Georgia Rehabilitation Center, Inc. v. Newnan Hospital

SEARS, Chief Justice,

dissenting.

The trial court erred in denying Georgia Rehabilitation Center, Inc.’s (“GRC”) motion to compel arbitration. The parties agreed in writing that “[a]ny dispute, controversy or claim arising out of or in connection with, or relating to, this Operating Agreement or any breach or alleged breach hereof shall, upon request of any party involved, be submitted to, and settled by, arbitration.” A dispute arose between GRC and Newnan Hospital regarding the limited liability company (“LLC”) formed by the Articles of Organization and governed by the Operating Agreement. Newnan filed a lawsuit seeking dissolution of the LLC, and GRC formally requested that the matter be submitted to arbitration. Thus, as the Court’s opinion correctly recognizes, the central issue to be decided is whether the dispute is one “arising out of, in connection with, or relating to [the] Operating Agreement.”2

Newnan claims it is not, despite the complaint’s explicit references to “[t]he Operating Agreement.”3 Newnan contends, and the majority agrees, that because Newnan invoked OCGA § 14-11-603 (a) as a basis for dissolution, its dispute with GRC does not arise out of the Operating Agreement, is not connected with it, and does not relate to it. However, OCGA§ 14-11-603 (a) authorizes dissolution of an LLC only where “it is not reasonably practicable to carry on the business in conformity with the articles of organization or a written operating agreement.” (Emphasis supplied.) In addition, Newnan’s complaint expressly requested that the LLC be dissolved “[p]ursuant to the provisions of O.C.G.A. § 14-11-603 ... ore terms that are in accordance with . . . the provisions of the Operating Agreement between the parties.”4

I do not see how a decision maker, be he a judge or an arbitrator, can decide whether it is “reasonably practicable” to carry on the business “in conformity with” the existing Articles of Organization and Operating Agreement without analyzing those two documents in detail and determining the legal effect of many of their provisions in *338light of current circumstances.5 Moreover, no decision maker can award Newnan the relief it explicitly requested in the complaint without following much the same process. Consequently, Newnan’s complaint for dissolution presents a “dispute, controversy or claim” “relating to” or “connect [ed] with” the Operating Agreement.

Decided March 17, 2008. Parks, Chesin & Walbert, A. Lee Parks, Larry H. Chesin, for appellant. Tisinger Vance, J. Thomas Vance, Charles D. Mecklin, Jr., for appellee.

Had the parties agreed to arbitrate only disputes “arising out of . . . this Operating Agreement or any breach or alleged breach hereof,” I might agree with the majority’s analysis and holding. But Newnan signed a much broader agreement. Newnan agreed to arbitrate not merely claims arising out of a breach or alleged breach of the Operating Agreement, but “[a]ny dispute, controversy or claim” “relating to” or “in connection with” the Operating Agreement.6 In my view, this language is broad enough to include the present claim for dissolution of the LLC, and Newnan’s recitation of a statutory basis for dissolution does not render the matter any less related to, or connected with, the Operating Agreement.7 Accordingly, I dissent.

I am authorized to state that Justice Carley joins in this dissent.

Maj. opinion, supra at 335.

Complaint ¶¶ 22-23.

Complaint ¶ 23 (emphasis supplied).

OCGA§ 14-11-603 (a).

Compare Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388U.S. 395, 398 (87 SC 1801, 18 LE2d 1270) (1967) (noting broad scope of arbitration clause in consulting agreement requiring parties to arbitrate “[a]ny controversy or claim arising out of or relating to this Agreement, or the breach thereof”); Moses H. Cone Mem. Hosp. u. Mercury Constr. Corp., 460 U. S. 1, 5 (103 SC 927, 74 LE2d 765) (1983) (same for arbitration clause in construction contract).

See Southland Corp. v. Keating, 465 U. S. 1, 15, n. 7 (104 SC 852, 79 LE2d 1) (1984) (holding arbitration clause in franchise agreement applicable to “any controversy or claim arising out of or relating to this Agreement or the breach hereof” required arbitration of statutory claims for violation of disclosure requirements imposed by California Franchise Investment Law).