Second Circuit Affirms Order Compelling Arbitration, Rejects as Waived Arguments Not Made Before Trial Court
The Second Circuit Court of Appeals had no difficulty affirming a district court’s order compelling the executor of an estate to arbitrate his claims based on an arbitration clause contained in an IRA application signed by the deceased.
At oral argument, the executor (an attorney appearing pro se) admitted that he had forfeited any argument that the arbitration provision itself was invalid, and thus was left to rely on the theory that the contract as a whole was invalid. The Second Circuit easily rejected this, noting that the U.S. Supreme Court has held that “unless [a] challenge is to the arbitration clause itself, the issue of the contract’s validity is considered by the arbitrator in the first instance.” Thus, the Court found that the matter should go to arbitration where the arbitrator could decide the question of the contract’s validity.
The executor also argued that the district court erred in even considering the motion to compel due to an “electronic filing error” not specified in the opinion. However, in addition to being waived for not having been raised before the district court, the Court found that this argument lacked all merit because the executor knew about the motion, responded to it, and could not show any prejudice.
Aretakis v. First Financial Equity, Corp., Hilltop Securities, Inc., No. 17-3649 (2d Cir. Dec. 10, 2018)