938 F.2d 31 (2nd Cir. 1991), 1501, Bear, Stearns & Co., Inc. v. Bennett

Docket Nº:1501, Docket 91-7233.
Citation:938 F.2d 31
Party Name:BEAR, STEARNS & CO., INC., Petitioner-Appellant, v. Robert C. BENNETT, Jr., Respondent-Appellee.
Case Date:July 08, 1991
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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938 F.2d 31 (2nd Cir. 1991)

BEAR, STEARNS & CO., INC., Petitioner-Appellant,

v.

Robert C. BENNETT, Jr., Respondent-Appellee.

No. 1501, Docket 91-7233.

United States Court of Appeals, Second Circuit

July 8, 1991

Argued May 20, 1991.

A. Robert Pietrzak, New York City (Charna L. Gerstenhaber, Donna Carrier-Tal, Brown & Wood, New York City, of counsel), for petitioner-appellant.

Thomas R. Grady, Naples, Fla., for respondent-appellee.

Before VAN GRAAFEILAND, MESKILL and McLAUGHLIN, Circuit Judges.

VAN GRAAFEILAND, Circuit Judge:

Bear, Stearns & Co. appeals from a judgment of the United States District Court for the Southern District of New York (Patterson, J.) dismissing its petition to compel Robert C. Bennett, Jr. to arbitrate his claim against Bear Stearns before the American Arbitration Association (AAA) in New York City. We hold that the petition should have been granted.

In 1983 Bennett, a Florida resident, signed a Customer Agreement with Bear Stearns, a securities broker-dealer, which agreement provided in part that

[a]ny controversy arising out of or relating to your account in connection with transactions between us or pursuant to this Agreement or the breach thereof shall be settled by arbitration in accordance with the rules, then in effect, of the National Association of Securities Dealers, Inc., the Board of Governors of the New York Stock Exchange, Inc. or the Board of Governors of the American Stock Exchange, Inc. [AMEX] as you may elect.

Article VIII, section 2(c) of the AMEX Constitution (the AMEX Window) provides that

if any of the parties to a controversy is a customer, the customer may elect to arbitrate before the American Arbitration Association in the City of New York, unless the customer has expressly agreed, in writing, to submit only to the arbitration procedure of the Exchange.

In July 1990 Bennett filed a Demand for Arbitration with the AAA alleging that Bear Stearns had mismanaged his account. Although Bennett made his demand pursuant to his Customer Agreement, and perforce the AMEX rules, he filed the demand in Florida and sought arbitration in the City of Naples. Relying upon the above-quoted provisions of the Agreement and Constitution, Bear Stearns filed a petition in the Southern District of New York to compel arbitration in New York City. Although

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Bennett's counsel conceded in the court...

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