Opinion
Nos. NNH CV05 4011052, NNH CV05 4011053
August 11, 2006
MEMORANDUM OF DECISION ON MOTION TO COMPEL ARBITRATION
These are companion cases in which the plaintiff FPJ Investments LLC, a 49% owner of Ameritx, LLC, is in conflict with the defendant Harinder B.S. Jalli who is the manager of Ameritx, and with the defendant Sonerica, LLC which holds 51% of the aggregate units of Ameritx. The first action is one alleging breach of fiduciary duty and breach of contract and seeking injunctive relief and monetary damages. The second action seeks a writ of mandamus compelling the defendants to permit the plaintiffs to inspect and copy certain corporate records.
The defendants have moved to stay these proceedings and to compel arbitration. They cite an arbitration clause in the written Operating Agreement of Ameritx, LLC, signed by Frank Perrotti, Jr., as manager of and on behalf of FPJ, and by Harmnder B.S. Jalli, as manager of and on behalf of Sonerica, LLC. The arbitration clause states:
¶ 15.1 In the event that any dispute shall arise between the Members as to the interpretation of this Operating Agreement or any dispute that may arise between the Members under this Operating Agreement or any dispute in regard to the management of the Company, such dispute may be submitted to a board of arbitrators. The board of arbitrators shall consist of three (3) persons, one selected by the aggrieved Member, one selected by a Majority Interest (excluding the aggrieved Member), and the third to be selected by the two (2) arbitrators chosen by the Members. The decision of the board of arbitrators or the arbitrator, as the case may be, shall be final and binding upon the Members. The costs of arbitration shall be borne equally by the Members.
The plaintiff opposes arbitration on the grounds that, while this clause permits the parties to elect binding arbitration, it does not compel the parties to participate in binding arbitration. The plaintiff points to the use of the term "such dispute may be submitted to a board of arbitrators" rather than " shall be submitted to a board of arbitrators."
The court finds that the intent of the parties, as evidenced by the wording of the clause in the written Operating Agreement, was to permit, and perhaps even encourage, arbitration, but was not to compel the arbitration of disputes.
In A. Dubreuil Sons, Inc. v. Lisbon, 215 Conn. 604 (1990), the Supreme Court considered the use of the phrase "all claims . . . may be decided by arbitration" and determined that the trial court had committed no error in failing to compel arbitration of the dispute. While the intent of the parties in Dubreuil was even clearer because the word "may" had been substituted in an addendum for the word "shall," it remains true that the word "may" is not normally a word of command, but rather generally imports permissive conduct. Id., 611 And so the court finds its use to be here.
Accordingly the court denies the Motion to Compel Arbitration (# 133 in both files).