CanWell, LLC v. High Street Capital Partners, LLC, 031620 RISUP, KM-2019-0948

Docket Nº:C.A. KM-2019-0948, KM-2019-1047
Opinion Judge:LICHT, J.
Party Name:CANWELL, LLC, CANWELL PROCESSING (RI), LLC and CANWELL PROCESSING (ME), LLC, Petitioners, v. HIGH STREET CAPITAL PARTNERS, LLC, d/b/a ACREAGE HOLDINGS, INC., and as the Successor-in-interest to THE WELLNESS AND PAIN MANAGEMENT CONNECTION, LLC, and KEVIN MURPHY JOHN AND JANE DOES 1-20, Respondents. CANWELL, LLC, Petitioner, v. THE WELLNESS AND P...
Attorney:For Plaintiff: Vincent A. Indeglia, Esq. John C. Revens, Jr., Esq. William M. Russo, Esq. Thomas A. Tarro, III, Esq. For Defendant: Preston W. Halperin, Esq. Jeffrey S. Brenner, Esq.
Case Date:March 16, 2020
Court:Superior Court of Rhode Island
 
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CANWELL, LLC, CANWELL PROCESSING (RI), LLC and CANWELL PROCESSING (ME), LLC, Petitioners,

v.

HIGH STREET CAPITAL PARTNERS, LLC, d/b/a ACREAGE HOLDINGS, INC., and as the Successor-in-interest to THE WELLNESS AND PAIN MANAGEMENT CONNECTION, LLC, and KEVIN MURPHY JOHN AND JANE DOES 1-20, Respondents.

CANWELL, LLC, Petitioner,

v.

THE WELLNESS AND PAIN MANAGEMENT CONNECTION, LLC and Its Successor in Interest, HIGH STREET CAPITAL PARTNERS, LLC d/b/a ACREAGE HOLDINGS, INC., NORTHEAST PATIENTS GROUP d/b/a WELLNESS CONNECTION OF MAINE LLC, KEVIN MURPHY, and JOHN DOES 1-20, Respondents.

C.A. Nos. KM-2019-0948, KM-2019-1047

Superior Court of Rhode Island, Kent

March 16, 2020

"The long and winding road, that leads, to your door" The Beatles, 1970

For Plaintiff: Vincent A. Indeglia, Esq. John C. Revens, Jr., Esq. William M. Russo, Esq. Thomas A. Tarro, III, Esq.

For Defendant: Preston W. Halperin, Esq. Jeffrey S. Brenner, Esq.

DECISION

LICHT, J.

I. Introduction

The issue in this dispute is which door. In addition to these two petitions, two arbitrations, which the parties consented to, have been pending since October 2019, a case is pending in the Maine Superior Court, and a declaratory judgment action has been brought in Delaware. The facts of these petitions have been discussed at length in the Court's two prior decisions dated December 16, 2019 and January 29, 2020, and, thus, will not be repeated. As a result of those decisions, an Order and Judgment were entered in each case on March 5, 2020. This Court opened the door to arbitration but Respondents have filed Motions to Stay pending appeal of those judgments.

II. Standard of Review

Rhode Island Supreme Court Rule of Appellate Procedure 8(a) permits a trial court to hear a party's motion for a stay of enforcement pending an appeal of that trial court's decision. A stay pending appeal should not be granted unless the moving party "makes a 'strong showing that (1) it will prevail on the merits of its appeal; (2) it will suffer irreparable harm if the stay is not granted; (3) no substantial harm will come to other interested parties; and (4) a stay will not harm the public interest."' Town of North Kingstown v. International Association of Firefighters, Local 1651, AFL-CIO, 65 A.3d 480, 481 (R.I. 2013) (quoting Narragansett Electric Co. v. Harsch, 367 A.2d 195, 197 (R.I. 1976)). Although all four of the above-referenced factors should be considered, '"[they] are not prerequisites that must be met, but are interrelated considerations that must be balanced together."' Id. (quoting Service Employees International Union Local 1 v. Husted, 698 F.3d 341, 343 (6th Cir. 2012)).

"Whether the movant is likely to succeed on appeal is the 'sine qua non' of the standard governing rulings on motions to stay." Lawrence v. Western Mass. Blasting Corp., No. WC-2003-0600, 2013 WL 5526007, at *3 (R.I. Super. Oct. 01, 2013) (quoting International Association of Firefighters, 65 A.3d at 482); see also Providence Journal Co. v. FBI, 595 F.2d 889, 890 (1st Cir. 1979) (noting that "[a]ppellants are not, of course, entitled to a stay pending appeal without showing that their appeals have potential merit"). As a result, where the movant is unlikely to succeed on the merits, it must make a particularly strong showing on the other factors in order to tip the balance in favor of granting the stay. Id.

III. Motions to Stay

A. Likelihood of Success on the Merits

1. First Petition

Respondents argue that they will prevail on the merits of their appeal in four respects.

a. Hearing under G.L. 1956 § 10-3-5

Respondents argue that they were denied the evidentiary hearing that they were procedurally entitled to on the validity of the amended arbitration provision in the CanWell OAs pursuant to § 10-3-5. Section 10-3-5 states, in pertinent part: "[i]f the making of the arbitration agreement or the failure, neglect, or refusal to perform the arbitration agreement is in issue, the court shall proceed summarily to the trial thereof."

It is well established that the raise-or-waive rule precludes a litigant from raising an issue if it was not first properly raised. Cusick v. Cusick, 210 A.3d 1199, 1203 (R.I. 2019). In the present case, Respondents never filed a motion pursuant to § 10-3-5 for an evidentiary hearing on the discrete issue of validity of the amended arbitration provision in the CanWell OAs prior to the entry of final judgment and, thus, the Court was never presented with a proper and timely mechanism to hold such a hearing. Respondents argue that "the matter leapfrogged from a petition to compel arbitration under § 10-3-4, to a motion to dismiss, to final judgment." Resp't Mem. in Supp. Of its Mot. To Stay, KM-2019-0948 (First Petition). This statement is ironic because Respondents filed the motion to dismiss, they submitted their own form of judgment, which was different from the Petitioners' form, and requested a hearing on the language.

In particular, Respondents contend that the Court could not make High Street Capital Partners, LLC d/b/a Acreage Holdings, Inc. (High Street/Acreage)1 submit to arbitration without such a trial. The Court finds that Respondents failed to preserve this argument on numerous occasions.

First, an Order was entered on October 25, 2019 in each case sending certain matters to arbitration. Respondents consented and never asked for language in that Order to exclude High Street/Acreage. Secondly, Respondents contended during oral argument on March 12, 2020 on their Motions to Stay that they were deprived of the opportunity to file...

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