Berman v. Dean Witter & Co., Inc.

CourtCalifornia Court of Appeals
Writing for the CourtCOMPTON; FLEMING, Acting P.J., and BEACH
Citation119 Cal.Rptr. 130,44 Cal.App.3d 999
PartiesJack BERMAN and Leona Berman, husband and wife, Plaintiffs and Respondents, v. DEAN WITTER & CO., INC., and Norman Sobel, Defendants and Appellants. Civ. 43953.
Decision Date30 January 1975

Page 130

119 Cal.Rptr. 130
44 Cal.App.3d 999
Jack BERMAN and Leona Berman, husband and wife, Plaintiffs and Respondents,
v.
DEAN WITTER & CO., INC., and Norman Sobel, Defendants and Appellants.
Civ. 43953.
Court of Appeal, Second District, Division 2, California.
Jan. 30, 1975.

Page 131

[44 Cal.App.3d 1001] Stephens, Jones, LaFever & Smith by Eugene W. Bell, Michael J. Abbott, Los Angeles, for defendants and appellants.

Robert M. Aran, Beverly Hills, for plaintiffs and respondents.

COMPTON, Associate Justice.

Defendants Dean Witter & Co. (Witter) and Norman Sobel (Sobel) appeal from an order 1 denying their petition

Page 132

to compel arbitration and to stay proceedings in the action brought against them by plaintiffs Jack and Leona Berman.

Plaintiffs who are husband and wife commenced this action with the filing of a complaint captioned 'Complaint for Negligence; Complaint for a Breach of a Fiduciary Relationship' which alleged that Leona Berman maintained an account with Witter, a securities broker, and that on May 16, 1972, Jack Berman purchased on margin for Leona's account five short-term future contracts for Japanese yen. The order and purchase were handled by Sobel as agent of Witter.

The complaint further alleges that Witter and Sobel acquired the future contracts at a grossly excessive price and negligently concealed from plaintiffs certain market information and the fact that Witter and Sobel were inexperienced in the currency market. As a result of relying on Sobel and Witter's advice, plaintiffs suffered a financial loss which they would not have suffered but for such advice.

Defendants simultaneously answered, denying their liability, and petitioned to compel arbitration. The latter petition was based on a written customer agreement between Witter and Leona, which agreement provided in part as follows:

'In consideration of your accepting one or more accounts of the undersigned [Leona] (whether designated by name, number or otherwise) and your agreeing to act as brokers for the undersigned in the [44 Cal.App.3d 1002] purchase or sale of securities or commodities, the undersigned agrees as follows:

'. . .

'4. All Monies, securities, commodities or other property which you may at any time be carrying for the undersigned . . . shall be subject to a general lien for the discharge of all obligations of the undersigned to you, . . .

'5. All securities and commodities or any other property, now or hereafter held by you, or carried by you for the undersigned (either individually or jointly with others) or deposited to secure the same, may from time to time and without notice to me, be carried in your general loans and may be pledged, re-pledged, hypothecated or re-hypothecated, separately or in common with other securities and commodities or any other property, for the sum due to you thereon or for a greater sum and without retaining in your possession and control for delivery a like amount of similar securities or commodities.

'. . .

'13. In all transactions between you and the undersigned . . . you are acting as the brokers of the undersigned . . .

'. . .

'16. Any controversy between [Witter and Leona] arising out of or relating to this contract or the breach thereof, shall be settled by arbitration, . . ..' (Emphasis added.)

This customer's agreement establishing Leona's account with Witter was necessitated by the fact that Leona desired to transact business with Witter on 'margin' and as noted the transactions in question here were 'margin' purchases.

In opposing defendants' petition for arbitration, plaintiffs advanced three reasons why the instant action falls outside the ambit of the arbitration provision of the contract: (1) that the action sounds in tort, (2) that neither Sobel nor Jack are signatories to the contract, and (3) that the contract is applicable only to transactions in 'securities' or 'commodities' and currency futures are neither of these.

[44 Cal.App.3d 1003] The trial court based on a stipulated set of facts purported to make 'findings of fact' to the effect that (1) Japanese yen futures are not securities or commodities, and (2) that plaintiffs had not agreed in writing to arbitrate the controversy which is the subject to this law suit. Based on these 'findings' the trial court denied the petition for arbitration.

Page 133

The trial court was not presented with any factual issues to...

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96 practice notes
  • Dryer v. Los Angeles Rams
    • United States
    • United States State Supreme Court (California)
    • December 5, 1985
    ...as agents for the Rams, then they are entitled to the benefit of the arbitration provisions. (Berman v. Dean Witter & Co., Inc. (1975) 44 Cal.App.3d 999, 1004, 119 Cal.Rptr. 130.) Thus, our conclusion that this entire dispute be referred to arbitration applies to the individual defendants a......
  • Graham v. Scissor-Tail, Inc., SCISSOR-TAI
    • United States
    • United States State Supreme Court (California)
    • February 5, 1981
    ...130 Cal.Rptr. 534; Vernon v. Drexel Burnham & Co. (1974) 52 Cal.App.3d 706, 125 Cal.Rptr. 147; Berman v. Dean Witter & Co., Inc. (1975) 44 Cal.App.3d 999, 119 Cal.Rptr. 130; Lewsadder v. Mitchum, Jones & Templeton, Inc. (1973) 36 Cal.App.3d 255, 111[28 Cal.3d 823] Cal.Rptr. 405; Frame v. Me......
  • Norcal Mutual Insurance Co. v. Newton, No. A086152.
    • United States
    • California Court of Appeals
    • October 10, 2000
    ...Handling, Inc. v. Crown Controls Corp. (1982) 137 Cal.App.3d 99, 105, 186 Cal.Rptr. 740; Berman v. Dean Witter & Co., Inc. (1975) 44 Cal.App.3d 999, 1003, 119 Cal.Rptr. 130 .) "Whether an arbitration agreement applies to a controversy is a question of law to which the appellate court applie......
  • Elijahjuan v. Superior Court of L.A. Cnty., No. B234794.
    • United States
    • California Court of Appeals
    • January 16, 2013
    ...of California (2000) 83 Cal.App.4th 677, 681, footnote 2, 686, 99 Cal.Rptr.2d 809( Coast ) nor Berman v. Dean Witter & Co., Inc. (1975) 44 Cal.App.3d 999, 1003, 119 Cal.Rptr. 130( Berman ) compels a different conclusion. Coast stands for the unremarkable proposition that a tort claim arisin......
  • Request a trial to view additional results
96 cases
  • Dryer v. Los Angeles Rams
    • United States
    • United States State Supreme Court (California)
    • December 5, 1985
    ...as agents for the Rams, then they are entitled to the benefit of the arbitration provisions. (Berman v. Dean Witter & Co., Inc. (1975) 44 Cal.App.3d 999, 1004, 119 Cal.Rptr. 130.) Thus, our conclusion that this entire dispute be referred to arbitration applies to the individual defendants a......
  • Graham v. Scissor-Tail, Inc., SCISSOR-TAI
    • United States
    • United States State Supreme Court (California)
    • February 5, 1981
    ...130 Cal.Rptr. 534; Vernon v. Drexel Burnham & Co. (1974) 52 Cal.App.3d 706, 125 Cal.Rptr. 147; Berman v. Dean Witter & Co., Inc. (1975) 44 Cal.App.3d 999, 119 Cal.Rptr. 130; Lewsadder v. Mitchum, Jones & Templeton, Inc. (1973) 36 Cal.App.3d 255, 111[28 Cal.3d 823] Cal.Rptr. 405; Frame v. Me......
  • Norcal Mutual Insurance Co. v. Newton, No. A086152.
    • United States
    • California Court of Appeals
    • October 10, 2000
    ...Handling, Inc. v. Crown Controls Corp. (1982) 137 Cal.App.3d 99, 105, 186 Cal.Rptr. 740; Berman v. Dean Witter & Co., Inc. (1975) 44 Cal.App.3d 999, 1003, 119 Cal.Rptr. 130 .) "Whether an arbitration agreement applies to a controversy is a question of law to which the appellate court applie......
  • Elijahjuan v. Superior Court of L.A. Cnty., No. B234794.
    • United States
    • California Court of Appeals
    • January 16, 2013
    ...of California (2000) 83 Cal.App.4th 677, 681, footnote 2, 686, 99 Cal.Rptr.2d 809( Coast ) nor Berman v. Dean Witter & Co., Inc. (1975) 44 Cal.App.3d 999, 1003, 119 Cal.Rptr. 130( Berman ) compels a different conclusion. Coast stands for the unremarkable proposition that a tort claim arisin......
  • Request a trial to view additional results

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