NOTICE: NOT FOR PUBLICATION.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

ARIZONA COURT OF APPEALS

DIVISION ONE

DAN CAREY, Plaintiff/Appellee,

v.

K&M SEAFOOD FINANCIAL, LLC, an Arizona limited liability 

company; GARY SOUCY and THERESA SOUCY, husband and wife; 

JOSEPH SOUCY, a single man; RANDY BRONNER and JANE DOE 

BRONNER, husband and wife, Defendants/Appellants.

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 REMANDED

COUNSEL

Slaton & Sannes, PC, Scottsdale

By Joel E. Sannes

Counsel for Plaintiff/Appellee

Hovore Law PLLC, Scottsdale

By F. Thomas Hovore

Counsel for Defendants/Appellants
CAREY 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 decide 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 alleged in his complaint, that K&M Seafood 

Financial LLC (“K&M”) was offering to sell securities. After he made an 

inquiry, Randy Bronner, 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 

received a revised Agreement.

¶3 K&M paid Carey three monthly interest payments of $2000. 

Gary Soucy, 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 suspending “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 dba BD Resourcing, and Randy Bronner and his spouse (collectively 

“Defendants”). Carey’s amended complaint alleged claims against: all 

Defendants for unlicensed brokering of securities (Count One), sale of 

unregistered securities (Count Two), and fraud in the purchase and sale of 

securities (Count Three); Gary Soucy and K&M for consumer fraud (Count 

Four); K&M for breach of contract (Count Five); and Gary Soucy and spouse

under a veil-piercing theory (Count Six).

¶5 The Defendants moved to compel arbitration based upon the 

Agreement’s arbitration clause. After briefing, the trial court denied the 

Defendants’ motion. Defendants appealed. We have jurisdiction 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 The Arizona Legislature 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 Adopts 

the Revised Uniform Arbitration Act, 43 Ariz. St. L.J. 481 (2011). The AZRUAA applies to all arbitration agreements made after January 1, 2011. 

A.R.S. § 12-3003. Because the parties entered into the Agreement in June 

2011, the AZ–RUAA applies 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 the interpretation of an 

arbitration clause de novo, Grosvenor Holdings, L.C. v. Figueroa, 222 Ariz. 

588, 593, ¶ 9, 218 P.3d 1045, 1050 (App. 2009), and the denial 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 Agreement

¶8 Defendants first argue that a valid 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 not sign the Agreement, Carey has not 

disputed the existence of the Agreement 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 who did not sign an agreement may 

be bound by the agreement if the party recognizes the validity 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 Arbitration 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’ agreement 

determines the scope of the arbitration agreement. See Clarke v. Asarco, Inc.,

123 Ariz. 587, 589, 601 P.2d 587, 589 (1979). “Although it is commonly 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. Peabody 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 

Constructors, Inc. 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 these claims.

 

2 He specifically alleged that the parties “had an enforceable contract 

created by an offer, acceptance and consideration.” And he alleged he fully 

performed by sending K&M $100,000 after receiving a draft of the 

Agreement, and subsequently received three monthly interest payments.

3 Section 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 Estate 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, which 

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 Uniform Act, provides 

that the section was:

intended to incorporate the holdings of the 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 arbitrate, are for a court to decide 

. . . .

¶12 Although we are guided by case law examining the FAA, the 

Hawai’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 Cnty. of 

Hawai’i, 301 P.3d at 595. The majority of federal 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” creates a narrow arbitration clause, which is 

limited to interpreting the contract. See Mediterranean Enterprises, Inc. v. 

Ssangyong Corp., 708 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 Court, relying on the 

reasoning from the majority of federal courts, held that under Hawai’i’s 
CAREY 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 

arbitration clause that covered related torts. Cnty. of Hawai’i, 301 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 explained that 

“in order for the dispute to be characterized as arising out of or related to 

the subject matter of the contract, and thus subject to arbitration, it must, at 

the very least, raise some issue the resolution of which requires 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 Dusold is not the 

same as the clause in this case, Carey argues Dusold requires us to hold that 

his security claims are not subject to arbitration because an arbitration 

clause with “arising under” only applies to disputes raising an issue that

“the resolution of which requires a reference to or construction of some 

portion of the contract itself.” See id.

¶14 But we 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 id.

¶15 Carey alleged that the Agreement was for the sale of 

securities. Defendants, however, contended that the Agreement was a debt 

instrument. Although 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 contractual 

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 

the Agreement. See Dusold, 167 Ariz. at 362, 807 P.2d at 530; see 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) The 

arbitration clause therefore applies to Carey’s security claims, Counts 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 

Counts 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 the arbitration clause 

applies to Count Five, the breach of contract claim, he 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 any 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 statute 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 have 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 other conditions precedent to an 

obligation to arbitrate have been met, are for the arbitrators to decide.”); see 

also A.R.S. § 12-3021(B) (“An arbitrator may award reasonable attorney 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 

arbitration clause also applies to Count Five. 

d. Piercing the Corporate Veil

¶20 Carey also alleged that Gary Soucy was the alter ego of K&M. 

He claimed, as a result, that Gary Soucy was, legally speaking, K&M. See 
CAREY 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 sues an individual under 

an alter ego theory, that defendant may demand arbitration to the same 

extent the corporate entities could do so.” Sun Valley Ranch, 231 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 Finally, 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 [nonsignatory] 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 nonsignatory may compel arbitration when “the signatory’s 

claims arise out of and relate directly to the written agreement . . . .” Id. at

297, ¶ 40, 294 P.3d at 135 (quoting CD Partners, LLC v. Grizzle, 424 F.3d 795, 

798 (8th Cir. 2005)) (internal quotation marks omitted). Likewise, a 

nonsignatory may compel arbitration when the signatory 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 297, ¶ 40, 294 P.3d at 135 (quoting 4 Am. Jur. 2d Alternative Dispute 

Resolution § 60) (internal quotation marks omitted).

¶23 Here, Carey alleged that Joseph Soucy and Randy Bronner

were also responsible for brokering and selling unregistered securities and 

fraud in the sale of those securities, Counts One through Three. He alleged

that Bronner made the offer to sell K&M’s securities and that Joseph Soucy, 

as well as Gary 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 Bronner, nonsignatories to the 

Agreement, with Gary Soucy and K&M. See id. Because Carey will still 

need to prove that the Agreement is a security 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 award 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 the foregoing, we reverse the order denying 

arbitration and remand the case for the trial court to compel arbitration.