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Jones v. Ventura2/25/2005
ts "induced [Dutton] to place funds [in the investment accounts] by making false statements and promises with regard to their knowledge of the trust nature of the funds and their knowledge of the requirements of the law with regard to investing the subject funds."
Ventura must rely on or refer to the investment agreements to establish his breach-of-fiduciary-duty, fraud, and suppression claims. Therefore, his claims arise out of the investment agreements for purposes of the motions to compel arbitration, and the language of the arbitration provisions is broad enough to encompass Ventura's claims.
Next, we address Ventura's status as a nonsignatory to the arbitration agreements. Generally, "a nonsignatory to an arbitration agreement cannot be forced to arbitrate claims." Cook's Pest Control, Inc. v. Boykin, 807 So. 2d 524, 526 (Ala. 2001). However, this Court has enforced arbitration provisions against nonsignatories under either a third-party-beneficiary theory or an intertwined-claims theory. Against the brokerage defendants, Ventura asserts a breach of fiduciary duties (allegedly arising under a conservator in invitum theory), and fraudulent conduct and/or suppression. Because Ventura is a third-party beneficiary of the accounts and because his claims arise out of the manner in which the investment accounts were managed or should have been managed, he is seeking the benefits of the investment agreements entered into by Dutton.
If a nonsignatory to a contract containing an arbitration provision has obtained or seeks to obtain the benefit of the contract, the nonsignatory may not avoid the application of the arbitration provision. See Wolff Motor Co. v. White, 869 So. 2d 1129 (Ala. 2003); Equifirst Corp. v. Ware, 808 So. 2d 1, 5 (Ala. 2001) ("This Court has enforced an arbitration provision against a nonsignatory plaintiff when that nonsignatory plaintiff claimed the benefit of the contract containing the arbitration provision but attempted to avoid the application of the arbitration provision.").
Finally, Ventura seeks to assert a cause of action against the brokerage defendants pursuant to the common-law theory of trustee in invitum as applied to conservators. See Belcher v. Birmingham Trust Nat'l Bank, 348 F. Supp. 61 (N.D. Ala. 1968). However, because Ventura is subject to the arbitration provisions contained in the brokerage contracts, we express no opinion on this issue. That is an issue for the arbitrator to resolve.
For these reasons, we reverse the trial court's order denying the motion to compel arbitration filed by Edward Jones and Decker. We also reverse the trial court's order denying the motion to compel arbitration filed by Morgan Stanley and Bowen. We remand this case for the entry of an order consistent with this opinion.
1031752 -- REVERSED AND REMANDED.
1031767 -- REVERSED AND REMANDED.
Nabers, C.J., and See, Lyons, Harwood, Woodall, and Smith, JJ., concur.
Parker, J., dissents.
Bolin, J., recuses himself.
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