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ADVEST, INC. v. WAGNER

September 27, 2005.

ADVEST, INC., Plaintiff,
v.
GEORGE WAGNER, Defendant.



The opinion of the court was delivered by: JOY CONTI, District Judge

MEMORANDUM OPINION

Plaintiff Advest, Inc. ("plaintiff" or "Advest") brought this action under the Federal Arbitration Act, 9 U.S.C. §§ 1, et seq. (the "FAA"), in the nature of a petition to compel arbitration and stay a civil action that defendant George Wagner ("defendant" or "Wagner") commenced in state court. This court heard evidence and argument during a bench trial on November 10, 2004. On January 5, 2005, the parties filed proposed findings of fact and conclusions of law.

Pursuant to Federal Rule of Civil Procedure 52, this court makes the following findings of fact and conclusions of law.

  I. FINDINGS OF FACT

  1. Advest is a corporation that provides securities brokerage, investment banking, and asset management services. Advest is licensed to do business within the Commonwealth of Pennsylvania. Advest is a member of the National Association of Securities Dealers ("NASD"). Joint Stipulations, ¶ 1. 2. In January 1996, Wagner became a client of Advest by opening a brokerage account (the "Account") and signing an Advest Account Application and an IRA Application. Joint Stipulations, ¶ 2.

  3. According to the booklet accompanying the Advest Account Application ("Account Agreement and Information About Your Advest Account"), the agreement Wagner made with Advest concerning his brokerage account includes "the Brokerage Agreement, . . . these Definitions, the Account Application, and any other written agreements between us concerning the Brokerage Account. . . ." Joint Stipulations, Ex. 1 at 17.

  4. The Advest Account Application, IRA Application, and the booklet accompanying the Advest Account Application ("Account Agreement and Information About Your Advest Account") (together, the "Agreements") are clearly identified as Advest account documents. Joint Stipulations, Ex. 1. Plaintiff's uncontested testimony at trial establishes that Advest prepared the original forms of these documents. Trial Transcript at 21.

  5. The Agreements are contracts evidencing a transaction involving commerce, as defined by the Federal Arbitration Act, 9 U.S.C. § 1. Joint Stipulations, ¶ 3.

  6. The Agreements included, inter alia, several clauses dealing with the arbitrability of disputes arising under the Agreements. Joint Stipulations, Ex. 1.

  7. Immediately above Wagner's signature on page 2 of the Advest Account Application is the following language:
By signing below, I also acknowledge that . . . I have received, read and understand the terms and conditions of the Account Agreement set forth in the accompanying booklet. . . . In accordance with the pre-dispute arbitration clause in Section 15 of the Brokerage Agreement on page 7, I am agreeing in advance to arbitrate any controversies which may arise with you.
Joint Stipulations, Ex. 1 at second page (unnumbered) (emphasis in original).
  8. In addition, Section 15 of the Advest Account Agreement contains the following arbitration clause:
You agree that all controversies which may arise between us, including but not limited to those involving any transaction or the construction, performance, or breach of the Account Agreement or any other agreement between us, whether entered into prior, on or subsequent to the date hereof, shall be determined by arbitration. . . . This arbitration provision shall be enforced and interpreted exclusively in accordance with applicable Federal law, including the Federal Arbitration Act.
Joint Stipulations, ¶ 4; Joint Stipulations, Ex. 1 at 7-8 (emphasis added).
  9. Immediately above Wagner's signature on the IRA Application is the following language:
I have received and read the Advest, Inc. Prototype Individual Retirement Account Plan and Disclosure Statement, the Advest Brokerage Agreement (Appendix A), and the Beneficiary Information below. . . . By signing below, I also acknowledge that, in accordance with the pre-dispute arbitration clause in Section 5 of the Brokerage Agreement, I am agreeing in advance to arbitrate any controversies which may arise with you.
Joint Stipulations, Ex. 1 at 7-8 at third page (unnumbered) (emphasis in original).

  10. The Agreements define the terms "[w]e/us/our/Advest" to mean "Advest, its subsidiaries, affiliates, officers, directors, agents or employees." Joint Stipulations, Ex. 1 at 18.

  11. During the relevant time period, "Nussbaum Partners" referred to a group of licensed securities representatives employed by Advest. Joint Stipulations, ¶ 8; Trial Transcript at 5. 12. All members of "Nussbaum Partners" worked as a team and pooled their commissions. Trial Transcript at 5.

  13. All members of "Nussbaum Partners" were employees of Advest. In Pittsburgh, they worked at the Advest office at 3400 One Oxford Center. Trial Transcript at 5-6.

  14. "Nussbaum Partners" did not maintain separate office space, did not file tax returns in the name of "Nussbaum Partners", and did not have any separate employees. Trial Transcript at 5-6.

  15. "Nussbaum Partners" was not listed on the building registry of One Oxford Center, where Advest maintains its Pittsburgh office. Trial Transcript at 7.

  16. "Nussbaum Partners" did not maintain a separate telephone listing in the name of "Nussbaum ...


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