Gordon v. Kuzara
358 Mont. 432
Mont.2010Background
- Gordons filed an Application for Judicial Dissolution of Half Breed LLC under § 35-8-902, MCA.
- Kuzara, a managing member, moved to compel arbitration based on an arbitration clause in the LLC's Operating Agreement (OA).
- District Court denied Kuzara's motion to compel arbitration.
- OA arbitration clause covers challenges to the agreement, activities under it, or interpretation of its terms, but does not mention judicial dissolution.
- Gordons seek statutory dissolution under § 35-8-902, MCA, which is a district-court remedy; the District Court held dissolution not subject to the OA arbitration clause.
- Montana Supreme Court affirmed the District Court’s denial of arbitration and upheld judicial dissolution authority under statute.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the OA arbitration clause cover judicial dissolution? | Gordons: dissolution is not within the OA scope; dissolution is statutory, not OA action. | Kuzara: dissolution may be arbitrated if related to OA actions. | No; OA does not cover judicial dissolution under § 35-8-902. |
| Is dissolution under § 35-8-902 a suitable basis for relief independent of OA disputes? | Gordons argue statutory dissolution proper and independent. | Kuzara contends dissolution relies on OA activities. | Yes; statutory dissolution is proper independent of OA arbitration. |
| What standard applies to arbitration-compel decisions in Montana for this issue? | Gordons rely on de novo review of district court ruling. | Kuzara disputes the scope of review. | Review is de novo. |
| Should Georgia Rehab. Ctr. influence Montana’s approach to OA arbitration vs. judicial dissolution? | Gordons rely on similar reasoning that dissolution lies outside OA. | Kuzara cites Georgia Rehab. Ctr. and similar authorities. | Georgia Rehab. Ctr. informs but does not control; dissolution not governed by OA. |
Key Cases Cited
- Burkhart v. Semitool, Inc., 300 Mont. 480, 5 P.3d 1031 (Mont. 2000) (arbitration valid when parties agreed to arbitrate)
- Kortum-Managhan v. Herbergers NBGL, 204 P.3d 693 (Mont. 2009) (scope of arbitration; contract-based disputes)
- Zigrang v. U.S. Bancorp Piper Jaffray, Inc., 329 Mont. 239, 123 P.3d 237 (Mont. 2005) (whether parties agreed to arbitrate; threshold inquiry)
- Martz v. Beneficial Montana, 332 Mont. 93, 135 P.3d 790 (Mont. 2006) (arbitration as forum for contract disputes; deference to arbitration clause)
- Philip Morris, Inc., 352 Mont. 30, 217 P.3d 475 (Mont. 2009) (de novo review of arbitration decisions; contract interpretation)
- State ex rel. Bullock v. Philip Morris, Inc., 352 Mont. 30, 217 P.3d 475 (Mont. 2009) (arbitration review standards referenced)
- Georgia Rehab. Ctr., Inc. v. Newman Hosp., 658 S.E.2d 737 (Ga. 2008) (arbitration clause not controlling dissolution proceedings under statute)
- River Links at Deer Creek, LLC v. Joseph Melz, 108 S.W.3d 855 (Tenn. App. 2002) (policy supports district-court dissolution when OA arbitration is incomplete)