Georgia Rehabilitation Ctr. Inc. v. Newnan Hospital

The trial court properly determined that it did not have to submit the issue of an LLC's dissolution to arbitration, because the statutory dissolution involved in this case did not arise out of or relate to the terms of the parties' operating agreement.

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Georgia Rehabilitation Center, Inc. “GRC” and Newnan Hospital “Newnan” are co-owners of Coweta Rehabilitation Services, LLC “CRS”, a limited liability company created to provide physical therapy, rehabilitation, and wellness services in Coweta County. When CRS ran into financial trouble, Newnan unilaterally requested that the Superior Court of Coweta County judicially dissolve CRS pursuant to OCGA § 14-11-603. GRC moved to compel arbitration on the issue of CRS’s dissolution. The trial court denied GRC’s motion to compel arbitration and, instead, appointed a receiver to oversee CRS during the pendency of further proceedings. GRC appeals, contending that the trial court erred in denying its motion to compel arbitration and in appointing a receiver. For the reasons set forth below, we affirm. 1. GRC contends that the trial court erred in denying its motion to compel arbitration, arguing that the Operating Agreement for CRS required that the issue of CRS’s dissolution be handled by an arbitrator. The trial court was authorized, however, to determine whether the issue of CRS’s dissolution was to be handled by a court or by an arbitrator, unless Newnan and GRC clearly and unmistakably provided otherwise in the Operating Agreement. AT&T Technologies, Inc. v. Communications Workers of America , 475 U. S. 643 II 106 SC 1415, 89 LE2d 648 1986; Bryan County v. Yates Paving & Grading Co., inc. , 281 Ga. 361 638 SE2d 302 2006.

The Operating Agreement does not provide that an arbitrator must decide issues of arbitrability, but does provide in relevant part that “any 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 the request of any party involved, be submitted to, and settled by, arbitration.” Thus, the question to be resolved by the trial court here was whether the judicial dissolution of CRS was a claim arising out of, in connection with, or relating to CRS’s Operating Agreement.

Georgia Rehabilitation Ctr. Inc. v. Newnan Hospital

The trial court properly determined that it did not have to submit the issue of an LLC's dissolution to arbitration, because the statutory dissolution involved in this case did not arise out of or relate to the terms of the parties' operating agreement.

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