Newton v. U.S. Bancorp Invest., Inc.

[Cite as Newton v. U.S. Bancorp Invest., Inc., 2023-Ohio-1450.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Albert A. Newton et al., :
Plaintiffs-Appellants, :
No. 22AP-279
v. : (C.P.C. No. 21CV-3481)
U.S. Bancorp Investments, Inc. et al., : (ACCELERATED CALENDAR)
Defendants-Appellees. :
D E C I S I O N
Rendered on May 2, 2023
On brief: Baker & Hostetler, LLP, Ronald G. Linville, and
Douglas A. Vonderhaar, for appellants. Argued: Douglas A.
Vonderhaar.
On brief: Ulmer & Berne LLP, Michael N. Ungar, and
Michael J. Charlillo; Ulmer & Berne LLP, and Sarah M.
Benoit, for appellees. Argued: Michael J. Charlillo.
APPEAL from the Franklin County Court of Common Pleas
DORRIAN, J.
{¶ 1} Plaintiffs-appellants Albert A. Newton and Tina A. Newton appeal from a
judgment of the Franklin County Court of Common Pleas granting the motion to stay
proceedings pending arbitration filed by defendants-appellees U.S. Bancorp Investments,
Inc. (“U.S. Bancorp”) and Jerod A. Tilton. For the following reasons, we affirm.
I. Facts and Procedural History
{¶ 2} Appellants, a husband and wife, filed a complaint against appellees on
June 3, 2021 asserting six claims—intentional misrepresentation, negligent
misrepresentation, fraudulent inducement, breach of fiduciary duty, negligent non-
disclosure, and negligence—and seeking redress for the reduction of value and other
No. 22AP-279 2
charges and penalties resulting from Mr. Newton’s withdrawal of cash from his Nationwide
Life Insurance (“Nationwide”) annuity. This appeal does not address the merits of
appellants’ claims but instead concerns whether the trial court appropriately applied an
arbitration provision to stay the proceedings in the court of common pleas pending
resolution of arbitration.
{¶ 3} According to the complaint, Mr. Newton purchased a variable annuity from
Nationwide in 2013. Under the terms of the annuity, if Mr. Newton did not make any
withdrawals during a 10-year “[r]oll-[u]p [p]eriod,” he would receive a minimum
guaranteed benefit base that included an annual credit of 7 percent per year. (Compl. at
¶ 15.) However, if Mr. Newton made any withdrawal during the roll-up period, he would
lose the minimum guaranteed benefit base.
{¶ 4} In 2017, Mr. Newton was referred to Tilton, a broker-dealer and investment
adviser employed by U.S. Bancorp who is registered with the Financial Industry Regulatory
Authority (“FINRA”). Tilton provided Mr. Newton with “investment advisory services”
and, subsequently, Mr. Newton opened a brokerage account with U.S. Bancorp. (Compl. at
¶ 17.) Tilton also began servicing Mr. Newton’s existing Nationwide annuity.
{¶ 5} To open the brokerage account, Mr. Newton was required to sign U.S.
Bancorp’s standard Account Agreement, which expressly incorporates U.S. Bancorp’s
Universal Customer Agreement and Account Disclosures (hereinafter “Customer
Agreement”). The Customer Agreement “covers any and all accounts that [the signatory
customer] may open or reopen with [U.S. Bancorp] (including, without limitation, those
accounts held jointly with others or on behalf of others),” is “subject to * * * all applicable
rules and regulations of FINRA,” and contains a “[p]re-[d]ispute [a]rbitration
[a]greement.” (Mot. to Dismiss or Stay, Ex. 2, Customer Agreement at ¶ 2, 4, and 25.) The
arbitration provision states, in pertinent part:
I agree that any controversy arising out of or relating to my
account, to transactions with or for me or to this agreement or
the breach thereof * * * whether asserted against U.S. Bancorp
Investments and/or its present or former agents or employees,
will be settled by arbitration before and in accordance with the
then current rules of the Financial Industry Regulatory
Authority.
(Customer Agreement at ¶ 25.)
No. 22AP-279 3
{¶ 6} Mr. Newton alleges that in 2018 he needed cash and sought professional
advice from Tilton. According to the complaint, Tilton advised Mr. Newton in January
2018 to withdraw funds from both the U.S. Bancorp brokerage account and the Nationwide
annuity. After Mr. Newton expressed concern about being assessed a penalty in relation to
the annuity, Tilton allegedly assured Mr. Newton he could withdraw the funds, stating “the
government got involved and now you can withdraw up to 10% if you are over age 60.”
(Compl. at ¶ 4.) Mr. Newton asserts he then asked Tilton to call Nationwide to confirm that
a withdrawal from the annuity would not affect its value.
{¶ 7} On or around January 29, 2018, U.S. Bancorp sent an annuity withdrawal
form to Mr. Newton, Mr. Newton signed it and returned it to U.S. Bancorp, and U.S.
Bancorp sent it to Nationwide. A few weeks later, Nationwide processed the request and
the funds were withdrawn from the annuity.
{¶ 8} According to the complaint, in April 2018 Mr. Newton called Tilton to inform
him that the annuity base was not increasing as it normally had. Tilton allegedly then “told
[Mr. Newton] to ‘wait’ for the Annuity’s 2018 year-end statement” to reflect that the
withdrawal did not affect the annuity value. (Compl. at ¶ 5.) By waiting, appellants assert
Mr. Newton missed his chance to remedy the annuity’s impaired value. Appellants
contend, in summary, “[appellees’] improper investment advice and subsequent
misrepresentations diminished the [a]nnuity’s value [in amount to be determined but in
excess of $100,000] and altered [appellants’] retirement plan.” (Compl. at ¶ 43.)
{¶ 9} Appellees filed a motion to dismiss or stay pending arbitration asking the trial
court to enforce an arbitration provision contained in the Customer Agreement, which was
attached to the motion along with the Account Agreement. The trial court agreed with
appellees and granted the motion to stay pending completion of FINRA arbitration. In
doing so, the trial court determined: the arbitration provision in the Customer Agreement
is broad; the thrust of appellants’ claims is that reliance on advice from Tilton resulted in
financial loss; the asserted tort claims are not a bar to mandatory arbitration since they
arose from the duties owed to appellants by virtue of their relationship to Tilton; and the
claims ultimately fall within the scope of the arbitration provision.
{¶ 10} The trial court also determined that Mrs. Newton, although a non-signatory
to the U.S. Bancorp documents, nevertheless “may” be subject to the arbitration provision
No. 22AP-279 4
since she is a direct beneficiary to the annuity who is not asserting separate, independent
claims against appellees. (Apr. 11, 2022 Journal Entry Granting Mot. to Stay Proceedings
Pending Arbitration (“Stay Journal Entry”) at 4.) The trial court then reasoned that because
Mr. Newton’s claims are subject to a mandatory arbitration provision, Mrs. Newton’s
claims should be stayed under R.C. 2711.02. The trial court explained, “[p]robably the
arbitrator will be able to decide whether Mrs. Newton’s claims are subject to arbitration
with her husband’s claims, or for efficiency of the parties will agree to it. If her claims are
not resolved in arbitration, she can move to lift the stay once arbitration is fully complete.”
(Stay Journal Entry at 5.)
II. Assignments of Error
{¶ 11} Appellants appeal and assign the following four assignments of error for our
review:
[I.] The Court below erred in concluding that Appellant-Tina
Newton is bound by the arbitration provision in the Account
and Customer Agreements that she did not sign.
[II.] The Court below erred in concluding that each of
Appellants’ causes of action arises from duties owed to
Appellants by virtue of their relationship with Appellees.
[III.] The Court below erred in concluding Appellants’ claims
are subject to the arbitration provision in the Account and
Customer Agreements.
[IV.] The Court below erred in staying this matter and
compelling arbitration of Appellants’ claims.
III. Standard of Review
{¶ 12} An appeal from a motion to dismiss or stay proceedings and compel
arbitration that presents a question of law is reviewed de novo. Fifth Third Bank v.
Rowlette, 10th Dist. No. 13AP-337, 2013-Ohio-5777, ¶ 5. Whether the parties before the
court are the same parties named in the arbitration agreement and whether those parties
agreed to arbitrate the dispute are both questions of law subject to de novo review on
appeal. Id.; Academy of Medicine of Cincinnati v. Aetna Health, Inc., 108 Ohio St.3d 185,
2006-Ohio-657, ¶ 5 (“[W]hether a particular claim is arbitrable is one of law for the court
to decide.”). See, e.g., West v. Household Life Ins. Co., 10th Dist. No. 06AP-906, 2007-
No. 22AP-279 5
Ohio-845, ¶ 12 (reviewing issues concerning the named parties and whether a dispute is
arbitrable de novo).
IV. Analysis
{¶ 13} The second, third, and fourth assignments of error, which collectively
challenge the scope of the arbitration provision, would, if sustained, render the first
assignment of error concerning Mrs. Newton as a non-signatory moot. We therefore begin
by addressing the scope-related assignments of error prior to proceeding to the non-
signatory issue.
A. Scope of the Arbitration Provision (Second, Third, and Fourth
Assignments of Error)
{¶ 14} In the second and third assignments of error, appellants contend the trial
court erred in concluding appellants’ causes of action “ar[ose] from duties owed to
[a]ppellants by virtue of their relationship with [a]ppellees” and “are subject to the
arbitration provision in the Account and Customer Agreements.” (Appellants’ Brief at v.)
With the fourth assignment of error, appellants generally state the trial court erred in
staying this matter and compelling arbitration of appellants’ claims. Appellants specify the
dispositive issue for all three of these assignments of error is whether “[a]ppellees’
independent tortious conduct removed [a]ppellants’ claims from the scope of the
arbitration provision in the operative agreements.” (Appellants’ Brief at vi.)
{¶ 15} Preliminarily, we note appellants have not separately argued these three
assignments of error as required by appellate rules. Pursuant to App.R. 12(A)(1)(b), “a
court of appeals shall * * * [d]etermine the appeal on its merits on the assignments of error
set forth in the briefs.” “The court may disregard an assignment of error presented for
review if the party raising it * * * fails to argue the assignment separately in the brief, as
required under App.R. 16(A).” App.R. 12(A)(2). Cook v. Wilson, 165 Ohio App.3d 202,
2006-Ohio-234, ¶ 17 (10th Dist.) (“App.R. 12(A)(2) recognizes th[e] need for clarity and
requires that assignments of error be argued separately. The failure to argue separately
assigned errors is grounds for summary affirmance.”). Because appellants argued their
second, third, and fourth assignments of error collectively rather than separately, App.R.
12(A)(2) provides this court with an independent basis to overrule these assignments of
error.
No. 22AP-279 6
{¶ 16} Moreover, the same result is reached after considering, in the interest of
justice, the single-issue appellants deem dispositive to all three assignments of error. As
explained further below, we conclude the trial court did not err by determining appellants’
allegations of appellees’ tortious conduct did not remove the claims from the scope of the
arbitration provision in this case.
{¶ 17} “Arbitration is a favored form of dispute settlement under Ohio law and
federal law.” Rowlette at ¶ 7. Arbitration under Ohio law is codified in R.C. Chapter 2711.
In pertinent part, R.C. 2711.01(A) states:
A provision in any written contract * * * to settle by arbitration
a controversy that subsequently arises out of the contract, or
out of the refusal to perform the whole or any part of the
contract, or any agreement in writing between two or more
persons to submit to arbitration any controversy existing
between them at the time of the agreement to submit, or arising
after the agreement to submit, from a relationship then existing
between them or that they simultaneously create, shall be valid,
irrevocable, and enforceable, except upon grounds that exist at
law or in equity for the revocation of any contract.
Further, “[i]f any action is brought upon any issue referable to arbitration under an
agreement in writing for arbitration, the court in which the action is pending, upon being
satisfied that the issue involved in the action is referable to arbitration under an agreement
in writing for arbitration, shall on application of one of the parties stay the trial of the action
until the arbitration of the issue has been had in accordance with the agreement.” R.C.
2711.02(B).
{¶ 18} This case also implicates the arbitration process established by FINRA for
resolving customer disputes. “FINRA is a non-profit corporation that functions as a self-
regulatory organization for securities firms and securities dealers.” Rowlette at ¶ 6.1
FINRA Rule 12200(a), which applies to customer disputes, states:
Parties must arbitrate a dispute under the Code if:
• Arbitration under the Code is either:
(1) Required by a written agreement, or
(2) Requested by the customer;
1More information on FINRA can be found at:
https://www.finra.org, with the Code of Arbitration Procedure for Customer Disputes available at
https://www.finra.org/arbitration-mediation/rules-case-resources/12000#12200. (Accessed May 2 2023.)
No. 22AP-279 7
• The dispute is between a customer and a member or
associated person of a member; and
• The dispute arises in connection with the business
activities of the member or the associated person, except
disputes involving the insurance business activities of a
member that is also an insurance company.
https://www.finra.org/rules-guidance/rulebooks/finra-rules/12000 (Accessed May 2,
2023.)
{¶ 19} Consistent with R.C. 2711.01 and the FINRA code, this court has set forth a
two-part test to determine whether litigants must submit to an arbitration proceeding.
West at ¶ 12. “[T]he court must first determine: (1) whether the parties before them are the
same parties named in the agreement to arbitrate; and, if so, (2) whether they agreed to
arbitrate the dispute in question.” Id. “If the court answers the first two questions in the
affirmative, and finds the clause is valid, then the court must compel arbitration.” Id.{¶ 20} In this case, appellants do not dispute that the first part of the test—whether
the parties before them are the same parties named in the agreement to arbitrate—is met
as to Mr. Newton. Rather, appellants challenge the second part of test in contending
appellees “independent tortious conduct removed [a]ppellants’ claims from the scope of
the arbitration provision in the operative agreements.” (Appellants’ Brief at vi.)
Specifically, appellants argue the language of the arbitration provision at issue applies only
to controversies “arising out of or relating to” Mr. Newton’s U.S. Bancorp brokerage
account, transactions with or for Mr. Newton, or the Customer Agreement. (Appellants’
Brief at 13-14, 19.) According to appellants, their claims instead arise from tortious
conduct—Tilton’s alleged misrepresentations about contacting Nationwide—which
occurred after the Customer Agreement was signed and are related to a financial product
purchased from Nationwide—not an account with U.S. Bancorp. Therefore, in appellants’
view, the parties did not agree to arbitrate the claims in question, and, in other words, the
claims fall outside the scope of the arbitration provision.
{¶ 21} To determine whether the parties agreed to arbitrate the disputed issue, “[w]e
first look at the language of the individual arbitration agreements.” Alexander v. Wells
Fargo Fin. Ohio 1, Inc., 122 Ohio St.3d 341, 2009-Ohio-2962, ¶ 9. In Aetna Health, the
No. 22AP-279 8
Supreme Court of Ohio held that an arbitration provision with the phrase “any claim or
controversy arising out of or relating to the agreement” is considered a broad provision.
(Internal quotations and citations omitted.) Aetna Health at ¶ 18. The court further
explained, “[a]rbitration is not limited to claims alleging a breach of contract, and creative
pleading of claims as something other than contractual cannot overcome a broad
arbitration provision. The overarching issue is whether the parties agreed to arbitrate the
issue.” Id. at ¶ 19.
{¶ 22} The court in Aetna Health cited approvingly to Fazio v. Lehman Bros., Inc.,
340 F.3d 386, 395 (6th Cir.2003), and, consistent with Fazio held “a state court in Ohio
may base that determination on a federal standard that inquires whether the action could
be maintained without reference to the contract or relationship at issue.” Aetna Health at
¶ 30. The Aetna Health court noted that, in Fazio, a broad arbitration provision applied to
claims, including theft, brought against a stockbroker for allegedly committing fraudulent
activities, including sending false statements to clients. Thus, under the Aetna Health
standard, “ ‘[e]ven real torts can be covered by arbitration clauses “[i]f the allegations
underlying the claims ‘touch matters’ covered by the [agreement].” ’ ” Alexander at ¶ 24,
quoting Fazio at 395, quoting Genesco, Inc. v. T. Kakiuchi & Co., Ltd., 815 F.2d 840, 846
(2d Cir.1987). Generally, “[t]he agreement must be enforced unless ‘ “ ‘it may be said with
positive assurance that the arbitration clause is not susceptible of an interpretation that
covers the asserted dispute. Doubts should be resolved in favor of coverage.’ ” ’ ” Alexander
at ¶ 13, quoting Aetna Health at ¶ 14, quoting AT & T Technologies, Inc. v. Communications
Workers of Am., 475 U.S. 643, 650 (1986), quoting United Steelworkers of Am. v. Warrior
& Gulf Navigation Co., 363 U.S. 574, 582-83 (1960).
{¶ 23} In this case, the Account Agreement check-marks “Brokerage” and then
“IRA” and incorporates the Customer Agreement. (Account Agreement at 1.) The Customer
Agreement states, in pertinent part:
2. Accounts Covered. This Agreement covers any and all
accounts that I may open or reopen with U.S. Bancorp
Investments (including, without limitation, those account held
jointly with others or on behalf of other).
***
No. 22AP-279 9
4. Applicable Rules and Regulations. This Agreement and all
transactions under this Agreement will be subject to * * * all
applicable rules and regulations of FINRA.
***
25. Pre-Dispute Arbitration Agreement.
***
I agree that any controversy arising out of or relating to my
account, to transactions with or for me or to this agreement or
the breach thereof * * * whether asserted against U.S. Bancorp
Investments and/or its present or former agents or employees,
will be settled by arbitration before and in accordance with the
then current rules of the Financial Industry Regulatory
Authority.
(Customer Agreement at ¶ 2, 4, 25.)
{¶ 24} First, as a threshold issue, we disagree with appellants that the Customer
Agreement, and therefore the arbitration provision within it, is inapplicable due to the
second paragraph “Accounts Covered” limitation. (Customer Agreement at ¶ 2.) The
underlying facts of this case do implicate the brokerage account. Specifically, Tilton was
retained to provide general investment advice and service both the brokerage account and
annuity, gave advice that implicated withdrawals from both the brokerage account and the
annuity, made false statements that he would, essentially, ensure his advice on the annuity
was accurate, and, as a result, reduced the value of the annuity and “devastated their
retirement plan” as a whole. (Compl. at ¶ 1.)
{¶ 25} Further, because the language of the arbitration provision in this case is
undisputedly broad, it must be enforced unless it can be said with positive assurance that
the arbitration provision is not suspectable of an interpretation that covers the asserted
dispute. Aetna Health at ¶ 5. The arbitration provision agreed to by Mr. Newton and
appellees covers any controversy “arising out of or relating to” the U.S. Bancorp account.
(Emphasis added.) (Customer Agreement at ¶ 25.) Then, after covering essentially any
scenario related to the U.S. Bancorp account specifically, the parties additionally agreed to
arbitrate any controversy “arising out of or relating * * * to transactions with or for [Mr.
No. 22AP-279 10
Newton]”—without qualification or reference to the U.S. Bancorp account. (Customer
Agreement at ¶ 25.)
{¶ 26} Contrary to appellants’ central argument, the allegations of tortious conduct
here do not defeat the broad arbitration provision since the asserted tort claims cannot be
maintained without reference to the investment adviser-customer relationship. Aetna
Health at ¶ 30. While appellants now argue their claims are not premised on allegations
surrounding Tilton’s substantive, “improper investment advice,” but rather arise only from
the alleged tortious conduct (the misrepresentations), this stance is at odds with the
allegations in the complaint and appellants’ position to the trial court in opposing the
motion to stay. (Compl. at ¶ 1, stating “[appellants] bring this action to remedy improper
investment advice from [appellees] that ruined the value of their variable annuity,” and
¶ 43-47; Sept. 2, 2021 Memo Contra at 1, 2, and 12, specifying “advice regarding the Annuity
and subsequent promises to ‘fix’ the same constituted tortious conduct regardless of the
amount of funds in the Brokerage Account.”) Instead, the alleged facts depict a scenario
where both the Nationwide annuity and the brokerage account were wrapped into the
investment advice given by Tilton to Mr. Newton as a part of his role as an investment
advisor. In other words, Tilton’s role as a financial adviser to Mr. Newton—“the
relationship”—is central to the claims. Aetna Health at ¶ 30; R.C. 2711.01(A). The
allegations of tortious conduct underlying the claims in this case, at minimum, “touch
matters” covered by the Customer Agreement. Alexander at ¶ 24; Fazio at 395.
{¶ 27} Overall, having reviewed appellants’ arguments and supporting legal
authority, we find the alleged tortious conduct does not bar enforcement of the broad
arbitration provision on the facts of this case. Therefore, the dispositive issue identified by
appellants concerning the scope of the arbitration provision lacks merit.
{¶ 28} Accordingly, for all the above stated reasons, the second, third, and fourth
assignments of error are overruled.
B. Mrs. Newton as a Non-signatory (First Assignment of Error)
{¶ 29} Appellants in their first assignment of error assert the trial court erred “in
concluding that [Mrs.] Newton is bound by the arbitration provision in the Account and
Customer Agreements that she did not sign.” (Appellants’ Brief at v.) They argue that
because Mrs. Newton did not sign the Account or Customer Agreements: the presumption
No. 22AP-279 11
favoring arbitration is inapplicable; the first inquiry of the West test fails since the parties
are not the same parties named in the agreement; the fact she may be an intended
beneficiary is irrelevant since the claims arise from appellees’ independent tortious conduct
and do not fall within the scope of the arbitration agreement; and, generally, she should not
be bound to arbitration. For the following reasons, appellants’ assignment of error lacks
merit.
{¶ 30} As a general matter, “courts have recognized that arbitration is a matter of
contract, and a party cannot be compelled to submit a dispute to arbitration unless he has
agreed to do so.” Rowlette at ¶ 7; West at ¶ 12 (stating the court must “first determine * * *
whether the parties before them are the same parties named in the agreement to
arbitrate.”). “ ‘[T]here is a counterweighing presumption against arbitration when a party
seeks to invoke an arbitration provision against a nonsignatory.’ ” (Emphasis sic.) Rowlette
at ¶ 7, quoting Taylor, Superintendent v. Ernst & Young, L.L.P., 130 Ohio St.3d 411, 2011-
Ohio-5262, ¶ 21. However, one exception to the general rule occurs where the non-
signatory is a beneficiary of the agreement. Settle-Muter Elec. Ltd. v. Intertech Sec., L.L.C.,
10th Dist. No. 17AP-787, 2018-Ohio-4839, ¶ 20 (“[A]n arbitration agreement may be
enforced against a nonsignatory, but only if that party is bound to the arbitration agreement
under ordinary contract or agency principles, such as estoppel, incorporation by reference,
assumption, piercing the corporate veil, alter ego, or third-party beneficiary.”). “A third
party seeking to benefit from a contractual relationship need not be expressly named in the
contract, but must be contemplated by the parties and be sufficiently identified.” West at
¶ 13.
{¶ 31} In this case, appellants contend the trial court erred in concluding Mrs.
Newton “is bound by the arbitration provision” and describe the trial court decision as
“compelling arbitration of her claims.” (Appellants’ Brief at v, 10.) However, contrary to
the premise of the assignment of error, the trial court determined that Mrs. Newton,
although a non-signatory to the U.S. Bancorp documents, nevertheless “may” be subject to
the arbitration provision since she is a “beneficiary directly under the annuity” who is not
asserting separate, independent claims against the appellees. (Stay Journal Entry at 4.)
The trial court did not hold that Mrs. Newton is bound by the arbitration provision, but
No. 22AP-279 12
rather that her identical claims should be stayed pending arbitration of Mr. Newton’s
claims. The trial court remarked:
Given the foregoing, “[o]nce a court determines that an issue in
a proceeding is subject to arbitration under a written
arbitration agreement, even claims involving nonsignatories to
the arbitration agreement are properly stayed under R.C.
2711.02(B).” Scott Fetzer Co. v. Miley, 8th Dist. No. 108090,
2019-Ohio-4578, ¶ 37 and cases cited. R.C. 2711.02(B) provides
that if the issue involved in the action is referable to arbitration,
upon the application of a party, the court shall stay all
proceedings on the action until the arbitration process is
completed.
Here, Mrs. Newton has not asserted any separate claims nor
alleged any harms on an independent basis. Requiring the
claims asserted by Mr. Newton to undergo arbitration while
Mrs. Newton pursues her identical claims here in court is not
in any party’s best interest; it would require duplicate efforts to
prosecute the case and potentially result in inconsistent
outcomes.
Because the claims asserted by Mr. Newton against Mr. Tilton
and U.S. Bancorp are subject to a mandatory arbitration
provision, the action must be stayed on the application of the
defendants pursuant to R.C. 2711.02. The court also stays all
non-arbitrable claims until all issues subject to arbitration are
heard and resolved. Settle-Muter Elec. Ltd. v. Intertech Sec.,
LLC, 2018-Ohio-4839, ¶ 22, 125 N.E.3d 279 (10th Dist.); see
also Harrison v. Winchester Place Nursing & Rehab. Ctr.,
2013-Ohio-3163, 996 N.E.2d 1001 (10th Dist.). Probably the
arbitrator will be able to decide whether Mrs. Newton’s claims
are subject to arbitration with her husband’s claims, or for
efficiency the parties will agree to it. If her claims are not
resolved in arbitration, she can move to lift the stay once
arbitration is fully complete.
(Emphasis added.) (Stay Journal Entry at 5.)
{¶ 32} Appellants have not challenged the trial court’s use of R.C. 2711.02(B) to stay
her claims, and the cases cited by the trial court support its action. See Scott Fetzer Co. v.
Miley, 8th Dist. No. 108090, 2019-Ohio-4578, ¶ 22, ¶ 37 (noting “the presence of other
defendants or other nonarbitrable claims does not deprive [the agreement signatories] of
their right to arbitrate any claims or disputes or issues or disputes that are subject to
No. 22AP-279 13
arbitration” and finding “no error in the trial court’s decision to stay the case pending
arbitration” since “[o]nce a court determines that an issue in a proceeding is subject to
arbitration under a written arbitration agreement, even claims involving nonsignatories to
the arbitration agreement are properly stayed under R.C. 2711.02(B).”); Settle-Muter Elec.
at ¶ 22, quoting AgGrow Oils, L.L.C. v. Natl. Union Fire Ins. Co. of Pittsburgh, PA, 242
F.3d 777, 783 (8th Cir.2001) (“When a matter includes both arbitrable and non-arbitrable
claims, district courts exercise discretion in deciding whether to stay the non-arbitrable
claims. * * * In such cases, ‘issues such as the risk of inconsistent rulings, the extent to
which parties will be bound by the arbitrators’ decision, and the prejudice that may result
from delays must be weighed in determining whether to grant a discretionary stay, and in
fashioning the precise contours of any stay.’ ”). We note appellants, in their memorandum
opposing appellees’ motion to dismiss or stay, appear to have recognized and even endorsed
the trial court’s ability to stay Mrs. Newton’s claims, stating, “[e]ven if this Court rules that
the Arbitration Provision governs Mr. Newton’s claims, only Mr. Newton’s claims should
be sent to arbitration, and Mrs. Newton’s claims should be stayed.” (Sept. 2, 2021 Memo
Contra at 6, fn. 4.)
{¶ 33} Lastly, appellants appear to argue that Mrs. Newton’s status as a non-
signatory signifies the West test fails globally and removes all the parties’ claims from
arbitration. However, West does not stand for the proposition that, in an action brought
by multiple plaintiffs, the fact that one plaintiff did not sign an agreement to arbitrate
removes all claims from arbitration. In fact, West recognized that enforcing an arbitration
agreement against a third-party beneficiary in certain circumstances is legitimate and
analyzed that issue on the facts presented there. See id. at ¶ 13-16. Therefore, to the extent
appellants contend the presence of a non-signatory as one of the plaintiffs removes the
entire action from arbitration under the test set forth in West, this argument lacks merit.
{¶ 34} Considering all the above, because appellants’ assignment of error is
premised on an incorrect view of the trial court’s holding and the trial court properly stayed
the proceeding under R.C. 2711.02(B) as to Mrs. Newton’s identical claims, the first
assignment of error is overruled.
No. 22AP-279 14
V. Conclusion
{¶ 35} Having overruled appellants’ four assignments of error, we affirm the
judgment of the Franklin County Court of Common Pleas.
Judgment affirmed.
BEATTY BLUNT, P.J., and LELAND, J., concur.