Broad Arbitration Agreement Covers All Accounts by Owner

Broad Arbitration Agreement Covers All Accounts by Owner

White v. Salomon Smith Barney, Inc., 2001 Cal. App. LEXIS 2844 (Cal. App., 1Dist., 11/30/01)

A broad arbitration provision covering one account of a client may be construed to cover disputes arising in other accounts.

The Whites opened ten brokerage accounts with SSB and subsequently brought suit against SSB with regard to all ten accounts. SSB moved to compel arbitration. However, it failed to produce agreements for two of the accounts. The arbitration clauses in the eight account agreements that were produced were identical, all providing that “all claims or controversies … arising from any account maintained by me with SSB individually or jointly with others in any capacity (or) any transaction involving SSB … shall be determined by arbitration….”

The trial court granted SSB’s motion to compel arbitration of claims arising from the eight accounts that contained arbitration clauses, but denied SSB’s motion with respect to the two accounts for which no agreements were produced.

SSB appeals and the Appellate Court reverses. Noting California’s “friendly” attitude toward arbitration and the fact that the clauses in the eight agreements wee very broad, the Court has “no difficulty” concluding that the arbitration clauses in the eight agreements apply to all controversies between the parties. The fact that two agreements were not produced is of no consequence, because the customers had signed agreements that covered all of their accounts and so no new agreement was necessary to bind the customers to arbitration of claims arising from the two accounts in question.(SLC Ref. No. 2002-01-01)

Keywords – Arbitration, Arbitibility, compel, agreement


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