Case Name: Bernard SPITZ and Gertrude Spitz, Appellants, v. PRUDENTIAL-BACHE SECURITIES, INC., and Nancy Abrams, Appellees
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 1987-01-28
Citations: 502 So. 2d 479
Docket Number: No. 85-2856
Parties: Bernard SPITZ and Gertrude Spitz, Appellants, v. PRUDENTIAL-BACHE SECURITIES, INC., and Nancy Abrams, Appellees.
Judges: LETTS, J., concurs.
Reporter: Southern Reporter, Second Series
Volume: 502
Pages: 479–481

Head Matter:
Bernard SPITZ and Gertrude Spitz, Appellants, v. PRUDENTIAL-BACHE SECURITIES, INC., and Nancy Abrams, Appellees.
No. 85-2856.
District Court of Appeal of Florida, Fourth District.
Jan. 28, 1987.
Rehearing and Sanctions Denied March 5, 1987.
Pamela M. Burdick of Russell L. Forkey, P.A., Fort Lauderdale, for appellants.
Lloyd R. Schwed and Kathy Klock of Fowler, White, Burnett, Hurley, Banick & Strickroot, P.A., Miami, for appellees.

Opinion:
LETTS, Judge.
We have before us for review the order of the trial court granting Prudential-Bache's Motion to Stay Action and Compel Arbitration. We reverse.
The Appellants are retirees who, after discussions with a Prudential-Bache account executive, invested in a limited partnership. The partnership's profitability did not live up to their expectations and the retirees filed a two count complaint alleging violation of section 517.301, Florida Statutes (1985), because of misrepresentations and omissions, and breach of fiduciary duties due to fraud.
Prudential-Bache moved to stay the action and compel arbitration. The retirees' memorandum in opposition argued that the arbitration clause was fraudulently induced, and they demanded a jury trial on that issue. See 9 U.S.C.A. § 4. In particular, they alleged that they were mailed a "Joint Account Agreement" with a cover letter stating that "The full and complete execution of these forms is necessary to comply with the rules of the New York Stock Exchange and, therefore, your prompt attention to this matter will be appreciated." The clause containing the arbitration agreement appears as the last paragraph of the Joint Trading Account Agreement. Prudential-Bache concedes that although the rules of the New York Stock Exchange do require that the customer sign forms, the rules do not in fact require that those forms include an arbitration agreement. The question for determination by the trial court is whether the retirees are attacking the making of the entire Joint Trading Account Agreement, or merely the particular arbitration clause. If the court concludes that the attack is on the entire contract which contains an arbitration agreement, arbitration may proceed. Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967), 9 U.S.C.A. § 4. If, on the other hand, the court determines that the attack centers on fraud in the inducement going only to the arbitration clause, the aggrieved party may demand a jury trial as to that issue. 9 U.S. C.A. § 4.
The trial court's order simply granted the motion to compel arbitration. We find that this was error and that the retirees' demand for jury trial should have been granted as to the issue of fraud in the making of the agreement to arbitrate.
To warrant a trial by jury under 9 U.S. C.A. § 4, the fraudulent inducement issue must be "genuine." That is, some evidence should be produced to substantiate the claim that the arbitration agreement to arbitrate was invalid due to fraud. Interbras Cayman Co. v. Orient Victory Shipping Co. S.A., 663 F.2d 4 (2d Cir.1981). We believe the retirees made an adequate preliminary showing of such a genuine issue. The entire thrust of the retirees' memorandum in response to the motion, and their accompanying affidavit, was not that they were fraudulently induced into signing the entire account agreement, but that they were fraudulently led to believe that they were required to agree to the arbitration provision. The affidavit, signed by both retirees, states that they only executed the agreement to comply with the New York Stock Exchange rules, an allegation which is sufficient to show the necessary reliance element for fraud. Thus, their demand for a jury trial on this fraud issue should have been granted.
Reversed and remanded for further proceedings in accordance herewith.
LETTS, J., concurs.
GLICKSTEIN, J., concurs specially with opinion.
STONE, J., dissents with opinion.
. Emphasized in the letter.