Denial Of Renewed Motion To Compel Arbitration Is Appealable When The Record Is Ambiguous With Respect To The Arbitrable Claim
FRENCH v. WACHOVIA BANK (July 31, 2009)
Brian French and his siblings (“French”) are the beneficiaries of the trust set up by their father. Wachovia Bank (the “Bank”) is the trustee of the French Trust. French sued the bank, alleging in Count I that the Bank breached its duties and in Count II that the bank provided false information with respect to life insurance policies. On the Bank's motion to compel arbitration, the court determined that only Count II was subject to arbitration. The court ordered the parties to arbitrate Count II and stayed proceedings with respect to Count I. French moved to amend the complaint to dismiss Count II and to lift the stay with respect to Count I. The court granted the motion on October 23. However, in response to an inquiry from the Bank, French denied that they had abandoned the Count II claims. On December 21, the Bank reasserted its request to compel arbitration on Count II and to stay Count I. The court denied the motion. The Bank appeals.
In their opinion, Judges Ripple, Manion and Tinder affirmed. The Court first addressed its jurisdiction. It noted that, under the Federal Arbitration Act, an interlocutory appeal may be taken from an order refusing to stay an action or refusing to order arbitration. The Court noted the existence of the October 23 order, which was not timely appealed, and noted the rule that a party cannot simply file a second motion and appeal from its denial when it failed to appeal from the denial of the first motion. Here, however, the Court relied on the ambiguity of the status of Count II after the October 23 order to conclude that an interlocutory appeal of the definitive denial of arbitration in the April 23 order was proper. On the merits, the Court agreed with the district court. Once French amended the complaint to eliminate Count II, the complaint at issue contained only Count I. Count I was not subject to arbitration. The Court concluded that the district court therefore correctly denied the request to compel arbitration.
