Opinion ID: 1702101
Heading Depth: 1
Heading Rank: 3

Heading: Arbitrability of the Second Account

Text: It is undisputed that the plaintiff did not sign a separate agreement expressly authorizing the opening of the second account account number XXX-XXXXX. She alleges that the defendants not only improperly opened that account, but transferred her securities and property from one account to the other without proper authorization. Consequently, she insists, transactions involving account number XXX-XXXXX, such as unauthorized purchases made in account number XXX-XXXXX and transferred to and sold in account number XXX-XXXXX, are not subject to arbitration under the terms of the Agreement that she signed upon the opening of account number XXX-XXXXX. In support of her argument, the plaintiff refers to Clause 12 of the Agreement, which provides that the agreement ... shall cover individually and collectively all accounts which the undersigned may open or reopen with [Merrill Lynch]. She insists that because the second account was not one that she opened or reopened, the second account is not subject to the arbitration provision. Merrill Lynch, however, contends that the phrase in Clause 11 providing for arbitration of any controversy... arising out of [its] business is sufficiently broad to encompass the transactions connected with the disputed account. The question thus becomes a matter of contractual interpretation to be determined by the intent of the parties. Ex parte Warrior Basin Gas Co., 512 So.2d 1364, 1367-68 (Ala.1987). A determination by the trial judge regarding the intent of the parties to arbitrate is a question of fact and, as such, will not be disturbed unless clearly erroneous. Id. at 1368 (citing Seaboard Coast Line R.R. v. Trailer Train Co., 690 F.2d 1343, 1348-49 (11th Cir.1982). We are unable to conclude that the trial judge's findings, based on the language of the Agreement itself, numerous affidavits, and the oral arguments of both parties, were clearly erroneous. For example, the language of the Agreement fairly supports a finding that the parties intended to arbitrate disputed claims. This is especially true with regard to the plaintiff's allegations that the defendants used the second account as a repository or transfer point for securities purchased through the first account. The transactions arising out of account number XXX-XXXXX are thus so inextricably intertwined with those involving account number XXX-XXXXX as to be inseparable absent resort to mere sophistry. In addition, we note that the trial judge, in properly applying federal substantive law of arbitrability, was constrained to construe the intent of the parties generously in favor of arbitrability. Ex parte Warrior Basin Gas Co., 512 So.2d at 1369; see also, Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985). Moreover, federal policy favoring arbitration and requiring courts to `rigorously' enforce arbitration agreements, mandates the finding of intent to arbitrate absent positive assurance that the parties did not so intend. Ex parte Warrior Basin Gas Co., 512 So.2d at 1370. We, therefore, conclude that the trial judge's findings were not clearly erroneous.