Charlie’s Project LLC, et al. v. T2B LLC, et al. (Lawyers Weekly No. 09-028-18)
COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss. SUPERIOR COURT. 1784CV03350-BLS2 ____________________ CHARLIE’S PROJECT LLC and ANNA K. HERNANDEZ v. T2B LLC, BRANDON McDANIEL, and NICOLE McDANIEL ____________________ MEMORANDUM AND ORDER DENYING DEFENDANTS’ MOTION TO COMPEL ARBITRATION AND DISMISS Charlie’s Project LLC (“CP”) and its founder Anna Hernandez have sued T2B LLC for allegedly breaching two contracts that concern the sale and delivery by T2B of clothes designed by Ms. Hernandez. Plaintiffs also claim that T2B, its founder Brendon McDaniel, and his spouse Nicole McDaniel have engaged in unfair and deceptive acts or practices in violation of G.L. c. 93A, that all three Defendants misappropriated CP’s designs, logos, marketing materials, and name, and that T2B and Nicole McDaniel have defamed Plaintiffs. Defendants have moved to dismiss this action. Their main argument is that all of Plaintiffs’ claims are subject to a mandatory arbitration clause contained in a third contract among T2B, Hernandez, and others. They also assert, in the alternative, that this action must be filed in Delaware under an allegedly mandatory forum selection clause in the LLC Agreement. The Court will DENY the motion to dismiss. The question whether the parties’ dispute must be arbitrated is for the Court to resolve. Though the parties to the third contract adopted the American Arbitration Association’s rules, and thereby agreed that the arbitrability of disputes arising under that contract must be decided by an arbitrator, that provision is not implicated here. Hernandez never agreed that the arbitrability of disputes arising under or out of the first two contracts would be decided by an arbitrator. Nor did she agree to arbitrate claims under those contracts, neither of which contains an arbitration provision. Finally, Defendants’ arguments regarding choice of forum are unavailing because the forum selection clause in the LLC Agreement does not apply here and, in any case, it is permissive not mandatory. 1. Factual Background. In 2012 Ms. Hernandez started a business that she called “Charlie’s Project.” Her aims, on behalf of her son Charlie, were to design and – 2 – sell children’s and women’s clothing that would help raise awareness about autism and Down syndrome, and to support charitable organizations with proceeds from selling such clothing. Although Hernandez did business under the name “Charlie’s Project” for several years, she did not form the corporate entity Charlie’s Project LLC (“CP”) until January 17, 2017, shortly after entering into the contracts at issue here. 1.1. The Distribution and Services Agreements. In the fall of 2016, Branden McDaniel proposed that he help distribute Charlie’s Project products. Ms. Hernandez agreed. Mr. McDaniel and two other people formed defendant T2B LLC as a Delaware limited liability company on December 1, 2016. Three days later T2B and Hernandez entered […]