Title: Altobelli v. Hartmann (Opinion on Application)
Citation: N/A
Docket Number: 150656
State: Michigan
Issuer: Michigan Supreme Court
Date: June 13, 2016

ALTOBELLI v HARTMANN 
 
 
Docket No. 150656.  Argued on application for leave to appeal March 9, 2016.  Decided 
June 13, 2016. 
 
 
Dean Altobelli filed a complaint in the Ingham Circuit Court against seven individual 
principals of the law firm of Miller, Canfield, Paddock and Stone, P.L.C. (the Firm)—five 
managing directors, the Firm’s CEO, and the head of the Firm’s litigation group.  Altobelli did 
not name the Firm as a defendant.  Altobelli himself was a senior principal of the Firm at the 
time the events from which this lawsuit arose took place.  All principals of the Firm were 
required to sign an Operating Agreement that contained information concerning principals’ 
rights and obligations and the administration of the Firm’s business.  The Operating Agreement 
also contained an arbitration clause that mandated arbitration of “any dispute . . . between the 
Firm . . . and any current or former Principal[.]”  In 2010, Altobelli informed two of the 
defendants—the Firm’s CEO, and the head of the Firm’s litigation group—that he wished to take 
a leave of absence from the Firm so that he could pursue an opportunity to join the coaching staff 
of the University of Alabama football team.  Altobelli suggested that the Firm allow him to 
maintain his ownership interest in the Firm and to return to the Firm as a senior principal any 
time before June 1, 2011.  Although Altobelli claimed he was initially promised he could take 
the job in Alabama and still receive certain allocated funds from his clients, defendants claimed 
that Altobelli knew that the individual making that alleged promise had no authority to make a 
formal commitment to Altobelli.  Believing that Altobelli had accepted the position at the 
University of Alabama, the CEO and the managing directors concluded that Altobelli had 
voluntarily withdrawn from the Firm.  Altobelli argued that he did not voluntarily withdraw, but 
that he was improperly terminated.  Altobelli’s attempt to resolve the matter through the direct 
settlement and mediation process, as outlined in the arbitration clause of the Operating 
Agreement, was unsuccessful.  In November 2011, Altobelli filed a demand for arbitration as 
provided for in the arbitration clause.  Despite having made the demand for arbitration, Altobelli 
filed the instant lawsuit alleging that the seven individuals named as defendants were responsible 
for engaging in tortious conduct with regard to Altobelli’s request for a leave of absence and 
retention of his equity ownership in the Firm.  Defendants filed a motion for summary 
disposition and a motion to compel arbitration as required by the arbitration clause.  Altobelli 
filed a motion for partial summary disposition.  The circuit court, Paula J. Manderfield, J., denied 
defendants’ motions and granted Altobelli’s motion for partial summary disposition, finding as a 
matter of law that Altobelli did not voluntarily withdraw from the Firm.  Rather, the circuit court 
concluded that defendants had improperly terminated Altobelli’s ownership interest without 
 
Michigan Supreme Court 
Lansing, Michigan 
Syllabus 
 
Chief Justice: 
Robert P. Young, Jr. 
 
Justices: 
Stephen J. Markman 
Brian K. Zahra 
Bridget M. McCormack 
David F. Viviano 
Richard H. Bernstein 
Joan L. Larsen 
This syllabus constitutes no part of the opinion of the Court but has been  
prepared by the Reporter of Decisions for the convenience of the reader. 
Reporter of Decisions: 
Corbin R. Davis 
authority.  Defendants appealed in the Court of Appeals.  The Court of Appeals, BORELLO, P.J., 
and SERVITTO and BECKERING, JJ., affirmed the circuit court’s denial of defendants’ motion to 
compel arbitration and reversed the circuit court’s order granting partial summary disposition to 
Altobelli.  307 Mich App 612 (2014).  The Court of Appeals determined that the central question 
was whether Altobelli could sue the Firm’s managing directors, CEO, and head of the litigation 
group in their individual capacities or whether the arbitration clause required arbitration of the 
dispute.  The Court of Appeals decided that the arbitration clause only required the arbitration of 
disputes between the Firm and a current or former principal, not disputes between a former 
principal and individually named defendants.  The Court of Appeals concluded that there existed 
a question of fact about whether Altobelli voluntarily withdrew from the Firm.  Defendants 
appealed, and the Supreme Court ordered and heard oral argument on whether to grant the 
application or take other action.  498 Mich 912 (2015). 
 
 
In a unanimous opinion by Justice BERNSTEIN, the Supreme Court held: 
 
 
The Operating Agreement’s mandatory arbitration clause is not limited to disputes 
between the Firm and current or former principals of the Firm.  The clause also applies to a 
dispute between a former principal and individually named principals of the Firm acting as 
agents of the Firm.  Because the Operating Agreement’s arbitration clause applies to this case, 
the lower courts erred by reaching the substantive content of Altobelli’s motion for partial 
summary disposition.  The arbitrators chosen according to the procedure outlined in the 
arbitration clause are responsible for resolving the issues raised in Altobelli’s motion.  
 
 
1.  A court reviewing the disposition of a party’s motion to compel arbitration must avoid 
analyzing the substantive merits of the dispute; if the dispute is arbitrable, the merits are to be 
analyzed by the arbitrator(s).  In this case, the lower courts should not have reached the issues 
raised in Altobelli’s motion for partial summary disposition because the arbitration clause 
mandated binding arbitration for disputes arising between a current or former principal of the 
Firm and the Firm, which includes individual principals of the Firm acting as agents of the Firm. 
 
 
2.  In interpreting an arbitration clause, the agency principles that apply to corporations 
also apply to professional limited liability companies.  The operation of a professional limited 
liability company depends on the actions of its employees who have been given the authority to 
act as the company’s agents.  The actions of these employees, when the employees are operating 
on behalf of the company, are the acts of the company.  Because a company cannot act on its 
own, an arbitration clause that includes a company as a party to arbitration must also include 
those employees that act as agents of the company. 
 
 
3.  An arbitration clause intended to cover any dispute between a current or former 
principal and a company is broad in scope but applies only when the subject matter of the dispute 
involves actions taken by a principal acting on behalf of the company.  In this case, Altobelli 
alleges numerous occasions on which one or more of the defendants deprived Altobelli of his 
rights under the Operating Agreement.  All of Altobelli’s allegations reflect decisions made by 
defendants in their capacities as the Firm’s agents, as authorized by the Operating Agreement 
and agency principles. 
 
 
Reversed in part and vacated in part; application for leave to appeal as cross-appellant 
denied as moot.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
©2016 State of Michigan 
FILED  June 13, 2016 
 
 
S T A T E  O F  M I C H I G A N 
 
SUPREME COURT 
 
 
DEAN ALTOBELLI, 
 
 
Plaintiff-Appellee/           
Cross-Appellant, 
 
 
v 
No. 150656 
 
MICHAEL W. HARTMANN, MICHAEL 
A. COAKLEY, M. ANNA MAIURI, 
JOSEPH M. FAZIO, DOUGLAS M. 
KILBOURNE, JOHN D. LESLIE and 
JEROME R. WATSON, 
 
 
 
Defendants-Appellants/    
Cross-Appellees. 
 
 
 
BEFORE THE ENTIRE BENCH  
 
BERNSTEIN, J.  
This case requires the Court to address whether plaintiff’s tort claims against 
individual principals of a law firm fall within the scope of an arbitration clause that 
mandates arbitration for any dispute between the firm and a former principal.  Generally 
speaking, a company may only act through its agents.  In this case, plaintiff, a former 
 
Michigan Supreme Court 
Lansing, Michigan 
OPINION 
 
Chief Justice: 
Robert P. Young, Jr. 
 
 
Justices: 
Stephen J. Markman 
Brian K. Zahra 
Bridget M. McCormack 
David F. Viviano 
Richard H. Bernstein 
Joan L. Larsen 
 
 
 
 
 
2 
principal, challenges actions the individual defendants performed in their capacities as 
agents carrying out the business of the firm.  Therefore, this is a dispute between the firm 
and a former principal that falls within the scope of the arbitration clause and is subject to 
binding arbitration. 
Accordingly, we reverse that part of the Court of Appeals’ opinion holding that 
this matter was not subject to arbitration.  We vacate the remaining portion of the Court 
of Appeals’ opinion, which relates to plaintiff’s motion for partial summary disposition, 
and we remand this case to the trial court for further proceedings consistent with this 
opinion. 
I.  FACTS AND PROCEDURAL HISTORY 
In 1993, plaintiff Dean Altobelli began working as an attorney for Miller, 
Canfield, Paddock and Stone, P.L.C. (“the Firm”), a professional limited liability 
company formed under the Michigan Limited Liability Company Act (MLLCA), 
MCL 450.4101 et seq.  Upon joining the Firm, plaintiff signed the “Miller Canfield 
Operating Agreement” (“Operating Agreement”), a document governing the Firm’s 
internal affairs.  The Operating Agreement provides that members of the Firm are 
referred to as “principals.”  All principals sign the Operating Agreement.  The 
introductory section of the Operating Agreement states that the document “by and 
between the [Principals] . . . evidences the following agreement between them[.]”  In a 
subsequent section, the principals further acknowledge that the “covenants and 
agreements herein contained shall inure to the benefit of and be binding upon the parties 
hereto[.]”   
 
 
 
3 
The Operating Agreement delegates particular responsibilities and powers to 
certain individuals within the Firm.  A principal must devote “his or her full time and best 
efforts to the success of the Firm except as otherwise approved in writing by the CEO 
with the approval of the Managing Directors.”  Principals may “voluntarily withdraw 
from the Firm at any time” and shall involuntarily withdraw in the event of a two-thirds 
vote of the senior principals.  Senior principals are principals who have been granted 
equity ownership in the Firm.  Five senior principals, called the “managing directors,” are 
invested with “[s]ole, full and complete power and authority to manage . . . the 
Firm . . . .”  Managing directors have the authority to designate a Chief Executive Officer 
(“CEO”), who has, “with binding effect on the Managing Directors, the power and 
authority of the Managing Directors with respect to the day-to-day administration of the 
business and affairs of the Firm.”  
The Operating Agreement also contains a mandatory arbitration agreement: 
3.6  Alternative Dispute Resolution: Mandatory Arbitration.  Any 
dispute, controversy or claim (hereinafter “Dispute”) between the Firm or 
the Partnership and any current or former Principal or Principals of the 
Firm or current or former partner or partners of the Partnership (collectively 
referred to as the “Parties”) of any kind or nature whatsoever (including, 
without limitation, any dispute[,] controversy or claim regarding step 
placement, or compensation, or the payment or non-payment of any bonus, 
the amount or change in amount of any bonus) shall be solely and 
conclusively resolved according to the following procedure: 
(a)  In the event of a Dispute, the Parties agree to first try in good 
faith to settle the dispute directly.  If the parties are unable to resolve the 
dispute, they shall submit the dispute to third party neutral facilitation in 
accordance with the mediation rules of the American Arbitration 
Association (“Mediation”).  If the Dispute is not resolved by a signed 
Settlement Agreement within ninety (90) days of a written request for 
Mediation given to one Party by the other and identifying the Dispute, the 
Dispute shall be settled by binding arbitration (“Arbitration”) in accordance 
 
 
 
4 
with the internal laws of the State of Michigan.  The Arbitration shall be 
conducted in accordance with the Commercial Arbitration Rules of the 
American Arbitration Association except as specifically provided herein.  
Judgment upon the award rendered by the arbitrators may be entered in any 
court having jurisdiction thereof.  There shall be three (3) arbitrators; one of 
whom shall be appointed by the Firm, one by the Principal(s) and/or 
partner(s) (as applicable) and the third of whom shall be appointed by the 
first two arbitrators.  The hearing shall be held in the Detroit metropolitan 
area.  [Emphasis added.] 
By January 2006, plaintiff had become a senior principal at the Firm.1  However, 
in late May or early June 2010, plaintiff decided he wanted to pursue a new opportunity 
as an assistant coach for the University of Alabama football team.  Plaintiff proposed a 7- 
to 12-month leave of absence from the Firm to defendant Michael Hartmann, the Firm’s 
CEO, and defendant Michael Coakley, who was the head of the Firm’s litigation group 
but was not a managing director.  Plaintiff suggested that the Firm permit him to maintain 
his ownership interest and return to the Firm as a senior principal any time before June 1, 
2011. 
Plaintiff avers that Hartmann initially promised plaintiff that he could spend as 
much time at the University of Alabama as he wanted and still receive certain allocated 
income from his clients.  Hartmann disputes this, claiming that although he told plaintiff 
that he could “probably” return to the Firm, plaintiff knew Hartmann had no authority to 
make a formal commitment.  Plaintiff contends that, in reliance on Hartmann’s assurance, 
he moved to finalize his agreement with the University of Alabama in June 2010.  
Plaintiff claims he also spent many hours preserving his clients and business for the Firm. 
                                              
1 Although plaintiff was a senior principal, he was not a managing director, and plaintiff 
does not allege that he had any further authority in the Firm. 
 
 
 
5 
Plaintiff alleges that Hartmann then withdrew his support, suddenly rejecting the 
proposed leave of absence and instead suggesting that plaintiff voluntarily withdraw from 
the Firm without any assurance that he would be reinstated.  In response, on July 10, 
2010, plaintiff sent an e-mail to the managing directors seeking approval of the job 
opportunity with the University of Alabama, and an exception to the section of the 
Operating Agreement obligating a principal to devote his or her full time to the Firm.  
Plaintiff claims he informed the managing directors that he had no plans to relinquish his 
principal status or compensation.  On July 20, 2010, plaintiff submitted a statement to 
defendant Coakley detailing his past and projected contributions to the Firm.  Plaintiff 
asserts that Hartmann informed plaintiff the next day that the managing directors had 
decided to terminate his equity ownership, effective July 31, 2010.  In an e-mail response, 
plaintiff demanded a vote of the principals, asserting that the managing directors lacked 
the authority to terminate him under the Operating Agreement.  On July 22, Hartmann 
replied: “I did not say the Firm had terminated your position.  I told you that since you 
had voluntarily accepted a full time position at Alabama and had already started there, the 
Firm will consider you to have withdrawn from the partnership as of July 31, 2010.”  
Plaintiff disputes this, contending that he did not voluntarily withdraw from the Firm, that 
he was improperly terminated, and that the Firm shorted plaintiff’s 2010 income as a 
result.2 
                                              
2 While the parties dispute whether plaintiff voluntarily withdrew from the Firm in July 
2010, it is undisputed that plaintiff eventually left the Firm, accepted a position at the 
University of Alabama, and is no longer a principal of the Firm. 
 
 
 
6 
Plaintiff initially sought resolution through the direct settlement and mediation 
process provided for in the Operating Agreement.  In November 2011, when these efforts 
failed, plaintiff filed a demand for arbitration with the American Arbitration Association, 
as outlined in the Operating Agreement.  Plaintiff’s arbitration demand contested his last 
five years of compensation and the managing directors’ decision to treat his departure as 
a relinquishment of his equity ownership status.  Plaintiff alleged bad-faith discrimination 
in the allocation of income, bad-faith violations of the Operating Agreement, bad-faith 
misrepresentation, bad-faith conspiracy to improperly exclude him from the Firm, and 
shareholder oppression in violation of MCL 450.4515. 
Despite having set the arbitration proceeding in motion, and while the parties were 
in the process of selecting arbitrators, plaintiff turned the tide by filing the instant case in 
the Ingham Circuit Court.  Plaintiff did not name the Firm itself as a defendant in the suit.  
Instead, plaintiff named seven individual principals of the Firm: Hartmann, Coakley, and 
the five managing directors (collectively, “defendants”).3  In his circuit court complaint, 
plaintiff presented claims substantially similar to those he had alleged in arbitration, 
essentially repackaging them as tortious conduct: breach of fiduciary duty, illegal 
shareholder 
oppression 
contrary 
to 
MCL 
450.4515, 
conversion, 
bad-faith 
misrepresentation, tortious interference with a business relationship or expectancy, and 
civil conspiracy. 
In the circuit court, defendants filed a motion for summary disposition under 
MCR 2.116(C)(10), and a motion to compel arbitration under MCR 2.116(C)(7).  In the 
                                              
3 As principals, each of these defendants had signed the Operating Agreement. 
 
 
 
7 
motion to compel arbitration, defendants argued that plaintiff’s claims fell within the 
scope of the Operating Agreement’s mandatory arbitration clause, and that the circuit 
court was therefore compelled to dismiss the complaint.  Plaintiff countered with a 
motion for partial summary disposition with respect to his claims of shareholder 
oppression, conversion, and tortious interference with a business relationship or 
expectancy.  The circuit court denied defendants’ motions, concluding that the dispute 
did not fall within the ambit of the arbitration clause.  The circuit court granted plaintiff’s 
motion for partial summary disposition, finding as a matter of law that plaintiff did not 
voluntarily withdraw from the Firm under MCL 450.4509(1)4 or the Operating 
Agreement, and that defendants had improperly terminated plaintiff’s ownership interest 
without authority. 
On appeal, the Court of Appeals affirmed the circuit court’s denial of defendants’ 
motion to compel arbitration, but reversed the circuit court’s order granting plaintiff’s 
motion for partial summary disposition.  Altobelli v Hartmann, 307 Mich App 612, 640; 
861 NW2d 913 (2014).  With respect to the motion to compel arbitration, the Court of 
Appeals determined that the central question was whether plaintiff could sue the Firm’s 
managers in their individual capacities or whether plaintiff was instead required to 
arbitrate his claims against them.  Id. at 626.  After examining the plain language of the 
arbitration clause, the Court of Appeals concluded that the provision only mandates 
arbitration of disputes between “the Firm” and “a Principal.”  Id. at 628.  The Court of 
                                              
4 MCL 450.4509(1) provides in pertinent part: “A member may withdraw from a limited 
liability company only as provided in an operating agreement.” 
 
 
 
8 
Appeals rejected defendants’ argument that this was in essence a dispute between 
plaintiff and the Firm, noting that plaintiff’s claims were asserted against defendants in 
their individual capacities and sought to hold them personally liable for their actions.  Id. 
at 630-631.  With respect to plaintiff’s motion, the Court of Appeals found that 
MCL 450.4509(1) permits voluntary withdrawal if a firm’s operating agreement allows 
for such withdrawal, even without specifying a particular method.  Id. at 631-636.  The 
Court of Appeals then found that a genuine issue of fact existed as to whether plaintiff 
voluntarily withdrew from the Firm, thus concluding that summary disposition was 
unwarranted.  Id. at 636-640. 
In this Court, defendants challenged the Court of Appeals’ ruling on the motion to 
compel arbitration.  Plaintiff filed a cross-appeal, challenging the Court of Appeals’ 
findings on plaintiff’s motion for partial summary disposition.  For the reasons stated 
below, we reverse the Court of Appeals’ judgment with respect to the motion to compel 
arbitration and vacate the remaining portions of the Court of Appeals’ decision relating to 
plaintiff’s motion for partial summary disposition.5 
                                              
5 In light of our resolution of defendant’s application for leave to appeal, plaintiff’s 
application for leave to appeal as cross-appellant is denied as moot. 
Additionally, after oral argument in this Court, plaintiff filed a “Motion to Correct the 
Record and to Impose Sanctions for Misconduct at Mini Oral Argument.”  Plaintiff 
alleged that, on the record during oral argument, defendants misrepresented the Firm’s 
indemnification obligations and also violated court procedures by allowing a supposedly 
unauthorized person to sit at defense counsel’s table.  Defendants responded in 
opposition.  Plaintiff’s motion is denied for lack of any legal or factual basis to support its 
claims.  
 
 
 
9 
II.  STANDARD OF REVIEW 
This Court reviews de novo a circuit court’s decision on a motion for summary 
disposition brought under MCR 2.116(C)(7).  Fane v Detroit Library Comm, 465 Mich 
68, 74; 631 NW2d 678 (2001).  Under MCR 2.116(C)(7), summary disposition is 
appropriate if a claim is barred because of “an agreement to arbitrate[.]”  Whether a 
particular issue is subject to arbitration is also reviewed de novo, In re Nestorovski 
Estate, 283 Mich App 177, 184; 769 NW2d 720 (2009), as is the interpretation of 
contractual language, Morley v Auto Club of Mich, 458 Mich 459, 465; 581 NW2d 237 
(1998). 
III.  ANALYSIS 
“Arbitration is a matter of contract.”  Kaleva-Norman-Dickson Sch Dist No 6 v 
Kaleva-Norman-Dickson Sch Teachers’ Ass’n, 393 Mich 583, 587; 227 NW2d 500 
(1975).  Accordingly, when interpreting an arbitration agreement, we apply the same 
legal principles that govern contract interpretation.  See F J Siller & Co v City of Hart, 
400 Mich 578, 581; 255 NW2d 347 (1977).  Our primary task is to ascertain the intent of 
the parties at the time they entered into the agreement, which we determine by examining 
the language of the agreement according to its plain and ordinary meaning.  See Miller-
Davis Co v Ahrens Constr, Inc, 495 Mich 161, 174; 848 NW2d 95 (2014).  In considering 
the scope of an arbitration agreement, we note that “[a] party cannot be required to 
arbitrate an issue which [it] has not agreed to submit to arbitration.”  Kaleva, 393 Mich at 
587.  “The general policy of this State is favorable to arbitration.”  Detroit v A W 
Kutsche, 309 Mich 700, 703; 16 NW2d 128 (1944).  The burden is on the party seeking 
to avoid the agreement, not the party seeking to enforce the agreement.  McKinstry v 
 
 
 
10 
Valley Obstetrics-Gynecology Clinic, PC, 428 Mich 167, 184; 405 NW2d 88 (1987).  In 
deciding the threshold question of whether a dispute is arbitrable, a reviewing court must 
avoid analyzing the substantive merits of the dispute.  Kaleva, 393 Mich at 594-595.  If 
the dispute is arbitrable, “the merits of the dispute are for the arbitrator.”  Id. at 595. 
Applying these principles, we must consider whether the language of the 
arbitration clause in the Operating Agreement is intended to cover the instant dispute 
between plaintiff and the individually named defendants.  The critical portion of the 
agreement reads: 
Any dispute, controversy or claim . . . between the Firm . . . and any 
current or former Principal . . . of any kind or nature whatsoever 
(including . . . compensation, or the payment or non-payment of any 
bonus . . .) shall be solely and conclusively resolved according to the 
following procedure [arbitration].   
To resolve this issue, we must analyze two aspects of this provision.  First, we must 
determine who the parties intended to include in the phrase, “between the Firm . . . 
and . . . [a] former Principal.”  Second, we must determine whether the subject matter of 
the instant dispute is covered by the arbitration clause. 
With respect to who is included, it is undisputed that plaintiff is a former principal.  
Therefore, this question turns on whether “the Firm” was meant to include the 
individually named defendants.  Here, we must consider the concept of agency.  
Although no Michigan court has explicitly applied agency principles when interpreting 
an arbitration clause, it is well established that “corporations can only act through officers 
and agents.”  Attorney General v Nat’l Cash Register Co, 182 Mich 99, 111; 148 NW 
420 (1914).  See Junius Ten Eyck v Pontiac, Oxford & Port Austin Railroad Co, 74 Mich 
 
 
 
11 
226, 232; 41 NW 905 (1889) (“The directors of a corporation are its agents.”); Mossman 
v Millenbach Motor Sales, 284 Mich 562, 569; 280 NW 50 (1938) (“Where a corporation 
has intrusted a manager with the general supervision of a particular branch of its 
business, it invests him with the power of a general agent . . . .”).6  This reflects the fact 
that a company is not a physical being capable of taking its own actions or making its 
own decisions.  Indeed, a firm cannot act on its own behalf.  Fraser Trebilcock Davis & 
Dunlap PC v Boyce Trust 2350, 497 Mich 265, 275; 870 NW2d 494 (2015).  Therefore, 
“the acts of officers and agents of a corporation, within the scope of their employment, 
are the acts of the corporation[.]”  Nat’l Cash Register, 182 Mich at 111.7 
                                              
6 We recognize that some cited caselaw addresses situations where agents acted on behalf 
of “a corporation,” whereas, in the instant case, the Firm is a professional limited liability 
company.  However, in applying agency principles to interpret the instant arbitration 
clause, we see no reason to distinguish between a corporation and another type of 
company, and therefore extend these established principles to the instant matter. 
7 In its opinion in the instant case, the Court of Appeals extensively reviewed two 
previous Michigan cases and ultimately found them inapplicable: Hall v Stark Reagan, 
PC, 294 Mich App 88; 818 NW2d 367 (2011), rev’d in part 493 Mich 903 (2012), and 
Rooyakker & Sitz v Plante & Moran, PLLC, 276 Mich App 146; 742 NW2d 409 (2007).  
Altobelli, 307 Mich App at 625-631.  In Hall, this Court considered an arbitration clause 
that covered “ ‘a dispute regarding interpretation or enforcement of . . . the parties’ rights 
or obligations’ ” under a shareholders’ agreement.  Hall, 493 Mich at 903.  This Court 
held that a dispute involving the motives of the defendants for invoking the separation 
provisions of the shareholders’ agreement fell within the scope of that particular 
arbitration clause.  Id.  In Rooyakker, the Court of Appeals concluded that two tort claims 
against nonparties to an arbitration agreement fell within the scope of an arbitration 
clause that included “any dispute or controversy arising out of or relating to” the 
agreement.  Rooyakker, 276 Mich App at 163.  Not only was the language of the 
arbitration clauses in those cases substantially different from the arbitration clause in the 
instant case, neither case considered whether claims against particular individuals, acting 
as agents, fell within the scope of an arbitration clause, which is at issue in the instant 
case.  We thus agree with the Court of Appeals that neither case is instructive in the 
instant matter.  
 
 
 
12 
Not only is this particular concept of agency ingrained in our caselaw, the 
statutory scheme governing the Operating Agreement also incorporates this principle.  
Under the Operating Agreement, the Firm is a limited liability company formed under the 
MLLCA.  MCL 450.4401(a) states that if the management of a limited liability company 
is delegated to its members, “[t]he members are considered managers for purposes of 
applying this act, including section 406 regarding the agency authority of managers . . . .”  
(Emphasis added.)  MCL 450.4406, in turn, states: “A manager is an agent of the limited 
liability company for the purpose of its business . . . .”  (Emphasis added.)  
MCL 450.4402(4) adds: “If the articles of organization delegate management of a limited 
liability company to managers, the articles of organization constitute notice to third 
parties that managers, not members, have the agency authority described in section 406.”  
(Emphasis added.)  The MLLCA explicitly refers to agency authority and the ability of 
individuals to act as agents for limited liability companies, which further supports the 
application of agency principles to interpret the instant arbitration clause. 
When interpreting an arbitration clause, other jurisdictions have similarly applied 
agency principles.  In Pritzker v Merrill Lynch, Pierce, Fenner & Smith, Inc, 7 F3d 1110, 
1122 (CA 3, 1993) (citation omitted; alteration in original), the United States Court of 
Appeals for the Third Circuit noted that a corporation “ ‘can only act through its 
employees, and an arbitration agreement would be of little value if it did not extend to 
[them].’ ”  In Arnold v Arnold Corp-Printed Communications for Business, 920 F2d 
1269, 1281 (CA 6, 1990), the Sixth Circuit Court of Appeals reasoned that if a plaintiff 
could “ ‘avoid the practical consequences of an agreement to arbitrate by naming . . . 
 
 
 
13 
signatory parties in their individual capacities only, the effect of the rule requiring 
arbitration would, in effect, be nullified.’ ”  (Citation omitted.)  The First Circuit agreed: 
Such a rule is necessary, our sister circuits have reasoned, because a 
corporate entity or other business can only operate through its employees 
and an arbitration agreement would be a meaningless arrangement if its 
terms did not extend to them. . . .  Any other rule, in the view of these 
courts, would permit the party bringing the complaint to avoid the practical 
consequences of having signed an agreement to arbitrate; naming the other 
party’s officers, directors or employees as defendants along with the 
corporation would absolve the party of all obligations to arbitrate.  [Grand 
Wireless, Inc v Verizon Wireless, Inc, 748 F3d 1, 11 (CA 1, 2014), citing 
Arnold, 920 F2d at 1281.] 
For the above reasons, we hold that agency principles apply in determining who is 
included within the scope of the arbitration clause. 
Next, we must consider whether the arbitration clause encompasses the subject 
matter of the dispute at issue in this case.  Generally speaking, to ascertain whether the 
subject matter of a dispute is of the type that parties intended to submit to arbitration, we 
again begin with the plain language of the arbitration clause.  See Miller-Davis, 495 Mich 
at 174.  We then consider whether a plaintiff’s particular action falls within that scope.  
We note that the gravamen of an action is determined by considering the entire claim.  
See Maiden v Rozwood, 461 Mich 109, 135; 597 NW2d 817 (1999).  We look beyond the 
mere procedural labels to determine the exact nature of the claim.  Adams v Adams (On 
Reconsideration), 276 Mich App 704, 711; 742 NW2d 399 (2007).  This is to avoid 
“artful pleading.”  Maiden, 461 Mich at 135. 
IV.  APPLICATION  
Turning to the instant case, we first consider who is included within the scope of 
the arbitration clause in the Operating Agreement, and we next consider whether the 
 
 
 
14 
subject matter of the instant dispute is covered by the clause.  With respect to who is 
included, we begin with the plain language of the clause, asking whether the parties to the 
Operating Agreement intended to include these particular defendants within the meaning 
of “the Firm.”  See Miller-Davis, 495 Mich at 174.  Here, we note that the Operating 
Agreement clearly recognizes the agency principles previously discussed.  The Operating 
Agreement, signed “by and between” plaintiff and defendants as an “agreement between 
them,” delegates authority to certain individuals to carry out the Firm’s business and 
manage its internal affairs.  Managing directors are invested with the “[s]ole, full and 
complete power and authority to manage . . . the Firm . . . .”  The CEO has, “with binding 
effect on the Managing Directors, the power and authority of the Managing Directors 
with respect to the day-to-day administration of the business and affairs of the Firm.”  
Thus, the language of the Operating Agreement evidences the parties’ understanding that 
a company cannot act on its own, but instead depends on the actions of agents to carry 
out its business.  See Nat’l Cash Register, 182 Mich at 111.8  By signing the Operating 
                                              
8 We also note that the arbitration clause does not limit its scope to a dispute “naming the 
Firm” and a former principal, but rather “between the Firm” and a former principal.  Had 
the parties intended that those named in the caption of a lawsuit dictate the scope of the 
agreement, they could have chosen particular language to indicate as much.  The fact that 
they did not do so adds additional support to the conclusion that the plain language of the 
agreement evinces the intent to more broadly include agents within the meaning of “the 
Firm.”  Plaintiff cannot now avoid the practical consequences of the arbitration clause 
simply by naming defendants in their individual capacities only.  See Arnold, 920 F2d at 
1281; Grand Wireless, 748 F3d at 11. 
 
 
 
15 
Agreement and accepting the arbitration clause, plaintiff was aware that certain 
individuals would be operating on the Firm’s behalf.9 
Under the facts of this case, defendants are those individuals operating on the 
Firm’s behalf.  Defendants are the five managing directors, the CEO, and the head of the 
Firm’s litigation group.  The Operating Agreement explicitly endows them with complete 
power and responsibility for managing the affairs of the Firm.10  As officers, managers, 
and directors entrusted with carrying out the Firm’s business, defendants are agents of the 
                                              
9 The Court of Appeals generally noted the following principle: “ ‘It is well established 
that corporate employees and officials are personally liable for all tortious and criminal 
acts in which they participate, regardless of whether they are acting on their own behalf 
or on behalf of a corporation.’ ” Altobelli, 307 Mich App at 630-631, quoting Joy Mgt Co 
v Detroit, 183 Mich App 334, 340; 455 NW2d 55 (1990).  But resolution of the issues 
presented in this appeal does not require the invocation of this principle.  In this appeal, 
we must decide in what venue plaintiff must bring his dispute, not whether the individual 
defendants may be held personally liable for the tortious actions alleged within that 
dispute.  We conclude that, because plaintiff’s claims challenge defendants’ actions taken 
in their capacity as agents of the Firm, plaintiff’s dispute falls within the scope of this 
particular arbitration clause and must therefore be resolved in arbitration.  Since this 
dispute must be resolved in arbitration, whether these defendants can be held personally 
liable for the challenged actions is a substantive matter reserved for the arbitrator.  See 
Kaleva, 393 Mich at 595.  
10 We acknowledge that defendant Coakley is not a managing director or CEO, but rather 
is a principal who is the head of the Firm’s litigation group.  However, plaintiff does not 
argue that Coakley’s unique status disqualifies him from being considered an agent.  
Regardless, this argument would be meritless, because principals too can be agents of a 
company.  See Mossman, 284 Mich at 568; MCL 450.4401; MCL 450.4404(2)(a) (“In 
discharging the manager’s duties, a manager may rely on information, opinions, reports, 
or statements . . . if prepared or presented by [a manager or principal] whom the manager 
reasonably believes to be reliable and competent in the matter presented.”).  The 
Operating Agreement itself states that “[t]he Principals do hereby agree to . . . engage in 
the practice of law under the name ‘Miller, Canfield, Paddock and Stone, P.L.C.,’ ” and 
“[e]ach Principal shall devote his or her full time and best efforts to the success of the 
Firm . . . .” 
 
 
 
16 
Firm.  Junius Ten Eyck, 74 Mich at 232; Mossman, 284 Mich at 569; MCL 450.4406.  
Their acts are acts of the company.  Nat’l Cash Register, 182 Mich at 111.  Because it is 
axiomatic that the Firm cannot act on its own, Fraser Trebilcock, 497 Mich at 275, and 
because these particular defendants are clearly endowed with agency authority to 
administer the Firm’s affairs, the individually named defendants must be included within 
the meaning of “the Firm” in the arbitration clause.11 
Next, we turn to whether the arbitration clause covers the subject matter of the 
dispute at issue in this case.  The arbitration clause covers “[a]ny dispute, controversy or 
                                              
11 The Court of Appeals noted that the arbitrator selection process in the arbitration clause 
requires the selection of three arbitrators, “one of whom shall be appointed by the Firm, 
one by the Principal(s) . . . and the third of whom shall be appointed by the first two 
arbitrators.”  Altobelli, 307 Mich App at 628 (quotation marks omitted).  The Court of 
Appeals reasoned that, in a dispute between principals, the Firm would not be a party, yet 
the selection process would nonetheless require the Firm to select an arbitrator.  Id.  The 
Court of Appeals concluded that this evinced the parties’ intent to distinguish between 
the Firm and its principals as well as an intent to exclude disputes between principals 
from the scope of the arbitration clause.  Id. 
Certainly, this language distinguishes between the Firm and an adversarial principal in 
the arbitration proceeding, giving each the power to select an arbitrator.  This provision 
does not, however, demonstrate any intent to exclude individual principals from the 
meaning of “the Firm.”  The selection procedure still functions even if the proceeding 
involves individually named defendants and a plaintiff; the defendants could collectively 
choose one arbitrator and the plaintiff could choose another.  In fact, were we to agree 
with the Court of Appeals that individuals could not be included within the meaning of 
“the Firm,” this selection process would not work.  The Firm, a company, cannot actually 
appoint its own arbitrators.  The Firm itself cannot take any action at all.  Instead, the act 
of appointing an arbitrator must be done by the Firm’s representatives in the arbitration 
proceeding.  In ascertaining the intent of the parties at the time they entered the contract, 
See Miller-Davis Co, 495 Mich at 174, we must conclude that this undeniable reality was 
understood by the parties.  This further demonstrates the intent to include individual 
principals within the meaning of “the Firm,” without explicitly stating as much in the 
arbitration clause. 
 
 
 
17 
claim . . . between the Firm . . . and [a] former Principal . . . of any kind or nature 
whatsoever (including . . . compensation, or the payment or non-payment of any 
bonus . . .).”  (Emphasis added.)  At the outset, we emphasize the extremely broad and 
inclusive language of this provision.  The plain language of the arbitration clause 
indicates that “any dispute” must be between the Firm and a former principal.  Therefore, 
we consider more specifically whether the subject matter of the dispute reflects actions 
taken by the individual defendants as agents of the Firm. 
In considering the gravamen of plaintiff’s complaint, we examine the entire claim, 
looking beyond procedural labels to determine the exact nature of the claim.  Maiden, 
461 Mich at 135; Adams, 276 Mich App at 710-711.  The result of this inquiry indicates 
that the instant dispute falls within the wide expanse of “any dispute” between the Firm 
and a current or former principal.  To begin, in the factual recitation section of his 
complaint, plaintiff states that he initially approached defendants Hartmann and Coakley 
to propose a leave of absence that might have put him at odds with the section of the 
Operating Agreement obligating a principal to devote his or her full time to the Firm.  In 
doing so, plaintiff acknowledged that his request was subject to the rules established in 
the Operating Agreement, and also that he believed Hartmann and Coakley had the 
authority to sanction his proposal.  Similarly, when Hartmann appeared unreceptive, 
plaintiff informed the managing directors that he did not intend to relinquish his equity 
status or compensation, again informing the Firm’s decision-makers that he sought 
protection under the Operating Agreement.  Plaintiff subsequently demanded the 
requisite two-thirds vote of the principals before his membership could be terminated, as 
outlined in the Operating Agreement.  Believing that the managers ultimately terminated 
 
 
 
18 
his ownership without this necessary vote, plaintiff now requests economic damages, 
particularly the “fair allocation of income (salary and bonuses).”  Thus, the essence of 
plaintiff’s allegations is that defendants’ actions deprived plaintiff of the compensation 
and bonuses to which he was entitled.  The arbitration clause explicitly encompasses a 
dispute involving “compensation, or the payment or non-payment of any bonus[.]”  
(Emphasis added.)  This alone places plaintiff’s dispute squarely under the mantle of the 
arbitration clause. 
Examining plaintiff’s individual claims further entrenches this dispute within the 
scope of the arbitration clause.  Plaintiff first alleges breach of fiduciary duty.  Plaintiff 
substantiates this claim with numerous factual allegations which inextricably tie 
defendants’ actions as agents of the Firm to the deprivation of plaintiff’s rights under the 
Operating Agreement.  “Bad-faith” allegations against defendants include “refusing to 
disclose information relevant to the affairs of the Firm,” “excluding [plaintiff] from 
involvement in significant Firm committees,” “isolating [plaintiff] from discussions about 
a client,” and “terminat[ing plaintiff’s] ownership position without a vote of the Firm’s 
owners.”  All of these alleged actions reflect decisions made by defendants in their 
capacities as the Firm’s agents, employing powers provided to them under the Operating 
Agreement and agency principles.  See Mossman, 284 Mich at 569 (“Where a 
corporation has intrusted a manager with the general supervision of a particular branch of 
its business, it invests him with the power of a general agent . . . .”) (quotation marks and 
citation omitted); see also MCL 450.4401; MCL 450.4402(4).  Therefore, this particular 
claim involves a dispute between the Firm and plaintiff, and is thus covered by the 
arbitration clause. 
 
 
 
19 
Likewise, to substantiate his claims of illegal shareholder oppression under 
MCL 450.4515, tortious interference with a business relationship or expectancy, and civil 
conspiracy, plaintiff asserts that defendants improperly terminated plaintiff’s ownership 
in contravention of procedures established by the Operating Agreement.  Plaintiff’s 
conversion claim maintains that defendants “deprived [plaintiff] of his property without 
due process required by law—the process required by the Operating Agreement.”  
Plaintiff’s claim alleging bad-faith misrepresentation avers that defendants intentionally 
duped plaintiff in order to secure the Firm’s business for themselves and other principals.  
Thus, in each individual claim, plaintiff takes issue with defendants’ actions as agents 
making decisions for the Firm, which plaintiff believes interfered with his financial 
entitlements under the Operating Agreement. 
In sum, plaintiff’s dispute falls within the scope of the mandatory arbitration 
clause in the Operating Agreement.  A company can only act through its agents, the 
individual defendants are agents of the Firm, and plaintiff’s claims inextricably tie 
defendants’ actions as agents to the alleged deprivation of plaintiff’s rights under the 
Operating Agreement.  Plaintiff’s dispute is subject to binding arbitration. 
V.  CONCLUSION 
We reverse the part of the Court of Appeals’ opinion regarding the motion to 
compel arbitration and instead hold that this case is subject to binding arbitration under 
the arbitration clause of the Operating Agreement.  Accordingly, the lower courts should 
not have reached the merits of plaintiff’s motion for partial summary disposition, as the 
motion addresses substantive contractual matters that must be resolved by the arbitrator.  
 
 
 
20 
Therefore, we vacate the portion of the Court of Appeals’ opinion related to plaintiff’s 
motion for partial summary disposition and remand this case to the trial court for further 
proceedings consistent with this opinion. 
 
 
Richard H. Bernstein 
 
Robert P. Young, Jr. 
 
Stephen J. Markman 
 
Brian K. Zahra 
 
 
Bridget M. McCormack 
 
David F. Viviano 
 
Joan L. Larsen