NOTICE: NOT FOR PUBLICATION. UNDER ARIZ. R. SUP. CT. 111(c ) , THIS DECISION DOES NOT CREATE LEGAL PRECEDENT

AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.

IN THE 

## A RIZONA 

## C OURT OF 

## A PP EALS

D IVISION O NE

DAN CAREY
, Plaintiff/Appell ee ,

v.

K&M SEAFOOD FINANCIAL, LLC, an Arizona lim ited liability company; GARY SO UCY and THERESA SOUCY, husband and wife; JOSEPH SOUCY, a single man; RAN DY BRONNER and JANE DOE
BRONNER , husband and wife, Defendant s /Appell an ts

.

No. 1 CA

- CV 13

- 0357

Appeal from the Superior Court in Maricopa County

No. CV2012

- 092926 The Honorable David M. Talamante

, Judge

REVERSED AND REMANDE D

COUNSEL

Slaton & Sannes, PC
, Scottsdale By Joel E. Sannes Counsel for Plaintiff/Appell ee

Hovore Law PLLC
, Scottsdale By F

. Thomas Hovore C ounsel for Defendant s

/Appell antsCAREY v. K&M , et al.
Decision of the Court

2 MEMORANDUM DECISION

Judge Maurice Portley delivered the decision of the Court, in which Chief Judge Diane M. Johnsen and Judge Patricia K. Norris joined.

P O R T L E Y
, Judge:

¶1 In this appeal, we d ecide whether a clause requiring the parties to allow the American Arbitration Association to resolve “[a]ny dispute arising under this [a]greement” encompasses the counts in Dan Carey’s complaint. Because we conclude that all the pending claims are subject to arbitration, we vacate the trial court ’ s order and remand with instructions to order arbitration.

BACKGROUND

¶2 Carey heard, and alle ge d in his complaint

, that K &M Seafood Financial LLC (“K&M”) was offering to sell securities. After he made an inquiry, Randy B r onner , acting on behalf of Joseph Soucy dba BD Resourcing
, sent a proposed Investment Agreement (“Agreement”)

. The Agreement provided K&M would pay monthly interest of two percent on any investment
, and K&M would return Carey’s investment “ with sixty (60) days written notice for all amounts under $100,000 and ninety (90) days for all amounts over $100,000. ” Carey
, however, requested Bronner revise the Agreement to include information about the limited use of his
investment

. A few days later and without waiting for a revised Agreement

, Cary paid K&M $100,000. Carey never signed the original Agreement or receive d a revised Agreement

.
¶3 K&M paid Carey three month ly interest payments of $2000.
G ary S oucy , K&M’s Chief Executive Officer, subsequently notified Carey that K& M’s partner had “diverted significant funds and inventory belonging to the Company

. ” After Carey demanded return of his $100,000

, K& M’s legal counsel responded that the company was suspend ing “ all interest payments, distributions, and disbursements. ”CAREY v. K&M , et al.
Decision of the Court

3 ¶4 Carey then sued K& M
, Gary Soucy and his spouse

, Joseph Soucy d ba BD Resourcing

, and Randy Bronner and his spouse (collectively “Defendants”). Carey’s amended c omplaint a llege d c laims against : all Defendants for unl icensed brokering of securities (Count One), s ale of unregistered securities (Count Two)

, and fraud in the purchase and sale of securities (Count Three); G ary Soucy and K&M for consumer fraud (Count Four) ; K& M for b reach of contract (Count Five) ; and G ary Soucy and spouse under a veil

- piercing theory (Count Six)

.
¶5 The Defendants moved to compel arbitration based upon the Agreement’s arbitration cla us e

. A fter briefing, t he trial court denied the Defendants’ motion. Defendants appealed. We have juris diction under Arizona Revised Statutes (“A.R.S.”) section 12

- 2101.01(A)(1)

. 1 After reviewing the opening and answering briefs, we requested supplemental briefing on Dusold v. Porta

- John Corp

. , 167 Ariz. 358, 807 P.2d 526 (App. 1990)

, and County of Hawai ’ i v. UNIDEV, LLC , 301 P.3d 588 (HI 2013 )

.

DISCUSSION

¶6 T he Arizona L egislature adopted the Revised Uniform Arbitration Act (“AZ

– RUAA”) , which substantially mirrors the Revised Uniform Arbitration Act (amended 2000) (“Uniform Act”) promulgated by the National Conference of Commissioners on Uniform State Laws

. See A.R.S. §§ 12

– 3001 through

– 3029 ; see also Bruce E. Meyerson, Arizona A dopts the Revised Uniform Arbitration Act

, 43 Ariz. St. L.J. 481 (2011)

. The AZ

RUAA applies to all arbitration agreements made after January 1, 2011. A.R.S. § 12

- 3003. Because the parties en tered into the A greement in June 2011
, t he AZ

– RUAA ap plies to this case.

¶7 Under the AZ

- RUAA, “[t]he court shall decide whether an agreement to arbitrate exists or a controversy is subject to an agreement to arbitrate.” A.R.S. § 12

- 3006(B). We review t he interpretation of an arbitration clause de novo

, Gros venor Holdings, L.C. v. Figueroa , 222 Ariz. 588, 593, ¶ 9, 218 P.3d 1045, 1050 (App. 2009)

, a nd the de nial of a motion to compel arbitration de novo. Nat ’ l Bank of Ariz. v. Schwartz, 230 Ariz. 310, 311, ¶ 4, 283 P.3d 41, 42 (App. 2012) (citations omitted ).

I. Arbitration Agreemen t

¶8 Defendants first argue that a va lid arbitration agreement exists even though Carey did not sign the Agreement. We agree. Even

1 We cite to the current version of the statute unless otherwise noted.CAREY v. K&M , et al.
Decision of the Court

4 though, as discussed, Carey did n ot sign the Agreement, Carey has not disputed the existence of the Agr eement and its arbitration clause. 2 See A.R.S. § 12

- 3006(A) ( “[a]n agreement contained in a record to submit to arbitration

. . . . ” ). 3 Moreover, a party w ho did not sign an agreement may be bound by the agreement if the party recognizes the validit y and accepts performance of the agreement. See Modular Sys., Inc. v . Naisbitt, 114 Ariz. 582, 585, 562 P.2d 1083 (App. 1977) ; see also Nghiem v. NEC Elec.

, Inc., 25 F.3d 1437, 1439 (9th Cir. 1994) ( an arbitration agreement must be in writing to be enforceable, but the parties need not sign it ) (citations omitted).

II. Scope of the Arbitra tion Agreement

¶9 The arbitration clause in the Agreement provides that “[a]ny dispute arising under this Agreement must be resolved [b]y [the] American Arbitration Association in Phoenix, Arizona.” The parties’ agreeme nt determines the scope of the arbitration agreement. See Clarke v. Asarco , Inc., 123 Ariz. 587, 589, 601 P.2d 58 7, 589 (1979). “Although it is comm only said that the law favors arbitration, it is more accurate to say that the law favors arbitration of disputes that the parties have agreed to arbitrate.” S. Cal. Edison Co. v. Peabod y W. Coal Co., 194 Ariz. 47, 51, ¶ 11, 977 P.2d 769, 773 (1999). Arbitration clauses , as a result, are to be “construed liberally and any doubts as to whether or not the matter in question is subject to arbitration should be resolved in favor of arbitration.” New Pueblo
Construct ors, In c. v. Lake Patagonia Recreation Ass ’n

, 12 Ariz. App. 13, 16, 467 P.2d 88 , 91 (1970).

a. Brokering and Sale of Unregistered Securities

¶10 Describing the arbitration clause here as “broad,” Defendants
argue that it applies to all of Carey’s claims, including Carey ’s brokering and sale of unregistered securities claims (“security claims ”). Describing the arbitration clause as “narrow,” however, Carey contends that it does not apply to th e se claims.

2 He specifically alleged that the parties “had an enforceable contract created by an offer, acceptance and consideration.” And he alleged he fully

pe rformed by sending K&M $100,000 after receiving a draft of the Agreement, and subsequently received three monthly interest payments

. 3 S ection 12

- 3001(6) defines a record as “information that is inscribed on a tangible medium or that is stored in an electronic or other medium and that is retrievable in perceivable form.”CAREY v. K&M , et al.
Decision of the Court

5 ¶11 The AZ

– RUAA does not address how the court should determine whether a dispute is subject to an arbitration clause

. Because AZ

– RUAA substantially mirrors the Uniform Act , we look to cases arising under the Uniform Act , its predecessor, the original Uniform Arbitration Act, and to the commentary for guidance. See In re Es tate of Dobert, 192 Ariz. 248, 252, ¶ 17, 963 P.2d 327, 331 (App. 1998) (if an Arizona statute is based on a uniform act, courts assume the legislature “intended to adopt the construction placed on the act by its drafters [

, ] ” and commentary to the uniform act is “highly persuasive unless erroneous or contrary to settled policy in this state”) (quoting State v. Sanchez, 174 Ariz. 44, 47, 846 P.2d 857, 860 (App. 1993)) (internal quotation marks omitted)

. Section 12

- 3006 , whi ch defines the court’s role in determining the validity of an arbitration agreement, mirrors the Uniform Act section 6

. Compare A .R.S. § 12

- 3006

, with Uniform Act § 6. Comment 2 to section 6 of the Uni form Act

, provides that the section was :

intended to incorpor ate the holdings of th e vast majority of state courts and the law that has developed under the [Federal Arbitration Act (“FAA”) ] that, in the absence of an agreement to the contrary, issues of substantive arbitrability, i.e. , whether a dispute is encompassed by an agreement to arbit rate, are for a court to decide

. . . .
¶12 Although we are guided by case law examining the FAA, the
Hawa i ’ i Supreme Court recently noted that federal courts are split on whether language that requires the parties to arbitrate disputes “arising under” the agreement between them covers related torts

. See C nty. of Hawai ’ i

, 301 P.3d at 595

. The majority of fede ral courts have held that “arising under” language creates a general arbitration clause with a broad

scope that includes related tort claims

. See , e.g., PRM Energy Sys., Inc. v. Primenergy, L.L.C.

, 592 F.3d 830, 836

- 37 (8th Cir. 2010) (arbitration provision containing “arising under” is a broad general arbitration clause that applied to tort claims including fraud, misappropriation of trade secrets , unfair competition, and tortious interference)

. A minority of courts , however, have held that “arising under” c reates a narrow arbitration clause , which is limited to interpreting the contract

. See Mediterranean En terprises, Inc. v. Ssangyong Corp., 70 8 F.2d 1458, 1464 (9th Cir. 1983) (“ We have no difficulty finding that ‘arising hereunder’ is intended to cover a much narrower scope of disputes, i.e., only those relating to the interpretation and performance of the contract itself .”). The Hawai’i Supreme C ourt, relying on the reasoning from the majority of federal courts, held that under Hawai ’ i’sCAREY v. K&M , et al.
Decision of the Court

6 Revised Uniform Arbitration Act an arbitration clause applying to “ [ a ] ny dispute arising under the terms of this Agreement” is a broad general arbitratio n clause that covered related torts

. Cnty. of Hawai ’ i

, 30 1 P.3d at 591, 605

- 06. Defendants urge us to adopt the approach taken by the Hawai’i Supreme Court in interpreting the arbitration clause contained in the Agreement.

¶13 In Dusold , we considered whether an arbitration clause that required the parties to arbitrate “any controversy or claim arising out of, or relating to this agreement , or the breach thereof” applied to the plaintiff’s personal injury claim. 167 Ariz. at 359, 807 P.2d at 527. We e xplained that “in order for the dispute to be characterized as aris i ng out of or related to the subject matter of the contract, and thus subje c t to arbitration, it must, at the very least, raise some issue the resolution of which re quires a reference

to or construction of some portion of the contract itself. ” Dusold

, 167 Ariz. at 362, 807 P.2d at 530. Although the arbitration clause in Dus old is not the same as the clause in this case

, Carey argues Dusold requires us to hold that his security claims are n ot subject to arbitration because an arbitration clause with “arising under” only applies to dispute s raising an issue that

“ the resolution of which requires a reference to or construction of some portion of the contract itself. ” See i d

.
¶14 But w e do not need to resolve the parties ’ conflicting arguments. Even if we agree with Carey, his security claims require “a reference to or construction of some portion” of the Agreement. See i d

.
¶15 Carey allege d that the A greement was for the sale of
securities

. D ef endants , however, contend ed that the A greement was a debt
instrument. A lthough under Arizona law a debt instrument can be a security, there are many exceptions , and whether a transaction involves a security depends on the circumstances , including the cont ractual arrangement and agreement between the parties

. See generally State v. Tober

, 173 Ariz. 211, 841 P.2d 206 (1992) (discussing applicable statutes and authorities). Accordingly, whether Carey purchased a security or a debt instrument, will require “reference to or construction of some portion” of

t he Agre ement

. See Dusold , 167 Ariz. at 362, 807 P.2d at 530; s ee generally Sun Valley Ranch 308 Ltd. P’ship ex rel. Englewood Properties, Inc. v. Robson

, 231 Ariz. 287, 293

- 94
, ¶¶ 19

- 22, 294 P.3d 125, 131

- 32 (App. 2012) T he arbitration clause therefore applies to Carey’s security claims, Count s One and Two

.CAREY v. K&M , et al.
Decision of the Court

7 b. Fraud and Consumer Fraud

¶16 Defendants also argue that the arbitration clause applies to
Count s Three and Four , fraud in the purchase and sale of securities and consumer fraud

. We agree

. Counts Three and Four are within the scope of the arbitration clause because they allege Defendants made misrepresentations in the Agreement. See U.S. Insulation, Inc. v. Hilro Const.
Co.
, 146 Ariz. 250, 254 n. 3, 705 P.2d 490, 494 n. 3 (App. 1985)

. Moreover
, like Carey’s security claims, Carey alleges that the frauds occurred in the sale of a security. Thus, the court must look to the Agreement to resolve these claims

.

c. Breach of Contract

¶17 Although on appeal Carey agrees th e arbitration clause applies to Count Five, the breach of contract claim

, h e argues that there is nothing to arbitrate because K&M admitted in its motion to compel arbitration that it breached the contract

. We disagree

.
¶18 Although K&M admitted that it had not repaid Carey the $100,000 , it has yet to file an answer or to assert an y potential affirmative defenses. And K& M averred in its motion to compel arbitration that Counts Three and Four, fraud and consumer fraud, are barred by the s tatute of limitations. See Ariz. R. Civ. P. 8(c ) (a party must include affirmative defenses in a pleading to a preceding pleading ). Moreover, even with K&M ’s admission that it did not return Carey’s investment

, an arbitrator will need to resolve any unpaid interest, as well as any attorneys’ fees and

costs

.
¶19 K&M is entitled to h ave an arbitrator decide any affirmative defenses

, damages

, fees and costs. See A.R.S. § 12

- 3006(C); Uniform Act § 6 cmt. 2 (“ issues of procedural arbitrability, i.e. , whether prerequisites such as time limits, notice, laches, estoppel, and o ther conditions precedent to an obligation to arbitrate have been met, are for the arbitrators to decide. ”) ; s ee also A.R.S. § 12

- 3021(B) (“ An arbitrator may award reasonable attor ney fees and other reasonable expenses of arbitration only if that award is authorized by law in a civil action involving the same claim or by the agreement of the parties to the arbitration proceeding. ”)

. Therefore, the arbit ration clause also applies to Count Five.

d. Piercing the Corporate Veil

¶20 Carey also alleged th at G ary Soucy was the alter ego of K&M

. He claim ed , as a result, that G ary Soucy was , legally speaking, K&M

. SeeCAREY v. K&M , et al.
Decision of the Court

8 Deutsche Credit Corp. v. Case Power & Equip. Co., 179 Ariz. 155, 160, 876 P.2d 1190, 1195 (App. 1994) (alter ego status exists “when there is such a unity of interest and ownership that the separate personalities of the corporation and the owners cease to exist ”). “ When a plaintiff su es an individual under an alter e go theory, that defendant may demand arbitration to the same extent the corporate entities could do so. ” Sun Valley Ranch , 23 1 Ariz. at 296, ¶ 36, 294 P.3d at 134

. Count Six is therefore subject to the arbitration clause.

III. Joseph Soucy and Randy Bronner

¶21 F inally, we must determine whether Carey also has to arbitrate his claims against Joseph Soucy and Randy Bronner, neither of whom were parties or signatories to the Agreement. Both, however, sought to compel arbitration of Carey’s claims against them

.
¶22 “ [A] willing [non signatory ] seeking to arbitrate with a signatory that is unwilling may do so under what has been called an alternative estoppel theory, which takes into consideration the relationships of persons, wrongs, and issues [

. ] ” Id. at 296, ¶ 37, 294 P.3d at 134 (quoting Merrill Lynch Inv. Managers v. Optibase, Ltd., 337 F.3d 125, 131 (2d Cir. 2003) ) (internal citations omitted) (internal quotation marks omitted). A non signatory may compel arbitration when “the signatory’s claims arise out of and relate directly to the written agreement . . . . ” Id. at 29 7
, ¶ 40, 294 P.3d at 13 5 ( quoting CD Partners, LLC v. Grizzle, 424 F.3d 795, 798 (8th Cir. 2005) ) (internal quotation marks omitted) . Likewise, a

non signatory may compel arbitration when the sign atory must rely on the

contract and alleges “substantially interdependent and concerted misconduct by both the nonsignatory and one or more of the signatories

. ” Id. at 29 7
, ¶ 40, 294 P.3d at 13 5 ( quoting 4 Am. Jur. 2d Alternative Dispute Resolution § 60 ) (internal quotation marks omitted)

.
¶23 Here, Carey alleg e d that Joseph Soucy and Randy Bronner

were also responsible for brokering and selling unregistered securit i es and fraud in the sale of those securities, Counts One through Three . He allege d that Bronn er made the offer to sell K&M’s securities and that Joseph Soucy

, as well as G ary Soucy, influenced Bronner ’s and K&M’s offer to sell
securities. Carey, as a result, has alleged “ substantial[] interdependent and concerted misconduct” by Joseph Soucy and B ronner, nonsignatories to the Agreement , with G ary Soucy and K&M. See i d. Because Carey will still need to prove that the Agreement is a secu rity and not a debt instrument to prevail on his claims against Joseph Soucy and Bronner, they can compel arbitration

.CAREY v. K&M , et al.
Decision of the Court

9 ATTORNEYS’ FEES

¶24 Carey requests an aw ard of attorneys’ fees and costs under A.R.S. §§ 12

- 341.01 and

- 341, and Arizona Rules of Civil Appellate Procedure 21. Because Carey is not the prevailing party, we deny his request.

CONCLUSION

¶25 Based on th e foregoi ng , we reverse the order denying arbitration and remand the case for the trial court to compel arbitration.