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Stanley v. Liberty

Supreme Judicial Court of Maine

March 5, 2015

JAMES G. STANLEY JR. et al.
v.
MICHAEL A. LIBERTY et al

Argued February 12, 2015

For George J. Marcus, Esq., and Daniel L. Rosenthal, Esq., Marcus, Clegg & Mistretta, P.A., Portland, for appellants Michael A. Liberty and the Liberty corporate entities.

For George T. Dilworth, Esq., and George Royle V, Esq., Drummond Woodsum, Portland, for appellees James G. Stanley, Jr., Barbara Stanley, and Northeast Marine Services, Inc.

For Daniel Rosenthal, Esq., for appellants Michael A. Liberty and the Liberty Corporate entities.

For George T. Dilworth, Esq., for appellees James G. Stanley, Jr., Barbara Stanley, and Northeast Marine Services, Inc.

Panel: ALEXANDER, MEAD, GORMAN, and HJELM, JJ.

OPINION

Page 664

ALEXANDER, J.

¶1 Michael A. Liberty (" Liberty" ) and five corporations under his control (" the Liberty corporate entities" ) appeal from a judgment of the Business and Consumer Docket ( Horton, J.) confirming a binding arbitration award in favor of James G. Stanley Jr., Barbara Stanley, and Northeast Marine Services, Inc. (collectively " Stanley" ). See 14 M.R.S. § § 5937, 5940 (2014).

¶2 Liberty and the Liberty corporate entities contend that the court erred in confirming, without modification, the arbitration award because the arbitrator exceeded his powers by (1) finding that Stanley should not be liable as a fiduciary for poorly documented personal transactions among Stanley, Liberty, and the Liberty

Page 665

corporate entities; (2) piercing the corporate veil and imposing personal liability on Liberty for certain transactions between Stanley and the Liberty corporate entities; and (3) misinterpreting or miscalculating the inflation adjustment provision of the retirement contract that generated this litigation. Liberty and the Liberty corporate entities also contend that the court erred by not including certain additional language suggested by them in its judgment confirming the arbitration award. Respecting the very narrow scope of courts' review of arbitration awards, see Leete & Lemieux, P.A. v. Horowitz, 2012 ME 71, ¶ 12, 53 A.3d 1106, we affirm.

I. CASE HISTORY

¶3 Between August 2012 and July 2013, James G. Stanley Jr., Barbara Stanley, and their company Northeast Marine Services, Inc., were parties to a binding arbitration with Michael A. Liberty and the Liberty corporate entities regarding contractual and fiduciary disputes arising from Stanley's tenure as an officer and director of the Liberty corporate entities. By agreement of the parties, the arbitration proceedings were not recorded. The case history that follows is drawn from the factual findings in the arbitrator's award. See Rainbow v. Ransom, 2010 ME 22, ¶ 3, 990 A.2d 535 (stating that when there is no transcript of hearings below, on review we assume that the record supports the findings of fact and discretionary rulings on procedure and remedies made during the course of the proceeding).

¶4 Michael Liberty was the sole shareholder or sole director of five corporations: Liberty Group, Inc. (" LGI" ); Liberty Management, Inc.; Equity Builders, Inc.; Mainland Development Company; and American Housing Preservation Corporation (" AHPC" ).[1] The Liberty corporate entities collaborated on real estate ventures and government-subsidized housing projects. " LGI was the literal and de facto parent of the other [corporate entities] and often guaranteed personal ...


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