 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
CAPROC Manager4/18/2005
older, CAPROC Manager derives its authority from Section 5.11 of the Agreement and the LLC Act," and "can cease to be a manager under the Agreement only by resignation or Amendment pursuant to Section 12.4 of the Agreement." The Complaint further alleges that Defendants' conduct in attempting to remove CAPROC Manager "violates the Agreement," strongly suggesting that Plaintiffs' claims do arise under the LLC Agreement.
In addition, the issues posed by Defendants' arguments arise under the LLC Agreement because they necessitate determination of the intent of the parties when they entered into the Agreement. In these circumstances, to resolve the issues raised by the Complaint, the Court would be forced to determine whether the parties intended to make removal impossible under the LLC Agreement, even in the face of material breaches of the Agreement by the Managing Shareholder. In determining the arbitrability of a claim, however, the Court may not consider the relative merits of that claim or the defenses to it "no matter how frivolous they appear." Thus, the nature of the issues raised by Plaintiffs' claim supports subjecting it to arbitration.
In connection with its argument that the purported removal of CAPROC Manager is not subject to arbitration, CAPROC relies on Nash v. Dayton Superior Corp. In Nash, the Court of Chancery held that to determine whether it has subject matter jurisdiction over a possibly arbitrable dispute, it must conduct two related inquiries. The first inquiry is whether the dispute is one which, on its face, is subject to arbitration under the governing contract; the second is "whether, realistically evaluating the complaint, a legal remedy is available and fully adequate."
The Nash case involved a corporate acquisition. The dispute centered on a Closing Balance Sheet that the acquisition contract provided would form the basis for any post-closing adjustments of the consideration received by the selling shareholders. The court considered two separate claims asserted by plaintiffs. The first claim related to an attempt by one party to add certain new items, which the complaint did not identify with any specificity, to the Closing Balance Sheet in the early stages of a prescribed dispute resolution process that culminated with arbitration. The court held this claim had not been shown to fall within the contractual arbitration clause, stating:
There is, at least potentially, a factual question as to whether the parties intended the arbitration process to permit Dayton Superior to revise the Closing Balance Sheet in response to objections raised by the Notice of Disagreement. For this reason, and in the present posture of the matter, I am unable to conclude that the New Items claim is clearly arbitrable.
The court then evaluated the nature of the non-arbitrable claim and concluded that plaintiff had no adequate remedy at law. Therefore, the court denied the motion to dismiss as to that claim.
The second claim asserted in Nash challenged the propriety of the establishment of a product liability reserve on the Closing Balance Sheet. Plaintiffs argued that claim presented a legal question distinct from the concededly arbitrable question of the appropriate size of the reserve. The court found that the claim, on its face, fell within the scope of the arbitration clause. Certain language of the contract at least indirectly supported that conclusion. Having determined that the claim was arbitrable and that arbitration constituted an adequate remedy at law, the court dismissed the second claim for lack of subject matter jurisdiction.
The holding in Nash is not inconsistent with this Court's conclusion that the valid
Page 1 2 3 4 5 Delaware Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|