Hl 1, LLC v. Riverwalk, LLC
15 A.3d 725
| Me. | 2011Background
- HL 1, LLC, Shipyard Brewing Co., LLC, and Forsley challenged an arbitration award in Maine after arbitration on control of OGG and related financing was completed.
- The OGG Operating Agreement required arbitration and preserved a party’s right to appeal questions of law arising at the hearing.
- The MOU increased the garage sale price and contemplated a joint venture; it was intended to modify the Garage P&S and related Garage Note, but documentation was never completed.
- The arbitration panel found the MOU binding and enforceable, and concluded Forsley and HL 1 could not become sole manager/member of OGG.
- The MUAA provides enumerated grounds for vacating an arbitration award and does not include errors of law; the trial court severed the statutory review provision from the arbitration clause.
- On summary judgment, the court held Forsley collaterally estopped from challenging several claims and ruled Shipyard Brewing lacked standing to seek dissolution of Ocean Gateway Garage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MUAA grounds are exclusive | Forsley argues expanded review for legal errors is allowed by contract. | Riverwalk argues MUAA grounds are exclusive and cannot be expanded by agreement. | Exclusive grounds; contract cannot expand review. |
| Whether the arbitration clause permits judicial review of law | Forsley contends the express right to appeal questions of law in 11.01 supports review of legal errors. | Riverwalk maintains MUAA limitations apply regardless of the agreement. | Judicial review of law is not available beyond MUAA grounds. |
| Severability of the judicial review provision | Forsley argues severability should be denied if the review provision is intertwined with arbitration. | Riverwalk argues severability is appropriate as the review provision is not central to the arbitration's purpose. | Judicial review provision is severable from the arbitration clause. |
Key Cases Cited
- Hall Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576 (U.S. 2008) (FAA grounds are exclusive; expanded review requires policy-based exceptions)
- Bd. of Dirs. of Me. Sch. Admin. Dist. No. 33 v. Teachers' Ass'n of Me. Sch. Admin. Dist. No. 33, 395 A.2d 461 (Me. 1978) (arbitration review limited to enumerated grounds)
- Kyocera Corp. v. Prudential-Bache Trade Servs., Inc., 341 F.3d 987 (9th Cir. 2003) (severability of expanded review provisions)
- Pugh's Lawn Landscape Co., Inc. v. Jaycon Dev. Corp., 320 S.W.3d 252 (Tenn. 2010) (state acts generally treat vacatur grounds as exclusive)