Michael Roupp, V. Lucius Gregory Meredith

CourtCourt of Appeals of Washington
DecidedFebruary 28, 2022
Docket82814-2
StatusUnpublished

This text of Michael Roupp, V. Lucius Gregory Meredith (Michael Roupp, V. Lucius Gregory Meredith) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Michael Roupp, V. Lucius Gregory Meredith, (Wash. Ct. App. 2022).

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

MICHAEL ROUPP; ROUPP ENTERPRISES, INC.; ROUPP No. 82814-2-I ENTERPRISES 401(K); and ROUPP (consol. with nos. 82815-1-I, ENTERPRISES DEFINED BENEFIT 82816-9-I, and 82817-7-I) PLAN, DIVISION ONE Respondents, UNPUBLISHED OPINION v.

LUCIUS GREGORY MEREDITH; EVAN JENSEN; KENNY ROWE; NAVNEET SUMAN; IAN BLOOM; ALEKSANDR BULKIN; EDWARD M. EYKHOLT; and RCHAIN COOPERATIVE,

Appellants.

APPELWICK, J. — RChain appeals from the denial of its CR 60(b) motion to

vacate the denial of its motion to compel arbitration. We reverse and remand for

the trial court to reconsider the motion to vacate.

FACTS

RChain Cooperative is a Washington cooperative association established

to develop a “blockchain”1 platform for electronic transactions. Michael Roupp and

his associated business entities became a member of RChain in August 2017.

1 A “blockchain” is a “‘digital database consisting of a continuously growing list of records, called blocks. These blocks of data are chained together using cryptography, making it difficult to rewrite the older records. Further, a blockchain and the data on it can be simultaneously used and shared within a large, decentralized publicly available network.’ ” A.J. Bosco, Blockchain and the Uniform Electronic Transaction Act, 74 BUS. LAW . 243, 243-44 (2018)). No. 82814-2-I/2

Roupp bought RHOC, RChain’s cryptocurrency tokens.2 In November 2019,

Roupp sued RChain for violations of the Consumer Protection Act,3 the Securities

Act of Washington,4 and tortious interference with business expectancy. In August

2020, RChain moved to compel arbitration based on an arbitration provision in its

“Membership Agreement.” RChain argued that under its bylaws all members were

required to sign the Membership Agreement, and that this was legally sufficient to

bind Roupp. Roupp argued that RChain failed to demonstrate that he had seen

and agreed to the Membership Agreement and its terms. No copy of a signed

agreement was produced. The trial court denied the motion to compel arbitration.

RChain appealed and we affirmed the trial court’s decision to deny the motion to

compel arbitration.5

RChain continued to review discovery for the underlying action pending

appeal of the denial of the motion to compel arbitration. Roupp had produced

approximately 113 gigabytes in discovery in July 2020. Review of the hundreds of

documents, video files, and images was complicated by Roupp’s failure to produce

the metadata for the documents as specified in RChain’s request for production.

Without the metadata, counsel for RChain was unable to determine when Roupp

downloaded or viewed the documents produced.

2 To generate startup capital, RChain sold cryptocurrency tokens called “RHOCs” that would eventually be converted into tokens called “REVs” which would allow users access to resources on the blockchain network. 3 Chapter 19.86 RCW. 4 Chapter 21.20 RCW. 5 A more comprehensive discussion of the facts and merits of that issue are

contained in linked appeal number 81915-1-I.

2 No. 82814-2-I/3

RChain located several e-mails and documents in what appeared to be

chronological order. A copy of the RChain Membership Agreement was found in

between e-mails exchanged by Roupp and RChain that were dated August 16,

2017 and August 19, 2017. Roupp had acknowledged that he became an RChain

member on or about August 29, 2017 but claimed that he never received or

assented to the Membership Agreement. The chronology of the production

documents suggested that Roupp had indeed received a copy of the Membership

Agreement between August 16 and 19, 2017. In light of this evidence, RChain

filed its January 2021 request for reconsideration of the denial of the motion to

compel arbitration or an evidentiary hearing on the timing of Roupp’s receipt of the

Membership Agreement.6

As soon as RChain filed the motion for reconsideration, Roupp alerted

RChain that the documents were jumbled together from different sources and were

not in chronological order. This was information RChain could not have known

without the metadata for the documents, which had been requested but which

Roupp had failed to produce. Roupp then produced the metadata, but only for the

copy of the Membership Agreement, which proved RChain’s inferences about the

chronology of events were incorrect. RChain struck its motion for reconsideration.

Subsequently, Roupp produced additional files with metadata. Among the

new documents, RChain found that Roupp had completed a copy of its “Accredited

6The motion was filed by defendants Lucius Meredith, Evan Jensen, Ian Bloom and RChain. Defendants Alexksandr Bulkin, Navneet Suman, and Kenny Rowe joined separately.

3 No. 82814-2-I/4

Participant Questionnaire.” The Accredited Participant Questionnaire has a

section called “Verification of Purchase” that states,

I acknowledge:

a) that I have reviewed the Private Token Sale and RHOC Documents and/or Instructions presented to me, and attached hereto;

(b) that the Private Token Sale documents and attachments hereto have been fully completed and executed by the appropriate party.

This acknowledgement was signed by Roupp and dated August 30, 2017. 7

Following this verification and signature page, the Questionnaire included “Exhibit

A,” a list entitled “RHOC Documents and/or Instructions.” The list included the

Membership Agreement. However, the Membership Agreement itself was not

attached to the Questionnaire produced by Roupp. RChain had no record of this

signed document.

RChain began investigating how Roupp acquired the blank form

Questionnaire. A prospective purchaser of RHOC could access the Questionnaire

in two ways—from RChain’s website using the private sale participation request

page or from RChain’s legal document repository on GitHub.8 If Roupp obtained

the Questionnaire on GitHub, he would have seen the Membership Agreement in

the legal repository but would not have been required to read and agree. By

contrast, if he accessed the Questionnaire through the RChain website, he could

access the private sale participation request page only after having been

7 One page of the document is dated August 31, 2017. The attestation is dated August 30, 2017. 8 GitHub (a subsidiary of Microsoft) is an online service that companies can

utilize to archive their website code.

4 No. 82814-2-I/5

presented with the Membership Agreement and clicking to indicate acceptance of

the agreement.

RChain examined the version of its website code in effect when Roupp

applied for membership to determine the steps he necessarily followed in

becoming a member. The membership sign-up process on the RChain website

required registration with a name and e-mail address to create an account.

Creating an account generated a verification e-mail where the user would click a

link within the message that would return the user to RChain’s website to confirm

the e-mail was verified. After signing in to RChain’s website, the registered user

could begin the membership process. In step one, the website presented the

Membership Agreement. To continue, the user was required to click an “I Agree”

button to assent to the terms of the Membership Agreement. After agreeing to the

Membership Agreement, the user was presented with an online invoice for the $20

membership fee.

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