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Meister v. Stout

Court of Appeals of Colorado, Fourth Division

May 7, 2015

Michael Meister, Plaintiff-Appellant,
v.
S. Brian Stout; Anthony DeLollis; Venti Solutions, LLC, a Colorado limited liability company, Defendants-Appellees

Page 917

El Paso County District Court No. 12CV508. Honorable Maria R. Prudek, Judge.

Stinar, Zendejas, Hansen & Gaithe, LLC, M. James Zendejas, Colorado Springs, Colorado, for Plaintiff-Appellant.

Sparks Wilson Borges Brandt & Johnson, P.C., Gregory V. Pelton, Colorado Springs, Colorado, for Defendant-Appellee S. Brian Stout.

Hogan Lovells US, LLP, John W. Cook, Joseph L. Lambert, Colorado Springs, Colorado, for Defendants-Appellees Anthony DeLollis and Venti Solutions LLC.

Hawthorne and Bernard, JJ., concur.

OPINION

MILLER, JUDGE

Page 918

[¶1] Appellant, Michael Meister, appeals from the district court's ruling compelling arbitration of his claims and from its judgment confirming the arbitration award. We affirm and remand the case for a determination of the appellees' reasonable attorney fees and costs incurred on appeal.

[¶2] As a matter of first impression in the state courts of Colorado, we hold that a signatory to an agreement containing an arbitration clause may be equitably estopped from avoiding arbitration when he sues a nonsignatory on claims that (1) presume the existence of that agreement or (2) allege interconnected and concerted misconduct between the nonsignatory and one or more of the signatories related to that agreement.

I. Background

[¶3] Anthony DeLollis and S. Brian Stout founded an information technology company, Venti Solutions, LLC. A few years later, Meister invested in Venti and became a

Page 919

member of the company by entering into a purchase agreement.

[¶4] The purchase agreement, signed by Venti, Stout, DeLollis, and Meister, granted Meister a twenty percent interest in Venti in exchange for a capital contribution of $500,000. The agreement also incorporated by reference the Venti operating agreement, which was executed by Stout and DeLollis.[1] The parties to the purchase agreement agreed to be bound by all of the terms and provisions of the operating agreement. The operating agreement includes a dispute resolution article. This article provides that arbitration is the sole and exclusive mechanism for resolving all disputes, and it sets forth arbitration and related procedures.

[¶5] In 2012, Meister filed suit against DeLollis, Stout, and Venti. His amended complaint sought dissolution of Venti, recovery of his capital contribution and damages, a declaratory judgment establishing his rights and obligations under the operating agreement, and other relief. DeLollis and Venti moved the district court to compel arbitration under the operating agreement, and the court ordered all of the claims to arbitration. Venti then filed two counterclaims in the arbitration proceeding, one of which was dismissed before the hearing. Following the hearing, the arbitrator dismissed Meister's claims with prejudice and awarded $375,738.70 against him on Venti's breach of contract counterclaim based on his failure to pay the full amount of his capital contribution under the purchase agreement. The district court later confirmed the arbitration award over Meister's objection.

II. Meister's Claims Against Venti Are Subject to Arbitration

[¶6] The district court reasoned that all parties to the purchase agreement (which included Venti) were obligated to arbitrate disputes as a result of that agreement's incorporation of the operating agreement,[2] and it therefore ordered all claims to arbitration and stayed the litigation proceedings before the court. We affirm the district court's ruling, but for a different reason: we conclude ...


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