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Lobosco v. BlackRock

November 24, 2009

FRANK LOBOSCO, PLAINTIFF-APPELLANT,
v.
BLACKROCK, INC., AND MERRILL LYNCH, PIERCE, FENNER & SMITH, INC., DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-9342-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 26, 2009

Before Judges Rodríguez, Reisner and Yannotti.

Plaintiff Frank Lobosco appeals from an order entered by the trial court on June 6, 2008, granting a motion by defendants to compel arbitration, and an order entered on April 16, 2008, denying plaintiff's motion for an accounting. For the reasons that follow, we affirm.

On May 15, 1996, plaintiff met with representatives of Merrill Lynch, Pierce, Fenner & Smith Inc. (Merrill Lynch) and Merrill Lynch Investment Managers (MLIM) to open an investment account. On June 14, 1996, plaintiff signed a document entitled, "Merrill Lynch Asset Management Investment Objective," which indicated, among other things, that his "[p]rimary objective is to seek to earn a total rate of return modestly greater than that provided by a Portfolio equally divided between U.S. stocks and bonds."

On June 26, 1996, defendant executed the Merrill Lynch Asset Management Agreement (the Management Agreement), under which Merrill Lynch Asset Management, L.P. (MLAM) agreed to act as his investment manager. The following appears above plaintiff's signature:

BY SIGNING BELOW, THE UNDERSIGNED ACKNOWLEDGE(S): (1) THAT IN ACCORDANCE WITH THE ABOVE PARAGRAPH 28 ON THE THIRD AND FOURTH PAGES OF THIS CONTRACT, THE UNDERSIGNED AGREE(S) IN ADVANCE TO ARBITRATE ANY CONTROVERSIES WHICH MAY ARISE; AND (2) RECEIPT OF A COPY OF THIS CONTRACT.

Paragraph 28 of the Management Agreement states in pertinent part that arbitration would be "final and binding on the parties" and "[t]he parties are waiving their right to seek remedies in court, including the right to jury trial." Paragraph 28 additionally states:

WE AND YOU AGREE THAT ANY CONTROVERSY WHICH MAY ARISE BETWEEN US CONCERNING THIS AGREEMENT OR ANY TRANSACTION OR OTHER AGREEMENT (WHETHER ENTERED INTO BEFORE, WITH OR AFTER THIS AGREEMENT) SHALL BE DETERMINED BY ARBITRATION CONDUCTED BEFORE AND PURSUANT TO THE CONSTITUTION AND RULES OF THE BOARD OF DIRECTORS OF THE NEW YORK STOCK EXCHANGE, INC., OR BEFORE AND PURSUANT TO THE CODE OF ARBITRATION PROCEDURE OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC., AS YOU MAY ELECT. . . .

On March 16, 1998, plaintiff signed the Merrill Lynch IRA/IRRA/SEP/SRA Adoption Agreement (the Adoption Agreement). The following appears above plaintiff's signature:

This Agreement, when signed by me and accepted by Merrill Lynch, Pierce, Fenner, & Smith Incorporated ("Merrill Lynch"), as Custodian, incorporates the Merrill Lynch Individual Retirement Account Custodial Agreement (the "IRA Custodial Agreement"). By signing this agreement (the "Adoption Agreement"), I acknowledge (1) that there are fees for this account, (2) receipt of a copy of the Adoption Agreement and of the Merrill Lynch IRA Disclosure Statement and IRA Custodial Agreement, and (3) that, in accordance with section 6.4 of the IRA Custodial Agreement (on pages 23 and 24 of the Merrill Lynch IRA Disclosure Statement and IRA Custodial Agreement), I am agreeing in advance to arbitrate any controversies which may arise with the custodian.

Section 6.4 of the IRA Disclosure Statement is substantially the same as paragraph 28 of the Management Agreement. Section 6.4 states, among other things, that:

You agree that controversies which may arise between us including, but not limited to, those involving any transaction or the construction, performance or breach of this or any other agreement between us, whether entered into prior, on or ...


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