Rice v. Downs (2016) 247 Cal.App.4th 1213

An LLC member brought suit alleging that another member (an attorney) had breached his fiduciary duty and committed legal malpractice.  The trial court ordered those claims to arbitration pursuant to an arbitration provision in the LLC’s operating agreement, which required arbitration of all claims “arising out of” the agreement.  After arbitration, the plaintiff appealed, arguing that his claims were not arbitrable under the terms of the arbitration provision.  GMSR represented that plaintiff on appeal.  Although California law strongly favors finding claims within the scope of an arbitration agreement, the Court of Appeal adopted GMSR’s narrow interpretation of the intended scope of arbitrable claims and reversed the order compelling arbitration, which in large part was based on a comparison between the language of the arbitration provision and a substantially broader jurisdictional provision.

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