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Nationsbanc Investments Inc. v. Paramore5/21/1999
REL:05/21/1999Nationsbanc
PER CURIAM.
NationsBanc Investments, Inc., and Robert Lipscomb, defendants in an action pending in the Tuscaloosa Circuit Court, appeal that court's order denying their motions to dismiss or, in the alternative, to stay proceedings and to compel arbitration of the plaintiff's claims. For the reasons outlined below, we reverse and remand with instructions.
Facts and Procedural History
Billie Jo Nicole Paramore, a minor, brought this action through her guardian ad litem, against her father, Tony Paramore, as conservator of her estate, and against NationsBanc and its broker, Robert Lipscomb. Tony Paramore was appointed conservator of the plaintiff's estate on May 10, 1994. At the time, Billie Jo's estate consisted of approximately $380,000. This amount originated from the settlement of a wrongful-death action based on the death of Billie Jo's mother. Pursuant to § 26-2A-154, Ala. Code 1975, the letters of conservatorship specifically limited Tony Paramore's powers in dealing with Billie Jo's estate funds.
Tony Paramore, as conservator, entered into two contracts with NationsBanc establishing a brokerage account for the investment of funds belonging to Billie Jo 's estate. The account allowed Paramore, as a NationsBanc client, to "purchase, sell or hold securities." The account privileges outlined in the contract also allowed Paramore to withdraw account funds by writing checks and by using a debit card or automated-teller-machine card. These contracts contained arbitration clauses. Billie Jo alleges that, after Tony Paramore had entered the contracts, he depleted the estate funds to approximately $850.
Billie Jo 's original complaint alleged, among other things, that NationsBanc and Lipscomb had conspired with Tony Paramore to violate §§ 19-3-120 and 26-2A-152, Ala. Code 1975, and to deprive her of her money and other property and to make the conservatorship funds available to Tony Paramore. (NationsBanc and Lipscomb filed separate appeals challenging the trial court's refusal to compel arbitration. This opinion addresses both appeals. The two appellants will hereinafter be referred to as "NationsBanc.") After Billie Jo filed her original complaint, NationsBanc moved the trial court to dismiss or, in the alternative, to stay proceedings and to compel arbitration of her claims. The trial court denied the motions, without explanation. NationsBanc thereafter attempted to mediate the dispute, but to no avail, and the case was set for trial.
Because of the mediation efforts, NationsBanc did not seek review of the trial court's denial of arbitration. It was only after the mediation efforts failed that NationsBanc answered the original complaint and the first amendment to that complaint and raised the arbitration issue as an affirmative defense.
Billie Jo filed a second amendment to her complaint, alleging, among other things, claims for money had and received, a breach of fiduciary duty, suppression of a material fact, negligence and wantonness in the handling of the conservatorship account, and conspiracy to deplete the account; these claims were based upon numerous alleged acts of wrongdoing by NationsBanc and Tony Paramore.
NationsBanc then removed the action to a federal district court, but that court remanded the case to the Tuscaloosa Circuit Court. Thereafter, NationsBanc again moved the trial court to dismiss or, in the alternative, to stay proceedings and to compel arbitration of the claims asserted in the second amendment to the complaint. After holding a hearing, the court denied the motions. On appeal, NationsBanc argues that the two brokerage contracts containing arb
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