Meyers v. Marks

2011 Ohio 3523
Ohio Court of Appeals·Decided July 18, 2011·No. 7-10-13·Published·Cited by 1 cases

Opinion

IN THE COURT OF APPEALS OF OHIO THIRD APPELLATE DISTRICT

HENRY COUNTY

WILLIAM R. MEYERS,

PLAINTIFF-APPELLANT, -and- CASE NO. 7-10-13

W R MEYERS CO INC., PLAINTIFF-APPELLEE, v. OPINION JERRY A. MARKS, ET AL., DEFENDANTS-APPELLEES.

Appeal from Henry County Common Pleas Court Trial Court No. 09 CV 0186

Judgment Affirmed

Date of Decision: July 18, 2011

APPEARANCES:

George C. Rogers for Appellant

Thomas P. Killam for Appellees, Jerry A. Marks and Southpoint Business Park, LLC

ROGERS, P.J.

{¶1} Plaintiff-Appellant, William Meyers, appeals from the judgment of the Court of Common Pleas of Henry County ordering specific issues within the case to arbitration. Meyers contends that the trial court erred in ordering the parties to arbitration, that the trial court erred in ordering arbitration of the claim that Defendant-Appellee, Jerry Marks,1 had acquired membership rights in the limited liability company, and that the trial court erred in denying his motion for leave to dismiss the amended complaint. Based on the following, we affirm the judgment of the trial court.

{¶2} In 2001, Meyers, Marks, and David Roberts entered into an operating agreement (“Agreement”) for Southpoint Business Park (“Southpoint”), an Ohio limited liability company.2 Under this Agreement, Meyers, Marks, and Roberts each had a thirty-three and one-third percent interest in Southpoint. Agreement, p. 10. In 2006, the Agreement was amended (“Amended Agreement”) to reflect that Meyers and Marks purchased Roberts’ membership interest in Southpoint.3 Consequently, Meyers and Marks each have fifty percent interest in Southpoint. Amended Agreement, pp. 3-4.

1 Jerry Marks is also referred to as Tony. 2 Prior to being named Southpoint, the company was originally known as R & T Leasing, LLC and MRT Leasing, LLC. 3 Although the Amended Agreement contained other changes to the original Agreement, none of those changes are pertinent to the disposition of this case.

{¶3} In July 2009, Meyers filed a complaint (“original complaint”) for judicial dissolution of Southpoint. Meyers’ original complaint, in pertinent part, alleged that Marks:

[C]ommitted acts that have not been in the best interest of [Southpoint], * * * has failed to account for [Southpoint] funds, has failed and refused to provide [Southpoint’s] contract and financial records, has failed and refused to inform William R.

Meyers regarding [Southpoint] business decisions * * * has failed and refused to pay his capitol (sic) contribution for his share of [Southpoint].

Meyers’ Original Complaint, p. 3. As a result of Marks’ alleged failures, Meyers alleged that it was no longer reasonably practical to carry on the business of Southpoint and requested judicial dissolution of Southpoint. Meyers also alleged that Marks was not a member of Southpoint because he had not paid any portion of his initial capital contribution. In addition to requesting judicial dissolution of Southpoint, Meyers requested that a receiver be appointed to Southpoint to manage its affairs and prepare it for dissolution.

{¶4} In September 2009, Marks filed a motion to stay the proceedings and compel mediation and, if needed, arbitration. Marks argued that the claims asserted in Meyers’ complaint arise under or by reason of the Agreement and must, pursuant to provision 9.17 of the Agreement, be resolved via mediation and, if needed, arbitration. Provision 9.17 of the Agreement states in pertinent part:

With respect to any controversy or claim arising under or by reason of this Agreement or the breach of it, the parties first shall submit the same to mediation with a qualified mediator selected by their mutual agreement. If such controversy or claim cannot be settled by mediation, the same shall be settled by binding arbitration as set forth in the Ohio Revised Code. * * *

Agreement, pp. 35-36.

{¶5} In response to Marks’ motion to stay the proceedings and compel mediation and arbitration, Meyers filed a motion in opposition arguing, in pertinent part, that judicial dissolution of a limited liability company is not arbitrable, as the Revised Code limits authority to dissolve a limited liability company to the court of common pleas. Meyers further argued that determination of whether Marks is a member of Southpoint is not arbitrable, and requested the trial court to retain jurisdiction to determine the parties’ respective rights in Southpoint.

{¶6} In response to Meyers’ motion in opposition, Marks argued, in pertinent part, that dissolution is arbitrable, due to the breadth of the Agreement’s arbitration provision. Marks further argued that the declaratory judgment Meyers sought concerning the parties’ rights in Southpoint presents an arbitrable issue.

{¶7} In response to Marks’ responsive motion, Meyers, in pertinent part, reasserted his argument that the trial court retains exclusive jurisdiction to

judicially dissolve a limited liability company. Specifically, Meyers referred to the Agreement’s dissolution provision, which states:

7.1 Events of Dissolution: The Company shall be dissolved upon the happening of any of the following events:

7.1.1. Upon the unanimous written agreement of the Members;

or

7.1.2 Upon the occurrence of a Permitted Voluntary Withdrawal, a Transfer or an Involuntary Withdrawal * * *

Agreement, pp. 28-29. In light of this provision, Meyers argued that if he had sought dissolution in response to either event anticipated in the Agreement, then arbitration would be proper. Since, however, Meyers is not seeking judicial dissolution for either of the events anticipated in the Agreement, he argued that the trial court is exclusively vested with jurisdiction to dissolve Southpoint.

{¶8} Subsequently, Meyers filed a motion to appoint a receiver, which Marks opposed via motion.

{¶9} In November 2009, Meyers filed an amended complaint (“amended complaint”) which realleged that it was not reasonably practical to carry on the business of Southpoint, and requested judicial dissolution of Southpoint. Specifically, Meyers alleged that it was not reasonably practical to carry on the business of Southpoint due to deadlock in Southpoint’s management. Meyers also reasserted his request that the trial court appoint a receiver to Southpoint.

{¶10} On February 2, 2010, the trial court filed an order addressing Meyers’ motion to appoint a receiver and Marks’ motion to stay proceedings and to compel mediation. The trial court granted Meyers’ motion to appoint a receiver. The trial court also granted Marks’ motion to stay the proceedings and compel mediation, stating in pertinent part:

Defendants’ Motion to Stay Proceedings is granted. Except for the issue of judicial dissolution of [Southpoint], the remaining claims in Plaintiff’s Amended Complaint shall be referred for mediation to the Court’s Magistrate * * *. This Court reserves jurisdiction on the issue of judicial dissolution.

February 2, 2010, Order4, pp. 3-4. The trial court further stated that the parties were permitted to conduct discovery during the stay in order to facilitate mediation.

{¶11} Subsequently, Marks filed a motion to authorize the receiver to sell Southpoint’s assets. Marks acknowledged that he and Meyers no longer wished to do business together. Meyers filed a motion concurring with Marks’ motion authorizing the receiver to sell Southpoint’s assets. Subsequently, the trial court granted Marks’ motion to authorize the receiver to sell Southpoint’s assets.

{¶12} In April 2010, Meyers filed a motion entitled “Plaintiff’s Motion for Declaration that Defendant Tony Marks has No ‘Membership Rights’ in

4 Although the trial court captioned many of its orders as judgment entries and the parties persist in referring to them as such, most are interlocutory orders and should not be captioned judgment entry. A judgment is a final or appealable order. See Civ.R. 54(A).

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