Federal Court Says Signed, Sealed, Delivered, Oooh Baby, It's Arbitration

August 26, 2021

Motion practice is about as bland as it gets with civil litigation. As we come upon today's courtroom drama  in the United States District Court for the Southern District of Florida ("SDFL"), the Defendants have filed a Motion to Compel Arbitration in response to a Complaint. Diane Fisher, Plaintiff, v. PNC Bank N.A., and PNC Investments, LLC, Defendants (Order, SDFL, 18-CIV-22974 / August 23, 2021)

Weakened Mental State

What's in dispute in Fisher v. PNC is far from comes into conflict with where said dispute should be litigated:

Diane Fisher, with her mother, Rose Charlap, opened a joint bank account with Royal Bank of Canada. The daughter claims that her mother was of weakened mental state and was persuaded to transfer her account from Royal Bank of Canada to PNC Bank. Ms. Charlap's account became a joint Brokerage Account with her daughter, Ms. Fisher. The 11-page Brokerage Account Application containing the pre-dispute arbitration clause language was indisputably signed by Ms. Fisher. The Brokerage Account Customer Agreement referenced in the application did not have lines requiring signatures. However, the signed application refers to the last page of the agreement specifically containing the following language regarding arbitration:


This Agreement contains a pre-dispute arbitration clause. Under this clause, which becomes binding on all parties when you sign your Account Application, you, we and NFS agree as follows:. . . 

at Pages 2 - 3 of the SDFL Order

Sad . . . However

In addition to the above assertions, there are even more unsettling issues presented to the Court:

Ms. Fisher alleges several counts of theft, fraud, and negligence against the bank because her mother under the influence of her son, Alan, withdrew money unlawfully from the joint bank account without Ms. Fisher's knowledge or consent Those allegations, if true, are indeed sad. However, with an arbitration agreement signed by Ms. Fisher, these claims are to be resolved by an arbitrator.

at Page 3 of the SDFL Order

SIDE BAR: Unfortunately, the Court's narrative is imprecise because I can't quite figure out if "Alan" is the son of Ms. Fisher or the son of Rose Charlap -- as such, Alan could be the son or the brother of Ms. Fisher, or the grandson or the son of Ms. Charlap.

Signed, Sealed, and Delivered?

So . . . how come we're in federal court when there appears to be a mandatory arbitration clause in effect? As the Court saw the evidence, Plaintiff Fisher had signed an agreement on July 29, 2015 that said:

"Pre-Dispute Arbitration: This account is governed by a pre-dispute arbitration clause, which appears on the last page of the Brokerage Account Customer Agreement, and you acknowledge that you have received a copy of this clause," and the last page of the Brokerage Agreement provides that all parties give up "the right to sue each other in court." 

at Page 1 of the SDFL Order

A Magistrate Judge had reviewed the posture of the case and recommended to the Court that there was no binding arbitration agreement. The Court declined to follow the recommendation. As SDFL saw it in pertinent part:

Ms. Fisher now claims that she did not receive the Brokerage Agreement referenced in her signed Application. Yet, the Defendant bank submitted an affidavit to the contrary. The Magistrate Judge relied on this alleged factual dispute to conclude that an evidentiary hearing needs to be conducted for a judge to decide what was received. This Court disagrees. There is no evidence or even an allegation of fraud committed by the bank in obtaining Ms. Fisher's signature. The 14-page agreement is referenced in the signed application. As expected, banks and many institutions prefer arbitration to resolve disputes instead of the costly and lengthy proceedings in court. Ms. Fisher agreed.

To read the signed application, that also requires arbitration, without the referred to Brokerage Agreement as a rejection of the joint decision to forego the courts and arbitrate is not reasonable. An evidentiary hearing is thus not necessary. What is needed is for the allegations of fraud and theft to be reached on the merits, but not by the Court, but by the arbitrator, as agreed by Plaintiff Fisher and the bank.  
at Pages 3 - 4 of the SDFL Order

She said: She didn't get the referenced Agreement with the all-important arbitration clause. 

He said: She signed the Application and was provided with a copy of the referenced Agreement. 

She said. He said. A classic dispute!

In sending Fisher's case to arbitration, SDFL found that she had, in fact, signed the Application, and, the Court apparently believed the Defendants version of events; namely, that they sent her a copy of the Agreement. Accordingly, the Court found "sufficient indication that both sides agreed to arbitration." at Page 4 of the SDFL Order. In a final fillip, SDFL pronounces that:

[B]elated protestations that arbitration is not fair, the application was signed but not read, the Brokerage Agreement did not have a separate signature in addition to the application are not viable arguments sufficient to preclude arbitration. . . .

at Page 4 of the SDFL Order