Larson et al v. Ameriprise Financial Services, Inc.

Filing 15

MEMORANDUM AND ORDER granting the Defendant's 8 Motion to Stay and Compel Arbitration. This case is stayed pending arbitration. The parties are directed to proceed to arbitration. Every 60 days from the date of this order, counsel for the parties shall file a joint status report regarding the progress of the arbitration proceedings. The Clerk of the Court is directed to set an initial Status Report Deadline of July 8, 2016. Ordered by Magistrate Judge Cheryl R. Zwart. (MKR)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
TAB R. LARSON, Individually, and as
Personal Representative of the Estate of Kari
Lyn Larson, Deceased; and JAN A.
LARSON, Individually;
Plaintiffs,

4:16CV3025
MEMORANDUM AND ORDER

vs.
AMERIPRISE FINANCIAL SERVICES,
INC., a Foreign Corporation doing business
in Nebraska;
Defendant.
The defendant has moved to stay this matter and to compel arbitration. (Filing No. 8).
For the reasons stated below, Defendant’s motion is granted.

BACKGROUND

On May 16, 2013, Kari Larson applied for and opened multiple individual retirement
accounts (“IRAs”) with the defendant, Ameriprise Financial Services: She opened a
Brokerage IRA Account, no. 909XXXX, an Active Portfolio IRA Account, no. 146XXXX,
and an SPS Advantage IRA Account, no. 719XXX. She later acquired shares of Columbia
Income Builder Fund-A which were held has part of her Ameriprise portfolio as account
number 1108XXXX. Prior to opening these accounts, Kari Larson executed a beneficiary
agreement which named Plaintiffs Tab Larson and Jan Larson as transfer on death
beneficiaries. (Filing No. 1 at CM/ECF p. 2).
After Kari Larson’s death, the defendant distributed the content of the referenced
accounts to Brandon A. Willis. Plaintiffs have filed claims for breach of contract and thirdparty claims on behalf of themselves, individually, and on behalf of Kari Larson’s estate,
alleging the defendant wrongfully distributed the retirement account funds. (See Filing No.
1).

As to each account, when the accounts were opened, Kari Larson acknowledged and
signed forms containing language requiring arbitration of “any controversies.” (Filing Nos.
10-5 at CM/ECF pp. 9–10; 10-6 at CM/ECF p. 3; 10-7 at CM/ECF p. 8).1 Defendants have
moved to enforce these broad arbitration provisions.

LEGAL ANALYSIS
“Congress enacted the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-16 (1994), ‘to
reverse the longstanding judicial hostility to arbitration agreements . . . and to place
arbitration agreements upon the same footing as other contracts.’” Gannon v. Circuit City
Stores, Inc., 262 F.3d 677, 679 (8th Cir. 2001) (quoting Gilmer v. Interstate/Johnson Lane
Corp., 500 U.S. 20, 24, 111 S. Ct. 1647, 114 L. Ed. 2d 26 (1991)). The FAA “makes written
arbitration agreements ‘valid, irrevocable, and enforceable, save upon such grounds as exist
at law or in equity for the revocation of a contract.’” Arthur Andersen LLP v. Carlisle, 556
U.S. 624, 629-30, 129 S. Ct. 1896, 173 L. Ed. 2d 832 (2009) (quoting 9 U.S.C. § 2). Under §
2 of the FAA a “written provision in any . . . contract evidencing a transaction ‘involving
commerce’ providing for the settlement of future disputes by arbitration is enforceable.” 9
U.S.C. § 2.

The parties do not dispute and the court finds that the FAA applies to the current
matter. IRAs are transactions involving commerce and are included within the purview of the
FAA. See Rosemann v. Sigillito, 877 F.Supp. 2d 763, 769 (E.D. Mo. 2012) (citing 9 U.S.C.
§ 2).

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The court notes the wording of the arbitration provisions varied slightly for the individual
accounts but generally contained broad wording stating the parties agreed to arbitrate “any
controversies arising between Kari Larson and Ameriprise” or “any controversy arising out of, or
relating to, the Account[.]” See Filing Nos. 10-5 at CM/ECF pp. 9–10; 10-6 at CM/ECF p. 3; 10-7 at
CM/ECF p. 8

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Arbitration is favored. This court’s role is to engage in a limited inquiry to “determine
whether there is a valid agreement to arbitrate and whether the specific dispute at issue falls
within the substantive scope of that agreement.” Larry's United Super, Inc. v. Werries, 253
F.3d 1083, 1085 (8th Cir. 2001). If the court so finds, Section 3 of the FAA requires a stay of
proceedings subject to an arbitration agreement, and § 4 empowers the court to compel the
parties to proceed with arbitration. 9 U.S.C. §§ 3, 4. “The party resisting arbitration bears the
burden of demonstrating the motion to compel arbitration should be denied.” Green Tree
Financial Corp. -Alabama v. Randolph, 531 U.S. 79, 91 (2000).
Although Kari Larson’s estate was not a signatory to the arbitration agreement, a
decedent’s estate “stands in the decedent’s shoes and has the same rights and obligations as
the decedent did while [she] was alive.” Sheet Metal Workers Local No. 2 v. Silgan
Containers Mgf. Corp., 690 F.3d 963, 967 (8th Cir. 2012). Regarding Plaintiffs’ individual
claims, courts reason that if a nonsignatory wishes to obtain the benefits of the contract, he
must accept the contract’s terms as a whole and cannot avoid the application of certain
provisions. St. Paul Fire & Marine Ins. Co. v. API, Inc., 2004 WL 2161181 (Minn. App.
2004); Edward D. Jones, Co., LIP v. Ventura , 907 So.2d 1035, 1042 (Ala. 2005).

As to each account from which Plaintiffs wish to benefit, Defendant and Kari Larson
entered into a written agreement to arbitrate “any controversy.” Filing Nos. 10-5 at CM/ECF
pp. 9–10; 10-6 at CM/ECF p. 3; 10-7 at CM/ECF p. 8. The estate’s breach of contract claims
arise directly from the account contracts and are governed by the arbitration provisions
within those contracts. And the individual complaints brought by Tab and Jan Larson seek to
obtain the benefits of Kari Larson’s accounts. As such, each Plaintiff is must comply with the
arbitration provisions with the account documents.

The parties do not dispute that the accounts at issue were subject to arbitration
clauses. They also do not dispute that these arbitration clauses are binding on the Plaintiffs.
In fact, Plaintiffs did not actually oppose Defendants’ motion to stay and compel arbitration.
Instead, Plaintiffs’ Reply to Defendant’s Motion, (filing no. 13), merely requests the court
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enter an order estopping the defendant from asserting that the beneficiary form was not a
valid contract. (See Filing No. 13). Plaintiffs’ request is not relevant to and is beyond the
scope of the current motion.

IT IS THEREBY ORDERED
1)

Defendant’s Motion to Stay and Compel Arbitration, (filing no. 8), is granted.

2)

This case is stayed pending arbitration.

3)

The parties are directed to proceed to arbitration. Every 60 days from the date
of this order, counsel for the parties shall file a joint status report regarding the
progress of the arbitration proceedings.

4)

The Clerk of the Court is directed to set an initial Status Report Deadline of
July 8, 2016.

Dated this 9th day of May, 2016
BY THE COURT:
s/ Cheryl R. Zwart
United States Magistrate Judge

*This opinion may contain hyperlinks to other documents or Web sites. The U.S. District Court for the District of
Nebraska does not endorse, recommend, approve, or guarantee any third parties or the services or products they provide on
their Web sites. Likewise, the court has no agreements with any of these third parties or their Web sites. The court
accepts no responsibility for the availability or functionality of any hyperlink. Thus, the fact that a hyperlink ceases to
work or directs the user to some other site does not affect the opinion of the court.

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