Opinion ID: 1648193
Heading Depth: 3
Heading Rank: 1

Heading: Whether the Plaintiff's Claims Arise Out of or Relates to Hilliard's Accounts or Transactions with Smith Barney or Scudder.

Text: ¶ 12. Henry asserts that her claims do not depend upon the formation of the agreements between Smith Barney and Hilliard nor upon Smith Barney's management of these accounts pursuant to its duties to Hilliard under the agreements. Rather, she argues that her basis in the claim goes to the assets of the Hilliard estate and Smith Barney's fiduciary duties to the estate, notwithstanding the fact that such assets were earlier the corpus of Hilliard's personal individual and IRA accounts during her lifetime. The appellants argue that this controversy falls within the broad language of the arbitration agreements. ¶ 13. In Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 406, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967), the United States Supreme Court labeled the nearly identical language, any controversy or claim arising out of or related to this agreement, a broad arbitration clause that covered both the execution and acceleration of an agreement. Similar broadly worded arbitration provisions in securities agreements with brokerage houses have been held by courts to compel arbitration. See, e.g., Pritzker v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 7 F.3d 1110, 1114 (3rd Cir.1993) (noting that courts have broadly construed similar agreement); Trott v. Paciolla, 748 F.Supp. 305 (E.D.Pa. 1990) ( a similar arbitration agreement contained broad sweeping terms [that] clearly encompass claims related to the [customer at issue]); Levine v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 639 F.Supp. 1391 (S.D.N.Y.1986) (enforcing a similar agreement, finding that it is difficult to imagine language broader than the phrase any controversy). ¶ 14. All of the funds which are the subject of Henry's claims were derived directly from Hilliard's accounts and transactions with Smith Barney. Thus, Henry's claims would certainly be encompassed by the broad phrase [a]ny controversy arising out of or relating to those accounts as indicated in the arbitration clauses of the Client Agreements. Furthermore, the alleged removal and closure of the funds at issue by Scudder and Cospelich constitute transactions with Smith Barney which also trigger the arbitration agreements. Clearly Henry's claims arise out of or relate to Hilliard's accounts or transactions with Smith Barney and Scudder and, therefore, are subject to the arbitration agreements.