Ryan Cunningham v. Ronald F. LeGrand and Mountain Country Partners

785 S.E.2d 265, 237 W. Va. 68, 2016 W. Va. LEXIS 167
CourtWest Virginia Supreme Court
DecidedMarch 15, 2016
Docket11-1613
StatusPublished
Cited by5 cases

This text of 785 S.E.2d 265 (Ryan Cunningham v. Ronald F. LeGrand and Mountain Country Partners) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ryan Cunningham v. Ronald F. LeGrand and Mountain Country Partners, 785 S.E.2d 265, 237 W. Va. 68, 2016 W. Va. LEXIS 167 (W. Va. 2016).

Opinion

LOUGHRY, Justice:

The petitioner, Ryan Cunningham, appeals from the November 2, 2011, order of the Circuit Court of Kanawha County confirming an arbitration award and entering judgment on that award. 1 Seeking to obtain a vacatur of the arbitration award, the petitioner argues that: the arbitrator manifestly disregarded the law of West Virginia; the arbitrator considered hearsay evidence; and the arbitrator refused to reopen the proceedings *70 for rebuttal evidence. 2 In response to these assignments of error, the bankruptcy tras-tee 3 for respondent Mountain Country Partners, LLC (“Mountain Country”) argues that the petitioner has failed to identify any valid basis for setting aside the arbitration award. We concur and accordingly affirm the lower court’s ruling in this matter. Our decision is compelled both by the constricted scope of review for an arbitral award and the petitioner’s failure to raise even a colorable basis for vacating the award.

I. Factual and Procedural Background

Mountain Country, a West Virginia limited liability company, was formed for the purpose of acquiring land and mineral lights to develop oil and gas properties in West Virginia and Kentucky, 4 On October 10, 2006, Mr. Cunningham, Ronald F. LeGrand, and four additional individuals signed the Operating Agreement of Mountain Country (“Operating Agreement”). While the petitioner managed the day-to-day operations of Mountain Country for a salary, 5 Mr, LeGrand was the actual manager due to his controlling voting percentage. Dissatisfied with the venture’s lack of profit and fearful that Mr. LeGrand was wrongfully disposing of assets and/or committing fraud, 6 the petitioner instituted a civil action in the Circuit Court of Kanawha County on July 14, 2010. He sought injunctive relief for the purpose of gaining “access to all corporate records including all investor contact information .., and [requested] that he be given operating control of Mountain Country Partners, LLC.” 7 Because the petitioner had not submitted his claims to arbitration, as required by the Operating Agreement, 8 the respondents sought to dismiss the complaint.

Before the matter proceeded to arbitration pursuant to the mandatory arbitration clause contained in the Operating Agreement, 9 a ruling was obtained with regard to the petitioner’s attempt to gain access to the company records. Judge John Hrko, sitting in for Judge Stocky, ruled by order entered on November 5, 2010, that “West Virginia Code 31B-4-408 gives a member of a West Virginia LLC the absolute right to review all of the books and records of the LLC....” Pursuant to that order, Mountain Country was directed to give the petitioner reasonable access to “all books and records.” 10 The *71 underlying ease was stayed by the circuit court pending arbitration.

During the arbitration proceeding, a dispute arose when the petitioner sought to discover the identity of Mountain Country’s investors. He argued that the provisions of West Virginia Code § 31B-4-408 (2015) entitled him to gain access to the investor list in addition to the company’s books and records he had already been permitted to review. Citing to the provision of the statute that excepts disclosure of business records “to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances,” the arbitrator denied the petitioner access to the investor list. Id. at § 31B-4-408(b)(2). In furtherance of the ruling, the arbitrator found that the “identities of the additional investors in MOP [Mountain Country] are irrelevant to the claims and counterclaims advanced in this arbitration.” ,

A three-day arbitration hearing commenced on April 18, 2011. At issue were the petitioner’s singular claim predicated on seeking control of Mountain Country 11 as well as five counterclaims filed by Mr. Le-Grand and Mountain Country against the petitioner. 12 The evidence presented at the hearing included witness testimony, deposition testimony, and documentary evidence. The arbitrator advised the parties that he would take all evidence “for what it’s worth and discard it if it’s not relevant.” By agreement of the parties, all documents were introduced into evidence as authentic and admissible. The arbitrator found all the witness testimony to be credible.

On the third day of the arbitration hearing, the petitioner did not attend the proceedings; his counsel failed to seek either a postponement or a continuance. 13 Through a decision issued on July 5, 2011, the arbitrator denied the • petitioner’s claim but awarded relief against him based on the respondents’ counterclaims, ' Mr. Cunningham was ordered by the arbitrator to pay Mountain Country $113,717.50 in damages and $162,442.00 in attorney’s' fees and costs. 14 The petitioner did not offer any testimony or defense in response to the counterclaims advanced by the respondents. 15 Only when the award was issued did the petitioner seek to reopen the proceedings for the purpose of submitting rebuttal evidence. This request was denied by the arbitrator.

When the respondents sought to confirm the arbitration award in the circuit court, the petitioner filed a motion to vacate. The circuit court denied that motion and this appeal followed.

II. Standard of Review

As this Court recently acknowledged, “ ‘the scope of judicial review for an arbitrator’s decision is among the narrowest known at law.’ ” CDS Family Trust, LLC v. ICG, Inc., No. 13-0375, 2014 WL 184441, at *3 (W.Va. Jan. 15, 2014) (memorandum *72 dec’n) (citing MCI Constructors, LLC V. City Of Greensboro, 610 F.3d 849, 867 (4th Cir. 2010)). “‘Awards by arbitration are to be favored and liberally construed and are not to be set aside unless they appear to be founded on grounds clearly illegal.’ ” Board of Educ. v. W. Harley Miller, Inc. (“Harley Miller II”), 160 W.Va. 473, 494 n. 7, 236 S.E.2d 439, 451 n. 7 (1977) (quoting Syl. Pt. 3, Hughes v. Nat’l Fuel Co., 121 W.Va. 392, 3 S.E.2d 621 (1939)).

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Cite This Page — Counsel Stack

Bluebook (online)
785 S.E.2d 265, 237 W. Va. 68, 2016 W. Va. LEXIS 167, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ryan-cunningham-v-ronald-f-legrand-and-mountain-country-partners-wva-2016.