Khnkoyan v. Missakian CA2/1

Filed 3/3/14 Khnkoyan v. Missakian CA2/1 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

NAIRA KHNKOYAN et al., B248125

Plaintiffs and Appellants, (Los Angeles County Super. Ct. No. EC057005) v.

CRAIG MISSAKIAN et al.,

Defendants and Respondents.

APPEAL from a judgment of the Superior Court of Los Angeles County. Donna Fields Goldstein, Judge. Affirmed. Shaghzo & Shaghzo and Armen Shaghzo, for Plaintiffs and Appellants. Russ, August & Kabat and Robert F. Gookin, for Defendants and Respondents.

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Plaintiffs, minority shareholders of two limited liability companies (LLCs), appeal from a judgment confirming an arbitration award that set the value of their shares in the companies. Plaintiffs maintain that the court erred in confirming the award because the arbitrator exceeded his powers by not valuing their shares in accordance with the provisions of the LLCs’ Operating Agreements. We conclude that the arbitrator’s decision that the Operating Agreements did not apply to the valuation of the plaintiffs’ shares, even if erroneous, was an unreviewable error of law. Therefore we affirm the judgment. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11.) FACTS AND PROCEEDINGS BELOW Plaintiffs are minority shareholders in two limited liability companies: Damon’s Glendale Steak House, LLC and 317-319 Brand Blvd., LLC. Disputes arose among the LLCs’ shareholders over the operation of the companies and plaintiffs filed a suit against the majority shareholders. Pursuant to the LLCs’ Operating Agreements the disputes were submitted to binding arbitration. (The relevant provisions of the LLCs’ Operating Agreements are identical.) The third cause of action in plaintiffs’ initial arbitration demand sought an appraisal of their shares in the LLCs pursuant to Article 10 of the Operating Agreements which provides under specified circumstances for the sale of a member’s shares to other members of the LLCs or to third party investors. Article 10.2, subdivision (b) of the Operating Agreements states that in the case of a sale under the Agreements the shares must be appraised “without regard to any discount for minority interest in the Company or nonmarketability.” Plaintiffs subsequently amended their arbitration demand and notified the arbitrator and the defendants that they “hereby dismiss their Third Cause of Action for Sale of Minority Shareholders’ Shares Pursuant to Article 10 without prejudice.” After plaintiffs dismissed their action for sale of their shares under the Operating Agreements they moved for dissolution of the LLCs pursuant to former