Neil Maune
JEFFERSON CITY — The Missouri Supreme Court has vacated a St. Louis Circuit Court ruling and ordered the underlying dispute between an estate and a law firm to proceed to arbitration.
The opinion notes that with the estate of Neil J. Maune and the Maune Raichle Law Firm, the lower court incorrectly denied a motion to compel arbitration.
The high court concluded that the arbitration clause in the operating agreement of a related law firm applies and that the arbitrator, not the courts, must decide whether the estate’s claims fall within the scope of that agreement.
The case stems from a complex business relationship between Maune, attorney Marcus Raichle and two law firms with overlapping membership and financial arrangements.
According to the court, Maune and Raichle formed the Maune Raichle Law Firm as a general partnership without a written partnership agreement.
In 2009, the firm purchased two $10 million renewable term life insurance policies, one on Maune and one on Raichle, with the partnership listed as both owner and beneficiary.
Later, in 2011, Maune, Raichle and three others formed a separate law firm, Raichle Hartley French & Mudd, executing a formal operating agreement containing an arbitration clause.
They signed that agreement twice: once as “managers” and once as “members,” specifying in both places that they signed “individually and on behalf of the Company.”
For reasons the court described as unexplained, only Raichle’s life insurance policy was amended to designate the LLC as its beneficiary.
Maune’s policy continued naming the original general partnership as the beneficiary.
After Maune’s death in July 2023, the $10 million death benefit was paid to the partnership.
The estate subsequently filed suit in January 2024, alleging that the proceeds should have been paid to the LLC because it had paid the premiums for more than a decade.
The estate argued that if the funds had been directed to the LLC, the operating agreement would require the LLC to pay the estate the value of Maune’s ownership interest, an amount the estate implied would exceed the $1 million cap it expects to receive under the LLC’s current position.
The estate brought claims including denial of access to partnership books and records, tortious interference with contractual rights and business expectancies under the operating agreement, unjust enrichment and breach of fiduciary duty.
In response, Raichle and the partnership sought to compel arbitration based on the arbitration clause within the LLC’s operating agreement.
The circuit court denied that request, ruling that the partnership was not a party to the operating agreement and therefore could not enforce its arbitration clause.
However, the Missouri Supreme Court held that this conclusion was legally incorrect because, under Missouri law, a general partnership has no legal existence separate from its partners.
As the court explained, Missouri follows the “aggregate theory” of partnerships, meaning the partnership is simply the individuals acting together.
Because Maune and Raichle were the only partners and signed the operating agreement individually, their signatures were sufficient to bind the partnership.
The court rejected the estate’s argument that the two men signed the agreement only in their capacities as members and managers of the LLC, not as individuals.
The Supreme Court pointed to the signature page language, stating signatories signed “individually and on behalf of the Company,” as dispositive.
The court also noted that partners in a general partnership do not have separate legal capacities in the way corporate officers or LLC managers do, undercutting the estate’s reliance on appellate cases involving corporate or LLC signatories.
Citing its prior decision in Karlin, the court explained that when an arbitration agreement incorporates the American Arbitration Association’s rules, it includes a delegation clause assigning “gateway” questions, such as whether the agreement covers a particular dispute, to the arbitrator.
The estate did not challenge the delegation clause specifically, so the Supreme Court determined that the arbitrator must decide whether the estate’s claims fall within the arbitration agreement’s scope.
The court noted that much of the confusion in the case stemmed from the estate’s failure to distinguish which parties were bound to arbitrate from what issues were subject to arbitration.
It concluded that both Maune and Raichle, as signatories, and the partnership they comprise are bound by the arbitration agreement.
Whether the particular claims regarding the life insurance proceeds and alleged breaches fall within the scope of that agreement is for the arbitrator.
The Supreme Court vacated the circuit court’s order and remanded the case with instructions to grant the motion to compel arbitration.
Missouri Supreme Court case number: SC100942
