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Jones v. Ventura2/25/2005
r breach of this or any other agreement between us, whether entered into before or after the date an account is opened, shall be determined by arbitration ...."
In support of their motion, Morgan Stanley and Bowen submitted a copy of the "Active Assets Account Application," a copy of the "Dean Witter Client Agreement," and a copy of the probate court's order granting Dutton's petition for guardianship and conservatorship.
Ventura filed a lengthy response to the motions to compel arbitration. He asserted that the brokerage defendants had failed to establish the existence of a valid and binding contract containing an arbitration provision; he challenged the completeness of the account applications submitted by the brokerage defendants as exhibits; he also challenged the extent of the verification process used by the brokerage defendants in verifying Dutton's power to invest the assets of the trust estate. Ventura, relying on NationsBanc Investments, Inc. v. Paramore, 736 So. 2d 589 (Ala. 1999), argued that the purported investment agreements were void because Dutton, as conservator of his estate, lacked the capacity or authority to enter into the investment agreements with the brokerage defendants.
In further support of their motion to compel arbitration, Morgan Stanley and Bowen submitted the affidavit of Gwendolyn Taylor. Taylor attested, among other things, that if an account application is completed on someone's behalf by a guardian, Morgan Stanley requires a copy of the court order appointing the guardian. Taylor stated that in connection with Dutton's application, it was not necessary to complete the section of the application relating to trust accounts, because Dutton's application related to a guardianship account. Taylor attested that, under the policies then in effect at Morgan Stanley, the application, the new account form, and the court order appointing Dutton as guardian for Ventura's trust estate constituted the appropriate documentation to open a guardianship account.
Additionally, in their brief supporting their motion to compel arbitration, Morgan Stanley and Bowen addressed Dutton's authority to open the brokerage account. Morgan Stanley and Bowen recognized that "§ 26-2A-152, Ala. Code, empowers conservators to 'invest and reinvest funds of the estate as would a trustee'" and that "a trustee's power to invest funds is defined generally in Alabama Code, § 19-3-120 through § 19-3-132." Morgan Stanley and Bowen then argued, without providing any citation to caselaw or to expert testimony, that "Mrs. Dutton did not violate the powers granted guardians and conservators. The eligible investments specified in the foregoing statute may be pursued via a [Morgan Stanley] account."
Edward Jones and Decker also filed supplemental materials in support of their motion to compel arbitration. They submitted Decker's affidavit, in which he attested that he met with Dutton, that she informed him that she wanted to invest funds belonging to her minor son, and that she would be the custodian of those funds because her son was a minor. Decker denied that Dutton ever indicated that she held the money through a conservatorship or that she was the conservator of Ventura's estate.
All of the brokerage defendants argue that Ventura's claims were arbitrable. They argue that Dutton had the authority to contract on behalf of Ventura and that she had the authority to make investments on his behalf. In entering into the investment agreements with Edward Jones and Morgan Stanley, Dutton agreed to arbitrate any disputes; the brokerage defendants argue that the court should enforce those arbitration agreements. They assert that in deciding whether to enforce
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