Opinion · Court of Appeals for the Eleventh Circuit
Barbara Coleman v. Prudential Bache Securities, Inc., James P. McCormick Barbara Coleman v. Prudential Bache Securities, Inc., and James P. McCormick
802 F.2d 1350
- Type
- Opinion
- Court
- Court of Appeals for the Eleventh Circuit
- Jurisdiction
- Federal
- Date
- 1986-10-23
- Topic
- general
enforcing an arbitration agreement when a plaintiff alleged fraud regarding an underlying contract | must be asserted that "arbitration clause itself, standing apart from the whole agreement, was induced by fraud" | must be asserted that `arbitration clause itself, standing apart from the whole agreement, was induced by fraud' | must be asserted that "arbitration clause itself, standing apart from the whole agreement, was induced by fraud" | "absent a showing of fraud or mental incompetence," a party to an arbitration agreement will be held bound to its terms | “[A]bsent a showing of fraud or mental incompetence, a person who signs a contract cannot avoid her obligations under it by showing that she did not read what she signed.” | there is nothing substantively unconscionable with arbitration clause per se
Citator
- Cited by
- 30 opinions
COLEMAN v. PRUDENTIAL BACHE SECURITIES, INC.,802 F.2d 1350(11th Cir. 1986)
BARBARA COLEMAN, PLAINTIFF-APPELLEE, v. PRUDENTIAL BACHE SECURITIES, INC.,
JAMES P. McCORMICK, DEFENDANTS-APPELLANTS.
BARBARA COLEMAN, PLAINTIFF-APPELLANT, v. PRUDENTIAL BACHE SECURITIES, INC.,
AND JAMES P. McCORMICK, DEFENDANTS-APPELLEES.
Nos. 85-5787, 85-5916.
Non-Argument Calendar.
United States Court of Appeals, Eleventh Circuit.
October 23, 1986.
Page 1351
Russell L. Forkey, Ft. Lauderdale, Fla., for plaintiff-appellee.
Before RONEY, Chief Judge, KRAVITCH, Circuit Judge, and ATKINSfn*, Senior District Judge.
[2] The district court's decision denying the motion to compel arbitration of the section 10(b) securities claims is due to be affirmed under this Court's recenten bancdecision.Wolfe v.E.F. Hutton Co.,800 F.2d 1032(11th Cir. 1986).
[3] As to the state law fraud claims, the district court properly held as a matter of law that arbitration agreements between two parties with respect to state law claims are enforceable.DeanWitter, Reynolds, Inc. v. Byrd,470 U.S. 213,105 S.Ct. 1238,Page 135284 L.Ed.2d 158(1985). Coleman claims that the arbitration agreement here should not be enforced, however, because she was fraudulently induced to sign the Customer's Agreement and an Option Agreement. She argues that she signed the instruments without understanding the importance of the arbitration agreements contained therein, and that the agreements are contained in contracts of adhesion. Her consent to arbitration, she contends, was invalid.
[4] The district court reviewed Coleman's affidavit and accompanying memorandum of law, and denied her motion for a jury trial on the issue of the validity of the arbitration agreement. A review of these materials supports the district court's decision that there was no genuine issue of fact regarding the execution of the arbitration agreement. There is no evidence to support the claim that the arbitration clause itself, standing apart from the whole agreement, was induced by fraud. Thus, the district court's decision is in accordance with the leading case,Prima Paint Corp. v. Flood Conklin Mfg. Co.,388 U.S. 395,87 S.Ct. 1801,18 L.Ed.2d 1270(1967).
[I]f the claim is fraud in the inducement of the arbitration clause itself — an issue which goes to the "making" of the agreement to arbitrate — the federal court may proceed to adjudicate it. [footnote omitted] But the statutory language does not permit the federal court to consider claims of fraud in the inducement of the contract generally.
[5]Id.at 403-04,87 S.Ct. at 1805-06. Claims alleging unconscionability, coercion, or confusion in signing the agreement generally should be determined by an arbitrator because those issues go to the formation of the entire contract rather than to the issue of misrepresentation in the signing of the arbitration agreement.Merrill Lynch, Pierce, Fenner, Smith v.Haydu,637 F.2d 391,398(5th Cir. Unit B 1981)1;Brener v.Becker Paribas, Inc.,628 F. Supp. 442,446(S.D.N.Y. 1985).
[6] Finally, Coleman asserts that the arbitration agreements should not be enforced because the customer consents are adhesion contracts and are therefore invalid. There is no evidence that the agreements were adhesion contracts. First, there is nothing inherently unfair or oppressive about arbitration clauses.SeeSurman v. Merrill Lynch, Pierce, Fenner Smith,733 F.2d 59,61n. 1 (8th Cir. 1984);Brener,628 F. Supp. at 446n. 3. Second, absent a showing of fraud or mental incompetence, a person who signs a contract cannot avoid her obligations under it by showing that she did not read what she signed.Comprehensive AccountingCorp. v. Rudell,760 F.2d 138,140(7th Cir. 1985);Donovan v.Mercer,747 F.2d 304,308n. 4 (5th Cir. 1984). Because Coleman has not produced sufficient evidence showing unfairness or unconscionability, the district court properly ruled that the customer consents were not the product of adhesion contracts.
[7] AFFIRMED.
- Honorable C. Clyde Atkins, Senior United States District Judge for the Southern District of Florida, sitting by designation. ↩
- Bonner v. City of Prichard,661 F.2d 1206(11th Cir. 1981) (en banc), this court adopted as binding precedent all of the decisions of the former Fifth Circuit handed down prior to the close of business on September 30, 1981.Id.at 1209. ↩