On appeal from Superior Court of New Jersey, Law Division, Morris County.
Approved for Publication February 28, 1996.
Before Judges Michels and Villanueva. The opinion of the court was delivered by VILLANUEVA, J.A.D.
The opinion of the court was delivered by: VILLANUEVA
The opinion of the court was delivered by VILLANUEVA, J.A.D.
Defendant Prudential Securities Incorporated appeals from an order of the Law Division that denied its motion to dismiss plaintiffs' complaint seeking to recover damages allegedly incurred as the result of defendant's wrongful disclosure of plaintiffs' account information to a third party pursuant to a subpoena and to require plaintiffs to submit all the issues raised in their complaint to arbitration. We affirm.
Plaintiffs each signed an Opening Account Agreement (Account Agreement) with defendant. Each Account Agreement contained the following provisions:
The undersigned agrees, and by carrying an account for the undersigned you agree, all controversies which may arise between us concerning any transaction or the construction, performance or breach of this or any other agreement between us, whether entered into prior, on or subsequent to the date hereof, shall be determined by arbitration.
Any controversy arising out of or relating to my account, to transactions with or for me or to this agreement or the breach thereof, and whether executed or to be executed within or outside of the United States, shall be settled by arbitration.
In addition, the Account Agreements contained two provisions relating to arbitration:
All controversies which may arise between us concerning any transaction or the construction, performance or breach of this or any other agreement between us . . . shall be determined by arbitration;
Any controversy arising out of or relating to my account, to transactions with or for me or to this agreement or the breach thereof, . . . shall be settled by arbitration.
Plaintiffs' daughter and son-in-law were involved in a domestic violence action, and the son-in-law served a subpoena duces tecum upon defendant requiring it to produce documents dealing with all transactions in plaintiffs' accounts. Plaintiffs notified defendant that no documents should be produced until a motion was made by plaintiffs to quash the subpoena. Notwithstanding the fact that defendant agreed to comply with plaintiffs' instruction and the domestic violence matter was settled, defendant turned over the documents. As a result, plaintiffs were drawn into the underlying divorce action.
Plaintiffs filed a complaint seeking damages incurred as a result of defendant's wrongful disclosure of its account information to a third party. Plaintiffs' complaint alleges two causes of action: (1) a breach by one of Prudential's representatives of an oral representation not to produce plaintiffs' documents and records for use in an unrelated matrimonial action; and (2) negligence in providing said documents to counsel for a third party in an unrelated action following the settlement of that action. Defendant filed a motion to dismiss the complaint or to compel arbitration. The trial court, without oral argument and without issuing any oral or written opinion, denied the motion.
On appeal, defendant contends that the trial court erred in failing to dismiss plaintiffs' complaint and to order arbitration. It argues that the underlying dispute between plaintiffs and defendant must be submitted to arbitration under the Federal Arbitration Act, 9 U.S.C.A. §§ 1-307 (FAA or the Act). It further argues that the dispute arose out of the Account Agreements ...