CHARLESTON – The West Virginia Supreme Court of Appeals has affirmed a circuit court’s decision confirming the arbitration award in a lawsuit filed nearly six years ago.
The petitioner, Ryan Cunningham, appeals from the November 2, 2011, order of Kanawha Circuit Court confirming an arbitration award and entering judgment on that award.
Seeking to obtain a vacatur of the arbitration award, the petitioner argues that the arbitrator manifestly disregarded the law of West Virginia; the arbitrator considered hearsay evidence; and the arbitrator refused to reopen the proceedings for rebuttal evidence.
In response to these assignments of error, the bankruptcy trustee for respondent Mountain Country Partners LLC argues that the petitioner has failed to identify any valid basis for setting aside the arbitration award. We concur and accordingly affirm the lower court’s ruling in this matter.
“Our decision is compelled both by the constricted scope of review for an arbitral award and the petitioner’s failure to raise even a colorable basis for vacating the award,” the March 15 opinion states.
Justice Allen Loughry authored the majority opinion.
On Oct. 10, 2006, Cunningham, Ronald F. LeGrand and four additional individuals signed the operating agreement for Mountain Country and, while Cunningham managed the day-to-day operations of Mountain Country for a salary, LeGrand was the actual manager due to his controlling voting percentage.
On July 14, 2010, Cunningham instituted a civil action in Kanawha Circuit Court because he was dissatisfied with the venture’s lack of profit and fearful that LeGrand was wrongfully disposing of assets and/or committing fraud.
Before the matter proceeded to arbitration pursuant to the mandatory arbitration clause contained in the operating agreement, a ruling was obtained with regard to Cunningham’s attempt to gain access to company records and Mountain Country was directed to give Cunningham reasonable access to all books and records. The underlying case was stayed pending arbitration.
During the arbitration proceeding, a dispute arose when Cunningham sought to discover the identity of Mountain Country’s investors and the arbitrator denied him access to the investor list.
A three-day arbitration hearing commenced April 18, 2011, and Cunningham did not offer any testimony or defense in response to counterclaims advanced by LeGrand and Mountain Country. Only when an award was issued did he seek to reopen the proceedings for the purpose of submitting rebuttal evidence and this request was denied.
When the respondents sought to confirm the arbitration award, the petition filed a motion to vacate and the circuit court denied that motion and the appeal followed.
“The petitioner specifically linked his need to reopen the arbitration proceeding to the arbitrator’s reliance on hearsay evidence.,” the opinion states. “The post-award request to introduce rebuttal evidence is expressly tied to his belief that the arbitrator would ‘disregard rampant hearsay testimony.’”
Given its decision that the arbitrator’s consideration of hearsay evidence was not improper, the circuit court found it unnecessary to address the petitioner’s related request to reopen the hearing.
“Solely to address the alleged error, however, the circuit court proceeded to rule that the arbitrator had the necessary discretion to refuse the petitioner’s request to reopen the proceedings,” the opinion states. “The circuit court concluded that the petitioner ‘was not deprived of the ability to present evidence...’ And ‘[t]o the extent Cunningham now points to his alleged illness at the final day of the hearing as a potential issue preventing further testimony, he could have, but did not, seek an extension or continuance before the hearing was closed.’”
In seeking to vacate the arbitral award by asserting such a patently procedural complaint as the need to reopen the proceeding to respond to hearsay evidence, the petitioner has relied upon improper grounds for relief.
“Based on the foregoing, the decision of the Circuit Court of Kanawha County to confirm the arbitration award and enter judgment on the award is affirmed,” the opinion states.
Cunningham is represented by Richard Neely of Neely & Callaghan.
LeGrand and Mountain Country Partners are represented by William F. Dobbs Jr., William C. Ballard of Elizabeth A. Amandus of Jackson Kelly PLLC.
W.Va. Supreme Court of Appeals case number: 11-1613