Jarvis v. Lehr
2014 Ohio 3567
Ohio Ct. App.2014Background
- Jarvis invested $250,000 and became a member of General Power Products, LLC (GPP) under a written operating agreement signed by Jarvis and managing member Daniel Lehr.
- Jarvis sued Lehr, ITE, LLC, and others alleging misconduct, including misappropriation and commingling of GPP funds, and asserted a breach-of-contract claim based on the operating agreement’s prohibition on commingling.
- The GPP operating agreement contains an arbitration clause providing that disputes among the “Interest Holders” as to their rights or liabilities under the agreement shall be exclusively determined by arbitration.
- Defendants moved to compel arbitration and to stay the proceedings under R.C. Chapter 2711; the trial court denied the motion to stay.
- Defendants appealed, arguing the trial court erred because at least one claim (breach for commingling) falls within the written arbitration clause, requiring a stay of the entire action under R.C. 2711.02(B).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the appellate court has jurisdiction to hear an appeal of denial of a stay under R.C. 2711.02(C) | Jarvis argued R.C. 2711.02(C) unlawfully expands appellate jurisdiction and conflicts with appellate rules | Defendants relied on R.C. 2711.02(C) to appeal the denial of a stay as a final, appealable order | Court held it has jurisdiction: orders under R.C. 2711.02 are final and appealable per Mynes v. Brooks |
| Whether the trial court erred in denying a stay of proceedings pending arbitration because Jarvis’s breach-of-contract claim is subject to the operating agreement’s arbitration clause | Jarvis argued the operating agreement was not properly of record and his commingling claim falls outside arbitration | Defendants argued the authenticated operating agreement covers disputes among members about rights/liabilities under the agreement, including the commingling claim, so the entire case must be stayed | Court held the operating agreement was authenticated, the commingling breach claim falls within the arbitration clause, and under R.C. 2711.02(B) the entire proceeding must be stayed pending arbitration |
Key Cases Cited
- Chef Italiano Corp. v. Kent State Univ., 44 Ohio St.3d 86 (Ohio 1989) (final-order requirements for appellate jurisdiction)
- Gen. Acc. Ins. Co. v. Ins. Co. of N. Am., 44 Ohio St.3d 17 (Ohio 1989) (final-order standards)
- Mynes v. Brooks, 124 Ohio St.3d 13 (Ohio 2009) (orders granting or denying stays under R.C. 2711.02 are final and appealable)
- Maestle v. Best Buy Co., 100 Ohio St.3d 330 (Ohio 2003) (distinguishing R.C. 2711.02 and 2711.03 procedures for arbitration enforcement)
- ACRS, Inc. v. Blue Cross & Blue Shield of Minnesota, 131 Ohio App.3d 450 (Ohio App. 1998) (party seeking stay must produce properly authenticated arbitration agreement)