Court of Appeals of Ohio, Eighth District, Cuyahoga
JOHN T. AVERY, Plaintiff-Appellant,
ACADEMY INVESTMENTS, L.L.C., ET AL. Defendants-Appellees.
Appeal from the Cuyahoga County Court of Common Pleas Case
Singerman, Mills, Desberg & Kauntz Co., L.P.A., and
Christopher O'Connell, for appellant
Hochman & Potter L.L.C., Thomas A. Barni and Jason A.
Whitacre, for appellees.
JOURNAL ENTRY AND OPINION
A. GALLAGHER, JUDGE
1} Plaintiff-appellant John Avery filed a complaint
seeking judicial dissolution of two companies of which he
claims to be a member, defendants-appellees Academy
Investments, L.L.C. ("AI") and the Academy of
Fetish Arts, L.L.C. ("AFA"). Avery also sought
an accounting for both companies. The appellees moved to
dismiss, and alternatively, to stay the action pending
arbitration and mediation as required by the arbitration
clauses in both companies' operating agreements. The
appellees argued that Avery's claims were subject to
arbitration but also disputed Avery's contention that he
was a member of the companies and attached evidence
indicating that Avery's membership in both was terminated
prior to him filing the complaint. The trial court granted
the motion, staying the entire case "pending mandatory,
binding arbitration of Avery's claims in accordance with
the provisions of the AI and AFA operating agreements."
For the reasons that follow, we affirm.
2} On appeal, Avery asserts one assignment of error:
The trial court erred by staying Avery's
judicial-dissolution action pending binding arbitration.
3} As noted, Avery claims that he is a member of
both AI and AFA despite evidence indicating that he is
Both AI and AFA are Ohio limited liability companies and
governed by operating agreements. The AI operating agreement
provides that "[t]he terms and conditions of this
Agreement will govern the Members within the limited
liability company," and that "[t]his Agreement
contains the entire agreement between the parties."
Similarly, the AFA operating agreement provides that
"[t]he terms and conditions of this Agreement will
govern the Keystone Members within the limited liability
company, " and that "[t]his Agreement contains
the entire agreement between the parties."
4} Each operating agreement addresses the issue of
membership in the companies. For example, both agreements
list the company members, delineate member rights and
responsibilities, detail the nature of a member's
interest in the company as well as outline to what a member
is entitled by virtue of membership. This includes the
specific right of access to the company's financial
records. The agreements also contain mechanisms for admitting
new members and removing existing members.
5} The AI and AFA operating agreements contain
arbitration clauses. Though there is some difference between
the two clauses, for our purposes they are functionally
equivalent. The AI arbitration clause applies to any
dispute that "arises out of or in connection with [the
AI operating agreement] * * *." The AFA arbitration
clause applies to any dispute that "arises out of, in
connection with or is related to [the AFA operating
agreement] * * *."
6} Avery acknowledges that he is bound by, and
subject to, both the AI and AFA operating agreements.
Further, he recognizes that both agreements contain
arbitration clauses. His argument is instead that judicial
dissolution does not "arise" out of the agreements
and is thus outside of the scope of the arbitration clauses.