Carmody v. Raymond James Financial Services, Inc.

• Decision Date: 03 April 2008
• Docket Number: No. 07-909.,07-909.
• Citation: Carmody v. Raymond James Financial Services, Inc., 281 S.W.3d 721, 373 Ark. 79 (Ark. 2008)
• Parties: Thomas G. CARMODY and Dr. Norman C. Savers, Jr., as Co-Administrators of the Estate of Helen Virginia Coan, Deceased, and on Behalf of the Heirs of Helen Virginia Coan, Appellants, v. RAYMOND JAMES FINANCIAL SERVICES, INC., Appellee.
• Court: Arkansas Supreme Court

281 S.W.3d 721

373 Ark. 79

Thomas G. CARMODY and Dr. Norman C. Savers, Jr., as Co-Administrators of the Estate of Helen Virginia Coan, Deceased, and on Behalf of the Heirs of Helen Virginia Coan, Appellants, v.RAYMOND JAMES FINANCIAL SERVICES, INC., Appellee.

No. 07-909.

Supreme Court of Arkansas.

April 3, 2008.

Wilkinson Carmody Gilliam, by: Arthur R. Carmody, Jr., Shreveport, LA; Katherine Savers McGovern, Dallas, TX; and Marshall & See, by: Pat Marshall, Little Rock, for appellants.

Williams & Anderson PLC, by: Peter Kumpe and Alison Dennington, Little Rock, for appellee.

JIM HANNAH, Chief Justice.

Appellants, Thomas G. Carmody and Dr. Norman C. Savers, Jr., as co-administrators on behalf of the Estate of Helen Virginia Coan, deceased, and on behalf of the heirs of Helen Virginia Coan, appeal the probate order compelling arbitration issued by the Ouachita County Circuit Court.We affirm.

On March 8, 1977, Joseph Coan, by order of the Ouachita County Probate Court, was appointed as guardian of the person and the estate of Helen Virginia Coan("HVC").On November 19, 1985, after Joseph's death, Linnie Betts was appointed as the guardian of the person and the estate of HVC.On the same day, a Letter of Guardianship of the Person and the Estate in Succession were issued.

Betts, as guardian, petitioned the probate court on numerous occasions, requesting the court's approval for various actions, and the probate court granted her petitions.On June 27, 1996, Betts, as guardian for HVC, executed an agreement with Raymond James & Associates, Inc. authorizing the transfer of securities from a Stephens Inc. account to a Raymond James account.On the same date, Betts, as guardian of HVC, executed a New Account Form with Robert Thomas Securities, Inc., a subsidiary of Raymond James Financial, Inc.The New Account Form contained a Client Agreement, which included an arbitration agreement.

On October 30, 1997, Betts petitioned the court for authorization "to transfer all stocks owned by [HVC] to Raymond James & Associates, Inc., for deposit in the name of Linnie Betts, Guardian of the person and estate of Helen Virginia Coan."The probate court authorized the transfer, and on various dates thereafter, the court entered orders authorizing Betts to transfer stock for deposit in Raymond James, to sell stock held by Raymond James for the benefit of HVC, to re-register stock in the name of Raymond James to be held in the guardianship account, and to invest in certain specified funds as advised by Raymond James.On January 15, 2002, Betts, as guardian of HVC, executed a New Account Form with Raymond James Financial Services, Inc.This New Account Form contained a Client Agreement, which included an arbitration agreement.

When HVC died, Betts was appointed as co-administrator of HVC's estate.On March 13, 2006, the probate court ordered the appointment of Norman Savers and Tom Carmody as co-administrators of the Estate of HVC.The appointment was accepted and the Letters of Administration were issued on the same date.Subsequently, in an order entered on June 2, 2006, Betts was removed as co-administrator.

On November 2, 2006, the Estate of HVC, through its administrators, and the heirs of HVC filed suit against various defendants, including appelleeRaymond James Financial Services, Inc.("Raymond James"), alleging that HVC funds were commingled with the funds of another estate.Subsequently, on December 4, 2006, Raymond James filed a Motion to Stay Litigation and Compel Arbitration.HVC's estate opposed the motion.Following a hearing held on March 12, 2007, the court entered an order staying litigation against Raymond James and compelling arbitration.

The circuit court found that the arbitration agreements contained in the client agreements did not violate Ark.Code Ann. §§ 28-65-301(a)(3)and28-65-302(a)(1)(G)(Repl.2004).Further, the court found that arbitration agreements did not violate the public policy of Arkansas.Finally, the court concluded that the agreements were binding and enforceable on the petitioners who asserted claims derivative of the HVC estate.

The estate of HVC now brings this appeal, arguing that the circuit court erred in granting Raymond James's motion to compel arbitration because Ark.Code Ann. §§ 28-65-301(a)(3)and28-65-302(a)(1)(G) required probate court approval of the binding arbitration agreement.HVC's estate thus claims that, absent the court's prior approval of an arbitration agreement, the agreement is unenforceable.In addition, HVC's estate argues that a contract agreeing to a binding arbitration of an incapacitated person's claims without court approval violates public policy.

As an initial matter, we note that Raymond James has filed a motion to dismiss appeal.Raymond James argues that this court does not have jurisdiction to entertain this appeal because the circuit court's order compelling arbitration is not appealable.Pursuant to the Uniform Arbitration Act, an appeal may be taken from an order denying an application to compel arbitration made under Ark.Code Ann. § 16-108-202 or an order granting an application to stay arbitration made under Ark.Code Ann. § 16-108-202(b).SeeArk. Code Ann. § 16-108-219(Repl.2006).However, this court has held that an order compelling arbitration is not appealable.SeeEngland v. Dean Witter Reynolds, Inc.,306 Ark. 225, 811 S.W.2d 313(1991);Chem-Ash, Inc. v. Arkansas Power & Light,296 Ark. 83, 751 S.W.2d 353(1988).

HVC's estate argues that the order compelling arbitration is appealable pursuant to Ark. R.App. P.-Civ. 2(a)(12), which provides in relevant part that, under Ark. Code Ann. § 28-1-116, all probate orders are appealable, except an order removing a fiduciary for failure to give a new bond or render an accounting required by the court or an order appointing a special administrator.Raymond James responds that the order of the circuit court compelling arbitration is not "an order ... under the provisions of the Probate Code" as required by Ark.Code Ann. § 28-1-116(a)(Repl.2004).Rather, Raymond James argues that the order staying the litigation and compelling arbitration is an order under the provisions of the Federal Arbitration Act,9 U.S.C.A. § 2(1999).Thus, Raymond James argues that Rule 2(a)(12) is inapplicable.We disagree.Given that the order compelling arbitration included findings regarding probate matters, we conclude that the order is appealable under Rule 2(a)(12), and the motion to dismiss appeal is denied.Therefore, we will proceed with the appeal.

We review probate proceedings de novo and we will not reverse the decision of the probate court unless it is clearly erroneous.In re Estate of Keathley,367 Ark. 568, 242 S.W.3d 223(2006).Similarly, we review issues of statutory construction de novo as it is for this court to decide what a statute means.Stephens v. Arkansas Sch. for the Blind,341 Ark. 939, 20 S.W.3d 397(2000).In this respect, we are not bound by the trial court's decision; however, in the absence of a showing that the trial court erred, its interpretation will be accepted as correct on appeal.Id.

The basic rule of statutory interpretation is to give effect to the intent of the General Assembly.Martin v. Pierce,370 Ark. 53, 257 S.W.3d 82(2007).The first rule in determining the meaning of a statute is to construe it just as it reads, giving the words their ordinary and usually accepted meaning in common language.Id.This court will construe a statute so that no word is left void, superfluous or insignificant, with meaning and effect given to every word in the statute if possible.Id.When the language of the statute is plain and unambiguous, conveying a clear and definite meaning, we need not resort to the rules of statutory construction.Id.A statute is ambiguous only where it is open to two or more constructions, or where it is of such obscure or doubtful meaning that reasonable minds might disagree or be uncertain as to its meaning.Id.

HVC's estate argues that Ark. Code Ann. §§ 28-65-301(a)(3)and28-65-302(a)(1)(G)(Repl.2004) require reversal in this case.¹We begin by noting that a "`[g]uardian' is one appointed by a court to have the care and custody of the person or of the estate, or of both, of an incapacitated person."Ark.Code Ann. § 28-65-101(3)(Repl.2004).Section 28-65-301(a)(3)(Repl.2004) provides that "[t]he guardian of the person shall be entitled to the custody of the ward but shall not have the power to bind the ward or his or her property."Raymond James argues here, as it did below, that Ark. Code Ann. § 28-65-301(a)(3) did not limit Betts's authority to bind HVC's property because the statute means that a guardian who is a guardian of the person only does not have authority over the ward's property.Raymond James states that, because Betts was not merely the guardian of the person of HVC, but rather the guardian of the person and of the estate of HVC, § 28-65-301(a)(3) is simply inapplicable to the instant case.Raymond James avers that the broader provision found in § 28-65-301(b)(Repl.2004) is applicable.Section 28-65-301(b)(Repl.2004) provides in relevant part:

(b)(1) It shall be the duty of the guardian of the estate:

(A) To exercise due care to protect and preserve it;

(B) To invest it and apply it as provided in this chapter;

(C) To account for it faithfully;

(D) To perform all other duties required of him or her by law; and

(E) At the termination of the guardianship, to deliver the assets of the ward to the persons entitled to them.

(Emphasis added.)

Raymond James's argument is well taken.The circuit court found:

Petitioners further contend that Betts, as guardian, did not have the power to bind the assets of the incompetent.Petitioners refer specifically to Ark.Code Ann. § 28-65-301(a)(3) as the basis for the asserted limitation placed upon the guardian.However, it is clear that the language that denies a guardian power...