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MURKEN V. SUNCOR ENERGY, INC., 2005-NMCA-102, 138 N.M. 179, 117 P.3d 985
ARLO AND JOYCE MURKEN,
on behalf of themselves and others similarly situated,
Plaintiffs,
DEUTSCHE MORGAN GRENFELL, INC. and
JOHN RENDALL,
Defendants,
and W. JACK BUTLER,
Defendant-Appellant
v.
SUNCOR ENERGY, INC.; SYNCRUDE (CANADA), INC.; SHELL (CANADA), INC.;
EXXON-MOBIL, INC.; DEUTSCHE BANK, AG; RAYMOND AND RAWL (EXXON); R.
GEORGE (SUNCOR); BOB PITMAN; AL HYNDMAN (SYNCRUDE); HELMAR
KOPPER (DEUTSCHE BANK); and MERRILL LYNCH, PIERCE, FENNER & SMITH,
INC.,
Third-Party Defendants-Appellees.

Docket No. 24,848
COURT OF APPEALS OF NEW MEXICO
2005-NMCA-102, 138 N.M. 179, 117 P.3d 985
June 29, 2005, Filed
APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY, William F. Lang, District Judge
Released for Publication August 16, 2005.
COUNSEL
Victor R. Marshall, Diane P. Donaghy, Victor R. Marshall & Associates, P.C., Albuquerque, NM, for Appellant
Robert A. Johnson, Johnson & Nelson, P.C., Albuquerque, NM, Joel R. Sharp, Jenkens & Gilchrist, Dallas, TX, for Appellee Merrill Lynch, Pierce, Fenner & Smith, Inc.

JUDGES
RODERICK T. KENNEDY, Judge. WE CONCUR: JAMES J. WECHSLER, Judge, JONATHAN B. SUTIN, Judge
AUTHOR: RODERICK T. KENNEDY

OPINION
KENNEDY, Judge.
{1} Third-party Plaintiff W. Jack Butler appeals from the district court's order compelling him to arbitrate his claims against multiple third-party defendants collectively referred to hereinafter as Merrill Lynch.  Butler's third-party claims arose in the larger context of a securities fraud class action brought by the former shareholders of Solv-Ex Corporation against corporate officers Butler and John Rendall, among others.  In response to Butler's third-party complaint, Merrill Lynch filed a motion to compel arbitration under an equitable estoppel theory. The district court granted the motion to compel arbitration and Butler appealed.
{2} Butler argues that he did not execute an agreement to arbitrate and that the doctrine of equitable estoppel does not apply in this case. We agree, and hold that equitable estoppel cannot be used by a defendant signatory against a plaintiff non-signatory claimant to compel arbitration under the facts of this case. Where, as here, the non-signatory is the plaintiff, and is not alleged to have engaged in substantially interdependent and concerted misconduct with a co-defendant or alleged to have embraced and directly benefitted from the agreement, a defendant signatory cannot use equitable estoppel to prevent the plaintiff from denying the existence of the arbitration agreement.  We therefore reverse the district court on this basis and do not address the remainder of Butler's claims.

BACKGROUND
{3} In 1996, former shareholders of Solv-Ex Corporation filed a lawsuit against Butler, Rendall, Solv-Ex Corporation, and Deutsche Morgan Grenfell, Inc. Both Rendall and Butler subsequently filed separate third-party complaints against Merrill Lynch.  Butler's complaint alleged market manipulation, unlawful combination in restraint of trade, prima facie tort, defamation, and malicious abuse of process.  Specifically, both Rendall and Butler alleged in their separate complaints that Merrill Lynch had dumped Solv-Ex stock on the market, contributing to the fall in the stock's prices.  In response to Butler's third-party complaint, Merrill Lynch filed a motion to compel arbitration, arguing that a pledge agreement between Merrill Lynch and Rendall, Butler's co-defendant in the class action, provided that all controversies between Rendall and Merrill Lynch would be determined by arbitration.
{4} Merrill Lynch argued that because the factual allegations in Butler's third-party complaint were similar to allegations made by Rendall, Butler should be equitably estopped from denying that the arbitration agreement applied to him.  It claimed that under the doctrine of equitable estoppel Butler should be compelled to arbitration if his claims either arose out of the pledge agreement or were factually intertwined with Rendall's.  Butler argued that he was not a signatory to the agreement containing the arbitration clause and that he therefore should not be compelled to arbitrate his claims.  The district court was persuaded by Merrill Lynch's arguments and entered an order compelling Butler to arbitrate his third-party claims.

DISCUSSION
{5} Butler raises four issues on appeal. He argues that (1) he did not execute an agreement to arbitrate and the doctrine of equitable estoppel does not apply in this case; (2) the uncontroverted evidence showed that Rendall did not execute an agreement containing an arbitration provision;
(3) Rendall was not acting as Butler's agent even if Rendall actually did execute a pledge agreement containing an arbitration provision; and (4) Butler's third-party claims were not covered by the arbitration clause of Rendall's alleged agreement.  Because Butler was not a signatory to the arbitration agreement between Rendall and Merrill Lynch, the threshold issue is whether, under the circumstances of this case, Butler can be compelled to arbitration pursuant to the doctrine of equitable estoppel.  We review a district court's grant of a motion to compel arbitration de novo. Alexander v. Calton & Assocs., Inc., 2005-NMCA-034,

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New Mexico Law