Hurst v. 1st Discount Brokerage, Inc. et al

Filing 97

ORDER denying 75 Motion to Dismiss; granting 77 Motion to Dismiss; ORDER ADOPTING 95 REPORT AND RECOMMENDATIONS and administratively terminating case subject to being reopened for good cause shown upon the conclusion of arbitration. Signed by Honorable Jimm Larry Hendren on November 15, 2011. (tg)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
FAYETTEVILLE DIVISION
COBY TOWNSEND HURST

PLAINTIFF

v.

Civil No. 10-5127

1ST DISCOUNT BROKERAGE, INC.;
RIDGE CLEARING & OUTSOURCING
SOLUTIONS, INC.; BILL CRAFT;
and RAY ROGERS

DEFENDANTS

O R D E R
Now

on

this

15th

day

of

November,

2011,

comes

on

for

consideration the following:
*

Defendant's Request For Dismissal Of All Allegations

(document #75) filed by defendant Bill Craft;
*

Motion

To

Dismiss

Second

Amended

Complaint

Or,

Alternatively, Motion To Compel Arbitration Of Issues Presented In
Plaintiff's Second Amended Complaint (document #77) filed by
defendants

1st

Discount

Brokerage,

Inc.;

Ridge

Clearing

&

Outsourcing Solutions, Inc.; and Ray Rogers;
*

the

Magistrate

Judge's

Report

And

Recommendation

(document #95); and
*

Defendant's

Request

For

Report

And

Recommendations

(document #96) filed by Bill Craft,
and the Court, having carefully reviewed the foregoing, finds and
orders as follows:
1.

In his Second Amended Complaint, plaintiff Coby Townsend

Hurst ("Hurst") alleges that defendants Ray Rogers ("Rogers") and

Bill Craft ("Craft") were, during the relevant time period, agents
or

brokers

of

defendant

1st

Discount

Brokerage,

Inc.

("1st

Discount"), a securities brokerage doing business in Washington
County, Arkansas.
Clearing

&

Hurst further alleges that defendant Ridge

Outsourcing

accounting/brokerage

firm

Solutions,
and

member

Inc.
of

("Ridge")
the

New

was

York

an

Stock

Exchange doing business in Washington County, Arkansas, with which
Craft and Ray were associated.
The gravamen of the Second Amended Complaint is Hurst's
contention that Ray and Craft failed to timely transfer certain
securities payable to him on the death of his father, and that
during the delay the securities lost value.
2.

1st Discount, Ridge, and Ray moved to dismiss or stay,

contending that Hurst's claim is subject to arbitration pursuant
to contracts signed by both Hurst and his father.

Craft moved to

dismiss, contending that the facts are in his favor.
3.

The Magistrate Judge did a careful analysis of the

brokerage agreements signed by Hurst and his father, and concluded
that the dispute here asserted is subject to arbitration.

This

decision included the dispute as it relates to Craft, "since it is
not disputed that he is an agent of 1st Discount, and as such, is
subject to the same contractual provisions, including arbitration
contracts, to which the principal is bound."
4.

Craft filed a document entitled "Defendant's Request For

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Report And Recommendations," which has been treated as Objections
to the Report And Recommendation.

In it, Craft again presents

factual arguments which he believes favor dismissal of the claims
against him, and asks the Court to direct the other parties to
provide him with discovery.
The Court will deny the relief sought by Craft.

The purpose

of a motion to dismiss is not to obtain a decision on the merits,
but to determine whether the plaintiff has asserted facts that
affirmatively and plausibly suggest that he has the right he
claims.

Gregory v. Dillard's, Inc., 565 F.3d 464, 473 (8th Cir.

2009). Thus, to the extent Craft asserts his lack of culpability,
the Court simply cannot consider contentions.
Nor can the Court grant Craft's plea for discovery.
determined

that

the

dispute

is

subject

to

Having

arbitration,

the

appropriate action is administrative termination of the judicial
proceedings, relegating the parties to the procedures available in
the arbitration forum they have agreed upon.
IT

IS

Dismissal

THEREFORE

Of

All

ORDERED

Allegations

that

Defendant's

(document

#75)

and

Request

For

Defendant's

Request For Report And Recommendations (document #96) are denied.
IT IS FURTHER ORDERED that the Motion To Dismiss Second
Amended Complaint Or, Alternatively, Motion To Compel Arbitration
Of

Issues

Presented

In

Plaintiff's

(document #77) is granted.
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Second

Amended

Complaint

IT IS FURTHER ORDERED that the Magistrate Judge's Report And
Recommendation (document #95) is adopted in toto, and this matter
is hereby administratively terminated, subject to being reopened
for good cause shown upon the conclusion of arbitration.
IT IS SO ORDERED.
/s/ Jimm Larry Hendren
JIMM LARRY HENDREN
UNITED STATES DISTRICT JUDGE

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