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HITORQ LLC v. TCC Veterinary Servs.

Court of Appeals of Utah

August 20, 2020, Filed

No. 20180971-CA

Opinion

POHLMAN, Judge:

HITORQ LLC and Lisa Pasquarello (collectively, Plaintiffs) appeal the district court's order compelling them to arbitrate their claims against Tyler S. Stiens, TCC Veterinary Services Inc., John Artz, and Artz Vetmed Services PLLC (collectively, Defendants). They also appeal the district court's refusal to stay the arbitration proceedings. We affirm.

BACKGROUND

Pasquarello, Artz, and Stiens are all veterinarians who practiced veterinary medicine together in Park City, Utah. Beginning in 2011, they practiced at the Silver Creek Animal Clinic (the Clinic), which was a limited liability company that operated in a building owned by the Silver Creek Animal Clinic Real Estate LLC (the Real Estate Company), another limited liability company. Each veterinarian owns an individual corporate entity, [*2]  each of which, in turn, has an interest in both the Clinic and the Real Estate Company (collectively, the Companies). Specifically, Pasquarello is the sole member of HITORQ LLC (HITORQ), which has a 25% membership interest in the Companies. Artz is the sole member of Artz Vetmed Services PLLC (Vetmed), which also has a 25% membership interest in the Companies. And Stiens is the sole owner of TCC Veterinary Services Inc. (TCC), which has a 50% membership interest in the Companies.

In September 2015, Artz agreed to purchase HITORQ's membership interest in the Companies for a cash payment and the assumption of remaining debt. The closing date for the sale was scheduled for November 14, 2015—not long before Pasquarello's planned move out of state—and Pasquarello intended to continue working at the Clinic until the sale closed. But the sale did not close, and Pasquarello alleged that Artz and Stiens refused to allow her to work at the Clinic after November 13, 2015. It is undisputed that in June 2016, Artz and Stiens voted to expel HITORQ from its membership in the Companies on the basis that Pasquarello had failed to be reasonably productive in the practice of veterinary medicine with the [*3]  Clinic.

In November 2016, Plaintiffs filed suit against Defendants. Notably, Plaintiffs attached the Clinic's operating agreement (the Operating Agreement) to the complaint. The complaint alleged ten causes of action, but we describe and discuss only the three that are relevant to this appeal.

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2020 Utah App. LEXIS 124 *

HITORQ LLC AND LISA PASQUARELLO, Appellants, v. TCC VETERINARY SERVICES INC., TYLER S. STIENS, ARTZ VETMED SERVICES PLLC, AND JOHN ARTZ, Appellees.

Notice: THIS OPINION IS SUBJECT TO REVISION BEFORE PUBLICATION IN THE OFFICIAL REPORTER.

Prior History:  [*1] Third District Court, Silver Summit Department. The Honorable Kara L. Pettit. The Honorable Kent R. Holmberg. No. 160500473.

CORE TERMS

arbitration, Dissolution, Clinic, membership, election, Dictionary, cleaned, underpinnings, dissolve, election-to-purchase, oppressive, valuation, notice

Business & Corporate Compliance, Pretrial Matters, Alternative Dispute Resolution, Judicial Review, Civil Procedure, Appeals, Standards of Review, De Novo Review, Questions of Fact & Law, Arbitration, Federal Arbitration Act, Orders to Compel Arbitration, Validity of ADR Methods, Governments, Legislation, Interpretation, Arbitrability, Contracts Law, Contract Conditions & Provisions, Arbitration Clauses, Arbitration Agreements, Contracts Law, Contract Interpretation, Intent, Courts, Judicial Precedent, Evidence, Burdens of Proof, Allocation, Business & Corporate Law, Limited Liability Companies, Dissolution & Winding Up, Member Duties & Liabilities, Management Duties & Liabilities, Remedies, Damages, Punitive Damages, Costs & Attorney Fees, Attorney Fees & Expenses, Basis of Recovery, Statutory Awards, Judicial Officers, Judges, Discretionary Powers