from the Jackson Superior Court The Honorable Bruce Markel
III, Judge Trial Court Cause No. 36D01-1611-PL-44
ATTORNEYS FOR APPELLANTS Jason M. Smith W. Brent Gill Smith
Law Services, P.C. Seymour, Indiana.
ATTORNEYS FOR APPELLEES Stacy Walton Long William J. Barkimer
Krieg DeVault LLP Indianapolis, Indiana.
BARNES, SENIOR JUDGE.
David and Rhonda Earley ("the Earleys") appeal the
trial court's stay and order compelling arbitration in
their action against Edward D. Jones & Co., LP
("Edward Jones"), Edward Jackson, and Adam Jackson
(collectively, "Defendants"). We affirm.
The Earleys raise two issues, which we restate as:
I. whether the trial court properly found that the
arbitration agreements between the parties were enforceable;
II. whether the trial court properly found that the Federal
Arbitration Act applied rather than Missouri law.
Edward Jones is a national corporation based in Missouri and
doing business in Jackson County, Indiana, and Edward Jackson
and Adam Jackson were employees/agents of Edward Jones. In
1998, David Earley opened a Roth Individual Retirement
Account ("IRA") with Edward Jones. The Adoption
Agreement, which David signed, provided: "I appoint
Edward Jones to serve as Custodian in accordance with the
terms and conditions of the Edward Jones Self-Directed
Individual Retirement Account Custodial Agreement, which
contains a pre-dispute arbitration clause. I hereby
acknowledge that I have received and read such Agreement and
the Disclosure Statement and Schedule of Fees accompanying
it." Appellants' App. Vol. II p. 31. The Custodial
Agreement provided, in part:
Any controversy arising out of or relating to any of my
accounts or transactions with you, your officers, directors,
agents and/or employees for me, or to this agreement, or the
breach thereof, or relating to transactions or accounts
maintained by me with any of your predecessor or successor
firms by merger, acquisition or other business combinations
from the inception of such accounts shall be settled by
arbitration in accordance with the rules then in effect of
the Boards of Directors of the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc., the Municipal Securities
Rulemaking Board, or the National Association of Securities
Dealers, Inc. as I may elect.
Id. at 44.
In 2005, the Earleys opened a joint account with Edward
Jones. They signed an Account Authorization and
Acknowledgement Form, which provided: "The Edward Jones
Account Agreement and Disclosure Statement contains on page
20 a binding arbitration provision which may be enforced by
the parties. By my/our signature below, I/we have received a
copy of this document . . . and agree to its terms and
conditions." Id. at 45. That agreement
contained an arbitration clause similar to the earlier
In 2009, David executed a revised Roth IRA agreement. David
acknowledged that he had received and reviewed the Retirement
Account Agreement, which contained a binding arbitration
clause similar to the earlier arbitration clauses. The
document also provided: "THESE CONTRACTS CONTAIN A
BINDING ARBITRATION PROVISION . . . WHICH MAY BE ENFORCED BY
THE PARTIES." Id. at 74. Also in 2009, the
Earleys opened traditional IRAs with Edward Jones. They
signed a document acknowledging that they had received and
reviewed the Retirement Account Agreement, which contained a
binding arbitration provision similar to the earlier
provisions. The document also provided: "THESE CONTRACTS
CONTAIN A BINDING ARBITRATION PROVISION . . . WHICH MAY BE
ENFORCED BY THE PARTIES." Id. at 87, 89, 91.
Finally, in 2014, Rhonda opened another IRA account with
Edward Jones. She signed an Account Authorization and
Agreement Form, in which she acknowledged receiving and
reviewing the Account Agreement, which contained a binding
arbitration provision similar to the earlier provisions. The
document also provided: "THE EDWARD JONES ACCOUNT
AGREEMENT CONTAINS . . . A BINDING ARBITRATION PROVISION
WHICH MAY BE ENFORCED BY THE PARTIES." Appellants'
App. Vol. III p. 31. All of the agreements also provided that
the agreement was to be governed by the laws of the State of
In November 2016, the Earleys filed a complaint against the
Defendants regarding a significant decrease in funds that the
Earleys invested with Edward Jones. The Earleys'
complaint alleged breach of contract, negligence,
constructive fraud, and conversion. Defendants filed a motion
to dismiss or to compel arbitration and stay the proceedings.
Defendants alleged that the Earleys' agreements with
Edward Jones contained binding arbitration provisions, that
the disputes fell within the scope of the arbitration
provisions, and that Missouri law governed.
The Earleys responded and argued: (1) the provisions are not
valid under Missouri law because they lack the language and
format required by Missouri Revised Statutes Section 435.460;
and (2) they "were never presented with the arbitration
provisions in question and their signatures were obtained by
misrepresentation as to the substance of the signed documents
which contained the arbitration provisions."
Id. at 48. The Earleys submitted affidavits in which
they alleged that the forms were presented merely as forms to
open an account, they trusted Jackson to advise them of
relevant facts regarding the documents, they were not given
the agreements containing the arbitration provisions, and
Jackson never discussed the agreements or arbitration
provisions with them.
The trial court held a hearing on Defendants' motion. At
the hearing, Defendants argued that the Federal Arbitration
Act ("FAA") preempted Missouri law and governed the
parties' agreements. The trial court then allowed the
parties to submit additional briefs. Defendants argued that
the FAA applied because the contracts involve interstate
commerce and that the Earleys acknowledged in writing that
they received the agreements and that they contained
arbitration provisions. The Earleys then filed another
response arguing that the Defendants' misrepresentations
voided any contracts and that FAA was not controlling. After