Houlihan v. Offerman & Co., Inc., No. 93-2684
| Court | United States Courts of Appeals. United States Court of Appeals (8th Circuit) |
| Writing for the Court | Before RICHARD S. ARNOLD, Chief Circuit Judge, HENLEY, Senior Circuit Judge, and BEAM; BEAM |
| Citation | 31 F.3d 692 |
| Parties | Fed. Sec. L. Rep. P 98,351 Edward HOULIHAN; Agnes Houlihan, Appellees, v. OFFERMAN & COMPANY, INCORPORATED, Appellant. |
| Docket Number | No. 93-2684 |
| Decision Date | 04 August 1994 |
Page 692
v.
OFFERMAN & COMPANY, INCORPORATED, Appellant.
Eighth Circuit.
Decided Aug. 4, 1994.
Page 693
Rebecca E. Bender, Minneapolis, MN, argued, for appellant.
Michael J. Schaffer, Sioux Falls, SD, argued (Roberto A. Lange, on the brief), for appellees.
Before RICHARD S. ARNOLD, Chief Circuit Judge, HENLEY, Senior Circuit Judge, and BEAM, Circuit Judge.
BEAM, Circuit Judge.
Edward and Agnes Houlihan (the Houlihans) brought this diversity action against their broker, Offerman & Company, Incorporated (Offerman), alleging various state-law claims relating to their investment losses. Offerman moved to compel arbitration and to stay discovery pursuant to the "Pre-Dispute Arbitration Agreement" contained in a brokerage account application signed by the Houlihans. The district court denied Offerman's motion. Offerman appeals. We reverse.
I. BACKGROUND
The Houlihans did not sign an arbitration agreement when they opened their account with Offerman in 1983. They did execute such an agreement, however, on October 29, 1992, as one of nineteen provisions of a customer agreement contained in a brokerage account application that Offerman sent to their home. The arbitration clause of the customer agreement provides generally that "all controversies [between the Houlihans
Page 694
and Offerman] concerning any order or transaction, or the continuation, performance or breach of this or any other agreement between us, where entered into before, on, or after the date this account is opened" shall be determined by a panel of arbitrators under the arbitration rules of the National Association of Securities Dealers, Inc. Joint Appendix at 30.The Houlihans brought this suit to recover damages for their alleged investment losses that occurred prior to the date they signed the 1992 customer agreement. Offerman moved to compel arbitration and to stay proceedings in federal court, arguing that the arbitration clause expressly covers preexisting disputes. The Houlihans resisted Offerman's motion claiming that the arbitration agreement was the product of fraud in the inducement and that the agreement lacked consideration and was unconscionable.
The Houlihans' fraud in the inducement claim is based on a letter Offerman sent accompanying the 1992 account application. The letter states that the Securities and Exchange Commission (SEC), trustee banks, and Internal Revenue Service (IRS) require updated information about the account and that the Houlihans must complete and sign the application even if they had previously executed a similar form. 1 The Houlihans claim that the named entities did not require updated account information. Offerman's letter does not mention the arbitration agreement or any other terms of the customer agreement.
Agnes Houlihan claims that she understood from Offerman's letter and from the account application that her signature was necessary only to verify the information she had given on the application. She did not understand that she was agreeing to arbitrate any disputes with Offerman and she feels that she was tricked into signing this agreement. Edward Houlihan admitted in his video affidavit that he noticed the word "arbitration" on the application, but explained that he did not actually read the terms of the agreement and that he thought the arbitration clause did not apply to him.
The unread account application provides, just above the signature line:
I (WE) REPRESENT THAT I (WE) HAVE READ THE TERMS AND CONDITIONS GOVERNING THIS ACCOUNT AND AGREE TO BE BOUND BY SUCH TERMS AND CONDITIONS AS CURRENTLY IN EFFECT AND AS MAY BE AMENDED FROM TIME TO TIME. THIS ACCOUNT IS GOVERNED BY A PRE-DISPUTE ARBITRATION AGREEMENT WHICH IS PART OF THE CUSTOMER AGREEMENT. I (WE) ACKNOWLEDGE RECEIPT OF THE PRE-DISPUTE ARBITRATION AGREEMENT.
Joint Appendix at 31A. The specific terms of the arbitration agreement are printed on the back of the customers' copy of the application on a page entitled "Customer Agreement." 2
The district court denied Offerman's motions to stay court proceedings and to compel arbitration. We have jurisdiction over the district court's order pursuant to 9 U.S.C. Secs. 16(a)(1)(A) and (B).
II. DISCUSSION
Before a party may be compelled to arbitrate under the Federal Arbitration Act, the district court must engage in a limited inquiry to...
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Douglass v. United Services Auto. Ass'n, No. 95-50007
...exception to it. The Eighth Circuit reviews accepted unobjected-to proposed factual findings for plain error. See Griffini v. Mitchell, 31 F.3d at 692; Thompson v. Nix, 897 F.2d 356, 357 (8th Cir.1990). As noted, Griffini cited Nettles, but omitted any reference to review for "manifest......
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Simitar Entertainment, Inc. v. Silva Entertainment, No. Civ. 98-1628 (JRT/RLE).
...of arbitration. See, Title 9 U.S.C. § 3; Keymer v. Management Recruiters Int'l, Inc., supra at 1156; Houlihan v. Offerman & Co., 31 F.3d 692, 695 (8th Cir.1994); Morgan v. Smith Barney, Harris Upham & Co., supra at 1165. The decision to stay the remaining nonarbitrable claims, pendi......
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Hoffman v. Cargill, Inc., No. C 97-3015-MWB.
...Inc., 113 F.3d 832, 833-34 (8th Cir.1997) (considering whether the parties agreed to arbitrate); Houlihan v. Offerman & Co., 31 F.3d 692, 694 (8th Cir.1994) (noting that before a party may be compelled to arbitrate, the district court must determine whether a valid agreement to arbitrat......
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Swanson v. Wilford, File No. 19-cv-117 (DWF/LIB)
...6, 2012), (citing Dialysis Access Center, LLC v. RMS Lifeline, Inc., 638 F.3d 367, 375 (1st Cir. 2011); Houlihan v. Offerman & Co., 31 F.3d 692, 694-95 (8th Cir. 1994)), report and recommendation adopted sub nom. Albert v. Verizon Wireless, 2012 WL 3079072 (D. Minn. July 30, 2012). In t......
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Douglass v. United Services Auto. Ass'n, No. 95-50007
...exception to it. The Eighth Circuit reviews accepted unobjected-to proposed factual findings for plain error. See Griffini v. Mitchell, 31 F.3d at 692; Thompson v. Nix, 897 F.2d 356, 357 (8th Cir.1990). As noted, Griffini cited Nettles, but omitted any reference to review for "manifest......
-
Simitar Entertainment, Inc. v. Silva Entertainment, No. Civ. 98-1628 (JRT/RLE).
...of arbitration. See, Title 9 U.S.C. § 3; Keymer v. Management Recruiters Int'l, Inc., supra at 1156; Houlihan v. Offerman & Co., 31 F.3d 692, 695 (8th Cir.1994); Morgan v. Smith Barney, Harris Upham & Co., supra at 1165. The decision to stay the remaining nonarbitrable claims, pendi......
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Hoffman v. Cargill, Inc., No. C 97-3015-MWB.
...Inc., 113 F.3d 832, 833-34 (8th Cir.1997) (considering whether the parties agreed to arbitrate); Houlihan v. Offerman & Co., 31 F.3d 692, 694 (8th Cir.1994) (noting that before a party may be compelled to arbitrate, the district court must determine whether a valid agreement to arbitrat......