Reilly v. WM Financial Services Inc.
Docket: No. 02-17100; D.C. No. CV-00-20563-JW/EAI
Court: Court of Appeals for the Ninth Circuit; February 1, 2004; Federal Appellate Court
John and Patricia Reilly, Trustees of the John and Patricia Reilly Family Trust, appeal the district court's order that confirmed an arbitration award in favor of the defendants under the Federal Arbitration Act (FAA). The Reillys alleged monetary losses due to violations of federal securities laws and California state laws, leading the district court to compel arbitration. A National Association of Securities Dealers panel denied their claims and the district court subsequently confirmed this arbitration award. The Reillys argue on appeal that there is a genuine issue regarding whether they agreed to arbitrate, specifically disputing whether they received or saw the application form that included the arbitration clause. They acknowledge signing a document indicating they had read and agreed to the arbitration section but maintain that they did not see the actual clause. The court reviews the district court’s confirmation of the arbitration award for factual findings that are not clearly erroneous and legal questions de novo. Under 9 U.S.C. § 4, a jury trial is required only if there is a legitimate issue regarding the existence or scope of the arbitration agreement. Federal courts apply state law principles for contract formation, and since this case originated in California, California law governs. The defendants provided the signed investment account agreement, which confirmed the Reillys' acknowledgment of the arbitration clause. The Reillys failed to produce specific facts to support their claim of a triable issue regarding the arbitration agreement's validity. Their declarations stating they did not see or approve the arbitration clause do not create a triable issue, as California law holds that parties can be bound by terms they did not read or understand. Additionally, the existence of the arbitration clause was not in dispute, and the court found that the terms were readily available to the parties. The district court's order confirming the arbitration award is affirmed, and this decision is not intended for publication or citation in other cases except as permitted by Ninth Circuit Rule 36-3.