Ex parte Alexander
| Decision Date | 26 January 1990 |
| Docket Number | PRUDENTIAL-BACHE |
| Citation | 558 So.2d 364 |
| Parties | Ex parte Richard G. ALEXANDER. (Re Richard G. ALEXANDER v.SECURITIES, INC., and Jeffrey L. Howard). 88-1391. |
| Court | Alabama Supreme Court |
Sidney W. Jackson III of Jackson & Taylor, Mobile, for petitioner.
Louis E. Braswell of Hand, Arendall, Bedsole, Greaves & Johnston, Mobile, for respondents.
The issue in this case is whether the trial court erred in staying the plaintiff's case pending arbitration of his claims.
Richard Alexander allegedly lost approximately $30,000 in the stock market on "Black Monday," October 17, 1987. He sued his broker, Jeffrey L. Howard of Prudential-Bache Securities, Inc., and Prudential-Bache for not limiting his losses to $7,500 by implementing a "stock loss program," which Alexander alleges is a mechanism that would have involved a sale of his stocks before the prices dropped below a certain level. Prudential-Bache and Howard claim that they do not know what a "stock loss program" is. On August 17, 1987, Howard had sent Alexander a letter stating that "our stock investment strategy includes investing of $60,000 into stock positions allowing a maximum of $7500 in losses in these positions." The defendants assert that they were suggesting that Alexander invest in options, particularly puts, 1 in order to minimize losses, and that in the week just prior to Black Monday, Howard explicitly discussed put options with Alexander as a means for reducing any possible losses. Alexander chose not to do so and adopted a "wait and see" attitude. The defendants allege that after Black Monday Alexander told Howard that he regretted not taking the advice on the puts. Alexander claims that he never made any of the above statements and that he never discussed puts with the defendants. It is undisputed that only Alexander had the authority to make investment decisions regarding the purchase or sale of any securities in his account and that the defendants could not trade any securities for Alexander's account without his express permission; the defendants only made suggestions to Alexander regarding his security investments.
The only signed agreement between the parties is an option agreement containing an arbitration clause; this agreement was signed on July 6, 1987, and contained the following language:
"Except for any controversy with a public customer for which a remedy may exist pursuant to an express or implied right of action under the federal securities laws, any claim or dispute between us, or initiated by either of us, relating to the purchase, sale, handling, execution or endorsement of puts and calls for my account, shall be arbitrated in accordance with the rules of the exchange on which the transaction giving rise to the claim was executed, or in accordance with the rules of the New York Stock Exchange Inc. or the NASD if the put or call is not traded on a national securities exchange."
Prudential-Bache moved to have the case stayed pending arbitration; the trial court granted that motion.
Now, Alexander seeks a writ of mandamus directing the trial court to vacate its order staying his lawsuit pending arbitration, and he claims that his suit involves only his "stock account," on which he says he never signed anything, including an arbitration clause. However, Alexander does not have a "stock account" with Prudential-Bache; he has only an account that includes stocks, options, bonds, and precious metals, and he has historically traded in all those investments, including options, through that one account.
As this Court has stated before, a petition for a writ of mandamus is the proper means to test a trial court's granting of a motion to arbitrate or the granting of a stay pending arbitration. 2 See Ex parte Thomson McKinnon Sec., Inc., 517 So.2d 614 (Ala.1987), and Ex parte Warrior Basin Gas Co., 512 So.2d 1364 (Ala.1987) . The standard for our review of a petition for writ of mandamus involving a stay pending arbitration is whether there is a clear showing that the trial court abused its discretion. Ex parte McKinney, 515 So.2d 693 (Ala.1987).
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