Estrella v. Damiani

          For Plaintiff: Thomas L. Mirza, Esq.

          For Defendant: Michael Marino, Esq.; Paul D. Ragosta, Esq.; David L. Ward, Esq.; Kristin B. Pettey, Esq.

          DECISION

          STERN, J.

         Defendant, Steven Damiani (Steven), moves this Court for an order determining those issues which are arbitrable and those that are nonarbitrable, severing the arbitrable issues, or, alternatively, staying this judicial proceeding in its entirety pending the outcome of arbitration between Janney Montgomery Scott LLC (Janney) and Armando Damiani (Mandy). Advancing similar arguments, Defendants, Janney and Richard A. Ranone (Ranone), move this Court for an in limine order excluding evidence concerning (1) the validity of Mandy's account with Janney (Janney Account) and (2) the validity of two disputed Transfer on Death forms (TODs). The Plaintiff, Robert Estrella (Estrella), in his capacity as Executor of Lillian Estrella's (Lillian) Estate and Mandy's Estate, has objected to the Defendants' motions.

          I

         Facts and Travel

         On January 8, 2018, Estrella filed his First Amended Complaint (Amended Complaint) in his executory capacity. The Amended Complaint asserts various claims including the following:

Count XI: Declaratory Judgment (Both Estates v. Steven, Ranone, and Janney);

Count XII: Conversion (Both Estates v. Steven, Ranone, and Janney);

Count XIII: Tortious Interference with Inheritance (Lillian's Estate v. Steven, Ranone, and Janney);

Count XIV: Civil Conspiracy (Both Estates v. Steven, Ranone, and Janney);

Count XV: Violation of R.I. Gen. Laws § 9-1-2 (Both Estates v. Steven, Ranone, and Janney);

Count XVI: Breach of Fiduciary Duty (Mandy's Estate v. Ranone and Janney);

Count XVII: Violation of R.I. Gen. Laws § 6-13.1-5.2 (Mandy's Estate v. Ranone and Janney); and

Count XVIII: Constructive Trust (Both Estates v. Steven).

         Janney and Ranone moved to compel arbitration of Estrella's claims based on an arbitration clause (2016 Clause) contained in the Janney "onboarding" paperwork, which purported to transfer into the Janney Account some of Mandy's assets previously held with a different financial institution. Pl.'s Ex. A at 1. Janney and Ranone argued that because Estrella's claims were subject to the 2016 Clause, this case needed to be dismissed or, at the very least, stayed pending arbitration. Id. at 12 ("The FAA requires that where issues before the court are arbitrable, the court shall stay the trial of the action but the court may dismiss, rather than stay, a case when all of the issues before the court are arbitrable."). Estrella opposed the motion, arguing the 2016 Clause was unenforceable because the onboarding paperwork was the product of an unconscionable procedure. Pl.'s Ex. B at 6. Estrella also argued that even if arbitration were appropriate as to Janney, a stay should not issue because he had asserted some nonarbitrable claims. Id. at 12.

         Before this Court issued a decision or held a hearing on the conscionability of the bargaining process, Janney and Ranone discovered a separate, 2009 arbitration agreement (2009 Agreement) entered between Mandy and Janney. Pl.'s Ex. C at 14. Based on the 2009 Agreement, Janney and Ranone again moved to compel arbitration (irrespective of the validity of the onboarding paperwork) and argued that the remainder of the case needed to be dismissed or stayed. Estrella again opposed the motion. Pl.'s Opp'n to Defs.' Mot. Dismiss and Compel Arbitration. On May 1, 2018, Judge Silverstein issued a bench decision in which he did not grant Janney and Ranone's request for a stay, ^[1] denied the request to compel Ranone's claims to arbitration, and ordered Estrella's claims against Janney to arbitration. Order ¶¶ 1-3, May 8, 2018. Since Judge ...