Ronay Family Limited Partnership v. Tweed
157 Cal. Rptr. 3d 680
Cal. Ct. App.2013Background
- Tweed and TFI sought to compel arbitration under CapWest's arbitration clause for Ronay's claims arising from CapWest investments.
- Ronay alleged CapWest was defunct and FINRA membership cancelled, so arbitration might be unavailable; plaintiff resisted arbitration.
- Trial court held Tweed/TFI's arbitration rights depended on CapWest and denied arbitration.
- Court analyzes whether Tweed/TFI can enforce arbitration as CapWest's agents or third-party beneficiaries.
- FINRA Rule 12202 governs arbitrability when a member's membership is terminated or defunct; interpretation governs this case; decision reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who may enforce the arbitration clause | Ronay | Tweed/TFI | Tweed/TFI may enforce as agents/third-party beneficiaries |
| Scope of FINRA Rule 12202 | Ronay | Tweed/TFI | Rule applies to members; associated persons may enforce under other rules |
| Effect of CapWest's defunct status | Ronay | Tweed/TFI | CapWest defunct does not strip Tweed/TFI of rights to arbitration under FINRA rules |
| Alternative basis under CCP 1281.2(c) | Ronay | Tweed/TFI | Record insufficient to affirm on this basis; remand for consideration under 1281.2(c) |
Key Cases Cited
- DMS Services, Inc. v. Superior Court, 205 Cal.App.4th 1346 (2012) (nonparties can enforce arbitration when there is sufficient identity of interest)
- Thomas v. Westlake, 204 Cal.App.4th 605 (2012) (de novo review for arbitration-rights questions)
- Dryer v. Los Angeles Rams, 40 Cal.3d 406 (1985) (agency exception allows enforcement of principal's arbitration by agent)
- Cione v. Foresters Equity Services, Inc., 58 Cal.App.4th 625 (1997) (third-party beneficiary may enforce arbitration clause)