Karolyn Shepherd, Individually and as Co-Successor Trustee of the Burge Family Revocable Trust, Judy Kay Stevenson, Individually and as Beneficiary of the Burge Family Revocable Trust, Jon Mark Shepherd, Individually, and Girard Securities, Inc. v. Bobby Burge, Individually and as Beneficiary of the Burge Family Revocable Trust, 07-17-00295-CV

Background

Plaintiff Bobby Burge sued his sisters, broker Girard Securities, and broker Shepherd alleging fraud, conversion, breach of fiduciary duty, theft and conspiracy arising from two brokerage accounts (a Premiere Select IRA and a Joint Tenancy account) opened at Girard in November 2011.
Account-opening paperwork contained a conspicuous acknowledgement above Burge’s signature stating the account is governed by a pre-dispute arbitration clause in the Customer Agreement; the Customer Agreement contains a broad FINRA arbitration clause covering “all controversies” concerning any account, order, or transaction.
Girard and Shepherd moved to compel arbitration and to stay the district-court proceedings under both the Federal Arbitration Act and the Texas Arbitration Act, attaching the account documents and affidavits.
Burge filed a response and affidavit but did not deny signing the Joint Account documents or receiving/agreeing to the arbitration clause; his affidavit addressed his mother’s mental state and did not controvert execution of the arbitration agreement.
The trial court denied the motions to compel arbitration; appellants appealed interlocutorily under Texas statutes allowing appeals from denials of arbitration motions.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Existence of a valid arbitration agreement	Burge did not explicitly argue non‑existence in the record; he submitted an affidavit unrelated to execution.	Girard/Shepherd: account documents and acknowledgements, signed by Burge and Shepherd, establish a valid arbitration agreement.	Trial court erred by denying motion—record evidence established a valid arbitration agreement (appellants contend).
Whether the claims fall within the arbitration clause’s scope	Burge framed claims as torts and fiduciary breaches outside simple contract disputes.	Girard/Shepherd: the clause is broad, covering “all controversies” concerning any account or transaction; claims arise from or are intertwined with the covered accounts.	Claims are arbitrable because factual allegations concern the accounts and fall within broad arbitration language (appellants’ position).
Burden of proof and need for evidentiary hearing	Burge implicitly relied on factual disputes to avoid arbitration.	Appellants: movants met their initial affidavit burden; Burge failed to controvert execution, so no factual dispute required an evidentiary hearing.	Where affidavit evidence of agreement is unrebutted, trial court must compel arbitration; denial was reversible error (appellants’ contention).
Applicable standard of contract construction	Burge urged that non‑signatories/claims fall outside clause (implicit).	Appellants: Texas contract principles govern scope; ambiguities resolved in favor of arbitration; claims focused on account transactions.	Court should apply Texas contract law, construe clause broadly in favor of arbitration (appellants’ contention).

Key Cases Cited

In re Merrill Lynch & Co., 315 S.W.3d 888 (Tex. 2010) (interlocutory appeal exists from denial of arbitration)
Jack B. Anglin Co., Inc. v. Tipps, 842 S.W.2d 266 (Tex. 1992) (existence of arbitration agreement is a question of fact; summary resolution by affidavits)
In re FirstMerit Bank, 52 S.W.3d 749 (Tex. 2001) (scope of arbitration clause is question of law; construe plaintiff’s factual allegations)
Prudential Sec. Inc. v. Marshall, 909 S.W.2d 896 (Tex. 1995) (party resisting arbitration bears burden to show claims fall outside clause)
In re D. Wilson Constr. Co., 196 S.W.3d 774 (Tex. 2006) (arbitrability analysis and deference to broad arbitration agreements)
Valence Operating Co. v. Dorsett, 164 S.W.3d 656 (Tex. 2005) (contract interpretation principles—court seeks parties’ intent from the instrument)