MEMORANDUM OPINION
Elliot Wolff brings this action personally and as trustee of the Egon Wolff Trust against Westwood Management LLC and other associated entities (collectively “defendants”), alleging breach of fiduciary duty and derivative claims, all of which stem from the management and sale of property in which Wolffs father invested over 35 years ago. Before the court is defendants’ motion to compel arbitration [# 4] under the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq. Upon consideration of the motion, the opposition thereto, and the record of this case, the court concludes that the motion must be granted.
I. BACKGROUND
In 1971, Wolffs father purchased a share in a real estate partnership venture created by Dr. Laszlo Tauber. The purpose of the venture, which was called the District of Columbia Joint Venture (“DCJV”), was to own and develop a parcel of land located in the District of Columbia into an office building complex. According to the DCJV agreement, Wolffs father purchased an ownership interest of 0.5% in the land and 0.25% in the building for $20,000. The DCJV agreement also included an arbitration clause, which provided that the parties “agree not to enter into any court action in any dispute which may arise during construction and management of the office building complex and agree that any dispute or controversy that cannot be amicably settled will be submitted
Tauber successfully developed the land into what is now the Transpoint building and later purchased an adjacent half-acre parcel of land to be used as a parking lot. When Wolffs father died in November 1984, his ownership interest in the DCJV passed to his son and to the trust established under his estate. On December 6, 1984, Tauber sent a letter to the investors in the DCJV and to the investors in the various other joint ventures he managed to inform them that he was restructuring the joint ventures into a single partnership that he would control. 1 In the letter, Tau-ber explained that the consolidation would facilitate management of the various properties and would more easily allow for a sale or merger with a larger company. The letter offered investors three options: (A) to sell their interest, (B) to become class “B” partners, or (C) to become class “C” partners. Each class contained a different kind of investment in the new partnership with a different pay structure. The letter additionally offered, “[i]f anybody has any second thoughts and is not willing to cooperate, I will put his/her interest in trust....” Defs.’ Ex. 2 (Tauber Ltr., Dec. 6, 1984) at 6 (“1984 Tauber Letter”). Investors were asked to respond to the letter and choose one of the three options, with option “B” to be the default position if no response was returned to Tauber by the date specified. In response to the letter, Wolff declined to become an investor in the new partnership and asked Tauber to put his interest in the DCJV in trust. Tauber agreed. Although Wolff was not a member of the newly created Consolidated Partnership and did not sign the Consolidated Partnership agreement, that agreement contained an arbitration clause providing that “any dispute or controversy that cannot amicably be settled shall be submitted to binding arbitration.” Defs.’ Mem. at 4.
Tauber later reorganized the Consolidated Partnership into several LLCs
2
in order to limit the liability of the partnership interests and, in 1999, the Transpoint building and the adjacent lot were transferred to the Laszlo N. Tauber & Associates I, LLC (“Tauber I”) subsidiary. The parties dispute whether Tauber I was owned and controlled by the LNT & A Master LLC, the master entity which wholly owned a number of subsidiary LLCs, which in turn owned a number of the properties previously held by the Consolidated Partnership. Although the original LNT & A Master LLC operating agreement has not been provided to the court, a March 3, 2006 amendment to the LNT
&
A Master LLC operating agreement also contains an arbitration clause.
See
Defs.’ Ex. 3 (“LNT & A Master Agreement”) § 9.8(a). Wolff was not a member
In 2002, Tauber died and, pursuant to the 1984 Tauber Letter, management and control of the ventures that had been transferred into the Consolidated Partnership was vested with Westwood Management LLC. In February 2004, Westwood sold the Transpoint building and the adjacent lot and distributed payment to the investors according to their respective classes. On July 10, 2006, Wolff filed a complaint alleging breach of fiduciary duty and derivative claims, all resulting from the management and sale of the Trans-point building and the adjacent lot. He alleges that defendants used funds from various mortgages and refinances of the Transpoint building and the adjacent lot for purposes other than for use by and for the Transpoint building and the adjacent lot; specifically, to make improvements to other properties and for defendants’ enrichment. Defendants have moved to compel arbitration, asserting that Wolff is bound by the arbitration clause in the DCJY agreement as well as the arbitration clauses in the subsequent agreements.
II. ANALYSIS
A. Standard Of Review
When a party opposing arbitration contends that no agreement to arbitrate was entered, she effectively raises the issue of whether there was a meeting of the minds on the agreement to arbitrate, and the standards for resolving a summary judgment motion pursuant to Federal Rule of Civil Procedure 56 are therefore applied.
Booker v. Robert Half Int’l, Inc.,
The FAA provides that “[a] written provision in ... a contract evidencing a transaction involving interstate commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. The question of whether a particular dispute is arbitrable is “undeniably an issue for judicial determination.”
AT & T Techs. v. Commc’ns Workers of Am.,
A strong policy favoring alternative means of dispute resolution through arbitration supports a presumption of arbi-trability.
Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp.,
Relying on the language of the FAA, which states that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds that exist at law or in equity for the revocation of any contract,” 9 U.S.C. § 2, federal courts have applied “ordinary state-law principles that govern the formation of contracts” when determining arbitrability,
First Options of Chicago, Inc. v. Kaplan,
1. The Parties Entered Into A Valid And Enforceable Arbitration Agreement
There can be no dispute that, at least at the time they executed the DCJV Agreement, the parties entered into a binding-arbitration agreement. Wolff s father signed the DCJV Agreement, which contained an arbitration clause, and “a signature on a contract indicates mutuality of assent and a party is bound by the contract unless he or she can show specific circumstances relieving him or her of such an obligation.”
Emeronye,
In
Allied-Bruce Terminix Companies v. Dobson,
the Supreme Court addressed the disagreement in the state and federal courts surrounding the meaning of the FAA’s words “involving commerce.”
Here, Wolff argues that defendants have not shown that the DCJV Agreement involves interstate commerce. Pis.’ Opp’n at 14. The court, however, has no trouble concluding that the investment in a multimillion dollar office building located in the District of Columbia while owned by entities in Maryland involves interstate commerce. See Compl. ¶¶ 1, 4, 28. The fact that Wolff owned only a small share of the venture (0.5% in the land and 0.25% in the building) is of no consequence when viewed under the lens of Wickard and its progeny.
Wolff further asserts that the arbitration agreement does not apply to this controversy because it was extinguished by the creation of the Consolidated Partnership. Wolff maintains that he is beyond the reach of the DCJV Agreement, yet that he is not bound by the arbitration clause contained in the Consolidated Partnership agreement because he did not consent to be governed by any partnership agreements subsequent to the DCJV Agreement. See Pis.’ Opp’n at 20-22. The court is not persuaded.
It is well settled that an arbitration clause is enforceable after the expiration of a contract when the dispute is over an obligation created by the expired contract.
See Montgomery Mailers’ Union No. 127 v. Advertiser Co.,
The obligations at issue in this case can only have arisen from the DCJV Agreement because there was no other agreement with defendants that Wolff entered into. Thus, even if the DCJV Agreement terminated upon creation of the Consolidated Partnership, the court concludes that the agreement to arbitrate manifested in the DCJV Agreement survives termination of the DCJV Agreement and that it applies to this controversy.
2. The Arbitration Agreement Encompasses The Claims Raised In The Complaint
Having concluded that an arbitration agreement exists, the court must next examine the scope of the arbitration agreement and determine whether it covers all of the claims raised in Wolffs complaint. The arbitration provision in the DCJV Agreement provides that “[t]he parties agree not to enter into any court action in any dispute which may arise during construction and management of the office building complex and agree that any dispute or controversy that cannot be amicably settled will be submitted to arbitration .... ” DCJV Agreement ¶ 15. As is often the case in contract disputes, the parties disagree regarding the proper interpretation of this language. Wolff focuses on the first part of the arbitration clause and argues that the terms of the DCJV Agreement’s arbitration provision “expressly exclude the dispute at issue” because the agreement restricts the duty to arbitrate to those disputes “which may arise during construction and management of the office building complex.” Pis.’ Opp’n at 17. Conversely, defendants rely on the second part of the arbitration clause and assert that the agreement to arbitrate applies to “any disputes,” not just those arising during construction and management of the office building complex. Defs.’ Mem. at 7. Defendants further insist, however, that even if the arbitration provision is read narrowly to include only those disputes that arise during construction and management, the dispute at issue is encompassed in “management” of the office building complex, because “management ... would have to include financing and disposition of the property.” Id. at 8.
At the center of this dispute is the question of whether the arbitration clause is broad or narrow — that is, whether the phrase “any dispute or controversy” broadly encompasses any dispute arising under the contract, or if it instead modifies the part of the arbitration clause specifically referring to disputes which arise during construction and management. It is unnecessary for the court to dwell on this question, however, because both paths of interpretation lead to the same result.
Where an arbitration clause is broad, arbitration is appropriate “whenever a party has asserted a claim, however
In deciding whether the counts of Wolffs complaint are subject to arbitration, the court must bear in mind that “[a]n order to arbitrate [a] particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.”
United Steelworkers of Am. v. Warrior & Gulf Navigation Co.,
Here, if the arbitration clause provided in the DCJV Agreement is read broadly, it is clear that Wolffs allegations of breach of fiduciary duty and derivative claims touch upon the contract. The contract was the basis of Wolffs relationship with defendants and this dispute arose directly from defendants alleged breach of fiduciary duties owed pursuant to the contract. Additionally, if the arbitration clause is read narrowly, Wolffs allegations of breach of fiduciary duty and derivative claims are within the scope of the arbitration clause because the clause provides that “any dispute which may arise during construction and management of the office building complex ... will be submitted to arbitration.” DCJV Agreement ¶ 15. Wolff maintains that this language “demonstrates that the agreement to arbitrate pertains not to disputes that arise
from
the [DCJV] agreement or from [] Tauber’s management of the Transpoint building, but instead only
temporally
with [ ] the construction and [] management of the Transpoint building.” Pis.’ Opp’n at 15 (emphasis in original). Wolff appears to assert that “management” is limited to the time in which the DCJV controlled the Transpoint building, and therefore, because the transactions giving rise to defendants’ liability for the financial management of DCJV’s former assets did not occur until after the creation of the Consolidated Partnership, they lie outside the arbitration agreement.
See id.
at 17. The court, however, sees no reason to construe the arbitration clause as applying only temporally to management under the
The claims raised in Wolffs complaint are thus within the scope of the arbitration clause. As defendants correctly point out, “management” of the Transpoint building “would have to include financing and disposition of the property.” Defs.’ Mem. at 8. Accordingly, the court concludes that, whether the arbitration clause is read broadly or narrowly, it encompasses the claims raised in Wolffs complaint.
3. Equitable Principles Do Not Estop Defendants From Invoking The Arbitration Agreement
Wolff further argues that, should the court find that the arbitration agreement applies to this dispute, the doctrine of unclean hands prevents defendants from invoking the arbitration agreement while, at the same time, denying Wolff the rights he had under the DCJV. Pis.’ Opp’n at 19. According to Wolff, defendants’ actions include “concealing the continued existence of the DCJV between 1985 and 1999; and [] denying [] plaintiffs the ability to review the records of financial transactions made after 1985.” Id.
It is well settled that under the FAA, a district court’s consideration of a motion to compel arbitration is limited to determining whether the parties entered into a valid agreement to arbitrate, and does not reach the merits of the parties’ claims.
See Nelson,
Wolff attempts to analogize the doctrine of unclean hands with fraud in the inducement and cites
Prima Paint
for the proposition that “[t]o immunize an arbitration agreement from judicial challenge on the ground of fraud in the inducement would be to elevate it over other forms of contract — a situation inconsistent with the ‘saving clause’ [in § 2 of the FAA].” Pis.’ Opp’n at 18 (citing
Prima Paint,
III. CONCLUSION
For the foregoing reasons, the court concludes that defendants’ motion to compel arbitration must be granted. An appropriate order accompanies this memorandum opinion.
Notes
. Defendants refer to the single partnership as Laszlo N. Tauber M.D. & Associates or LNT & A Partnership. Wolff, however, asserts that defendants "provide no evidence of the actual existence of any entity with either of these names.” Pis.’ Opp’n at 2 n. 1. Although Wolff correctly assert that no evidence has been proffered establishing the name of this entity, the evidence in this case demonstrates that such an entity did exist. Accordingly, the court will refer hereinafter to the partnership created by the December 6, 1984 letter as the "Consolidated Partnership.”
. An LLC is a corporate entity that provides many of the benefits of both corporations and partnerships. Specifically, an LLC provides limited personal liability to its members but operates in much the same way as a traditional partnership (whose members do not generally enjoy limited liability). See generally Md. Code Ann., Corps. & Ass'ns § 4A-101 ef seq. Each of the relevant LLCs to this case is a Maryland LLC, organized pursuant to Maryland’s Limited Liability Company Act. See id.
. Wolff argues that defendants' failure to include a statement of undisputed material facts with their motion as required by LCvR 7(h) “calls for an outright denial and dismissal of [the] motion.” Pis.' Opp’n at 13. In support of his argument, Wolff cites
Argueta v. District of Columbia,
. While very expansive language will generally indicate a broad arbitration clause,
see, e.g., Prima Paint,
. Wolff also relies on
El. DuPont de Nemours & Co. v. Rhone Poulenc Fiber & Resin Intermediates
for the proposition that “[t]o allow a plaintiff to claim the benefit of a contract and simultaneously avoid its burdens would both disregard equity and contravene the purposes underlying enactment of the Arbitration Act.” Pis.’ Opp'n at 20 (quoting
