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POINTS AND AUTHORITIES
QUESTIONS PRESENTED AND STANDARD FOR REVIEW PAGE
Grunstad v. Ritt, 106 F.3d 201 (7th Cir. 1997) 10
State Farm Mut. Auto. Ins. Co. v. George Hyman Constr. Co., 306 Ill.App.3d
874, 715 N.E.2d 749 (4th Dist. 1999) 10
IDS Life Ins. Co. v. SunAmerica, Inc., 103 F.3d 524, 530 (7th Cir. 1996) 10,11
JURISDICTIONAL STATEMENT
9 U.S.C. §16 (1999) 11
Illinois Supreme Court Rule 307 11
STATEMENT OF FACTS
Securities Exchange Act of 1934, 15 U.S.C. § 78c(a)(18) 12
ARGUMENT
9 U.S.C. §1 et seq. (1999) 21
Southland Corp. v. Keating, 465 U.S. 1, 16, 104 S. Ct. 852, 861, 79 L.Ed.2d
1 (1984) 21
Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 219-20, 105 S. Ct. 1238,
84 L.Ed.2d 158 (1985); 21,23
Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 270, 115 S. Ct. 834,
130 L.Ed.2d 753 (1995) 21
Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103
S. Ct. 927, 74 L.Ed.2d 765 (1983) 21, 22
Volt Information Sciences, Inc. v. Board of Trustees of the Leland Stanford
Junior University, 489 U.S. 468, 109 S. Ct. 1248, 103 L.Ed.2d 488 (1989) 21
9 U.S.C. §2 (1999). 22
Caudle v. Sears, Roebuck & Co., 245 Ill. App. 3d 959, 614 N.E.2d 1312,
185 Ill. Dec. 627 (5th Dist. 1993) 22
McDonald v. Mabee, 241 Ill. App. 3d 340, 608 N.E.2d 592, 181 Ill. Dec.
519 (3rd Dist. 1993) 22
9 U.S.C. §3 (1999) 23
I. THE COURT ERRED BY FAILING TO BROADLY INTEREPRET THE SCOPE OF THE CMA AGREEMENT AS MANDATED BY UNITED STATES SUPREME COURT PRECEDENT.
Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 221, 105 S. Ct. 1238, 1241,
84 L.Ed.2d 158 (1985) 23
Amgen, Inc. v. Ortho Pharmaceutical Corporation, 303 Ill.App.3d 370, 378,
708 N.E.2d 385, 390, 236 Ill. Dec. 799 (1st Dist. 1999) 24
Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 396, 87 S. Ct.
1001, 1803, 18 L.Ed.2d 1270 (1967) 24
AT&T Technologies, Inc. v. Communication Workers of America, 475 U.S. 643,
650, 106 S. Ct. 1415, 1419, 4 L.Ed.2d 1409 (1960) 24
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626,
105 S. Ct. 3346, 3354, 87 L.Ed.2d 444 (1985) 24
A. The Circuit Court Erred by Concluding that the Scope of the Arbitration Clause was Limited to Claims Arising from the CMA Account.
Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford
Junior Univ., 489 U.S. 468, 479, 109 S. Ct. 1248, 103 L.Ed.2d 488 (1989) 26
Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218, 105 S. Ct. 1238, 84
L.Ed.2d 158 (1985) 26
B. In Construing the Intent of the Parties, the Circuit Court
Plainly Misread the Text of the Arbitration Clause of the CMA Agreement.
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105
S. Ct. 3346, 3354, 87 L.Ed.2d 444 (1985) 28
Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 115 S. Ct. 1212, 131
L.Ed.2d 76 (1995) 29
Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 87 S. Ct. 1801,
18 L.Ed.2d 1270 (1967) 29
C. The Circuit Court Erred by Placing Reliance upon the
Plaintiffs Act of Casting her Claim in Tort.
Mitsubishi Motors v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 624-25 n.
13, 105 S. Ct. 3346, 3352-53 n. 13, 87 L.Ed.2d 444 (1985) 30
Sweet Dreams Unlimited, Inc. v. Dial-A-Mattress Int'l, Ltd., 1 F.3d 639,
643 (7th Cir.1993) 30
Howells v. Hoffman, 209 Ill. App. 3d 1004, 1006-7, 568 N.E.2d 934, 936-7,
154 Ill. Dec. 713 714-5 (3rd Dist. 1991) 31
II. AS AN AGENT OF MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED, MLLA IS ENTITLED TO COMPEL
ARBITRATION UNDER THE CMA AGREEMENT
In re Amoco Cadiz, 659 F.2d 789, 795-796 (7th Cir. 1981) 31
Arnold v. Arnold Corp., 920 F.2d 1269, 1281 (6th Cir. 1990) 31
Messing v. Rosenkrantz, 872 F. Supp. 539, 541 (N.D.Ill. 1995) 31
Howells v. Hoffman, 209 Ill. App. 3d 1004, 1006-7, 568 N.E.2d 934, 936-7,
154 Ill. Dec. 713 714-5 (3rd Dist. 1991) 32
Pritzker v. Merrill Lynch, Pierce, Fenner & Smith Inc., 7 F. 3d 1110
(3rd Cir. 1993) 32
Leitzia v. Prudential Bache Securities, Inc., 802 F.2d 1185 (9th Cir. 1986) 32
Scher v. Bear Stearns & Co. Inc., 723 F. Supp. 211 (S.D.N.Y. 1989) 32
Brown v. Dean Witter Reynolds Inc., 601 F. Supp. 641 (S.D. Fla 1985) 32
A. MLLA was an Agent of Merrill Lynch, Pierce, Fenner & Smith, Incorporated in Connection with the Transaction at Issue in this
Case.
Moy v. County of Cook, 159 Ill.2d 519, 640 N.E.2d 926203 Ill. Dec. 776 (1994) 32
Cnota v. Palatine Area Football Assn, 227 Ill.App.3d 640, 592 N.E.2d 196,169
Ill. Dec. 709 (1st Dist. 1992) 32
Lang v. Silva, 306 Ill.App.3d 960, 715 N.E.2d 708, 240 Ill. Dec. 21
(1st Dist. 1999) 32
Hansen v. Caring Professionals, 286 Ill.App.3d 797, 222 Ill. Dec. 145,
676 N.E.2d 1349 (1st Dist. 1997) 32
Slates v. International House of Pancakes, Inc., 90 Ill.App.3d 716, 413
N.E.2d 457, 46 Ill. Dec. 17 (4th Dist. 1980) 33
Hoffman & Morton Co. v. American Insurance Co., 35 Ill.App.2d 97, 102, 181
N.E.2d 821 (1st Dist. 1962) 33
Long v. Great Cent. Ins. Co., 190 Ill.App.3d 159, 546 N.E.2d 739, 137 Ill. Dec.
794 (4th Dist. 1989) 33
Mitchell v. McEwen & Assoc., 360 Ill. 278, 283-4, 196 N.E. 186 (1935) 34
Kalman v. Bertacchi, 57 Ill.App.3d 542, 373 N.E.2d 550, 15 Ill. Dec. 204
(1st Dist. 1978) 34
Elmore v. Blume, 31 Ill.App.3d 643, 334 N.E.2d 431(3rd Dist. 1975) 34
Winston v. Sears, Roebuck & Co. 88 Ill.App.2d 358, 233 N.E.2d 95
(1st Dist. 1967). 34
Securities Exchange Act of 1934, § 3(a)(18) 36
15 U.S.C. § 78c(a)(18) (1999) 36
15 U.S.C. Sec. 77o (1999) 37
B. The Circuit Court Improperly Ignored the Acts of William Maniscalco.
Pyne v. Witmer 129 Ill.2d 351, 543 N.E.2d 1304, 135 Ill. Dec. 557 (1989) 37
Laird v. Baxter Health Care Corporation, 272 Ill.App.3d 280, 650 N.E.2d 215,
208 Ill. Dec. 758 (1st Dist. 1995) 38
Restatement (Second) of Agency § 228 (1958) 38
C. The Circuit Court Erred By Determining The Agency Issue Based On The Plaintiffs Decision Not To Join Merrill Lynch
To This Case.
Howells v. Hoffman, 209 Ill. App. 3d 1004, 568 N.E. 2d 934, 154 Ill. Dec. 713
(3rd Dist. 1991) 40, 41, 43
Wilson v. Waverlee Homes, Inc., 954 F. Supp. 1530 (M.D. Ala. 1997) 41, 42, 43
Pritzker v. Merrill Lynch, Pierce, Fenner & Smith Inc., 7 F. 3d 1110 (3rd Cir. 1993) 43, 44
Prograph Intl, Inc. v. Barhydt, 928 F. Supp. 983, 990 (N.D.Cal. 1996) 44
D. The Circuit Court Erred By Applying Case Law of Estoppel
To Determine Whether MLLA was an Agent of Merrill Lynch.
Thomson CSF v. American Arbitration Association, 64 F.3d 773 (2nd Cir. 1995) 44, 45
AT&T Technologies, Inc. v. Communication Workers of America, 475 U.S. 643,
650, 106 S. Ct. 1415, 1419, 4 L.Ed.2d 1409 (1960) 45
Pritzker v. Merrill Lynch, Pierce, Fenner & Smith Inc., 7 F. 3d 1110 (3rd Cir. 1993) 45, 46
III. UNDER THE TERMS OF HIS REGISTRATION AGREEMENT
WITH THE NASD, MANISCALCO MUST ARBITRATE HIS
INDEMNITY CLAIM.
First Investors v. American Capital Financial Services, Inc, 823 F.2d 307, 309
(9th Cir. 1987) 46, 47
Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 221, 105 S. Ct. 1238, 1241,
84 L.Ed.2d 158 (1985) 47
B. As an Agent and Associated Person of Merrill Lynch, MLLA is Subject to the NASD Code.
Kidder, Peabody & Co., Inc. v. Zinsmayer Trusts Partnership, 41 F.3d 861,
863 (2nd Cir. 1994) 48
In re: Amoco Cadiz, 659 F.2d 789, 795-796 (7th Cir. 1981) 48
C. Maniscalcos Indemnification Claim Against MLLA is Arbitrable Under NASD Rule 10101.
Essex Corp. v. Independent Financial Marketing Group, Inc., 994 F. Supp.
532 (S.D.N.Y. 1998) 49, 50
15 U.S.C. §78c(a)(21)(1996) 49
Cular v. Metropolitan Life Ins. Co., 961 F. Supp. 550, 556 (S.D.N.Y. 1997) 50
Chisholm v. Kidder Peabody Asset Management, Inc., 810 F. Supp. 479, 481,
n.2 (S.D.N.Y. 1992) 50
Tays v. Covenant Life Ins. Co., 964 F.2d 501 (5th Cir. 1992) 50
§ 3(a)(18) of the Securities Exchange Act of 1934 50
Farrand v. Lutheran Brotherhood, 993 F.2d 1253, 1254-5 (7th Cir. 1993) 50, 51
D. Maniscalcos Claim is Subject to Arbitration under NASD Rule 10201.
Kresock v. Bankers Trust Co., 21 F.3d 176 (7th Cir. 1994) 52
Williams v. Cigna Financial Advisors, Inc., 56 F.3d 656 (5th Cir. 1995) 52
IV. THE CIRCUIT COURT ABUSED ITS DISCRETION IN REFUSING
TO STAY THE ACTION IN ITS ENTIRETY PENDING COMPLETION
OF THE ARBITRATION PROCESS.
Morrie Mages & Shirley Mages Foundation v. Thrifty Corp., 916 F.2d 402,
(7th Cir. 1990) 53
IDS Life Ins. Co. v. SunAmerica, Inc., 103 F.2d 524 (7th Cir. 1996) 53
American Home Assurance Co. v. Vecco Concrete Construction Co., 629 F.2d 961,
964 (4th Cir. 1980) 53, 54
Contracting Northwest Inc. v. City of Fredericksburg, 713 F.2d 382 (8th Cir. 1983) 54
American Heart Disease Prevention Foundation, Inc. v. Hughey, 106 F.3d 389
(4th Cir. 1997) 55
White Eagle Laundry Co. v. Slawek, 296 Ill. 240, 244, 129 N.E. 753, 755 (1921) 55
Peregrine Financial Group, Inc. v. Martinez, 305 Ill. App. 3d 571, 712 N.E.2d 861
238 Ill. Dec. 757 (1st Dist. 1999) 55
Taylor v. Peoples Gas Light & Coke Co., 275 Ill.App.3d 655, 211 Ill. Dec. 942,
656 N.E.2d 134 (1st Dist. 1995) 55
Horwitz, Schakner & Associates, Inc. v. Schakner, 252 Ill.App.3d 879, 884-5,
625 N.E.2d 670, 674, 192 Ill. Dec. 515 (1st Dist. 1993) 55
Midwest Window Systems, Inc. v. Amcor Industries, Inc., 630 F. 2d 535, 537
(7th Cir. 1980) 57
Olsher Metals Corp. v. M/V Agios Andreas, 982 F. Supp. 402 (E.D. La 1997) 57
Nat. Foundation for Cancer Research v. A.G. Edwards & Sons, Inc., 821 F.2d
772, 778 (D.C. Cir. 1987) 57
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