Aste v. Metropolitan Life Insurance Co., No. 1-99-2574
1st District, March 28, 2000
SECOND DIVISION
| KATHRYN G. ASTE, Independent Executrix, of the Estate of MARY G. KENNEY, deceased June 7, 1994, Plaintiff-Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY, METLIFE SECURITIES, INC., Defendants-Appellees, and ANTHONY M. WILLIAMS, Defendant. | Appeal from the Circuit Court of Cook County. Honorable Jennifer Duncan-Brice, Judge Presiding. |
JUSTICE GORDON delivered the opinion of the court:
Plaintiff appeals from an order of the circuit court of Cook County compelling arbitration. On appeal, plaintiff argues that Illinois arbitration law applies to this case, that the arbitration agreement is void for lack of consideration and that the arbitration agreement is void due to violations of the Illinois Securities Law. We reverse.
The plaintiff, Kathryn G. Aste, sued defendants, Metropolitan Life Insurance Company ("Metropolitan"), MetLife Securities, Inc. ("MetLife") and Anthony M. Williams on various grounds including breach of fiduciary duty, constructive fraud and negligence arising out of financial dealings that the decedent, Mary G. Kenney, had with the defendants. Defendants Metropolitan and MetLife moved to compel arbitration based on the arbitration clause in a document signed by one of their employees and by the decedent. The trial court held a hearing on this issue and ruled for defendants. Both sides were represented by counsel.
According to plaintiff's Second Amended Complaint, plaintiff Kathryn G. Aste is the independent executrix of the estate of Mary G. Kenney who died on June 7, 1994. Defendant Anthony Williams was employed by Metropolitan from before April 15, 1993, to July of 1993 as an account representative. His duties included contacting elderly individuals for the purpose of persuading them to invest in products offered by Metropolitan and MetLife. Metropolitan directed Williams to offer its estate planning services to potential customers at no charge in order to allow him to introduce himself to such potential customers. Williams, however, could not assist a potential customer with a transfer of assets to MetLife from another company without the participation of Paul Dooley.
Dooley was employed by Metropolitan and MetLife from before April 15, 1993, until after December 15, 1993. Plaintiff alleges on information and belief that Dooley had all the duties and responsibilities of Williams. Additionally, as a registered securities salesperson for MetLife, Dooley was responsible for assisting clients in transferring assets to MetLife from other companies. Dooley was registered as a securities salesperson with MetLife between June 1, 1993, and October 22, 1993.
In April or May of 1993 Williams contacted Kenney by telephone in order to solicit her use of MetLife's estate planning services. In May and June of 1993 Williams and Dooley met with decedent three or four times. On May 18, Williams prepared an estate analysis report for decedent. On May 20, Dooley interviewed Kenney and executed a MetLife Securities, Inc., "customer profile" form which stated that her objectives were to obtain current income and tax advantages. Additionally, a box marked "no" is checked next to a line which inquires if "the fund's investment objective" differs from the client's investment objective. The form contains an arbitration clause which reads:
"1. MetLife Securities, Inc. (hereinafter "MSI") and the purchaser of the shares, who is the signatory below (hereinafter the "Customer"), agree that any controversy between MSI, its employees, directors, agents, officers or affiliates and the Customer arising out of or relating to any transactions between such parties shall be determined by arbitration. Any arbitration pursuant to this agreement shall be conducted before, and under the rules of, the National Association of Securities Dealers, Inc. Judgement upon the award of the arbitrators may be entered in any federal or state court having jurisdiction.
2. This agreement and any arbitration hereunder shall be governed and construed in accordance with the laws of the State of New York, United States of America, including New York procedural and substantive arbitration laws and rules, without giving effect to conflicts of law principles."
The bottom of the form states that it is the "Tampa Mutual Fund Administrative Office Copy." The customer profile was signed by Dooley (on the line identified as "Registered Representative's Signature") and by Kenney. On May 28 Dooley transferred $212,000 from Kenney's Merrill Lynch Federal Securities Trust to various accounts at MetLife.
After June 17, Williams continued to meet with Kenney on a weekly basis. During that time Williams requested and received from Kenney a "loan" of $70,000 in order to start a tavern business. Dooley and Williams subsequently started a tavern business, known as T.J.'s Pub, which closed shortly after its opening. Williams also received three additional checks for $55,000, $55,000, and $27,000 respectively, from Kenney. As a result of these transactions, plaintiff sued Metropolitan, MetLife, and Williams. Defendants Metropolitan and MetLife moved to compel arbitration based on the arbitration clause in the customer profile and their motion was granted by the trial court. This appeal followed.
Plaintiff first contends that the Uniform Arbitration Act (710 ILCS 5/1 et. seq. (West 1992)) applies to this case. Defendants Metropolitan and MetLife ("defendants") contend that federal arbitration law (9 U.S.C.