Ohio court enforces arbitration in family trust dispute over venture investments

A long-running legal battle over access to family-controlled venture capital investments will proceed to arbitration following a ruling by Ohio’s Eighth Appellate District.

In Murfey v. Muth, the appellate court affirmed a decision by the Cuyahoga County Court of Common Pleas that granted motions to compel arbitration and stayed the case. The plaintiffs, Spencer L. Murfey III and Cynthia H. Murfey, filed suit both individually and as co-trustees of family trusts created by their parents, alleging they were unfairly excluded from participating in a series of investment partnerships due to their status as adopted children.

The dispute centers on a network of family investment entities—WHC Ventures 2009-1, LP; WHC Ventures 2013, LP; WHC Ventures 2016, LP; and the more recently established WHC 2020 and WHC 2023. These partnerships were used by the family to invest in Greylock Partners, a venture capital firm historically associated with Warren H. Corning, the family’s patriarch who died in 1975. Corning had been involved with Greylock since its inception in the 1960s.

The plaintiffs contend that while they had participated in earlier partnerships, they were excluded from later offerings beginning in 2020. They attribute this exclusion to their adoptive status and argue it caused a reduction in their ownership and investment rights. The lawsuit, brought against relatives Maria G. Muth and Mary V. Murfey, as well as Peter W. Nordell Jr. and WHC Ventures, LLC, alleged breach of contract, tortious interference, civil conspiracy, spoliation of evidence, unjust enrichment, and sought declaratory relief.

The parties had previously litigated related matters in multiple jurisdictions. In 2018, the plaintiffs filed a books-and-records action in Delaware, followed by a separate Delaware suit in 2020 that included allegations involving distributions, capital calls, and irregularities in the partnership agreements. That case settled. In 2020 and 2021, the plaintiffs also brought trust-related claims in Florida, naming Muth and another co-trustee, Homer Chisholm, as defendants. Those actions remain pending.

The Ohio suit was initially filed in 2021 and later voluntarily dismissed to allow for settlement negotiations. The present case is a refiled version of that action, incorporating additional claims. In response, the defendants moved to compel arbitration under the Limited Partnership Agreements (LPAs), all of which contain mandatory arbitration provisions. The plaintiffs acknowledged signing the LPAs but argued that the defendants had waived their arbitration rights by engaging in years of litigation.

The trial court disagreed, and the appellate court upheld the ruling. The opinion emphasized that under Ohio law, waiver of arbitration must be explicit and that any doubt must be resolved in favor of arbitration. The appellate panel found no abuse of discretion in the trial court’s decision, noting that while there had been earlier litigation, those cases were either limited in scope or did not directly overlap with the current claims.

The court also noted that the plaintiffs had not requested an oral hearing on the motions to compel arbitration, undercutting their argument on procedural grounds. It rejected the notion that participation in prior lawsuits or settlement discussions constituted a waiver of arbitration, especially in the absence of significant litigation in the refiled case.

The ruling effectively halts the Ohio proceedings, sending the matter to arbitration as specified by the partnership agreements.

Although the substantive claims—including allegations of exclusion from family wealth due to adoption—remain unresolved, the decision reinforces the binding nature of arbitration clauses in partnership disputes, particularly in closely held family investment structures.

For advisors and professionals managing multigenerational wealth, the case highlights how legal conflicts within family enterprises can be shaped—and often contained—by well-drafted governance documents. As the use of private investment vehicles grows more sophisticated, so too do the legal frameworks that govern them. The Murfey case offers a clear example of how arbitration clauses can serve to redirect even emotionally charged disputes away from the courtroom and into private resolution channels.