Mission Residential, LLC v. Triple Net Properties, LLC

Triple Net Properties (Triple) (defendant) and Mission Residential (Mission) (plaintiff) formed NNN/Mission Residential Holdings, LLC (Holdings) under an operating agreement whose Section 13.9 required binding arbitration of member disputes. Triple brought arbitration against Mission for breach of contract, plus a derivative claim on behalf of Holdings; the arbitrator dismissed the direct breach claim for lack of standing but let the derivative claim proceed. Mission sued in circuit court for a declaration that Holdings itself had never agreed to arbitration, but the arbitrator (relying on AAA Rule R-7(a), which gives arbitrators sole authority over arbitrability) refused to pause the arbitration and found the derivative claim arbitrable, a conclusion the circuit court agreed with; Mission appealed to the Virginia Supreme Court.