Gordon v. Kuzara
2010 MT 275
Mont.2010Background
- Gordons filed an Application for Judicial Dissolution of Half Breed LLC under § 35-8-902 MCA in Musselshell County.
- Kuzara, a managing member, moved to compel arbitration based on an arbitration clause in the Half Breed Operating Agreement (OA).
- The District Court denied Kuzara’s motion to compel arbitration, ruling the OA did not govern judicial dissolution proceedings.
- Gordons argued dissolution is statutory and not based on OA activity; the OA clause covers challenges to the agreement, activity under the agreement, or interpretation of the agreement.
- The Montana Supreme Court held the OA arbitration clause does not apply to judicial dissolution under § 35-8-902 MCA, affirming the district court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the OA arbitration clause cover judicial dissolution? | Gordons | Kuzara | No; clause does not cover dissolution |
| Is judicial dissolution within the scope of arbitration as ‘activity conducted pursuant to the agreement’? | Gordons | Kuzara | No; dissolution is a statutory remedy outside OA scope |
| Can dissolution proceed under statute even where OA contains an arbitration clause? | Gordons | Kuzara | Yes; statutory dissolution proceedings are independent of the OA |
Key Cases Cited
- Burkhart v. Semitool, Inc., 300 Mont. 480, 5 P.3d 1031 (Mont. 2000) (arbitration agreements are valid; threshold is agreement to arbitrate)
- Kortum-Managhan v. Herberger's NBGL, 204 P.3d 693 (Mont. 2009) (whether parties agreed to arbitrate; contract-based analysis)
- Zigrang v. U.S. Bancorp Piper Jaffray, Inc., 123 P.3d 237 (Mont. 2005) (arbitration threshold requires agreement to arbitrate the dispute)
- Martz v. Beneficial Montana, 135 P.3d 790 (Mont. 2006) (arbitration forum preference; contract challenges belong in arbitration when applicable)
- Georgia Rehab. Ctr., Inc. v. Newman Hosp., 658 S.E.2d 737 (Ga. 2008) (dissolution under statute not arising from OA; dissolution is exclusive to statute)
- River Links at Deer Creek, LLC v. Joseph Melz, 108 S.W.3d 855 (Tenn. App. 2002) (good policy to resolve dissolution via district court even with arbitration)