new

legal theory at summary judgment is unacceptable. See Amerijet Int’l, Inc. v.

Miami-Dade Cnty., Fla., 7 F. Supp. 3d 1231, 1236 (S.D. Fla. 2014), aff’d, 627

F. App’x 744 (11th Cir. 2015) (“A plaintiff may not raise a new claim at the

summary judgment stage because the opposing party has no notice of the

newly-raised claim based on the allegations set forth in the operative

complaint.”).

Trying to salvage its claim, Plaintiff argues that its “fair value” damages

claim is not new. It asserts that “the gravamen of [its breach of contract claim]

has always been that Defendant breached the Capital Operating Agreement

9 Plaintiff argues the difference between its current claim for “fair market value” and its

original claim for “lost future distributions” is a distinction without a difference. (Doc. 111

at 7). This could not be further from the truth. Plaintiff’s claim for lost future distributions

would accumulate the distributions it would have received over the course of several years.

Conversely, fair market value looks to what Plaintiff’s thirty-percent interest would have

sold for under market conditions on a fixed date (i.e., the date the interest was repurchased).

See VALUE, Black’s Law Dictionary (12th ed. 2024) (defining “fair market value”).

Further complicating matters, although Plaintiff now seeks judgment for fair market

value (of roughly $15.9 million), the expert opinion on which it relies does not provide a fair-

market-value analysis. Plaintiff’s expert explained he was retained to “[c]alculate Plaintiff’s

economic damages in the form of lost profits and lost cash distributions[.]” (Doc. 103-1 at 6–

7 (emphasis added)). Indeed, he calculated Plaintiff’s lost profits and distributions through

April 2025—four years after Defendant repurchased Plaintiff’s membership interest. The

term “fair market value” is not found anywhere in the expert’s report. It seems Plaintiff does

not know what damages it seeks.

by wrongfully redeeming Plaintiff’s 30% interest without fair compensation.”

(Doc. 111 at 2). As discussed above, this is untrue. The gravamen of Plaintiff’s

claim was that Defendant breached the Capital Operating Agreement by

failing to pay Plaintiff’s distributions and redeeming its membership interest

without contractual authorization. Put simply, Plaintiff originally took issue

with being ousted from the Company, whereas it now accepts such ousting but

seeks additional compensation. Such a “fundamental change” to the nature of

Plaintiff’s breach of contract claim “in the midst of summary judgment” is not

permitted. See Hurlbert, 439 F.3d at 1297 (rejecting the plaintiff’s attempt to

introduce at summary judgment a new statutory basis for which he was

entitled to FMLA leave).

Plaintiff later asserts that “[t]he precise relief sought developed as the

case progressed, as specific performance became impossible after Defendant

secretly dissolved the company without notice to Plaintiff or the Court.” (Doc.

111 at 2–3). By admitting to the developing nature of its sought relief, Plaintiff

acknowledges its current requested relief differs from that in the operative

complaint. And to the extent Plaintiff blames this change on newly discovered

information during the case (i.e., Defendant dissolving Capital), this is not

justification for raising a new argument now. Rather, Plaintiff should have

amended the complaint under Federal Rule of Civil Procedure 15(a) to add the

claim. See Gilmour v. Gates, McDonald & Co., 382 F.3d 1312, 1315 (11th Cir.

2004) (“At the summary judgment stage, the proper procedure for plaintiffs to

assert a new claim is to amend the complaint in accordance with Fed. R. Civ.

P. 15(a).”); Li v. Walsh, No. 16-81871-CIV, 2022 WL 892703, at *4 (S.D. Fla.

Feb. 18, 2022) (“Had KK-PB wanted to change the relief sought or its theory of

damages, the proper approach would have been to seek to amend its pleading

pursuant to Rule 15 of the Federal Rules of Civil Procedure, and not through

summary judgment.”).

That’s not all. Plaintiff’s bait and switch is about more than just

calculating damages. Section 10.6 generally permits Capital to repurchase

Plaintiff’s membership interest at fair market value. But if the company

repurchased Plaintiff’s membership interest for “cause,” then it only needed to

pay Plaintiff’s capital contribution. The Cooney brothers determined cause

existed and repurchased Plaintiff’s membership interest for $15,000 (the

amount of Plaintiff’s capital contribution). Thus, determining whether

Plaintiff is entitled to fair market value (as it now maintains) turns on whether

“cause” existed. This is a new factual dispute not alleged anywhere in the

operative complaint (or even addressed in Plaintiff’s motion).

In short, Plaintiff’s new claim is too little, too late. Its Third Amended

Complaint provided a litany of grounds on which it believed Defendant

breached the Capital Operating Agreement. But the ground asserted here is

not one of them. The Court thus rejects Plaintiff’s attempt to raise its new

legal theory at summary judgment. And because the rejected theory is the sole

basis for Plaintiff’s summary-judgment motion, the Court denies the motion.10

Defendant’s Motion for Summary Judgment

Not anticipating Plaintiff’s surprise claim, Defendant moves for

summary judgment on Plaintiff’s breach of contract claim as alleged in the

Third Amended Complaint. (Doc. 102). In response, Plaintiff regurgitates its

new theory from its summary-judgment motion. But its attempt to add a new

claim does not work when opposing summary judgment either. See Gilmour,

382 F.3d at 1315 (“A plaintiff may not amend her complaint through argument

in a brief opposing summary judgment.”); Cruz v. Advance Stores Co., Inc., 842

F. Supp. 2d 1356, 1360 (S.D. Fla. 2012) (“[A] party may not raise a new theory

for the first time in response to a summary judgment motion.”). Plaintiff

otherwise provides no response supporting its alleged claims or opposing

summary judgment on those claims.11 It does not address them at all. As such,

Plaintiff has abandoned every alleged basis in its pleading for its breach of

contract claim. See Resolution Tr. Corp. v. Dunmar Corp., 43 F.3d 587, 599

10 At various points, Plaintiff argues Defendant breached the implied covenant of good faith

and fair dealing. (Docs. 104 at 13; Doc. 108 at 10–11). But the Court already dismissed

Plaintiff’s breach of implied covenant claim. (Doc. 92 at 20–21).

11 In Plaintiff’s response to Defendant’s motion for summary judgment, it disputes the

validity of the amendment to include section 10.6 in its response to Defendant’s statement of

facts. (Doc. 108 at 4). But this is insufficient. See Michaels v. Sasser’s Glass Works Inc., 662

F. Supp. 3d 1223, 1243 (S.D. Fla. 2023), aff’d, No. 23-11166, 2025 WL 588648 (11th Cir. Feb.

24, 2025) (“Perfunctory, undeveloped arguments without discussion or citation to pertinent

legal authority are waived.”).

(11th Cir. 1995) (explaining that “grounds alleged in the complaint but not

relied upon in summary judgment are deemed abandoned”); Blue Cross & Blue

Shield of Ala. v. Weitz, 913 F.2d 1544, 1550 (11th Cir. 1990) (“Presenting such

arguments in opposition to a motion for summary judgment is the

responsibility of the non-moving party, not the court[.]”); McIntyre v. Eckerd

Corp., 251 F. App’x 621, 626 (11th Cir. 2007) (finding no error in the district

court’s conclusion that the plaintiff abandoned her battery claim by making no

argument in response to the defendant’s summary-judgment motion on such

claim). Thus, judgment for Defendant 1s appropriate.

Accordingly, it is now ORDERED:

1. Defendant Michael Cooney’s motion for summary judgment (Doc.

102) is GRANTED.

2. Horsman Holdings, LLC’s motion for summary judgment (Doc. 104)

is DENIED.

3. The Clerk is DIRECTED to enter judgment for Defendant and

against Plaintiff, deny all pending motions as moot, terminate any

deadlines, and close the case.

DONE and ORDERED in Fort Myers, Florida on January 15, 2026.

UNITED STATES DISTRICT JUDGE

Copies: All Parties of Record

15