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COA affirms arbitration opinion on rehearing

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Rehearing a case at the request of the appellant, the Indiana Court of Appeals reaffirmed its original opinion that trustees are not bound by an arbitration clause that was signed by predecessors.

In Smith Barney v. StoneMor Operating LLC, et al., No. 41A04-1103-MF-96, Smith Barney requested a rehearing of a trial court’s denial of motion to compel arbitration. Affirming its original opinion, the COA held that two companies that took control of a mortuary business did not sign the original client agreements the mortuary business had with Smith Barney. Those original agreements contained an arbitration clause, which Smith Barney claims applies to StoneMor and Independence Trust Co.

A mortuary business had been placed in receivership after its owner allegedly stole millions of dollars in cemetery trust funds. StoneMor agreed to buy the company, and Independence was appointed trustee of trusts that had been administered by the receiver, along with new trusts that StoneMor established. The trial court allowed StoneMor and Independence to assert receiver’s claims against Smith Barney, which they did by filing a complaint.

A week later, Smith Barney filed a motion to compel arbitration. Smith Barney claims that with respect to contracts, trust law clearly recognizes that a successor trustee is bound by contractual obligations entered into by its predecessor trustees relating to the trust. But the COA wrote that Smith Barney had not cited a single case in support of that claim.

The appeals court held that the appellees were not parties to the client agreements executed by predecessors Community Trust and Security Financial, and therefore did not personally agree to submit to arbitration. Smith Barney asserts that Independence Trust is nevertheless bound by the arbitration clause “as a consequence of [Independence Trust] assuming the position as the successor trustee to those predecessor trustees.”

Regardless of whether a “successor trustee” may be considered a “successor in interest” for purposes of the client agreements, the fact remains that Independence Trust did not sign the agreements. Consequently, there is no basis for compelling StoneMor to arbitrate its claims, the COA held, affirming the trial court’s judgment.


 

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  1. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  2. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  3. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

  4. Here's an idea...how about we MORE heavily regulate the law schools to reduce the surplus of graduates, driving starting salaries up for those new grads, so that we can all pay our insane amount of student loans off in a reasonable amount of time and then be able to afford to do pro bono & low-fee work? I've got friends in other industries, radiology for example, and their schools accept a very limited number of students so there will never be a glut of new grads and everyone's pay stays high. For example, my radiologist friend's school accepted just six new students per year.

  5. I totally agree with John Smith.

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