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Where a plaintiff has moved for summary disposition on a defendant’s counterclaims, the motion should be allowed in part and denied in part, as only Count IV’s claim for monetary damages is subject to an arbitration provision in the parties’ buy-sell agreement.
“The present cause of action arises from a dispute by the shareholders of AVI Imagined, Inc. The First Amended Complaint alleges several claims stemming from the Defendant/CounterPlaintiff Andrea Rokicsak’s (‘Rokicsak’) alleged mismanagement of AVI. The relationship of the Parties’ shareholdings is governed by an Amended and Restated Buy-Sell Agreement.
“Before the Court is Plaintiff/Counter-Defendant Lawrence Walters’s Motion for Partial Summary Disposition of the Defendant/Counter-Plaintiff Andrea Rokicsak’s Amended Counterclaim pursuant to MCR 2.116(C)(7) and MCR 2.116(C)(8).
“At stake is whether summary disposition of the counts for Judicial Relief Pursuant to the Michigan Business Corporation Act (Count I), Shareholder Oppression (Count II), Breach of Fiduciary Duty (Count III), Breach of Bylaws (Count V), Demand for Accounting (Count IX), and Appointment of a Receiver (Count X) in the counterclaim is warranted purusant to MCR 2.116(C)(7) because they are subject to the arbitration provision set forth in the Parties’ Amended Buy-Sell Agreement? Because Counts I-III, V, IX and X do not fall within the scope of the arbitration provision, the answer is ‘no.’
“Also at stake is whether summary disposition of the count for Statutory Conversion in the counterclaim (Count VII) is warranted because Rokicsak fails to plead the conversion with the requisite specificity, and as a result the claim fails as a matter of law? Because Rokicsak does not describe the alleged conversion or the money/property allegedly converted with any specificity, the answer is ‘yes.’
“Additionally at stake is whether summary disposition of the count for Civil Conspiracy in the counterclaim (Count VIII) is warranted because the other counterclaims set forth by Rokicsak are subject to arbitration and dismissal, and without a viable underlying tort claim, the civil conspiracy claim fails as a matter of law? Because the underlying tort claims for breach of fiduciary duty and defamation/slander are not subject to arbitration, the counterclaims remain viable, and the answer is ‘no.’
“Finally at stake is whether summary disposition of the count of Appointment of Receiver in the counterclaim (Count X) is warranted because the appointment of a receiver cannot be maintained as a standalone cause of action? Because Lawrence Walters (‘Walters’) cursorily addresses this argument and cites no authority for its position, the issue is deemed abandoned, and the answer is ‘no.’
“The Articles of the Amended Buy-Sell Agreement expressly address (1) ownership of the shares, (2) restrictions on transfers, (3) sales to third parties, (4) death of a shareholder, (5) termination of employment, (6) disability of a shareholder, (7) transfers by operation of law, (8) procedural requirements for exercise of a buy-out, (9) price and terms, (10) repayment of loans, (11) transfer and liquidation, and (12) non-compete/non-disclosure. Accordingly, the scope of the arbitration clause set forth in Section 11.1 of the Agreement is consequently limited to these issues.
“Count IV is titled ‘Breach of Amended and Restated Buy-Sell Agreement’ and ostensibly falls with ambit of the arbitration provision. It seeks both monetary damages and specific performance of the Amended and Restated Buy-Sell Agreement. The arbitration provision specifically carves out the request for specific performance. As such, only Count IV’s claim for monetary damages is appropriately subject to the arbitration clause.
“In Count VII, Rokicsak sets forth a claim for statutory conversion by Walters against her personally. Consequently, the scope of this claim is limited to the alleged conversion by Walters (not AVI) of money/property personally belonging to Rokicsak (not AVI). These allegations, accepted as true and construed in a light most favorable to Rokicsak are insufficient to state a claim for statutory conversion. Upon review of the allegations under Count VII of the First Amended Counterclaim, Rokicsak (i) does not adequately specify what property or money that she had an interest in that was subject to conversion and (ii) does not adequately describe the alleged conversion of her property or money.
“Rokicsak’s conspiracy claim is founded on the premise that all underlying tort claims would be subject to arbitration and dismissed, but the Court has not done so. Specifically, the tort claims for Breach of Fiduciary Duty (Count III) and Defamation/Slander (Count VI) are not subject to arbitration and therefore remain viable. Rokicsak’s claim for civil conspiracy is based on the two underlying tort claims for defamation and breach of fiduciary duty pending before this Court and not subject to arbitration. As such, the Motion fails on these counts.
“Based on the foregoing Opinion, the Plaintiff/Counter-Defendant’s Motion for Summary Disposition is GRANTED as to Count VII (Statutory Conversion) and otherwise DENIED. As previously ordered, the claim for monetary damages in Count IV (Breach of the Amended Buy-Sell Agreement) will remain subject to arbitration.”
Walters v. Rokicsak; MiLW No. 10-110013, 29 pages; Oakland Circuit Court; Warren, J.
