MICHELE PAQUIN, JORDAN JOHNSON, JUSTIN JOHNSON, JOEL JOHNSON AND JARED JOHNSON v. ANDREW CAMPBELL, LPL FINANCIAL, LLC AND THE PRIVATE TRUST COMPANY, N.A., AS TRUSTEE OF THE MARLENE MCLEOD REVOCABLE TRUST DATED APRIL 30, 2008 AS AMENDED OCTOBER 30, 2018
22-2859
Fla. Dist. Ct. App.Jan 19, 2024Background
- Marlene McLeod passed away in 2021, leaving her daughter and four grandchildren (Appellants) as her surviving heirs.
- Appellants filed suit against McLeod’s investment advisor, his employer, and the trustee of her trust, alleging tort claims (negligence and interference with inheritance) and seeking declaratory relief.
- Appellees moved to compel arbitration or dismiss, arguing the existence of arbitration clauses in McLeod’s financial contracts that allegedly bound Appellants.
- The trial court compelled arbitration without a hearing or findings, despite Appellants not being signatories to the relevant agreements.
- Appellants appealed, contesting both their status as nonsignatories and equitable estoppel as bases for compelling arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Florida or federal (FAA) law governs nonsignatory enforcement of arbitration agreements | Florida law applies under tort principles | FAA governs due to interstate commerce, with MA law informing via choice of law | State contract law applies; here, Florida law |
| Whether Appellants, as nonsignatories, can be compelled to arbitrate under the contracts | They are not signatories, nor estopped | Appellants are bound either as parties or by equitable estoppel | Appellants cannot be compelled to arbitrate |
| Applicability of equitable estoppel due to direct benefit from contracts | Claims are in tort, not based on contracts | Appellants are seeking direct benefits from customer/advisor relationship | No direct benefit; estoppel inapplicable |
| Trial court’s summary order compelling arbitration | Lacked legal findings or hearing | Order was proper based on contract provisions | Reversed and remanded |
Key Cases Cited
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009) (State contract law, not the FAA, governs the enforceability of an arbitration agreement against a nonsignatory)
- Seifert v. U.S. Home Corp., 750 So. 2d 633 (Fla. 1999) (Sets out three elements to consider when compelling arbitration in Florida)
- State Farm Mut. Auto. Ins. Co. v. Roach, 945 So. 2d 1160 (Fla. 2006) (Lex loci contractus governs contract interpretation in Florida)
- Liberty Commc’ns, Inc. v. MCI Telecomm. Corp., 733 So. 2d 571 (Fla. 5th DCA 1999) (Ordinary contract principles control who is bound by arbitration agreements)
- BDO Seidman, LLP v. Bee, 970 So. 2d 869 (Fla. 4th DCA 2007) (Outlines theories under which nonsignatories may be bound to arbitration, including equitable estoppel)