Jones v. Jacobson
195 Cal. App. 4th 1
| Cal. Ct. App. | 2011Background
- SG and SGSP (with Jacobson, SFIA, Lyxor, SG Hambros) appeal a trial court order denying arbitration of claims by Charles and Judith Jones.
- Arbitration provision is in a two-page form account agreement between the Joneses and SGAS, not signed by SG or SGSP.
- Joneses amended complaint adding SG parties post-discovery; Jacobson joined SG appeal.
- Trial court held SG appellants were not parties to the account agreement and declined equitable estoppel as a basis to compel arbitration.
- Jacobson appellants argued third-party beneficiary status to enforce arbitration; court rejected this theory.
- Court resolves that none of the SG or Jacobson appellants validly enforce arbitration and affirms denial of arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether nonsignatories may enforce arbitration under the agreement | Joneses deny SG/SGSP party status. | SGs argue they are parties via identity of interest/agent language. | No; nonsignatories failed to prove they are parties to the agreement. |
| Burden of proof to show existence of an arbitration agreement | Joneses burden to show agreement exists. | SGs must prove they are parties to the agreement. | Burden on nonsignatory to show they are a party to the agreement. |
| Application of equitable estoppel to compel arbitration | Arbitration should apply because claims are intertwined with contract. | Claims are not founded in or intertwined with the account agreement. | Equitable estoppel not satisfied; no independent basis to compel arbitration. |
| Third party beneficiary theory under the account agreement | Jacobson as broker-dealer may enforce as third-party beneficiary. | No sufficient nexus; not a contract beneficiary to the Joneses’ claims. | Jacobson not entitled to enforce arbitration as third-party beneficiary. |
| Agency/identity of interest issues governing enforcement | Debreu/Auvray alleged SGAS-affiliates; language extends to agents. | No proven agency relationship; agency arguments forfeited. | Agency argument forfeited; no enforceable identity of interest shown. |
Key Cases Cited
- Brookwood v. Bank of America, 45 Cal.App.4th 1667 (Cal. Ct. App. 1996) (standard for arbitration applicability on review)
- Brown v. Wells Fargo Bank, N.A., 168 Cal.App.4th 938 (Cal. Ct. App. 2008) (independent judgment on interpretation when no extrinsic facts)
- Titolo v. Cano, 157 Cal.App.4th 310 (Cal. Ct. App. 2007) (burden shifts when plaintiff challenges physician arbitration agreement)
- Nguyen v. Tran, 157 Cal.App.4th 1032 (Cal. Ct. App. 2007) (exceptions for nonsignatories include preexisting agency relationships)
- Goldman v. KPMG, LLP, 173 Cal.App.4th 209 (Cal. Ct. App. 2009) (equitable estoppel requires claims intertwined with contract obligations)
- Coast Plaza Doctors Hospital v. Blue Cross of California, 83 Cal.App.4th 677 (Cal. Ct. App. 2000) (scope of arbitration provisions and related issues)
- EFund Capital Partners v. Pless, 150 Cal.App.4th 1311 (Cal. Ct. App. 2007) (arbitration scope; burden considerations in nonsignatory enforcement)