ST. LOUIS — The Missouri Court of Appeals has upheld a trial court’s denial of a motion to compel arbitration filed by the Maune Raichle Law Firm in a $10 million insurance dispute.
The lawsuit involves whether proceeds from a life insurance policy held by the late Neil Maune, co-founder of the law firm, should benefit the firm or the law firm Maune Raichle Hartley French & Mudd, LLC (MRHFM), of which Maune and Raichle were also partners, according to the Nov. 26, Missouri Court of Appeals decision.
Neil Maune and Marcus Raichle Jr. co-founded Maune Raichle Law as a general partnership in 2009, with no formal partnership agreement. Both partners secured $10 million life insurance policies naming the firm as the sole beneficiary.
In 2011, they joined other attorneys to establish MRHFM, signing the new firm’s Operating Agreement as individual members and managers.
While MRHFM took over premium payments for the policies, the beneficiary of Maune’s policy was never updated to reflect the new firm, unlike Raichle’s policy, which was amended to name MRHFM.
When Maune passed away in July 2023, the $10 million payout was directed to Maune Raichle Law.
Subsequently, Maune’s estate, represented by his widow, Diana Maune, filed a lawsuit alleging that the law firm wrongfully retained the proceeds.
The estate contends the funds should have gone to MRHFM per its Operating Agreement, which purportedly outlined their use for purchasing Maune’s ownership interest in MRHFM.
The Motion to Compel Arbitration
Maune Raichle Law and Raichle sought to compel arbitration, arguing that MRHFM’s Operating Agreement contained an arbitration clause delegating disputes, including those over the applicability of arbitration itself, to an arbitrator.
They further contended that the estate’s claims were intertwined with the Operating Agreement, justifying arbitration.
However, the trial court rejected these arguments, ruling that Maune Raichle Law, as a distinct legal entity, was not a party to the Operating Agreement. It concluded there was no contractual relationship between Maune Raichle Law and Maune’s estate that could mandate arbitration.
In its decision, the appellate court agreed with the trial court’s reasoning, finding no basis to compel arbitration.
"The Operating Agreement has no bearing on disputes between MR Law and its partners," the court wrote. "Because they are not parties to the agreement, no valid contract was formed between MR Law, its general partners, and MRHFM law firm, and the arbitration clause in the Operating Agreement cannot be enforced against the estate."
The court also rejected arguments that the relationship between Maune Raichle Law and MRHFM warranted invoking arbitration to preserve the integrity of the Operating Agreement.
It noted that Raichle’s multiple roles—as an individual, as the firm’s general partner and as a manager of MRHFM—did not merge the legal distinctions among these entities.
"We hold that, since there is no contract between MR Law and the Estate, MR Law cannot compel the Estate to arbitrate its claims per the arbitration provision in the Operating Agreement because they never agreed to do so," Judge Renee D. Hardin-Tammons wrote in the decision. "Further, the relationship between MR Law and the Estate was not close enough so as to eviscerate the agreement to which MR Law is not a party. Finally, the Estate’s claims arise out of and rely on the alleged tortious conduct of MR Law, which is independent of any term in the Operating Agreement."
The appellants are represented by Tina N. Babel and Joshua Levine.
The respondents are represented by Jeffrey R. Baron and D. Todd Matthews.
The parties did not respond to a requests for comment.
Missouri Court of Appeals, Eastern District case number: ED112669