Wojcik v. Aetna Life Ins. and Annuity Co., 95 C 1447.

• Decision Date: 25 August 1995
• Docket Number: No. 95 C 1447.,95 C 1447.
• Citation: Wojcik v. Aetna Life Ins. and Annuity Co., 901 F.Supp. 1282 (N.D. Ill. 1995)
• Parties: David A. WOJCIK, Plaintiff, v. AETNA LIFE INSURANCE AND ANNUITY COMPANY; Edward F. Bacher, and Edward F. Sommer, Defendants.
• Court: U.S. District Court — Northern District of Illinois

901 F. Supp. 1282

David A. WOJCIK, Plaintiff, v.AETNA LIFE INSURANCE AND ANNUITY COMPANY; Edward F. Bacher, and Edward F. Sommer, Defendants.

No. 95 C 1447.

United States District Court, N.D. Illinois, Eastern Division.

August 25, 1995.

COPYRIGHT MATERIAL OMITTED

Steven B. Varick, McBride, Baker & Coles, Chicago, IL, for Wojcik.

William Martin Walsh, Sonnenschein, Nath & Rosenthal, Chicago, IL, Thomas R. Kraemer, Charles J. Faruki, Faruki, Gilliam & Ireland, Dayton, OH, for Aetna Life Ins. & Annuity Co.

Jacqueline A. Criswell, Tressler, Soderstrom, Maloney & Priess, Chicago, IL, Barry H. Wolinetz, Eugene R. Butler, David C. Levine, Baker & Hostetler, Columbus, OH, for Bacher & Sommer.

MEMORANDUM OPINION AND ORDER

CASTILLO, District Judge.

In a diversity action, David A. Wojcik("Wojcik") filed suit against Aetna Life Insurance and Annuity Company("Aetna"), Edward F. Bacher("Bacher"), an Aetna agent working in Columbus, Ohio, and Edward F. Sommer("Sommer"), an Aetna regional manager until 1991.Wojcik alleged intentional interference with prospective business advantage (Count II), deceptive business practices (Count IV), and civil conspiracy against all defendants.(Count V).Wojcik alleged breach of contract (Count I), and against Bacher and Sommer, intentional interference with contract against defendant Aetna.(Count III).In the action presently before the Court, Aetna moves for an order to dismiss Wojcik's claims pursuant to Fed. R.Civ.Pro. 12(b)(6) and to compel arbitration pursuant to the Federal Arbitration Act,9 U.S.C. Sec. 2.For the reasons discussed below, defendant's motion to compel arbitration is granted.

BACKGROUND

Aetna is an insurance and annuities firm which is a member of the National Association of Securities Dealers("NASD")¹ and which has a principal place of business in Hartford, Connecticut.David Wojcik, a resident of Downers Grove, Illinois, began working full-time for Aetna as an insurance broker on or about December, 1980.(Compl. ¶ 6).By 1986, Wojcik's success as a broker was evidenced by promotions through six job titles and conferral of Aetna's "Marketing Management Award."(Compl. ¶ 6).On June 1, 1987, upon the suggestion of Aetna sales manager John Gilla, Wojcik executed a new contract with Aetna and became an Aetna Annuity Representative ("agent").(Compl. ¶ 8).In this capacity Wojcik also achieved success and earned a place in Aetna's "Honors Club" every year since becoming an agent in 1987, and a position on Aetna's published "Top 200" list of agents from 1987 until the list was discontinued in 1990.(Compl. ¶ 10).

In December, 1988, Wojcik alleges that he was approached by Aetna, Sommer and Bacher and asked to assign his business and clients to Bacher and become a Bacher employee.(Compl. ¶ 11).Wojcik declined the offer and chose to remain an independent Aetna agent.Wojcik claims the defendants embarked on a scheme to destroy him in retaliation.(Compl. ¶ 12).Wojcik alleges that the defendants reassigned clients from Wojcik to Bacher, and refused to assign Wojcik new clients or "cases"² in contravention of oral promises made to Wojcik as inducement for him to become an Annuity Representative.(Compl. ¶ 7).In November, 1989, Wojcik ceased to be an agent and returned to his former position as an Aetna broker.(Compl. ¶ 15).However, in May, 1993, again upon the advice of Aetna sales manager John Gilla, Wojcik once again became an Aetna agent.(Compl. ¶ 15).Wojcik's claims stem from allegedly conspiratorial conduct on behalf of the defendants which began during Wojcik's initial career as an Aetna Annuities Representative.(Compl. ¶¶ 16-33).

To lawfully sell insurance and annuity products for Aetna, Wojcik registered with NASD.On January 4, 1984, Wojcik completed an application for registration with NASD.Aetna's Mot. to Compelat 2.The application, known as a "Form U-4," contained a provision requiring applicants to submit to arbitration those disputes required to be arbitrated under the NASD Code of Arbitration ("the NASD Code"):³

I agree to arbitrate any dispute, claim or controversy that may arise between me and my firm, or a customer, or any other person that is required to be arbitrated under the rules, constitutions, or by-laws of the organizations with which I register, as indicated in Question 8.

Aetna's Mot. to Compel(Ex. A, Form U-4at 4).In response to Question 8, Wojcik registered with NASD.

At the time Wojcik signed the Form U-4 (1984) the NASD Code, part I, section 1, enumerating matters eligible for submission, required arbitration of:

... any dispute, claim or controversy arising out of or in connection with the business of any member of the Association, with the exception of disputes involving the insurance business of any member which is also an insurance company: (1) between or among members; (2) between or among members and public customers or others. ...

(Wojcik Memo. in Opp. to Aetna's Mot. to Compel. at 3).Also, at that time, part II, section 8(a) of the NASD Code, entitled "Required Submission," provided:

Any dispute, claim or controversy eligible for submission under Part I of this Code between or among members and/or associated persons, and/or certain others, arising in connection with the business of such member(s) or in connection with the activities of such associated person(s), shall be arbitrated under this Code, at the instance of:

(1) a member against another member;

(2) a member against a person associated with a member or a person associated with a member against a member; and

(3) a person associated with a member against a person associated with a member.

Aetna's Mot. to Compel(Ex B, NASD Manual).Wojcik, as a registered representative of NASD member Aetna, is an "associated person."⁴

The Form U-4 signed by Wojcik on January 4, 1984, also contained a compliance clause in which Wojcik agreed to:

... abide by, comply with, and adhere to all the provisions, conditions and covenants of the statutes, constitutions, certificates of incorporation, by-laws and rules and regulations of the states and organizations as they are and may be adopted, changed or amended from time to time ...

Aetna's Mot. to Compelat 2-3;(Ex A, Form U-4).Effective October 1, 1993, NASD amended its rules to specifically bring employment related disputes within the sphere of arbitrable matters.⁵SeeNASD Manual (CCH)¶ 3701(1993).On March 7, 1995, Wojcik filed suit against defendants Aetna, Bacher and Sommer.On June 13, 1995, Aetna moved to dismiss the suit and compel arbitration.

ANALYSIS

In order to determine whether a claim is arbitrable, the Court must determine: (1) whether there is an agreement to arbitrate; (2) whether the claims fall within the scope of that agreement; and (3) whether there has been a waiver of the right to arbitrate.SeeGilmer v. Interstate/Johnson Lane Corp.,500 U.S. 20, 24-34, 111 S.Ct. 1647, 1651-56, 114 L.Ed.2d 26(1991).In this action the parties do not dispute that an agreement to arbitrate was signed by Wojcik, nor do they contend that waiver of the right to arbitrate is an issue.These criteria, therefore, need not be addressed by the Court.

The question before the Court is whether the claims asserted by Wojcik are within the scope of arbitrable matters contemplated by the arbitration agreement.Wojcik contends that his claims are not eligible for arbitration and opposes Aetna's motion to compel on several grounds.Wojcik argues that: (1)the 1993amendments to the Code, expressly providing for arbitration of employment-related disputes, can only be applied retroactively in direct contravention of Seventh Circuit authority; (2) the compliance clause in paragraph 2 of Wojcik's Form U-4, in which he promises to "abide by, comply with and adhere to all provisions ... constitutions ... and rules of NASD as they are and may be ... amended from time to time," does not extend to NASD's Code of Arbitration Procedure; and alternatively (3) should the amendments be held to apply, the dispute can not be arbitrable since: (a) it involves the insurance business of Aetna and therefore triggers a Code exception to arbitration; and (b) there are named defendants who are not eligible parties for arbitration whose presence precludes arbitration of Wojcik's claims against Aetna.We find Wojcik's arguments unpersuasive.

Standards Governing Arbitrability

The arbitration agreement in this case is not just the Form U-4, but the U-4 plus an extrinsic document, the NASD Code of Arbitration Procedure, incorporated by reference in the Form U-4.The agreement to arbitrate encompassed in the Form U-4 is governed by the Federal Arbitration Act("FAA") which provides that an arbitration clause "shall be valid, irrevocable, and enforceable save upon such grounds as exist in law or equity for the revocation of any contract."9 U.S.C. § 1 et seq.(1982).SeeGilmer,500 U.S. 20, 111 S.Ct. 1647(1991);O'Donnell v. First Investors Corp.,872 F.Supp. 1274, 1276(S.D.N.Y.1995).

Recently, the Supreme Court in First Options of Chicago, Inc. v. Kaplan, held that "when deciding whether the parties agreed to arbitrate a certain matter ... courts generally ... should apply ordinary state law principles that govern the formation of contracts."___ U.S. ___, ___, 115 S.Ct. 1920, 1924, 131 L.Ed.2d 985(1995).Furthermore, the Supreme Court has recently reiterated in Mastrobuono v. Shearson Lehman Hutton, Inc., that when a court interprets provisions in an agreement covered by the FAA, "due regard must be given to federal policy favoring arbitration, and ambiguities as to the scope of the arbitration clause itself resolved in favor of arbitration."___ U.S. ___, ___, 115 S.Ct. 1212, 1218, 131 L.Ed.2d 76(1995)(citingVolt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ.,489 U.S. 468, 476, 109 S.Ct. 1248, 1254, 103 L.Ed.2d 488(1989)).Therefore, the Arbitration Act mandates arbitration of this...