Applying equitable estoppel principles, the Eleventh Circuit today compelled arbitration by a plaintiff-investor despite her failure to sign any of the securities investment advisor and broker agreements requiring arbitration.  The court also allowed non-signatory defendants to compel arbitration of certain of her claims against them.  Both rulings applied only to the extent the claims that made the terms of the agreement an element — as where the plaintiff alleged that a defendant broke a promise in the agreement.  Becker v. Davis, No. 06-12654 (11th Cir. July 11, 2007).

The court distinguished claims that did not depend on the agreements and deemed them outside the ambit of the arbitration provisions.  The agreements did not contemplate a horse farm, the court cited as an example, but instead focused on securities investments.  The horse farm and other like claims will stay in court as arbitration of others proceeds.

Blawgletter sees no inconsistency between arbitrating some claims and litigating others — with the proviso that the arbitration moves ahead to resolution promptly.  And we wouldn’t worry too much about coordinating arbitration with court proceedings — although we imagine that the arbitration hearing will usually happen well before a court trial and that the court case might should await the outcome, depending of course on the circumstances.

Barry Barnett

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