Court Opinion

ID: 28374
Source: CourtListenerOpinion
Date Created: 2010-04-25 09:22:43+00
Date Added: 2024-06-11T12:15:39.085250
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                        FOR THE FIFTH CIRCUIT

                        _____________________

                             No. 02-10254
                        _____________________

PEOPLES BENEFIT LIFE INSURANCE COMPANY,

                                                        Plaintiff - Appellee,

                                 versus

DALE LARSON,

                                                    Defendant - Appellant.

_________________________________________________________________

             Appeal from the United States District Court
            for the Northern District of Texas, Fort Worth
                       (USDC No. 4:01-CV-900-A)

                              July 30, 2002

Before JOLLY, SMITH, and DEMOSS, Circuit Judges.

PER CURIAM:*

      After considering the record, briefs, and oral argument in

this case, we hold that this litigation should be stayed pending

arbitration.    Although it is clear from the district court’s good

opinion that it carefully considered the merits of this case, we

think that it nonetheless erred by failing to give proper weight to

(1)   the   interconnected   nature    of   the   four     contemporaneously

executed agreements    at    issue    and   (2)   the    broad   “related   to”

      *
      Pursuant to 5th CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5th CIR. R. 47.5.4.
language contained in the arbitration clause of the Conditional

Guaranty.    See   Personal   Security   &   Safety   Systems,   Inc.   v.

Motorola, Inc., __ F.3d __, 2002 WL 1413702 at *5 (5th Cir. July 1,

2002) (“In sum, we hold that, where the parties include a broad

arbitration provision in an agreement that is ‘essential’ to the

overall transaction, we will presume that they intended the clause

to reach all aspects of the transaction –- including those aspects

governed by other contemporaneously executed agreements that are

part of the same transaction.”); Neal v. Hardee’s Food Sys., Inc.,

918 F.2d 34, 38 (5th Cir. 1990) (“We hold that when the parties

included a broad arbitration clause in the essential License

Agreements covering ‘any and all disputes,’ they intended the

clause to reach all aspects of the parties’ relationship including

the purchase of the physical properties.”).

     The fact that Larson was not a signatory on each of the four

agreements does not distinguish this case from Neal and Personal

Security. With an eye towards the Larson Group’s primary liability

for the debt under the Security and Reimbursement Agreement,

Peoples Benefit deliberately chose to limit Larson’s individual

liability in the Conditional Guaranty.        The Conditional Guaranty

specifically directs that the two agreements should be interpreted

together.   Both contracts contain a broad arbitration provision.

The parties negotiated the Conditional Guaranty as part of their

overall goal to hold Larson Group liable broadly but limit Larson’s

individual liability to cases of criminal conduct or breaches of

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the Employment Agreement.     As a consequence, claims that Larson

fraudulently   induced   Peoples   Benefit   to    participate   in   this

transaction should be arbitrated.

     We therefore reverse the district court and remand for the

entry of a stay pending arbitration.

                                                  REVERSED AND REMANDED.

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