Court Opinion

ID: 4552178
Source: CourtListenerOpinion
Date Created: 2020-07-30 19:08:07.92014+00
Date Added: 2024-06-11T13:07:31.714760
License: Public Domain

IN THE SUPREME COURT OF MISSISSIPPI

                                NO. 2018-CA-01734-SCT

B&S MS HOLDINGS, LLC

v.

JILL LANDRUM

DATE OF JUDGMENT:                          11/15/2018
TRIAL JUDGE:                               HON. ROBERT GEORGE CLARK, III
TRIAL COURT ATTORNEYS:                     JOHN G. CORLEW
                                           HARRIS H. BARNES, III
COURT FROM WHICH APPEALED:                 MADISON COUNTY CHANCERY COURT
ATTORNEYS FOR APPELLANT:                   JOHN G. CORLEW
                                           LYNN CHAIN WALL
ATTORNEYS FOR APPELLEE:                    HARRIS H. BARNES, III
                                           JAMES WILLIAMS JANOUSH
NATURE OF THE CASE:                        CIVIL - OTHER
DISPOSITION:                               AFFIRMED - 07/30/2020
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

       BEFORE KING, P.J., CHAMBERLIN AND ISHEE, JJ.

       KING, PRESIDING JUSTICE, FOR THE COURT:

¶1.    In this dispute between members of a limited-liability company, the question before

this Court is whether statutory provisions prevent the enforcement of an arbitration provision

and waiver contained in the operating agreement of the company. Because the statutory

provisions do not control over the terms of the operating agreement, we affirm the trial

court’s decision to compel arbitration.

                       FACTS AND PROCEDURAL HISTORY

¶2.    David and Jill Landrum began to develop land in Livingston, Madison County,
Mississippi, in approximately 2006. David then sought financial assistance from Michael L.

Sharpe. Michael invested substantial sums in the business, and his wife, Marna Sharpe,

gained a membership interest in the business. On January 27, 2010, Livingston Holdings,

LLC (Livingston), a Mississippi limited-liability company, was formed. The original

members of the company were Jill, Marna, and Sara E. Williams. Livingston acquired

Williams’s ownership interests, and Marna later assigned her membership interest to B&S.

The development is now known as the Town of Livingston. The current members of

Livingston consist of B&S MS Holdings, LLC (B&S), and Jill.

¶3.    An operating agreement was executed effective January 1, 2010. It contained an

arbitration provision under article XIV that provided,

       Except for the injunctive relief provided in Article IX, any dispute, claim, or
       controversy in connection with or arising under this Operating Agreement, its
       construction, existence, interpretation, validity, or any breach hereof, which
       cannot be amicably settled between the parties, shall be finally and exclusively
       resolved by arbitration under the Rules of Arbitration of the American
       Arbitration Association then prevailing . . . . THE PARTIES HEREBY
       EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OR CLASS
       TREATMENT OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
       ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
       THE BREACH THEREOF, PROVIDED THAT NOTHING IN THIS
       AGREEMENT SHALL PRECLUDE A PARTY FROM SEEKING TO
       COMPEL ARBITRATION IN A STATE OR FEDERAL COURT OF
       COMPETENT JURISDICTION.

¶4.    On July 25, 2014, a Second Amended and Restated Memorandum of Understanding

and Amendment to Operating Agreement was executed. The amendment stated that Marna

“ha[d] made and continue[d] to make greater contributions to the Company than Landrum.”

                                              2
Marna and Jill agreed that Marna’s excess contributions would be converted to a loan.1

Therefore, the amendment provided that, after July 26, 2014, Marna’s membership interest

in the company would be 51 percent and Jill’s would be 49 percent until payment in full of

the loan and the return of Marna’s capital contributions.

¶5.    On February 13, 2018, B&S filed a complaint to dissolve Livingston under

Mississippi Code Section 79-29-803. B&S alleged that Livingston had become “involved

with a purported business turnaround consultant which, through egregious conflict of

interest, self dealing, and fraud acquired a dominant influence over Livingston.” It stated that

consultant Mark Calvert and his company Cascade Capital Group, LLC (Cascade), had

acquired the principal debt of Livingston entities, a note and deed of trust to BankPlus with

a principal balance of $421,957.94. Cascade allegedly modified the BankPlus note and

demanded from Livingston $951,147.12 with an interest rate escalated from the 5.5 percent

charged by BankPlus to 12 percent.

¶6.    Cascade then filed suit in the United States District Court for the Southern District of

Mississippi against Livingston; Chestnut Developers, LLC, a Livingston subsidiary; David

Landrum; and Michael Sharpe. Livingston answered the allegations of the complaint and

filed its own counterclaim, arguing fraud and self-dealing by Calvert and Cascade. But David

answered the lawsuit and admitted all of Cascade’s allegations. Additionally, B&S alleged

that Jill’s counsel demanded that Livingston not pay to defend itself against the Cascade

       1
        At that time, the principal sum of the loan was $2,325,778.48.

                                               3
lawsuit.

¶7.    B&S contended in its complaint to dissolve Livingston that

       Nothing could be more graphic than the fact that ‘it is not reasonably
       practicable to carry on the business in conformity with the . . . Operating
       Agreement’ than this disagreement between the 51% member of Livingston
       that it should recover damages for fraud and void the fraudulent transactions
       of Calvert/Cascade and the position of the 49% member that Livingston should
       not seek damages for the fraud committed against it, nor should it seek to void
       the alleged transactions which led to claims of over $1,300,000.00 against it.
       Livingston cannot carry on any business absent a recovery from the fraud
       committed against it. The members of this limited liability company have
       irreconcilable differences and the Court should dissolve the limited liability
       company pursuant to the provisions of Miss. Code § 79-29-803(1).

¶8.    In response, Jill filed a motion to dismiss the complaint or, alternatively, to compel

arbitration and to stay or dismiss the case.2 In her response, Jill argued that the operating

agreement provided that, “[i]f a quorum is present, the affirmative Majority Vote of the

Members shall be the act of the Members . . . .” Under article XIII, section 13.1(a), the

operating agreement stated that

       The Company shall be dissolved upon the occurrence of any of the following:

       (1) Upon the date specified in the Certificate of Formation filed in the office
       of the Secretary of State of Mississippi; or

       (2) By the affirmative Majority Vote of the Members.

No meeting or vote had ever been called with respect to the dissolution of the company.

Arbitration also had not been commenced. Jill argued that the parties were bound to the

       2
       The motion to dismiss is not in the record.

                                             4
operating agreement and had entered into a valid and binding arbitration provision. Because

the claims in B&S’s complaint arose under the operating agreement, Jill urged the Court, if

it did not dismiss the matter under Rule 12(b) of the Mississippi Rules of Civil Procedure,

to dismiss the matter and refer it to arbitration.

¶9.    B&S contended that Mississippi Code Section 79-29-123(3) foreclosed Jill’s

argument. Section 79-29-123(3) states,

       (3)     Except as provided in this subsection (3), the provisions of this chapter
       that relate to the matters described in paragraphs (a) through (d) of subsection
       (1) of this section may be waived, restricted, limited, eliminated or varied by
       the certificate of formation or operating agreement. In addition to the
       restrictions set forth in subsections (4) and (5) of this section, the certificate of
       formation or the operating agreement may not:
       ....

       (m) Vary the power of a court to decree dissolution in the circumstances
       specified in Section 79-29-803(1) . . . .

Miss. Code. Ann. § 79-29-123(3)(m) (Supp. 2019). Section 79-29-803(1) provides that,

       (1)    On application by or for a member, the chancery court for the county
       in which the principal office of the limited liability company is located, or the
       Chancery Court of the First Judicial District of Hinds County, Mississippi, if
       the limited liability company does not have a principal office in this state, may
       decree dissolution of a limited liability company:

       (a)   Whenever it is not reasonably practicable to carry on the business in
       conformity with the certificate of formation or the operating agreement . . . .

Miss. Code. Ann. § 79-29-803(1)(a) (Rev. 2013).

¶10.   The Madison County Chancery Court found that under Mississippi Code Section 79-

29-1211, members of a limited-liability company have a right to agree to arbitration. Section

                                                5
79-29-1211 provides, in relevant part, that,

       Except by agreeing to arbitrate any arbitrable matter in a specified jurisdiction
       or in this state, a member who is not a manager may not waive its right to
       maintain a legal action or proceeding in the courts of this state with respect to
       matters relating to the organization or internal affairs of a limited liability
       company.

Miss. Code. Ann. § 79-29-1211 (Rev. 2013) (emphasis added). Because the members of

Livingston agreed to arbitration in the operating agreement, the trial court ordered the parties

to conduct binding arbitration.

                                           ISSUES

       I.     Whether the trial court erred by ordering the parties to submit to
              arbitration in accordance with the terms of the operating agreement.

       II.    Whether judicial dissolution fell outside of the scope of the operating
              agreement arbitration clause.

                                       DISCUSSION

¶11.   Valid arbitration agreements are favored under Mississippi law. Harrison Cty.

Commercial Lot, LLC v. H. Gordon Myrick, Inc., 107 So. 3d 943, 949 (Miss. 2013) (citing

Smith Barney, Inc. v. Henry, 775 So. 2d 709, 713 (Miss. 2002)). “The grant or denial of a

motion to compel arbitration is reviewed de novo.” Rogers-Dabbs Chevrolet-Hummer, Inc.

v. Blakeney, 950 So. 2d 170, 173 (Miss. 2007) (internal quotation marks omitted) (quoting

E. Ford, Inc. v. Taylor, 826 So. 2d 709, 713 (Miss. 2002)).“We will not disturb a

chancellor’s factual findings ‘when supported by substantial evidence unless . . . the

chancellor abused his discretion, was manifestly wrong, clearly erroneous or applied an

                                               6
erroneous legal standard.’” Venture Sales, LLC v. Perkins, 86 So. 3d 910, 913 (Miss. 2012)

(quoting Ladner v. O’Neill (In re Estate of Davis), 42 So. 3d 520, 524 (Miss. 2010)).

I.     Whether the trial court erred by ordering the parties to submit to arbitration in
       accordance with the terms of the operating agreement.

       A.     Reasonable Practicality of Carrying on Business

¶12.   B&S argued that Mississippi Code Section 79-29-123(3)(m) prohibited an operating

agreement from contracting away the power of a court to decree dissolution. It contended that

no clause in an operating agreement can take away a limited-liability company member’s

right to petition the court for judicial dissolution. The trial court disagreed and found that

members of a limited-liability company have a right to agree to binding arbitration under

Mississippi Code Section 79-29-1211.

¶13.   A limited liability company’s “operating agreement is a contract, subject to contract

law . . . .” Bluewater Logistics, LLC v. Williford, 55 So. 3d 148, 159 (Miss. 2011).

Mississippi Code Section 79-29-123 provides that an operating agreement may not “vary the

power of a court to decree dissolution in the circumstances specified in Section 79-29-803(1)

. . . .” Miss. Code Ann. § 79-29-123(3)(m) (Supp. 2019). Section 79-29-803 states that a

court “may decree dissolution of a limited liability company” when “it is not reasonably

practicable to carry on the business in conformity with . . . the operating agreement.” Miss.

Code Ann. § 79-29-803(1)(a) (Rev. 2013) (emphasis added).

¶14.   Although a court may order dissolution of a company, this Court previously has

recognized that “[j]udicial dissolution has been described as a remedy extreme in nature, and

                                              7
one that is to be granted sparingly.” Venture Sales, 86 So. 3d at 914. In that case, the Court

discussed the definition of “‘not reasonably practicable’ in the context of judicial dissolution”

of a limited-liability company. Id. It concluded, “it is clear that when a limited liability

company is not meeting the economic purpose for which it was established, dissolution is

appropriate.” Id. at 915. Because the company’s operating agreement stated that its purpose

was to acquire and develop property and the property at issue remained completely

undeveloped more than ten years after the company was formed, this Court found that

judicial dissolution was appropriate. Id.

¶15.   In accordance with Venture Sales, B&S maintained that the trial court was required

to make a determination as to whether it was reasonably practicable to carry on the business

in conformity with the operating agreement.3 But Jill asserted that while chancery courts do

have authority to order a judicial dissolution, the relevant statutory criteria have not been met

in this case. She alleged that B&S had failed to make any allegations to sufficiently show

why arbitration would be impracticable. Livingston’s operating agreement defined a

“majority vote” as “a vote of the Members holding at least fifty one percent (51%) of the

Membership Interest then owned by the Members.” It also provided that dissolution of the

       3
        Livingston’s operating agreement stated that

       the purposes of the Company [are] to engage in real estate development,
       construction and related services directly, or indirectly through subsidiary
       entities, and any related lawful activity, and to deal in and with any Property
       of any kind, character or description, whether tangible, real, personal or
       mixed, and wheresoever located, in or by any lawful way, manner or means.

                                               8
company shall occur “by the affirmative Majority Vote of the Members.” Thus, Jill argues

that because B&S holds a 51 percent interest in the company, B&S could have unilaterally

dissolved Livingston by simply calling a dissolution vote and exercising its vote in favor of

dissolution.

¶16.   The trial court correctly found that members of a Mississippi limited-liability company

have a right to agree to binding arbitration and that the members of Livingston agreed to an

arbitration provision in the operating agreement. Mississippi Code Section 79-29-1201

specifically states that “[t]he rule that statutes in derogation of the common law are to be

strictly construed shall have no application to this chapter.” Miss. Code Ann. § 79-29-

1201(1) (Rev. 2013). It continues, “[i]t is the policy of this chapter to give the maximum

effect to the principle of freedom of contract and to the enforceability of operating

agreements.” Miss. Code Ann. § 79-29-1201(2) (Rev. 2013). And as the trial court found,

Section 79-29-1211 provides, in relevant part, that

       Except by agreeing to arbitrate any arbitrable matter in a specified jurisdiction
       or in this state, a member who is not a manager may not waive its right to
       maintain a legal action or proceeding in the courts of this state with respect to
       matters relating to the organization or internal affairs of a limited liability
       company.

Miss. Code. Ann. § 79-29-1211 (Rev. 2013) (emphasis added). The members in this case

agreed to an arbitration provision in the operating agreement which stated,

       [A]ny dispute, claim, or controversy in connection with or arising under this
       Operating Agreement, its construction, existence, interpretation, validity, or
       any breach hereof, which cannot be amicably settled between the parties, shall
       be finally and exclusively resolved by arbitration under the Rules of

                                              9
       Arbitration of the American Arbitration Association then prevailing.

“[T]his Court will respect the right of an individual or an entity to agree in advance of a

dispute to arbitration or other alternative dispute resolution.” IP Timberlands Operating Co.,

Ltd. v. Denmiss Corp., 726 So. 2d 96, 104 (Miss. 1998). Additionally, “[a]rbitration

agreements ‘shall be valid, irrevocable, and enforceable, save upon such grounds as exist at

law or in equity for the revocation of any contract.’” Smith v. Express Check Advance of

Miss., LLC, 153 So. 3d 601, 606 (Miss. 2014) (quoting 9 U.S.C. § 2 (1976)).

¶17.   As the statute states, the parties in this case were free to contract, and this Court must

enforce operating agreements. In accordance with the operating agreement, dissolution of the

company may occur through the majority vote of the members. B&S did not show that it is

unable to comply with the operating agreement’s terms and that judicial dissolution was

required in this case. Further, although Section 79-29-123 states that an operating agreement

may not vary the court’s power to decree dissolution in certain circumstances, Section 79-29-

803(1) clearly states that a trial court may decree dissolution of a limited liability company.

Miss. Code Ann. § 79-29-803(1) (Rev. 2013). It does not state that a trial court must decree

dissolution of the company. Thus, the trial court correctly found that the arbitration provision

contained in the operating agreement prevailed.

       B.     Waiver of Judicial Dissolution

¶18.   In addition, Jill argues that regardless of the arbitration agreement, the members each

waived their right to seek judicial dissolution under article XVI, section 16.2, of the

                                              10
operating agreement. That provision provided that “[e]ach Member irrevocably waives

during the term of the Company any right that he may have to maintain any action for a

decree of dissolution of the Company or for partition with respect to the property of the

Company.”

¶19.   “A court is obligated to enforce a contract executed by legally competent parties

where the terms of the contract are clear and unambiguous.” Merchs. & Farmers Bank of

Kosciusko, Miss. v. State ex rel. Moore, 651 So. 2d 1060, 1061 (Miss. 1995) (citing Humble

Oil & Refining Co. v. Standard Oil Co. (Ky.), 229 F. Supp. 586 (D.C. Miss. 1964), rev’d on

other grounds by 363 F.2d 945 (5th Cir. 1966). As Section 79-29-1201 provides, the policy

of that chapter is “to give the maximum effect to the principle of freedom of contract and to

the enforceability of operating agreements.” Miss. Code Ann. § 79-29-1201(2) (Rev. 2013).

B&S clearly and unambiguously agreed to waive its right to maintain an action for judicial

dissolution. Accordingly, the trial court correctly ordered the parties to conduct binding

arbitration in accordance with the provisions of the operating agreement. Therefore, we

affirm the judgment of the trial court.

II.    Whether judicial dissolution fell outside of the scope of the operating
       agreement’s arbitration clause.

¶20.   In the alternative, B&S argues that even without the prohibition of Section 79-29-

123(3) against an operating agreement’s contracting away the right of a party to seek judicial

dissolution of a limited-liability company, judicial dissolution is outside the scope of the

arbitration agreement.

                                             11
¶21.   B&S cited as instructive two Georgia cases. In one case, a limited-liability company’s

operating agreement stated that “[a]ny dispute, controversy or claim arising out of or in

connection with, or relating to, this Operating Agreement or any breach or alleged breach

hereof shall, upon the request of any party involved, be submitted to, and settled by,

arbitration.” Ga. Rehab. Ctr., Inc. v. Newnan Hosp., 658 S.E.2d 737, 738 (Ga. 2008)

(internal quotation marks omitted). The operating agreement provided for the dissolution of

the company only upon a dissolution notice from a member, the unanimous agreement of all

members, or the bankruptcy of a member. Id. Because the petition for dissolution was not

commenced under the operating agreement but was commenced by Georgia statute, the

Georgia court found that the statute provided an independent legal mechanism for

dissolution. Id. Therefore, the court held that the dissolution did not arise out of or relate to

the operating agreement and that the issue did not have to be submitted to arbitration. Id.

¶22.   In another case, the parties filed a petition for judicial dissolution by statute; the

petition provided that “on application by or for a member of a limited liability company, the

court may decree dissolution of the company whenever it is not reasonably practicable to

carry on the company’s business in conformity with the articles of organization or a written

operating agreement.” Simmons Family Props., LLLP v. Shelton, 705 S.E.2d 258, 259 (Ga.

Ct. App. 2010). The Georgia court found that the operating agreement did not govern

dissolution proceedings initiated under statute; therefore, the dissolution involved did not

arise out of or relate to the terms of the operating agreement. Id. at 260.

                                               12
¶23.   B&S contends that the case at issue is similar. It argues that the arbitration provision

in the operating agreement did not specifically mention dissolution and that the parties had

no intention of submitting judicial dissolution to arbitration. However, as discussed above,

the parties in this case agreed to waive their right to judicial dissolution in the company’s

operating agreement. The arbitration provision contained in the operating agreement

provided that “any dispute, claim, or controversy in connection with or arising under this

Operating Agreement, its construction, existence, interpretation, validity, or any breach

hereof, which cannot be amicably settled between the parties, shall be finally and exclusively

resolved by arbitration . . . .” Because the parties agreed to waive their right to judicial

dissolution and because dissolution of the company by the majority vote of the members is

provided for in the operating agreement, dissolution directly falls under the arbitration

provision contained in the contract. Therefore, this issue has no merit.

                                       CONCLUSION

¶24.   Livingston’s operating agreement contained a provision stating that the members

expressly waived their right to maintain an action for a decree of dissolution. In addition, the

operating agreement contained a binding arbitration provision. Because the dissolution of the

company fell within the operating agreement and therefore under the arbitration provision,

the trial court did not err by ordering the parties to submit to binding arbitration. Therefore,

we affirm the judgment of the trial court.

¶25.   AFFIRMED.

                                              13
    RANDOLPH, C.J., MAXWELL, BEAM, CHAMBERLIN, ISHEE AND
GRIFFIS, JJ., CONCUR. KITCHENS, P.J., DISSENTS WITH SEPARATE
WRITTEN OPINION JOINED BY COLEMAN, J.

       KITCHENS, PRESIDING JUSTICE, DISSENTING:

¶26.   I respectfully dissent. B&S MS Holdings, LLC, the majority member of Livingston

Holdings, LLC, filed an application for judicial dissolution of Livingston under Mississippi

Code Section 79-29-803(1) (Rev. 2013). Although Livingston’s operating agreement

contains an arbitration provision, by statute an operating agreement cannot vary the power

of the chancery court to decree dissolution when the chancellor finds that it is not reasonably

practicable to carry on the business in conformity with the operating agreement under

Mississippi Code Section 79-29-803(1). Miss. Code Ann. § 79-29-123(3) (Supp. 2019). The

majority’s decision to affirm the order for arbitration essentially writes the applicable statute

out of existence. Therefore, I would reverse the arbitration order and remand for further

proceedings.

¶27.   Livingston was formed under the provisions of the Revised Mississippi Limited

Liability Company Act. Miss. Code Ann. §§ 79-29-101-1317 (Rev. 2013 & Supp. 2019).

This appeal involves the interplay of portions of Livingston’s operating agreement with

provisions of the Act. The operating agreement provides that “any dispute, claim, or

controversy in connection with or arising under this Operating Agreement” must be resolved

by arbitration and that the parties “waive any right to trial by jury . . . of any claim . . . arising

out of or relating to this agreement or the breach thereof . . . .” The operating agreement also

                                                 14
provides that “[e]ach Member irrevocably waives during the term of the Company any right

that he may have to maintain any action for a decree of dissolution of the Company . . . .”

¶28.   Mississippi Code Section 79-29-123(3)(m) says that “the operating agreement may

not: . . . [v]ary the power of a court to decree dissolution in the circumstances specified in

Section 79-29-803(1) . . . .” Miss. Code Ann. § 79-29-123(3)(m) (Supp. 2019). Section 79-

29-803(1)(a) provides,

       (1)    On application by or for a member, the chancery court for the county
              in which the principal office of the limited liability company is located,
              or the Chancery Court of the First Judicial District of Hinds County,
              Mississippi, if the limited liability company does not have a principal
              office in this state, may decree dissolution of a limited liability
              company:

              (a)    Whenever it is not reasonably practicable to carry on the
                     business in conformity with the certificate of formation
                     or the operating agreement;

Miss. Code Ann. § 79-29-803(1)(a) (Rev. 2013). Section 79-29-1211 allows arbitration

agreements and provides that,

       Except by agreeing to arbitrate any arbitrable matter in a specified jurisdiction
       or in this state, a member who is not a manager may not waive its right to
       maintain a legal action or proceeding in the courts of this state with respect to
       matters relating to the organization or internal affairs of a limited liability
       company.

Miss. Code Ann. § 79-29-1211 (Rev. 2013).

¶29.   Section 79-29-123(3) and Section 79-29-803(1) say that an operating agreement

cannot vary the court’s power to dissolve an LLC when “it is not reasonably practicable to

carry on the business in conformity with the . . . operating agreement.” Miss. Code Ann. §§

                                              15
79-29-123(3)(m), 79-29-803(1)(a). The majority acknowledges that Section 79-29-123(3)

does not allow an operating agreement to limit a court’s power to decree judicial dissolution

under Section 79-29-803(1). Yet inexplicably it finds that the parties to this operating

agreement waived their right to seek judicial dissolution under Section 79-29-803(1). Under

the plain language of Section 79-29-123(3), the parties cannot waive their right to seek

judicial dissolution in the situation identified in Section 79-29-803(1). Therefore, consistent

with Section 79-29-123(3), I would hold that the parties’ waiver of the right to seek judicial

dissolution did not include a waiver of their right to judicial dissolution under the specific

circumstance identified in Section 79-29-803(1). Because by law no waiver was allowed, I

reject the majority’s conclusion that “the parties agreed to waive their right to judicial

dissolution [under Section 79-29-803(1)] . . . .” Maj. Op. at ¶ 23.

¶30.   The majority relies on Section 79-29-1211, which provides that LLC members may

waive their right to sue by agreeing to arbitrate “matters relating to the organization or

internal affairs of a limited liability company.” Miss. Code Ann. § 79-29-1211. The majority

holds that because the law favors arbitration agreements and because this Court respects the

right of freedom to contract, the parties validly agreed to arbitrate the request of B&S for

dissolution. But the complaint filed by B&S requested judicial dissolution under Section 79-

29-803(1). Section 79-29-123(3) says that an operating agreement cannot vary the chancery

court’s power to decree dissolution under Section 79-29-803(1).

¶31.   I would find that the provision for arbitration agreements in Section 79-29-1211 does

                                              16
not abrogate the directive in Section 79-29-123(3) that dissolution under 79-29-803(1) is for

the chancery court. When faced with a question of statutory interpretation, this Court’s role

is to “give effect to the legislative intent.” City of Natchez v. Sullivan, 612 So. 2d 1087, 1089

(Miss. 1992) (citing Anderson v. Lambert, 494 So. 2d 370, 372 (Miss. 1986)). We must

examine a statute’s plain language to discern its meaning. Id. If a statute is ambiguous, then

the Court should look to principles of construction. Id. “[E]ach section of the Code dealing

with the same or similar subject matter must be read in pari materia . . . .” Miss. Pub. Serv.

Comm’n v. Mun. Energy Agency of Miss., 463 So. 2d 1056, 1058 (Miss. 1985) (citing

Atwood Chevrolet-Olds, Inc. v. Aberdeen Mun. Sch. Dist., 431 So. 2d 926, 928 (Miss.

1983)). “When statutes are in pari materia, although apparently conflicting, they should, if

possible, be construed in harmony with each other to give effect to each.” Atwood , 431 So.
2d at 928 (citing Lamar Cty. Sch. Bd. v. Saul, 359 So. 2d 350, 353 (Miss. 1978)).

¶32.   Because Section 79-29-1211 is in pari materia with Section 79-29-123(3) and Section

79-29-803(1), these statutes must be construed harmoniously to give effect to each. Atwood,

431 So. 2d at 928 (citing Saul, 359 So. 2d at 353). Section 79-29-123(3) and Section 79-29-

803(1) say that an operating agreement cannot vary the court’s power to dissolve an LLC

when “it is not reasonably practicable to carry on the business in conformity with the . . .

operating agreement.” Miss. Code Ann. §§ 79-29-123(3), 79-29-803(1). Section 79-29-1211

provides that members may agree to arbitrate “matters relating to the organization or internal

affairs of a limited liability company.” Even assuming dissolution is a “matter relating to”

                                               17
an LLC’s “organization or internal affairs” that the parties can agree to arbitrate, Section 79-

29-123(3) and Section 79-29-803(1) must be given effect. Under those two statutes, members

cannot contract to vary a court’s power to decree dissolution “[w]henever it is not reasonably

practicable to carry on the business in conformity with the certificate of formation or the

operating agreement.” Miss. Code Ann. §§ 79-29-123(3), 79-29-803(1). Construing Section

79-29-123(3), Section 79-29-803(1), and Section 79-29-1211 harmoniously and giving effect

to each yields the conclusion that Section 79-29-1211 does not go so far as to permit

members to agree to arbitrate an issue of dissolution lying within the ambit of Section 79-29-

803(1). The plain language of the statutes evinces a legislative intent to vest that authority

in the chancery court.

¶33.   The majority finds also that the complaint filed by B&S to dissolve Livingston is

subject to arbitration “because dissolution of the company by the majority vote of the

members is provided for in the operating agreement . . . .” Maj. Op. ¶ 23. Certainly it is

conceivable that because the operating agreement provides that the company shall be

dissolved by the majority vote of its members and because B&S was the majority member,

a judicial dissolution might not be warranted. But that is a decision for the chancery court to

make under the authority granted in Section 79-29-803(1), which provides that the chancery

court “may” decree dissolution when it is not reasonably practicable to carry on the business.

Because B&S filed an application for judicial dissolution under Section 79-29-803(1)

averring that irreconcilable differences had arisen between Livingston’s members and

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requesting judicial dissolution, it was for the chancery court, not for this Court or for an

arbitrator, to adjudicate the merits of the application. Miss. Code Ann. § 79-29-123(3).

¶34.   When Livingston’s members chose to organize under the provisions of the Mississippi

Limited Liability Company Act, they chose to subject the LLC’s doings to all of the statutory

provisions governing LLCs. Section 79-29-123(3) prohibits an LLC’s operating agreement

from varying a court’s power to decree dissolution under Section 79-29-803(1). Although

Section 79-29-1211 allows LLC members to agree to arbitrate many issues, Section 79-29-

123(3) means that members cannot enter into an enforceable agreement to arbitrate the

dissolution of an LLC under Section 79-29-803(1), a matter reserved for the chancery court.

Because B&S filed an application for judicial dissolution under Section 79-39-803(1), the

chancery court erred by sending the request of B&S for judicial dissolution to arbitration.

Therefore, I would reverse the judgment and remand the case to the chancery court for

further proceedings.

       COLEMAN, J., JOINS THIS OPINION.

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