ROHAN MANAGEMENT, INC., an Arizona corporation; ROHAN MANAGEMENT, INC. DEFINED PENSION PLAN; ROHAN MANAGEMENT, INC. 401 (K) PLAN; PISHIT PATEL and JINTY PENG, husband and wife, Petitioners,
v.
THE HONORABLE LEE JANTZEN, Judge of the SUPERIOR COURT OF THE STATE OF ARIZONA, in and for the County of MOHAVE, Respondent Judge, NILAY S. PATEL, an individual; MAYANK S. PATEL, an individual, Real Parties in Interest.
Petition for Special Action from the Superior Court in Mohave
County No. S8015CV201801018 The Honorable Lee Frank Jantzen,
Judge
Quarles & Brady LLP, Phoenix By John A. Harris, Brian
Sirower, Michael S. Catlett, Benjamin C. Nielsen Counsel for
Petitioners
Clark
Hill PLC, Scottsdale By Darrell E. Davis, Sean M. Carroll,
Ryan J. Lorenz Counsel for Real Parties in Interest
Presiding Judge Jennifer B. Campbell delivered the opinion of
the Court, in which Judge Paul J. McMurdie and Judge Kent E.
Cattani joined.
OPINION
CAMPBELL, JUDGE
¶1
The question addressed in this special action is whether
Arizona Revised Statutes ("A.R.S.") section
29-785(A) mandates that an action for the involuntary
judicial dissolution of a limited liability company be
brought in the county in which the LLC's known place of
business is located. We accept special-action jurisdiction
and grant relief, holding that the statute does not limit
venue to the county which contains an LLCs known place of
business.
BACKGROUND
¶2
This case arises from a conflict over various business and
financial matters among a group of siblings and their
families involving jointly owned and managed companies and
properties. Pishit Patel ("Petitioner") filed suit
against members of his family, including Nilay Patel and
Mayank Patel ("Respondents"), and various other
entities in the Maricopa County Superior Court. In his second
amended complaint, Petitioner alleged, in relevant part, that
Respondents misused operating funds from Sammy's Island,
LLC-a business he formed to operate a mobile home and RV
park. Petitioner's complaint asked the court to determine
the ownership interests of Sammy's Island and to appoint
a receiver, and included claims for an accounting, breach of
contract, fraudulent nondisclosure, breach of fiduciary duty,
civil conspiracy, conversion, civil racketeering, and unjust
enrichment.
¶3
Respondents denied all of Petitioner's claims and filed
counterclaims. They alleged that, together, they owned 50
percent of the membership interests in Sammy's Island,
while Petitioner effectively owned the other 50 percent.
Respondents' counterclaims included breach of contract,
conversion, defamation, false light, breach of fiduciary
duty, and breach of the duty of good faith and fair dealing.
¶4The
same day Respondents filed their answer and counterclaims in
Maricopa County, they also filed a complaint against
Petitioner in the Mohave County Superior Court. Their
complaint included claims for breach of contract, accounting,
conversion and aiding and abetting, injunctive and
declaratory relief, and for the judicial dissolution of
Sammy's Island under A.R.S. § 29-785, again alleging
that Respondents together had a 50 percent ownership interest
in Sammy's Island and that Petitioner's actions had
made it impossible to continue operating the company.
¶5Petitioner
filed a motion for abatement in Mohave County, arguing that
substantially identical claims were already pending in
Maricopa County. In their response, Respondents argued that
pursuant to A.R.S. § 29-785, Mohave County was the
"exclusive" forum with "subject matter
jurisdiction" to resolve the judicial dissolution and
related claims. The Mohave County Superior Court denied
Petitioner's motion for abatement, ruling that the
statute does not allow for "concurrent jurisdiction
[between counties] in the dissolution claim." Petitioner
then filed a petition for special action with this court.
¶6After
the petition for special action, response, and reply were
filed, Respondents filed a notice to supplement the record to
inform this court they were voluntarily dismissing their
counterclaims relating to Sammy's Island in the Maricopa
County action. They argued this voluntary dismissal of
certain claims meant there were "no longer any claims
related to Sammy's Island . . . remaining in the Maricopa
County [a]ction," rendering moot the issue before us.
DISCUSSION
¶7
Petitioner argues the Mohave County Superior Court erred by
ruling that A.R.S. ยง 29-785(A) does not allow for
"concurrent jurisdiction in the judicial dissolution
claim." The Mohave County Superior Court ruled that
regardless of whether the Mohave claims were sufficiently
identical to the Maricopa claims to warrant abatement, the
statute does not permit the judicial dissolution claim to ...