Elyachar v. Big Bob's Flooring Outlet of Am., Inc., WD 84118

CourtCourt of Appeal of Missouri (US)
Writing for the CourtEDWARD R. ARDINI, JR., JUDGE
Citation633 S.W.3d 518
Docket NumberWD 84118
Decision Date21 September 2021
Parties Joseph ELYACHAR and Michael Elyachar, Respondents, v. BIG BOB'S FLOORING OUTLET OF AMERICA, INC., and Floors & More, LLC and Vincent Virga, Appellants.

633 S.W.3d 518

Joseph ELYACHAR and Michael Elyachar, Respondents,
v.
BIG BOB'S FLOORING OUTLET OF AMERICA, INC., and Floors & More, LLC and Vincent Virga, Appellants.

WD 84118

Missouri Court of Appeals, Western District.

Opinion filed: September 21, 2021


John M. Duggan, for Respondents.

Cameron Grant, for Appellants.

Division Three: Edward R. Ardini, Jr., Presiding Judge, Mark D. Pfeiffer, Judge and W. Douglas Thomson, Judge

EDWARD R. ARDINI, JR., JUDGE

Joseph Elyachar and Michael Elyachar ("the Elyachars") filed suit in the Circuit Court of Jackson County, Missouri, ("trial court") against Big Bob's Flooring Outlet of America, Inc., Floors & More, LLC, and Vincent Virga (collectively, "Defendants"), alleging breach of a stockholders’ agreement, breach of the covenant of good faith and fair dealing, fraudulent misrepresentation, breach of fiduciary duty, and seeking an accounting, judicial dissolution of Big Bob's Flooring Outlet of America, Inc. ("BBOA"), and the inspection of BBOA's corporate books ("Elyachars’ Claims"). Defendants responded by filing a Petition to Compel Arbitration of the Elyachars’ Claims in the United States District Court for the District of Massachusetts. Four days later, Defendants filed with the trial court a motion to stay the Jackson County, Missouri, proceedings "pending the outcome of [the] Petition to [C]ompel [A]rbitration pending in [Massachusetts] [and] (any ensuing arbitration)."1 Defendants appeal from the trial court's order denying its motion to stay. We dismiss for lack of appellate jurisdiction.

Factual and Procedural Background

David Elyachar owned BBOA, a Missouri corporation. In 2015, he sold seventy percent of his interest in the company to Floors & More, LLC, a Massachusetts limited liability company owned by Vincent Virga. The Elyachars, sons of David Elyachar,

633 S.W.3d 520

purchased the remaining thirty-percent interest in BBOA. As part of the purchase agreement with the Elyachars, they and the stockholders of BBOA entered into a stockholder's agreement ("Stockholder's Agreement").

The Stockholder's Agreement sets forth the relationship between the parties, including shareholder rights and responsibilities, when capital contributions and distributions of corporate profits would be made, management structure, and franchise purchase rules. The Agreement also contains dispute resolution provisions, including an arbitration clause. The arbitration clause states, in relevant part, "[t]he parties agree that any dispute arising under or related to this agreement shall be resolved by arbitration by the American Arbitration Association ("AAA") at its offices in Boston, Massachusetts under its commercial arbitration rules."

In May 2020, the Elyachars filed a petition in the trial court alleging that Defendants breached the Stockholder's Agreement by failing to make distributions to the Elyachars and not properly franchising BBOA, violated the covenant of good faith and fair dealing by not abiding by the Stockholder's Agreement, made fraudulent misrepresentations in negotiating the Agreement, and breached their fiduciary duty to the Elyachars. The petition also sought an accounting to determine whether the Elyachars were entitled to distributions under the Stockholder's Agreement, judicial dissolution of BBOA based on alleged acts and omissions that have "oppressed fiduciary duties" owed to the Elyachars, and a writ of mandamus to allow the Elyachars to inspect BBOA's corporate records.

Following the initiation of the Jackson County, Missouri, suit, Defendants filed a separate action in the United States District Court for the District of Massachusetts seeking to compel arbitration of the Elyachars’ Claims pending in the trial court. Defendants thereafter requested the trial court stay the Jackson County proceedings pending the outcome of the Massachusetts litigation. The trial court denied Defendants’ motion to stay. Defendants appeal from that denial.

Discussion

Defendants raise three points on appeal, all alleging that the trial court erred in denying its motion to stay. In Point I, Defendants claim that "the trial court was obligated to stay the proceedings and delegate issues of arbitrability to the arbitrator, in that the parties’ arbitration provision incorporated the AAA's rules, which provide that issues of arbitrability are within the jurisdiction of the arbitrator, requiring the action to be stayed and issues of arbitrability referred to the arbitrator." In Point II, Defendants assert that all of the claims raised by the Elyachars must be resolved by arbitration. In Point III, Defendants allege that, "even if a dissolution claim were not subject to arbitration, the remaining claims were and should have been stayed pending arbitration."

We note that all three of Defendants’ points on appeal request that this Court address issues concerning the arbitrability of the Elyachars’ Claims under the arbitration clause in the Stockholder's Agreement. In embarking on this approach, Defendants ignore that they did not ask the trial court to compel arbitration or otherwise determine the arbitrability of the claims asserted by the Elyachars in the Jackson County case. Instead, Defendants narrowly requested the trial court stay the Jackson County proceedings while the arbitrability issue was litigated elsewhere.

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2 practice notes
  • Big Bob's Flooring Outlet of Am., Inc. v. Elyachar, CIVIL ACTION NO. 20-11379-TSH
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • September 30, 2021
    ...clause contained therein. Appeal denied on jurisdictional grounds, see Elyachar v. Big Bob's Flooring Outlet of America, Inc. , WD 84118, 633 S.W.3d 518, 2021 Mo.App. Lexis 865 (Ct. App. MO. West. Distr. Div. III Sep. 21, 2021).4 Also on July 24, 2020, the BBOA Litigants filed a motion in t......
  • Bottorff-Arey v. Truman State Univ., WD 84006
    • United States
    • Court of Appeal of Missouri (US)
    • September 21, 2021
    ...and Count VIII referred to the school's "Clery office." Throughout Count VIII, Appellants referred to the duty to report that Gilchrist, 633 S.W.3d 518 as one of the Campus Security Authorities, owed to students. "Campus Security Authority" is a term used in the Clery Act and is defined in ......
2 cases
  • Big Bob's Flooring Outlet of Am., Inc. v. Elyachar, CIVIL ACTION NO. 20-11379-TSH
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • September 30, 2021
    ...clause contained therein. Appeal denied on jurisdictional grounds, see Elyachar v. Big Bob's Flooring Outlet of America, Inc. , WD 84118, 633 S.W.3d 518, 2021 Mo.App. Lexis 865 (Ct. App. MO. West. Distr. Div. III Sep. 21, 2021).4 Also on July 24, 2020, the BBOA Litigants filed a motion in t......
  • Bottorff-Arey v. Truman State Univ., WD 84006
    • United States
    • Court of Appeal of Missouri (US)
    • September 21, 2021
    ...and Count VIII referred to the school's "Clery office." Throughout Count VIII, Appellants referred to the duty to report that Gilchrist, 633 S.W.3d 518 as one of the Campus Security Authorities, owed to students. "Campus Security Authority" is a term used in the Clery Act and is defined in ......

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