MTR Gaming Group argues case in state Supreme Court - WBOY.com: Clarksburg, Morgantown: News, Sports, Weather

MTR Gaming Group argues case in state Supreme Court

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Parties recently appeared before the state Supreme Court in a case where a West Virginia gaming group alleges a former CEO violated a settlement agreement by filing a federal action in Pennsylvania.

Edson R. "Ted" Arneault filed the suit against MTR Gaming Group Inc. in Hancock County Circuit Court taking issue with contract and tort claims.

According to court documents, Arneault stepped down as the company's CEO in 2008 and entered into deferred compensation and consulting agreements.

In his suit, Arneault alleged MTR should pay annual premiums on certain insurance policies under that deferred compensation agreement.

MTR paid him a "significant sum in return for his promises and obligations to MTR," court briefs state.

Parties settled this lawsuit in February 2010.

In their settlement agreement, there were certain provisions such as a forum selection clause, which is where parties agreed that the venue would be entirely in Hancock County Circuit Court, MTR alleges. It also included a confidentiality provision.

Arneault later filed an amended complaint with a co-plaintiff in the Western District of Pennsylvania alleging violations of constitutional rights, retaliation for exercising his First Amendment Rights and violations of procedural due process rights, court documents state. He said this delayed his Pennsylvania gaming license.

MTR alleged this amended complaint stems from the settlement agreement saying it "quoted substantially from the settlement agreement" and "even attached the settlement agreement to the amended complaint."

MTR then made a motion to dismiss this action and responded with its own claims against Arneault in the Western District of Pennsylvania.

Its suit alleged a breach of the settlement agreement provisions such as a breach of a covenant not to compete, tortious interference with contractual relations and violations of Pennsylvania's Trade Secrets Act, according to court documents.

Arneault moved to dismiss this suit, arguing MTR violated the forum selection clause. The federal court has not yet ruled on this motion, court briefs note.

Arneault also filed a petition for rule to show cause in Hancock County Circuit Court, arguing MTR should be held in civil contempt for violating the settlement agreement.

The circuit judge later found the gaming company in civil contempt, saying three of the counts in that suit came out of the settlement.

The judge also found "at least a portion" of Arneault's suit came from the settlement agreement but provided him a "cure."

MTR gaming filed a petition for writ of prohibition in the state Supreme Court arguing justices should prohibit the lower court from enforcing the order that found it in contempt.

Represented by Robert J. D'Anniballe Jr., MTR asked in its brief to the West Virginia Supreme Court if the circuit court should have instead found Arneault in contempt.

The brief also asked justices if the circuit court should have waited on issuing a ruling before the federal court ruled on the motion.

Arneault, represented by Bob Fitzsimmons, asked in his brief if MTR's petition should be denied since he said the company has "other adequate means to obtain desired relief."

"MTR didn't choose to go to the Western district of Pennsylvania," D'Anniballe said. "We responded to the litigation in the same form Arneault picked to start this."

"We are merely responding to defend ourselves," he said later in the hearing. "We believe first and foremost that we not be filed in contempt."  

Arneault said MTR cannot show it was damaged in a way that's not correctable on appeal, even though the lower court imposed a $500 a day sanction against MTR until it dismisses three counts in its Pennsylvania case.

The brief argues MTR has not paid the fine.

Fitzsimmons said MTR's claim was "offensive" and said he didn't believe the writ is a proper form of remedy.

"The hearing was Jan. 4 of 2012. They had three months in which to dismiss counts in the Western District of Pennsylvania while the proposed findings of fact and conclusions of law were being submitted. They elected not to do that. The judge entered an order in April of 2012 and MTR rested upon their hopes that something would happen in the Western District. "