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Porter v. Williamson

Supreme Court of Alabama

January 30, 2015

Donald Porter et al.
v.
Byron Porter Williamson

Released for Publication August 5, 2015.

Appeal from Jefferson Circuit Court. (CV-2013-902152). Michael G. Graffeo, Trial Judge.

AFFIRMED IN PART; REVERSED IN PART; AND REMANDED WITH INSTRUCTIONS.

For Appellants: Bruce F. Rogers, John W. Clark IV, Jennifer A. Hanson, Bainbridge, Mims, Rogers & Smith, LLP, Birmingham; William B. Hairston III, Engel, Hairston & Johanson, P.C., Birmingham.

For Appellee: Andrew P. Campbell, Stephen D. Wadsworth, Campbell, Guin, Williams, Guy & Gidiere, LLC, Birmingham.

MAIN, Justice. Stuart, Bolin, Parker, Murdock, Shaw, Wise, and Bryan, JJ., concur.

OPINION

Page 1216

MAIN, Justice.

Donald Porter, Marc Porter, Porter Capital Corporation, Porter Bridge Loan Company, Inc., Lowerline Corporation, CapitalPartners Leasing, Inc., and CapitalPartners Leasing, LLC (hereinafter referred to collectively as " the Porter defendants" ), appeal from the denial of their motion to compel arbitration of the claims asserted against them by Byron Porter Williamson. We affirm in part, reverse in part, and remand the case with instructions.

I. Facts and Procedural History

Marc Porter and Donald Porter are brothers; they founded Porter Capital Corporation in 1991 and thereafter established the related companies Porter Bridge Loan Company, Inc., Lowerline Corporation, CapitalPartners Leasing, Inc., and CapitalPartners Leasing, LLC (the business entities are hereinafter referred to collectively as " the Porter companies" ). In 1992, the Porters hired their nephew Williamson as an employee of the Porter companies. In 2004, Williamson, Marc Porter, and Donald Porter entered into a shareholders agreement that made Williamson a 10% shareholder in Porter Capital Corporation, Porter Bridge Loan Company, Inc., Lowerline Corporation, and CapitalPartners Leasing, Inc. (" the agreement" ).[1]

On August 3, 2012, Williamson's employment as an employee of the Porter companies was terminated. Williamson thereafter provided written notice to the Porter companies of his intention to retire as a shareholder of the corporations and as a member of the limited-liability company. The agreement provided that under certain circumstances, including termination of the employment of a shareholder for cause or retirement of a shareholder, the Porter companies were required to purchase the shares of the terminated or retiring shareholder.[2] Following his termination and resignation as a shareholder of the corporations and a member of the limited-liability company, Williamson demanded that his shares in the corporations and his interest in the limited-liability company be purchased by the Porter companies pursuant to the agreement. The parties, however, were unable to agree on the value of Williamson's shares and interest. On May 30, 2013, Williamson sued Marc Porter, Donald Porter, and the Porter companies.

Count I of Williamson's complaint asserted that, pursuant to the agreement, the Porter defendants were required to purchase his shares and interest in the Porter companies. Williamson requested that the court enter an order requiring specific performance of the provisions of the agreement requiring the Porter defendants to purchase his shares and interest. Count II of Williamson's complaint asserted, alternatively, that the agreement was due to be rescinded. Count III sought compensatory and punitive damages for alleged misrepresentations and suppression

Page 1217

of material facts by the Porter defendants. Count IV alleged that the Porter defendants had converted money belonging to Williamson from an investment account controlled by the Porter companies.

On July 12, 2013, citing the arbitration provision of the agreement, the Porter defendants moved the trial court to dismiss the action without prejudice or to stay discovery and compel arbitration. Two provisions of the agreement bear on whether Williamson's claims must be arbitrated. The agreement provides:

" 28. Specific Performance. The Corporations and the Shareholders hereby acknowledge and agree that the Securities[3] cannot be readily purchased or sold in the open market and are of a unique and extraordinary nature, and for that reason, among others, they will be irreparably damaged in the event this Agreement is not specifically enforced. Should any dispute arise concerning the sale or disposition of the Securities, an injunction may be issued restraining any sale or disposition thereof pending the determination of such controversy, in the event of any controversy concerning the purchase or sale of any such Securities, the same shall be enforceable in a court of equity by a decree of specific performance or by temporary or permanent injunction or any other legal or equitable remedy, without the necessity of showing actual damages or furnishing a bond or other security. Such remedy shall, however, be cumulative and not exclusive, and shall be in addition to any other remedy which the Corporations and the Shareholders may have.
" 29. Arbitration. Except for items of specific performance referred to above, any controversy or claim arising out of, resulting from or relating to this Agreement shall be settled by arbitration conducted in Birmingham, Alabama in accordance with the Commercial Arbitration Rules of the American Arbitration Association (or organization which is the successor thereto). The parties hereto agree that service of process or notice of motion or other application in connection with any arbitration may be served by the means by which notices are to be given under this Agreement, provided that a reasonable time for appearance is allowed. Any award [in] such arbitration may be enforced on application of either party by the order or judgment of a court of any competent jurisdiction. The fees and ...

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