PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
ERIC M. LEVIN,
Plaintiff-Appellee,
v.
No. 10-1896
ALMS AND ASSOCIATES,
INCORPORATED; STEVEN P. ALMS,
Defendants-Appellants.
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Marvin J. Garbis, Senior District Judge.
(1:09-cv-03403-MJG)
Argued: December 9, 2010
Decided: February 10, 2011
Before NIEMEYER, DUNCAN, and KEENAN,
Circuit Judges.
Reversed by published opinion. Judge Duncan wrote the opin-
ion, in which Judge Niemeyer and Judge Keenan joined.
COUNSEL
ARGUED: Christopher R. Mellott, VENABLE, LLP, Balti-
more, Maryland, for Appellants. Steven Jonathan Kelly,
MILES & STOCKBRIDGE, PC, Towson, Maryland, for
2 LEVIN v. ALMS AND ASSOCIATES
Appellee. ON BRIEF: Viktoriya M. Shpigelman, VEN-
ABLE, LLP, Baltimore, Maryland, for Appellants. Matthew
S. Sturtz, MILES & STOCKBRIDGE, PC, Towson, Mary-
land, for Appellee.
OPINION
DUNCAN, Circuit Judge:
This action arises from the district court’s holding that cer-
tain disputes between Alms and Associates, Incorporated and
Steven P. Alms ("Appellants") and Eric Levin ("Appellee")
were not subject to mandatory arbitration. Following the fil-
ing of this appeal, Appellants asked this court to stay the dis-
trict court proceedings on the underlying claims pending
resolution of the appeal. On September 20, 2010, we issued
an interim one-judge order staying proceedings pending reso-
lution of the motion. Upon further consideration of the
motion, for the reasons detailed below, we joined the majority
of the circuits to have decided the issue in holding that the fil-
ing of the arbitrability appeal, as would be true of appeals
generally, divested the district court of jurisdiction over the
underlying claims. Accordingly, on December 9, 2010, we
issued an order extending the stay pending resolution of the
appeal. Having reviewed the merits of the appeal, we now
hold that the district court erred in finding that the underlying
claims were not subject to mandatory arbitration.
I.
Beginning in 2004, Appellants provided financial advisory
services to Appellee. In 2004, 2005, 2006, and 2007 the par-
ties entered into agreements referred to as "CFO Advisory
Agreements," which governed the advisory relationship and
the payment of fees.
LEVIN v. ALMS AND ASSOCIATES 3
According to Appellee, his relationship with Appellants
was plagued by irregularities. For example, he asserts that in
early 2006 Appellants advised him to invest more than
$83,000 in a land development company called SilverDeer
Olde Liberty, LLC. That same year, Appellants also advised
Appellee to invest $500,000 in a related real estate venture
known as SilverDeer Lakebound Fixed Return, LLC. Appel-
lee alleges that, in so doing, Appellants failed to disclose that
they were paid consultants for the SilverDeer entities and that
they had an advising agreement with SilverDeer under which
they were entitled to receive $150,000 in annual fees. Appel-
lee further alleges that "there is reason to believe" that Appel-
lants knew that SilverDeer was having financial difficulties as
early as 2005. Appellee’s Br. at 8. Appellee asserts that
Appellants neither informed him about the "blatant conflict of
interest" nor disclosed SilverDeer’s financial problems. Id.
Appellee also alleges that, from 2004 to 2009, Appellants
received fees from a financial firm known as Lydian Wealth
Management in exchange for placing Appellee’s investment
account with that firm. According to Appellee, the CFO
Agreements with Appellants required them to fully disclose
the commission to Appellee and to reduce their yearly advis-
ing fees based on that commission. Appellee asserts that
Appellants did not inform him about the commission and did
not reduce their fees. Finally, Appellee alleges that, in 2007,
Appellants misled him into giving them a loan that contained
terms unfavorable to him.
In 2009, Appellee filed suit against Appellants based on the
allegations described. The complaint raised claims for negli-
gence, negligent misrepresentation, violation of the Invest-
ment Advisers Act of 1940, 15 U.S.C. § 80b-1, and breach of
contract.
Appellants moved to dismiss the action or to stay the pro-
ceedings pending arbitration. They alleged that the 2007 CFO
Agreement with Appellee dictated that "any dispute" between
4 LEVIN v. ALMS AND ASSOCIATES
the parties would be submitted to binding arbitration. They
further noted that the 2007 Agreement also purported to "en-
compass[ ] and embod[y] all terms, understandings and agree-
ments by and between those parties." J.A. 36. On that basis,
Appellants argued that all of Appellee’s claims were subject
to arbitration.
The district court ordered Appellee to pursue any claims
accrued after January 1, 2007, in arbitration, but found that
the arbitration agreement did not cover the pre-2007 claims.
The court reasoned that the arbitration clause in the 2007
agreement was not worded such that it would apply retroac-
tively to claims accrued before the agreement was signed.
Appellants filed a notice of appeal with this court and
moved the district court to stay all proceedings pending
appeal. The district court specifically found that the appeal
was not frivolous. It nevertheless denied the motion in part,
explaining:
Plaintiff has a strong interest in avoiding delay of the
ultimate resolution of the case. In addition, Defen-
dants certainly will not suffer undue prejudice from
allowing proceedings in the instant case to continue,
at least through discovery. Moreover, in view of the
apparent presence of threshold limitations issues per-
taining to the pre-2007 claims, it would appear bene-
ficial to all concerned to proceed expeditiously.
Levin v. Alms, No. 09-3403 (D.Md. filed Aug. 31, 2010), ECF
No. 32. The district court therefore allowed discovery regard-
ing Plaintiffs pre-2007 claims to proceed. Appellants peti-
tioned this court to stay the proceedings.
On September 20, 2010 we issued a temporary one-judge
order staying the proceedings pending resolution of the stay
motion. We scheduled the motion and the merits of the case
for oral argument on December 9, 2010. Immediately follow-
LEVIN v. ALMS AND ASSOCIATES 5
ing oral argument on the motion, we issued an order granting
the motion and extending the interim stay pending resolution
of the appeal, with the panel’s reasons to be explained in this
opinion.
II.
Appellants assert that the filing of this appeal challenging
the district court’s arbitrability decision divested that court of
jurisdiction over the underlying claims. They further argue
that the district court erred in holding that the 2007 CFO
Agreement did not bind the parties to arbitrate any claims that
accrued prior to 2007. We address each contention in turn.
A.
As a general rule, the filing of an appeal "confers jurisdic-
tion on the court of appeals and divests the district court of its
control over those aspects of the case involved in the appeal."
Griggs v. Provident Consumer Disc. Co., 459 U.S. 56, 58
(1982). Section 16(a)(1)(A) of the Federal Arbitration Act
("FAA"), 9 U.S.C. § 16(a)(1)(A), authorizes an appeal from a
district court’s denial of a petition to stay an action pending
arbitration under § 3 of that act.1 Appellants’ motion required
us to decide whether the general rule applies in an appeal
under § 16(a)(1)(A) to divest the district court of jurisdiction
over the proceedings relating to the underlying claims. The
Third, Seventh, Tenth, and Eleventh Circuits have held that an
appeal regarding arbitrability of claims does divest the district
court of jurisdiction over those claims, as long as the appeal
is not frivolous. The Second and Ninth Circuit have held that
1
Although Appellants state that the original motion they filed with the
district court was a motion to stay under § 4 of the FAA, 9 U.S.C. § 4, that
statement is in error. See Appellants’ Motion Br. at 4. The section of the
FAA referring to motions to stay an action pending arbitration is § 3. A
review of Appellants’ original motion filed with the district court reveals
that the motion was correctly filed pursuant to § 3 of the FAA, not § 4.
6 LEVIN v. ALMS AND ASSOCIATES
no such divestiture occurs. For the reasons explained below,
we join the position adopted by the majority of the circuits.
We first discuss the issue of divestiture and then examine the
frivolousness exception.
1.
The seminal case adopting the majority position is
Bradford-Scott Data Corp. v. Physician Computer Network,
128 F.3d 504 (7th Cir. 1997). There the court held that a dis-
trict court was automatically divested of jurisdiction by the
filing of an appeal that alleged that the claims before the dis-
trict court were subject to mandatory arbitration. Id. at 505.
The court explained that "[t]he filing of a notice of appeal is
an event of jurisdictional significance—it confers jurisdiction
on the court of appeals and divests the district court of its con-
trol over those aspects of the case involved in the appeal." Id.
(quoting Griggs, 459 U.S. at 58). It further found that the
underlying claims before the district court were necessarily
"involved in the appeal" because "[w]hether the case should
be litigated in the district court is not an issue collateral to the
question presented by an appeal under § 16(a)(1)(A) . . . [I]t
is the mirror image of the question presented on appeal." Id.
The court also noted that "[c]ontinuation of proceedings in the
district court largely defeats the point of the appeal and
creates a risk of inconsistent handling of the case by two tri-
bunals." Id. Finally, the court explained how the principles
underlying arbitration supported its rationale:
Arbitration clauses reflect the parties’ preference for
non-judicial dispute resolution, which may be faster
and cheaper. These benefits are eroded, and may be
lost or even turned into net losses, if it is necessary
to proceed in both judicial and arbitral forums, or to
do this sequentially. . . . Immediate appeal under
§ 16(a) helps to cut the loss from duplication. Yet
combining the costs of litigation and arbitration is
what lies in store if a district court continues with the
LEVIN v. ALMS AND ASSOCIATES 7
case while an appeal under § 16(a) is pending. Cases
of this kind are therefore poor candidates for excep-
tions to the principle that a notice of appeal divests
the district court of power to proceed with the
aspects of the case that have been transferred to the
court of appeals.
Id. at 506. Three other circuits have adopted the Bradford-
Scott rationale. See Ehleiter v. Grapetree Shores, Inc., 482
F.3d 207, 215 n.6 (3d Cir. 2007); McCauley v. Halliburton
Energy Servs., Inc., 413 F.3d 1158, 1162-63 (10th Cir. 2005);
Blinco v. Greentree Servicing, LLC, 366 F.3d 1249, 1253
(11th Cir. 2004).
The Ninth Circuit and the Second Circuit have taken the
contrary view. In Britton v. Co-op Banking Group, 916 F.2d
1405 (9th Cir. 1990), the court found that the district court
was not divested of jurisdiction, reasoning that because "ar-
bitrability was the only substantive issue presented in [the]
appeal" the claims before the district court were not "the sub-
ject of the appeal." Id. at 1412. In Motorola Credit Corp. v.
Uzan, 388 F.3d 39 (2d Cir. 2004), the Second Circuit adopted
the Ninth Circuit’s holding. See id. at 54 ("[We] explicitly
adopt the Ninth Circuit’s position that further district court
proceedings in a case are not ‘involved in’ the appeal of an
order refusing arbitration, and that a district court therefore
has jurisdiction to proceed with a case absent a stay from this
Court.").
The courts adopting the majority position have expressly
rejected the contrary rationale. The Seventh Circuit explained
that although "arbitrability is distinct from the merits of the
litigation," an appeal under § 16(a)(1)(A) "presents the ques-
tion whether the district court must stay its own proceedings
pending arbitration" and therefore "[w]hether the litigation
may go forward in the district court is precisely what the court
of appeals must decide." Bradford-Scott, 128 at 506. Simi-
larly, the Eleventh Circuit explained that "[t]he only aspect of
8 LEVIN v. ALMS AND ASSOCIATES
the case involved in an appeal from an order denying a
motion to compel arbitration is whether the case should be lit-
igated at all in the district court" and thus "[t]he issue of con-
tinued litigation in the district court is not collateral to the
question presented by an appeal under § 16(a)(1)(A)." Blinco,
366 F.3d at 1251.
We find the majority view persuasive. The core subject of
an arbitrability appeal is the challenged continuation of pro-
ceedings before the district court on the underlying claims.
Therefore, because the district court lacks jurisdiction over
"those aspects of the case involved in the appeal," it must nec-
essarily lack jurisdiction over the continuation of any pro-
ceedings relating to the claims at issue. Griggs, 459 U.S. at
58. That the present case involves only the continuation of
discovery does not change that rationale. Discovery is a vital
part of the litigation process and permitting discovery consti-
tutes permitting the continuation of the litigation, over which
the district court lacks jurisdiction. See Bradford-Scott, 128
F.3d at 506 ("[P]reparation for trial must be suspended until
the court of appeals renders a decision."). Furthermore, allow-
ing discovery to proceed would cut against the efficiency and
cost-saving purposes of arbitration. See id. at 506; Blinco, 366
F.3d at 1251 ("[T]he principal benefits of arbitration, avoiding
the high costs and time involved in judicial dispute resolution,
[are] lost if the case proceeds in both judicial and arbitral
forums."). Also, allowing discovery to proceed could alter the
nature of the dispute significantly by requiring parties to dis-
close sensitive information that could have a bearing on the
resolution of the matter. If we later hold that the claims were
indeed subject to mandatory arbitration, the parties will not be
able to unring any bell rung by discovery, and they will be
forced to endure the consequences of litigation discovery in
the arbitration process.
2.
The approach discussed above is subject to certain safe-
guards against frivolous appeals. As the Ninth Circuit noted
LEVIN v. ALMS AND ASSOCIATES 9
in Britton, it would be inadvisable to "allow a defendant to
stall a trial simply by bringing a frivolous motion to compel
arbitration." 916 F.2d at 1412. For this reason, each of the cir-
cuits adopting the majority view has created a frivolousness
exception to the divestiture of jurisdiction. The Seventh Cir-
cuit found that the frivolousness concern "is met by the
response that the appellee may ask the court of appeals to dis-
miss the appeal as frivolous or to affirm summarily."
Bradford-Scott, 128 F.3d at 506. It further held that "[e]ither
the court of appeals or the district court may declare that the
appeal is frivolous, and if it is the district court may carry on
with the case." Id. The Tenth Circuit elaborated on the
mechanics of the frivolousness exception as follows:
[U]pon the filing of a motion to stay litigation pend-
ing an appeal from the denial of a motion to compel
arbitration, the district court may frustrate any liti-
gant’s attempt to exploit the categorical divestiture
rule by taking the affirmative step, after a hearing, of
certifying the § 16(a) appeal as frivolous or forfeited.
That certification will prevent the divestiture of dis-
trict court jurisdiction. Appellant may then move this
court for a stay pending appeal, asserting that the
district court’s finding of frivolousness is not sup-
ported by the record. If this court determines that the
appeal is not frivolous, we will stay the litigation in
the district court pending the appeal of the denial of
the motion to compel arbitration.
McCauley, 413 F.3d at 1162 (internal citations omitted); see
also Ehleiter, 482 F.3d at 215 n.6 (agreeing "with the majority
rule of automatic divestiture where the Section 16(a) appeal
is neither frivolous nor forfeited"); Blinco, 366 F.3d at 1253
("When a litigant files a motion to stay litigation in the district
court pending an appeal from the denial of a motion to com-
pel arbitration, the district court should stay the litigation so
long as the appeal is non-frivolous.").
10 LEVIN v. ALMS AND ASSOCIATES
We find the frivolousness safeguard as articulated by the
Tenth Circuit to be not only sensible but also consistent with
our approach in other areas of the law. For example, in the
double-jeopardy context, this court has recognized a "dual
jurisdiction" rule, "which allows a district court to proceed
with trial while a defendant pursues [a] . . . double jeopardy
appeal, where the district court has concluded that the appeal
is frivolous." United States v. Montgomery, 262 F.3d 233, 240
(4th Cir. 2001).2 In recognizing this doctrine, we noted that it
was not legally foreclosed by the divesture of jurisdiction rule
because that rule is "not based upon statutory provisions or
the rules of civil or criminal procedure" but rather "is a judge
made rule originally devised . . . to avoid confusion or waste
of time." Id. at 239-40. The frivolousness exception adopted
by the majority of the circuits is analogous to and consistent
with this "dual jurisdiction" doctrine.
We therefore hold that an appeal on the issue of arbitra-
bility automatically divests the district court of jurisdiction
over the underlying claims and requires a stay of the action,
unless the district court certifies the appeal as frivolous or for-
feited. In the event that such certification occurs, the party
alleging arbitrability may move this court to stay the district
court proceedings pending a review of the frivolousness deter-
mination. Given that the district court here specifically held
that the appeal was not frivolous, a stay of the action during
the pendency of this appeal was required. It is for these rea-
sons that we granted Appellants’ motion to stay the proceed-
ings below, pending resolution of this appeal.
2
As Appellants note, the Supreme Court has recently held that an appel-
late court has jurisdiction over any appeal under 9 U.S.C. § 16, regardless
of whether the issue is frivolous. Arthur Andersen LLP v. Carlisle, 129
S.Ct. 1896, 1900-01 (2009). However, this holding does not affect the
validity of the "dual jurisdiction" doctrine because that doctrine acknowl-
edges that the appellate court has jurisdiction but grants special permission
for the district court to exercise jurisdiction as well.
LEVIN v. ALMS AND ASSOCIATES 11
B.
We turn now to the merits of this appeal. The issue before
us is whether the district court erred in holding that the arbi-
tration clause in the 2007 CFO Advisory Agreement did not
apply to claims that accrued prior to January 1, 2007. We "re-
view de novo the district court’s conclusions regarding the
arbitrability of the disputes." Am. Recovery Corp. v. Comput-
erized Thermal Imaging, 96 F.3d 88, 91 (4th Cir. 1996).
"Whether a party has agreed to arbitrate an issue is a matter
of contract interpretation: ‘[A] party cannot be required to
submit to arbitration any dispute which he has not agreed so
to submit.’" Id. at 92 (quoting United Steelworkers of America
v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960)).
However, the Supreme Court has consistently encouraged a
"healthy regard for the federal policy favoring arbitration."
Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp.,
460 U.S. 1, 24 (1983). This federal policy is based on the
FAA, which "establishes that, as a matter of federal law, any
doubts concerning the scope of arbitrable issues should be
resolved in favor of arbitration, whether the problem at hand
is the construction of the contract language itself or an allega-
tion of waiver, delay, or a like defense to arbitrability." Id. at
24-25. The "heavy presumption of arbitrability requires that
when the scope of the arbitration clause is open to question,
a court must decide the question in favor of arbitration." Peo-
ples Sec. Life Ins. Co. v. Monumental Life Ins. Co., 867 F.2d
809, 812 (4th Cir. 1989). It is through this lens that we must
evaluate the language of the 2007 CFO Agreement.
The Agreement includes the following integration clause:
It is agreed by and between the parties hereto that
this agreement encompasses and embodies all terms,
understandings and agreements by and between
those parties and the terms may not be amended
except in writing by the parties hereto.
12 LEVIN v. ALMS AND ASSOCIATES
J.A. 36. The agreement also includes the following paragraph:
Any dispute shall be submitted to binding arbitration
before a single arbitrator in Howard County, Mary-
land, under the rules of the American Arbitration
Association, and the decision of the arbitrator shall
be final and binding upon the parties. In the event
that the client shall implement any advice, sugges-
tion, proposal or plan advanced by the advisor or
developed as a result of interaction between the cli-
ent, the advisor and/or any other advising profession-
als, the advisor shall not be liable to the client for
any loss, liability, costs or expenses which the client
may incur as a result thereof in excess of the actual
amount of fees paid to the advisor by the client under
this contract.
Id. (emphasis added). The first sentence in this paragraph is
the arbitration clause that is the subject of this appeal.
Appellee alleges that it is not the integration language that
is relevant here, but rather the allegedly narrower arbitration
provision. Specifically, he alleges that the arbitration provi-
sion’s "any dispute" language refers only to disputes arising
after the signing of the 2007 CFO agreement and that it
trumps the reference to "all terms, understandings and agree-
ments" in the integration clause. Our precedent instructs that
the contract must be read "as a whole." Gresham v. Lumber-
men’s Mut. Cas. Co., 404 F.3d 253, 260 (4th Cir. 2005). Fur-
thermore, whether one of two provisions in a contract controls
"is irrelevant where, as here, the two provisions can be com-
fortably read together." Universal Concrete Prods. Corp. v.
Turner Constr. Co., 595 F.3d 527, 531 (4th Cir. 2010). Here,
the integration and arbitration clauses can easily be read
together to state that the "agreement encompasses and
embodies all terms, understandings and agreements by and
between those parties" and that "[a]ny dispute shall be sub-
mitted to binding arbitration." J.A. 36. The language is broad
LEVIN v. ALMS AND ASSOCIATES 13
enough to encompass all agreements and any disputes, past
and present, especially given that the presumption in favor of
arbitrability is particularly applicable when the arbitration
clause is broadly worded. See AT&T Techs. v. Commc’ns
Workers of Am., 475 U.S. 643, 650 (1986) (finding the pre-
sumption "particularly applicable where the clause is as broad
as the one employed in this case, which provides for arbitra-
tion of ‘any differences arising with respect to the interpreta-
tion of this contract’"); see also J.J. Ryan & Sons, Inc. v.
Rhone Poulenc Textile, S.A., 863 F.2d 315, 321 (4th Cir.
1988) ("The International Chamber of Commerce’s recom-
mended clause which provides for arbitration of ‘[a]ll disputes
arising in connection with the present contract’ . . . does not
limit arbitration to the literal interpretation or performance of
the contract. It embraces every dispute between the parties
having a significant relationship to the contract regardless of
the label attached to the dispute.").
Although the arbitration clause does not specifically state
that it applies to claims accruing before the 2007 Agreement,
courts have generally applied broad "any dispute" language
retroactively, especially when combined with language that
refers to all dealings between the parties. For example, in
Cara’s Notions v. Hallmark Cards, 140 F.3d 566, 568 (4th
Cir. 1998), we applied retroactively an arbitration clause that
stated that the parties would arbitrate "[a]ny controversy or
claim arising out of or relating to this Agreement, or the
breach thereof, or any aspects of the relationship between"
the parties. Id. (emphasis in the original). We found relevant
a separate section of the agreement that stated "[t]his agree-
ment supersedes all prior oral or written representations and
constitutes the entire understanding." Id. at 570. While the
agreement here does not specifically state that it supersedes
others, it does similarly state that it "encompasses and
embodies all . . . agreements," which would seem to include
prior agreements, making the arbitration clause referring to
"all disputes" applicable retroactively.
14 LEVIN v. ALMS AND ASSOCIATES
Our sister circuits give retroactive application to broad arbi-
tration clauses as well. For instance, in Kristian v. Comcast
Corp., 446 F.3d 25 (1st Cir. 2006), the First Circuit found that
an agreement to arbitrate "any claim or dispute relating to or
arising out of this agreement or the services provided" could
be applied retroactively because "the phrase ‘or the services
provided’ covers claims or disputes that do not arise ‘out of
this agreement’ and hence are not limited by the time frame
of the agreements." Id. at 33. Similarly, in Zink v. Merrill
Lynch Pierce Fenner & Smith, 13 F.3d 330 (10th Cir. 1993),
the court found that the language "[a]ny controversy between
[the parties] arising out of [plaintiff’s] business or this agree-
ment shall be submitted to arbitration" was "clearly broad
enough to cover the dispute at issue despite the fact that the
dealings giving rise to the dispute occurred prior to the execu-
tion of the agreement." Id. at 332. Also, in Coenen v. R. W.
Pressprich & Co., 453 F.2d 1209 (2d Cir. 1972), the court
found that an agreement to arbitrate "any controversy between
. . . members" encompassed controversies that accrued before
the members entered into the agreement. Id. at 1212.
Appellee argues that he cannot be forced to arbitrate his
claims because he did not "knowingly and deliberately" waive
his right to judicial forum by entering into an "express and
specific" agreement to arbitrate the prior claims. Appellee’s
Br. at 11-13. He relies on the limitation of losses statement
following the arbitration clause which provides as follows:
"the advisor shall not be liable to the client for any loss . . .
in excess of the actual amount of fees paid to the advisor by
the client under this contract." J.A. 36. Citing cases in which
the arbitration clause at issue stated that it applied to "this
agreement," Appellee argues that the "this contract" language
restricts the arbitration clause only to the 2007 CFO Agree-
ment. Appellee’s Br. at 14-15; see, e.g., Peerless Importers,
Inc. v. Wine, Liquor & Distillery Workers Union Local One,
903 F.2d 924, 927-28 (2d Cir. 1990) (finding that the lan-
guage "arising under this Agreement and during its term" did
not apply retroactively). These cases provide no support for
LEVIN v. ALMS AND ASSOCIATES 15
Appellee’s view precisely because the limitation in them
inhered in the arbitration clause itself. Here, the "this con-
tract" language applies only to the limitation of losses provi-
sion, not to the arbitration clause. The loss provision makes
no reference to arbitration and there is nothing in the language
or structure of the paragraph that indicates that the second
sentence is intended to limit or qualify the first in any way.
Furthermore, even assuming that the "this contract" language
in the loss limitation provision creates some confusion as to
the retroactivity of the arbitration provision preceding it, the
arbitrability presumption applied to broad arbitration clauses
would require us to resolve "any doubts concerning the scope
of arbitrable issues . . . in favor of arbitration." Moses H. Cone
Memorial Hosp., 460 U.S. at 24-25.
Appellee further asserts, and the district court agreed, that
the arbitration clause is not retroactively applicable because it
is contained in only the most recent of successive contracts
and therefore the clause cannot be read to constitute a waiver
of Appellee’s right to a judicial forum for previously accrued
claims. As support for this proposition, both the district court
and Appellee rely heavily on Hendrick v. Brown & Root, Inc.,
50 F. Supp. 2d 527 (E.D. Va. 1999), which concluded that an
arbitration clause contained in the last of a series of project-
by-project contracts did not apply to claims that accrued
under previous agreements in that series. Hendrick, too, is
easily distinguishable on its facts. The parties in that case had
no ongoing business relationship like the one that existed
here. Rather, the parties entered into four discrete and sepa-
rate "project-by-project" agreements spanning specific peri-
ods of time and with lengthy gaps between each agreement.
The Hendrick court described the contracts at issue as fol-
lows:
Hendrick was hired pursuant to a different contract
for each period of employment and, pursuant to
those contracts, Hendrick was hired for separate and
distinct projects. On each occasion, he was treated as
16 LEVIN v. ALMS AND ASSOCIATES
a new employee; and, therefore, each time he was
hired, Hendrick was required to submit a new job
application and to complete new tax and other per-
sonnel forms. Each period of employment was for-
mally terminated in writing and Brown & Root
processed termination forms which made clear that
Hendrick was no longer entitled to compensation,
medical coverage and other benefits. As is evident
from each of the four employment contracts, Hend-
rick was an at-will employee and then only for the
particular assignment for which he was hired under
the operative employment contract.
Id. at 529. The court specifically distinguished Zink, discussed
above, in which the 10th Circuit held that the language "[a]ny
controversy between [the parties] arising out of [plaintiff’s]
business or this agreement shall be submitted to arbitration"
applied to claims that accrued before the arbitration agree-
ment was entered into. See Zink, 13 F.3d at 332. Hendrick
found Zink inapplicable to the case before it, stating "Zink
does not apply here because the parties did not have an ongo-
ing relationship under the 1988 employment contract." Id. at
536. According to the Hendrick court, Zink gave the clause
retroactive application because the activity on which the
underlying claim was based "was part and parcel of the ongo-
ing business dealings between the parties." Id.
The circumstances in this case are far more similar to Zink
than Hendrick. Unlike in Hendrick, here there is no evidence
that the parties had stop-and-go business dealings that periodi-
cally ended completely and began from scratch again. Instead,
the parties here had an ongoing relationship that was seam-
lessly renewed on an annual basis. Furthermore, the underly-
ing claims in this case concern events that are "part and
parcel" of the long-standing financial advising relationship
between Appellants and Appellee. Thus, Hendrick does not
support the conclusion that the arbitration provision here is
not retroactively applicable.
LEVIN v. ALMS AND ASSOCIATES 17
Accordingly, given the broad scope of the arbitration clause
applying to "any dispute" between the parties, and in light of
the arbitrability presumption that applies with special force to
broadly written clauses, we find that the district court erred in
holding that claims that accrued before 2007 were not subject
to arbitration. We therefore remand this matter to the district
court for further proceedings consistent with this opinion.
III.
For the foregoing reasons we
REVERSE.