Opinion ID: 2558115
Heading Depth: 2
Heading Rank: 2

Heading: Summary Judgment Challenges

Text: [¶ 37] Forsley argues that the court erred in determining by summary judgment that he was collaterally estopped from arguing that (1) the Riverwalk Defendants repudiated the MOU; (2) the MOU did not modify the Garage P & S or the Garage Note, both of which remain valid, binding, and enforceable; and (3) if the MOU did modify the Garage P & S, such modification constituted a breach and repudiation of the Garage Note. Forsley does not argue that he did not have an opportunity to litigate these issues in arbitration; he contends that the arbitration panel did not resolve these factual issues. [¶ 38] We review the grant of a summary judgment de novo, viewing the summary judgment record in the light most favorable to the nonprevailing party to determine whether any genuine issue of material fact remains and whether the moving party is entitled to judgment as a matter of law. Beal v. Allstate Ins. Co., 2010 ME 20, ¶ 11, 989 A.2d 733, 738. [¶ 39] Collateral estoppel prevents the relitigation of factual issues already decided if the identical issue was determined by a prior final judgment, and the party estopped had a fair opportunity and incentive to litigate the issue in a prior proceeding. Id. ¶ 17, 989 A.2d at 739-40 (quotation marks omitted). The doctrine of collateral estoppel also extends to judicially unconfirmed arbitration awards when the arbitrator's determination is sufficiently analogous to a final judgment. Id. ¶¶ 12-16, 989 A.2d at 738-39. [¶ 40] According to the arbitration award, the MOU was binding on the parties, and Forsley, on behalf of himself, HL 1, and Shipyard Brewing, agreed to the terms of the MOU without condition. The arbitration award stated: We reject the argument that the failure to complete the documentation contemplated by the MOU demonstrates that the entire agreement has failed. The MOU is binding and enforceable in accordance with its terms. Mr. Forsley's repudiation of the MOU and his unwillingness to participate in negotiations while this present litigation is pending, accounts for the incomplete and unfinished state of the documents. .... Upon the entry of a final judgment, we assume that the parties will carry out the terms of the MOU. Contrary to Forsley's assertion, the conclusion that the MOU was binding and enforceable was not conditioned upon the assumption that the parties would carry out the terms of the MOU. Furthermore, in reaching this conclusion, the arbitration panel necessarily considered and rejected the contention that the Riverwalk Defendants repudiated the MOU. [¶ 41] By its terms, the MOU modified the Garage P & S by increasing the purchase price from $11 million to $12 million. The MOU also expressly modified the Garage Note: If anything less than $12,000,000 in third party funds is paid to Seller for the purchase price proceeds, the amount otherwise payable to Shipyard Brewing Company on the first installment note [i.e., the Garage Note] shall be deferred until all such $12,000,000 purchase price proceeds are paid to Seller. In concluding that the MOU was binding and enforceable, the arbitration panel implicitly accepted that those terms modified the Garage P & S and the Garage Note. [¶ 42] Because the arbitration panel determined that the MOU was binding and enforceable, it necessarily resolved factual issues concerning whether the Riverwalk Defendants repudiated the MOU and whether the MOU modified the Garage P & S and the Garage Note. Furthermore, the arbitration award was sufficiently analogous to a final judgment. See Beal, 2010 ME 20, ¶¶ 13-15, 989 A.2d at 738-39. Consequently, the court did not err in concluding that Forsley was collaterally estopped from relitigating these factual issues in this action.
[¶ 43] Forsley contends that Ocean Gateway Garage breached the Garage Note by refusing to sell the garage to Forsley for his $11 million offer, and by virtue of this breach, Shipyard Brewing is a creditor of Ocean Gateway Garage and thus has standing to seek its judicial dissolution and the appointment of a receiver pursuant to 31 M.R.S. §§ 702(2), 703(1). [¶ 44] Maine's Limited Liability Company Act provides: The Superior Court of this State may decree the dissolution of, and liquidate the assets and business of, a limited liability company ... [i]n an action filed by a creditor of the [LLC] when it is established that the [LLC] is insolvent or that its debts exceed its assets. 31 M.R.S. § 702(2). Section 703 provides that the court may appoint a liquidating trustee in connection with its authority to wind up an LLC's affairs. 31 M.R.S. § 703(1). [¶ 45] We have concluded that the MOU is binding and enforceable. Accordingly, pursuant to its terms, the amount otherwise payable to Shipyard Brewing Company on the [Garage Note] shall be deferred until all such $12,000,000 purchase price proceeds are paid to Seller. The summary judgment record establishes that the garage has not been sold; therefore, no amounts were payable to Shipyard Brewing pursuant to the MOU, Shipyard Brewing is not a creditor of Ocean Gateway Garage, and it does not have standing to seek dissolution pursuant to section 702(2). [¶ 46] The court did not err in granting summary judgment to the Riverwalk Defendants on Forsley's claims seeking judicial dissolution. The entry is: Judgment affirmed.