Contract analysis

I. PRELIMINARY STATEMENT PCG respectfully opposes the motion to compel filed by MSH on November 6, 2023, seeking production of PCG's internal investment-committee memoranda and related deliberative documents (collectively, the "IC Memoranda"). MSH's motion targets approximately fourteen (14) categories of internal documents reflecting PCG's privileged communications with legal counsel and confidential business delibe

II. STATEMENT OF RELEVANT FACTS A. Background of the Joint Venture and Call-Option Exercise Palmetto Grand Ventures LLC ("PGV") was organized as a Florida limited liability company on June 15, 2017, under Florida Filing No. L17000124583. PGV was formed for the purpose of acquiring, renovating, and operating The Palmetto Grand Resort & Spa, a full-service luxury resort property situated on approximately 8.7 acres of b

Section 12.4 of the Operating Agreement grants PCG, as Manager, the right to purchase MSH's entire membership interest in PGV at "Fair Market Value" upon and after the fifth anniversary of the formation date—i.e., on or after June 15, 2022. As specified in OA Section 12.4(a), the "Fair Market Value" of the membership interest to be redeemed is to be determined by an independent MAI-certified appraiser selected by the

III. LEGAL STANDARD Under the JAMS Comprehensive Arbitration Rules, Rule 17(a), the Arbitrator has broad discretion to manage discovery in a manner consistent with the efficient resolution of the dispute. Rule 17(a) further provides that the Arbitrator may reference the Federal Rules of Civil Procedure as guidelines in resolving discovery disputes, while recognizing that arbitration proceedings are not bound by the f

IV. ARGUMENT A. The Internal Investment-Committee Memoranda Are Protected by the Attorney-Client Privilege

1. The IC Memoranda Reflect Privileged Legal Advice. The IC Memoranda at issue in MSH's motion were prepared during the period from approximately October 2022 through January 2023—the critical period during which PCG was evaluating whether and how to exercise the call option under OA Section 12.4. During this period, PCG's principals, including Dominic R. Pellegrino (Managing Member), Adriana Pellegrino-Voss (Senior

2. MSH Has Identified No Applicable Exception to the Attorney-Client Privilege. MSH's primary argument for overcoming the attorney-client privilege is that PCG placed its "state of mind" at issue by denying bad faith, thereby effecting an implied waiver of the privilege. This argument is without merit under Florida law and should be rejected. The so-called "at issue" or "implied" waiver doctrine provides that a party

1. The IC Memoranda Were Prepared in Anticipation of Litigation. Independent of the attorney-client privilege, many of the IC Memoranda are also protected by the work-product doctrine because they were prepared in anticipation of litigation or arbitration. The record demonstrates that the prospect of litigation or arbitration was reasonably anticipated well before PCG delivered the Exercise Notice on January 9, 2023.

2. MSH Cannot Demonstrate Substantial Need or Undue Hardship. Even assuming, arguendo, that some of the IC Memoranda constitute fact work product rather than opinion work product—a characterization that PCG does not concede—MSH cannot satisfy the heightened standard required to overcome the work-product doctrine. Under Florida Rule of Civil Procedure 1.280(b)(4)(A), the requesting party must demonstrate both (1) "sub

1. The Bad-Faith Claim Under OA Section 12.7 Does Not Create a Blanket discovery Right. MSH's motion rests on the implicit premise that the bad-faith standard of OA Section 12.7 creates a special discovery right that transcends the ordinary rules of privilege and work-product protection. This premise is unsupported by the text of the Operating Agreement, Florida law, or any persuasive authority. OA Section 12.7 provi

2. Permitting discovery Would Chill Legitimate Legal Consultation. The policy concerns underlying the attorney-client privilege are implicated with particular force in the context of MSH's motion. If parties exercising contractual call options could be compelled to produce their internal legal deliberations whenever the counterparty alleges "bad faith"—as the counterparty will virtually always do in a contested buyou

V. CONCLUSION For the foregoing reasons, Respondent Pellegrino Capital Group LLC respectfully requests that the Arbitrator enter an order:

1. Denying Claimant Meridian Shores Hospitality LLC's Motion to Compel Production of Documents in its entirety; or

2. In the alternative, directing that the thirty-seven (37) withheld documents and twelve (12) partially redacted documents be submitted to the Arbitrator for in camera review, with any compelled production limited to the narrowest possible scope following such review. PCG has complied fully with its discovery obligations in this proceeding, producing in excess of 42,000 pages of responsive, non-privileged documents