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Wyatt Siegal v. Steve A. Simons, Jr.
Date: 12-15-2022
Case Number: 1 CA-CV 22-0170
Judge: Jennifer B. Campbell
Court: Court of Appeals of Arizona on appeal from the Superior Court, Maricopa County
Plaintiff's Attorney:
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Defendant's Attorney: Stephen Brower
Description:
Phoenix, Arizona civil litigation lawyers represented Plaintiff, who sued Defendant on a breach of contract theory.
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"¶2 Siegal, Simons, and non-party Shane Freitas were members of Paramount Recovery Services ("PRS"), a limited liability company. In 2017, the three members entered into the Operating Agreement to "provide for the governance of [PRS] and the conduct of its business and to specify their relative rights and obligations in relation thereto." This agreement included an arbitration clause for all disputes between members and managers of the LLC.
         ¶3 In May 2020, Simons expressed interest in buying Siegal's 80% membership interest in PRS. Siegal contends the parties then entered into a Transfer Agreement, in which Siegal would transfer his interest to Simons in exchange for $293,000. Under the Transfer Agreement, when the sale closed, Siegal would "have no further rights as a Member in the Company" and would resign from PRS. According to Siegal, Simons executed and approved the Transfer Agreement.
         ¶4 Simons claims he never signed the Transfer Agreement, but made payments to Siegal totaling $187,833.24, in accordance with the terms of the Transfer Agreement in May and June 2020. Simons also filed "Articles of Amendment to Articles of Organization for PRS" with the Arizona Corporation Commission, "removing Wyatt Siegal as a member" in July 2020. Simons then stopped making payments.
2
         ¶5 In July 2021, Siegal filed a complaint alleging breach of contract and unjust enrichment.[1] Simons moved to dismiss the complaint and compel arbitration, arguing that this dispute fell under the arbitration clause in the Operating Agreement. At oral argument in the trial court, Simons also argued that Section 8.1 of the Operating Agreement required a member to provide formal notice of dissociation and wait 180 days-until the notice requirement had been met, a member was still bound by the Operating Agreement, including its mandatory arbitration provision.
         ¶6 Siegal argued that his claims did not arise out of the Operating Agreement but out of the Transfer Agreement since all issues related to the transfer of his interest in PRS to Simons. Siegal asserted the Transfer Agreement did not have an arbitration clause and instead specified it should "be construed according to the laws of the State of Arizona."
         ¶7 After oral argument, the superior court denied Simons' motion to dismiss and compel arbitration. The court found that the dispute arose from the Transfer Agreement, not the Operating Agreement. The superior court found Siegal was no longer a member or manager of PRS after the execution of the Transfer Agreement and was no longer bound by the arbitration requirement set out in the Operating Agreement. The court also found that the notice requirements in Section 8.1 of the Operating Agreement did not apply because it concerned voluntary dissociation from the LLC and not a transfer of membership interests.
         ¶8 Simons timely appealed the superior court's decision denying his motion to dismiss and compel arbitration."
Outcome:
Affirmed.
Plaintiff's Experts:
Defendant's Experts:
Comments:
About This Case
What was the outcome of Wyatt Siegal v. Steve A. Simons, Jr.?
The outcome was: Affirmed.
Which court heard Wyatt Siegal v. Steve A. Simons, Jr.?
This case was heard in Court of Appeals of Arizona on appeal from the Superior Court, Maricopa County, aZ. The presiding judge was Jennifer B. Campbell.
Who were the attorneys in Wyatt Siegal v. Steve A. Simons, Jr.?
Plaintiff's attorney: Click Here to Watch How To Find A Lawyer by Kent Morlan
Click Here For The Best Phoenix Civil Litigaiton Lawyer Directory
If no lawyer is listed, call 918-582-6422 and MoreLaw will help you find a lawyer.. Defendant's attorney: Stephen Brower.
When was Wyatt Siegal v. Steve A. Simons, Jr. decided?
This case was decided on December 15, 2022.
Defendant's Attorney: Stephen Brower
"¶2 Siegal, Simons, and non-party Shane Freitas were members of Paramount Recovery Services ("PRS"), a limited liability company. In 2017, the three members entered into the Operating Agreement to "provide for the governance of [PRS] and the conduct of its business and to specify their relative rights and obligations in relation thereto." This agreement included an arbitration clause for all disputes between members and managers of the LLC.
         ¶3 In May 2020, Simons expressed interest in buying Siegal's 80% membership interest in PRS. Siegal contends the parties then entered into a Transfer Agreement, in which Siegal would transfer his interest to Simons in exchange for $293,000. Under the Transfer Agreement, when the sale closed, Siegal would "have no further rights as a Member in the Company" and would resign from PRS. According to Siegal, Simons executed and approved the Transfer Agreement.
         ¶4 Simons claims he never signed the Transfer Agreement, but made payments to Siegal totaling $187,833.24, in accordance with the terms of the Transfer Agreement in May and June 2020. Simons also filed "Articles of Amendment to Articles of Organization for PRS" with the Arizona Corporation Commission, "removing Wyatt Siegal as a member" in July 2020. Simons then stopped making payments.
2
         ¶5 In July 2021, Siegal filed a complaint alleging breach of contract and unjust enrichment.[1] Simons moved to dismiss the complaint and compel arbitration, arguing that this dispute fell under the arbitration clause in the Operating Agreement. At oral argument in the trial court, Simons also argued that Section 8.1 of the Operating Agreement required a member to provide formal notice of dissociation and wait 180 days-until the notice requirement had been met, a member was still bound by the Operating Agreement, including its mandatory arbitration provision.
         ¶6 Siegal argued that his claims did not arise out of the Operating Agreement but out of the Transfer Agreement since all issues related to the transfer of his interest in PRS to Simons. Siegal asserted the Transfer Agreement did not have an arbitration clause and instead specified it should "be construed according to the laws of the State of Arizona."
         ¶7 After oral argument, the superior court denied Simons' motion to dismiss and compel arbitration. The court found that the dispute arose from the Transfer Agreement, not the Operating Agreement. The superior court found Siegal was no longer a member or manager of PRS after the execution of the Transfer Agreement and was no longer bound by the arbitration requirement set out in the Operating Agreement. The court also found that the notice requirements in Section 8.1 of the Operating Agreement did not apply because it concerned voluntary dissociation from the LLC and not a transfer of membership interests.
         ¶8 Simons timely appealed the superior court's decision denying his motion to dismiss and compel arbitration."
About This Case
What was the outcome of Wyatt Siegal v. Steve A. Simons, Jr.?
The outcome was: Affirmed.
Which court heard Wyatt Siegal v. Steve A. Simons, Jr.?
This case was heard in Court of Appeals of Arizona on appeal from the Superior Court, Maricopa County, aZ. The presiding judge was Jennifer B. Campbell.
Who were the attorneys in Wyatt Siegal v. Steve A. Simons, Jr.?
Plaintiff's attorney: Click Here to Watch How To Find A Lawyer by Kent Morlan Click Here For The Best Phoenix Civil Litigaiton Lawyer Directory If no lawyer is listed, call 918-582-6422 and MoreLaw will help you find a lawyer.. Defendant's attorney: Stephen Brower.
When was Wyatt Siegal v. Steve A. Simons, Jr. decided?
This case was decided on December 15, 2022.