Judges order dispute be arbitrated

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A complaint filed by a client against financial services companies and a former employee must be arbitrated per an agreement the client signed when opening an IRA account, the Indiana Court of Appeals concluded. The court split over whether one of the companies could compel arbitration.

In German American Financial Advisors & Trust Co. d/b/a German American Investment Svcs., PrimeVest Financial Svcs., Inc., and Jeffery W. Tooley v. Dennis M. Reed, 19A01-1110-PL-428, German American Financial Advisors and other appellants’ appealed the denial of their second motion to compel arbitration of Dennis Reed’s claims against them. Reed worked with Jeffery Tooley of GAFA and PrimeVest to open an IRA in 2003. GAFA and PrimeVest had a “commission sharing agreement.”

Reed’s new account application included an arbitration clause. In 2006, Reed rolled over his IRA accounts into a variable rate annuity under the advisement of Tooley that he’d be able to earn around $100,000 in three years and be able to withdraw the full amount without penalties at that time.

Three years later, when Reed sought to withdraw all the funds from the annuity, and after Tooley left GAFA, another employee told Reed he could only withdraw a portion without incurring significant penalties. Reed filed his complaint alleging violations of the Indiana Uniform Security Act, fraud, negligence, and other claims in 2009. The trial court denied the appellants’ first motion to compel arbitration; it denied the second motion to compel as well.

Reed challenged the second motion to compel by pointing out that PrimeVest and GAFA didn’t keep his entire record on file, so the original agreement was not found. He also argued that the companies provided several forms that they believed were the correct documents, but those forms turned out not to be the exact agreement that Reed signed in 2003.

The Court of Appeals reversed the trial court and ordered the dispute be arbitrated. They found the appellants satisfied their burden to show the existence of an enforceable arbitration agreement and that the disputed matter is the type of claim that is intended to be arbitrated.

“While we are unimpressed with Appellants’ failure to locate the proper documentation to support their first motion to compel, they ultimately met their burden on the second motion to compel arbitration, which is the only issue before us, and Reed has not offered any evidence to refute the evidence pointing to a valid arbitration agreement,” wrote Judge Edward Najam in the majority opinion.

The judges split over whether GAFA may compel Reed to submit his claims against it to arbitration. The majority found he is required to do so under the doctrine of equitable estoppel, but Judge Michael Barnes believed the majority “is elasticizing the plain and unambiguous language of the arbitration agreement by allowing GAFA to insist on arbitration when GAFA was not a named party to the arbitration agreement—only PrimeVest and Reed were named.”



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  1. I think the cops are doing a great job locking up criminals. The Murder rates in the inner cities are skyrocketing and you think that too any people are being incarcerated. Maybe we need to lock up more of them. We have the ACLU, BLM, NAACP, Civil right Division of the DOJ, the innocent Project etc. We have court system with an appeal process that can go on for years, with attorneys supplied by the government. I'm confused as to how that translates into the idea that the defendants are not being represented properly. Maybe the attorneys need to do more Pro-Bono work

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  4. There's probably a lot of blame that can be cast around for Indiana Tech's abysmal bar passage rate this last February. The folks who decided that Indiana, a state with roughly 16,000 to 18,000 attorneys, needs a fifth law school need to question the motives that drove their support of this project. Others, who have been "strong supporters" of the law school, should likewise ask themselves why they believe this institution should be supported. Is it because it fills some real need in the state? Or is it, instead, nothing more than a resume builder for those who teach there part-time? And others who make excuses for the students' poor performance, especially those who offer nothing more than conspiracy theories to back up their claims--who are they helping? What evidence do they have to support their posturing? Ultimately, though, like most everything in life, whether one succeeds or fails is entirely within one's own hands. At least one student from Indiana Tech proved this when he/she took and passed the February bar. A second Indiana Tech student proved this when they took the bar in another state and passed. As for the remaining 9 who took the bar and didn't pass (apparently, one of the students successfully appealed his/her original score), it's now up to them (and nobody else) to ensure that they pass on their second attempt. These folks should feel no shame; many currently successful practicing attorneys failed the bar exam on their first try. These same attorneys picked themselves up, dusted themselves off, and got back to the rigorous study needed to ensure they would pass on their second go 'round. This is what the Indiana Tech students who didn't pass the first time need to do. Of course, none of this answers such questions as whether Indiana Tech should be accredited by the ABA, whether the school should keep its doors open, or, most importantly, whether it should have even opened its doors in the first place. Those who promoted the idea of a fifth law school in Indiana need to do a lot of soul-searching regarding their decisions. These same people should never be allowed, again, to have a say about the future of legal education in this state or anywhere else. Indiana already has four law schools. That's probably one more than it really needs. But it's more than enough.

  5. This man Steve Hubbard goes on any online post or forum he can find and tries to push his company. He said court reporters would be obsolete a few years ago, yet here we are. How does he have time to search out every single post about court reporters and even spy in private court reporting forums if his company is so successful???? Dude, get a life. And back to what this post was about, I agree that some national firms cause a huge problem.