Wilkinson v. Dean Witter Reynolds, Inc.

• Decision Date: 04 March 1997
• Docket Number: No. 86150,86150
• Citation: Wilkinson v. Dean Witter Reynolds, Inc., 933 P.2d 878, 1997 OK 20 (Okla. 1997)
• Parties: John W. WILKINSON, and John W. Wilkinson, Individual Retirement Account, Plaintiffs/Appellees, v. DEAN WITTER REYNOLDS, INC., a foreign corporation, and Steve Dodson, an individual, Defendants/Appellants.
• Court: Oklahoma Supreme Court

Page 878

933 P.2d 878

1997 OK 20

John W. WILKINSON, and John W. Wilkinson, IndividualRetirement Account, Plaintiffs/Appellees, v.DEAN WITTER REYNOLDS, INC., a foreign corporation, and Steve Dodson, an individual, Defendants/Appellants.

No. 86150.

Supreme Court of Oklahoma.

March 4, 1997.

Charles E. Geister, III, Phillip G. Whaley, Oklahoma City, OK, for Defendants/Appellants.

Bradley K. Beasley, David B. McKinney, Sheila M. Powers, Tulsa, OK, for Plaintiffs/Appellees.

WATT, Justice.

This appeal arose from a dispute between Plaintiff/Appellee, John W. Wilkinson, and his broker, Dean Witter Reynolds, over Steve Dodson's handling of Wilkinson's Individual Retirement Account.Dodson was the Dean Witter Reynolds employee who handled Wilkinson's IRA.Wilkinson alleged that Dodson improperly liquidated $380,260 of Wilkinson's IRA assets and converted them to a term trust, which substantially reduced the value of the IRA.

FACTS

Wilkinson has five separate accounts with Dean Witter Reynolds.Only the IRA, however, is in Wilkinson's name alone.The first of the other four accounts, the Joint Account, is jointly owned by Wilkinson and his wife; the second, the Aviation Account, is owned by Wilkinson Aviation Consulting, Inc.; the third, the Family Account, is owned jointly by Wilkinson, his wife, and their two children; and the fourth, the Trust Account, is held by Wilkinson and his wife as co-trustees of the John W. and Geraldine Wilkinson Family Trust.

Wilkinson's IRA account has no provision requiring arbitration of disputes over the account.The IRA and the joint account were opened the same day, March 19, 1987.When opened, neither the IRA nor the Joint Account contained an arbitration provision.In 1988 and 1992 Wilkinson and his wife signed agreements covering the Joint Account that superseded the original 1987 agreement, and included an arbitration provision.Dean Witter Reynolds sought no change in the IRA, and the IRA continued to contain no arbitration provision.In fact, Dean Witter Reynolds never presented Wilkinson with an agreement to arbitrate disputes arising from the IRA.Apparently the Aviation Account, opened in 1989, contained no arbitration provision.

Wilkinson, his wife, and children, opened the Family Account in 1991.It contained an arbitration provision, as did the Trust Account, which Wilkinson and his wife opened as co-trustees in 1992.

The three accounts containing arbitration provisions differ from the IRA in another important respect: each of these three accounts was a margin account.Under the terms of these margin accounts the account owner was allowed to buy securities on margin, that is on credit; Dean Witter Reynolds had express discretion to sell its margin account customers' assets to satisfy margin requirements.The IRA account agreement prohibited Dean Witter Reynolds from investing or reinvesting IRA assets except at the direction of Wilkinson, and expressly stated that Dean Witter Reynolds had no discretionary investment responsibility.

Dean Witter Reynolds claims that the arbitration provisions apply to the IRA despite the fact that the IRA account agreement itself contains no arbitration provision.Dean Witter Reynolds relies on the following language concerning arbitration contained in the margin accounts:

I agree and by carrying my accounts you agree that all controversies between me or my agents or you and your agents or representatives or employees arising out of or concerning any such accounts, any transactions between us or for such accounts, or the construction, performance or breach of this or any other agreement between us, whether entered into prior to, on or subsequent to the date below, shall be determined by arbitration only....

The term "I" refers to those who signed each agreement.Thus, "I" as used in the margin accounts identifies different legal entities, joint-tenants and co-trustees, than does the "I" used in the IRA, which refers to Wilkinson alone.

ISSUE

Does the fact...