We granted an interlocutory appeal to review the trial court’s order granting the motion of defendant/appellee SAL Financial Services, Inc. to compel arbitration and stay proceedings in the trial court.1 We now conclude that the trial court erred in determining that an arbitrator, and not the court, should determine whether the arbitration provision at issue in this case is enforceable, and reverse and remand this case for reconsideration in light of this opinion. The facts underlying this appeal are as follows: Charles Warren Jordan hired J. Houston Lennard, an attorney, to establish a charitable remainder trust. Lennard was also named trustee of the trust. Lennard, as trustee, entered into a New Account Application and Client Account Agreement with the predecessor of SAL Financial. Lennard signed these documents above the line that said “Customer” and the line that said “Registered Representative.” The document was also signed by Edward C. Bonowitz as “Supervisory Principal” of SAL. These agreements allowed Lennard, a licensed stock broker, to act as a stock and investment broker for the trust and buy and sell securities on behalf of the trust. The following language appeared just above the signature lines: “I/WE UNDERSTAND THAT THE CUSTOMER AGREEMENT ON THE REVERSE OF THIS APPLICATION CONTAINS IN NUMBERED PARAGRAPH 19 A PRE-DISPUTE ARBITRATION CLAUSE REQUIRING ALL DISPUTES UNDER THIS AGREEMENT TO BE SETTLED BY BINDING ARBITRATION. BY SIGNING BELOW CUSTOMER ACKNOWLEDGES RECEIVING A COPY OF THIS AGREEMENT.”
Jordan’s family became dissatisfied with Lennard’s handling of the trust and the plaintiffs, who are the trustees who replaced Lennard and a representative of Jordan, filed suit against Lennard and his law firm alleging breach of fiduciary duties, fraud, and wanton and deliberate damage to the trust. The plaintiffs subsequently amended their complaint and filed suit against SAL Financial, alleging, inter alia, that SAL failed to properly supervise Lennard with regard to the investments and other transactions he made on behalf of the trust, and that SAL breached the fiduciary obligation it owed to the trust as its brokerage company by failing to act with reasonable diligence to ensure that Lennard did not have a conflict of interest by acting as the broker, trustee and attorney for the trust.
