Opinion ID: 491009
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: 5 On June 8, 1981, the Nesslages signed a margin agreement with Q & R Clearing Corp. with respect to a margin account they opened at York Securities for the purchase and sale of securities and commodities. The margin agreement contained the following arbitration provision: 6 [a]ny controversy arising out of or relating to [the account] ... shall be settled by arbitration in accordance with the rules of the American Arbitration Association or the Board of Governors of the New York Stock Exchange.... Judgment upon any award rendered by the arbitrators shall be final and may be entered in any court having jurisdiction thereof. 7 Unfortunately, the Nesslages' account substantially decreased in value and they became dissatisfied with Samson's handling of their account. In March 1983 they filed a multi-count complaint against York Securities, Samson, and two other brokerage firms and their employees. In July 1983 York Securities and Samson filed an answer asserting arbitration as an affirmative defense. The district court denied cross-motions for summary judgment on the state securities law claim (count III) and a defense motion to dismiss the civil RICO claim (count IV), and the parties engaged in discovery during the fall and winter of 1984-1985. 8 In March 1985 the Supreme Court decided Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 216-23, 105 S.Ct. 1238, 1240-43, 84 L.Ed.2d 158 (1985), holding that district courts must compel arbitration of pendent arbitrable claims, even if arbitration could result in the maintenance of separate proceedings in different forums, and should not stay arbitration proceedings or otherwise manipulate the order of the resulting bifurcated proceedings in order to protect the federal interest in the federal court proceedings. On April 25, 1985, relying upon the Dean Witter Reynolds Inc. v. Byrd decision, York Securities and Samson filed a motion to compel arbitration. The district court found that the Nesslages, York Securities and Samson intended that the margin agreement, including the arbitration provision, would govern their brokerage relationship, even though York Securities and Samson were not parties to the margin agreement, and that York Securities and Samson could enforce the margin agreement. Nesslage v. York Securities, Inc., No. 83-703C(6), slip op. at 3. The district court also found that York Securities and Samson were not in default in proceeding with arbitration and thus had not waived their right to enforce the arbitration provision. Id. at 3-4. The district court then determined that the Nesslages' Sec. 10(b)/Rule 10b-5 claims (count I) were not arbitrable. Id. at 4-5, citing Surman v. Merrill Lynch, Pierce, Fenner & Smith, 733 F.2d 59, 61 (8th Cir.1984) (Surman ). However, the district court decided that the other claims (counts III-VI) were arbitrable. These appeals followed.