Chastain v. Robinson-Humphrey Co.
United States Court of Appeals for the Eleventh Circuit
957 F.2d 851 (1992)
- Written by Alexander Hager-DeMyer, JD
Facts
Dr. J. B. Chastain opened a securities-trading account with Robinson-Humphrey Company, Inc. (defendant), allegedly on behalf of his daughter, Brenda Chastain (plaintiff). A customer agreement was executed with Brenda’s name on it, but Brenda did not personally sign the agreement or authorize anyone to sign it for her. The agreement contained an arbitration provision stating that any disputes arising in connection with the account would be resolved through arbitration. A dispute arose concerning the account, and Brenda filed securities-fraud claims against Robinson-Humphrey in Georgia state court. Robinson-Humphrey removed the case to federal district court and filed a motion to compel arbitration under the Federal Arbitration Act (FAA). Brenda claimed that the arbitration provision was unenforceable because she did not sign the customer agreement or create a valid contract in the first place. Robinson-Humphrey admitted that the signature on the document was not Brenda’s but contended that an arbitrator should decide the dispute over whether a contract existed between Brenda and Robinson-Humphrey. The district court denied the motion, finding that it would not be proper to mandate arbitration because the existence of a valid contract was in question. Robinson-Humphrey appealed to the Eleventh Circuit appellate court.
Rule of Law
Issue
Holding and Reasoning (Birch, J.)
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