Opinion ID: 874184
Heading Depth: 1
Heading Rank: 11

Heading: Binding Effect of the Agreement

Text: The Wattenbargers argue that Tifani's claims are not subject to arbitration because she did not sign the custodial account agreement that contains the clause. This argument ignores well-established Idaho law. In Loomis v. Cudahy, this Court held that the terms of another agreement not signed by the parties can be incorporated into the signed agreement by reference when the unsigned terms are readily available for inspection by the parties. 104 Idaho 106, 118-19, 656 P.2d 1359, 1371-72 (1982). The new account card signed by Tifani makes clear reference to the portion of the custodial account agreement that contains the arbitration clause. Furthermore, as noted above, there is no evidence that Tifani was not provided with the custodial account agreement or that it was not available to her. Thus, Tifani is bound by the arbitration clause even though it is not contained in the signed agreement. The Wattenbargers also argue that Jared Wattenbarger has a claim against the respondents because Tifani and Jared merged their investments, rendering them community property. As a result, the Wattenbargers contend that Jared's claims are not subject to arbitration because he was not a signatory of the agreement between Tifani and the respondents. The district court rejected this argument based on our holding in Dan Wiebold Ford, Inc. v. Universal Computer Consulting Holding, Inc., 142 Idaho 235, 127 P.3d 138 (2005). In that case, we cited a Michigan case as authority for the proposition that where one spouse bases his or her legal rights on a contract entered into by another spouse, the nonsignatory spouse is bound by the terms of the contract, including an arbitration clause. Id. at 242-43, 127 P.3d at 145-46. The Wattenbargers do not dispute this holding, but instead argue that it is inapplicable in this case because Jared and Tifani were not married at the time the agreement with the respondents was executed. They provide no authority in support of this argument, only noting that it stands to reason that spousal agency cannot reach so far into the past. As adequately pointed out by the respondents and the district court, the Wattenbargers' argument would produce an absurd result. The essence of the Wattenbargers' argument is that a party whose legal rights are solely based on an agreement signed by another is not subject to the terms of that agreement if he had no relationship with the signatory party at the time the agreement was executed. As the district court noted [t]he same rationale would apply in a situation where a plaintiff attempts to avoid arbitration by naming a co-plaintiff who did not sign the arbitration agreement. Accordingly, in the absence of any authority supporting their argument, and because of the absurd result it would produce, we affirm the district court's finding that both parties are bound by the arbitration agreement.