United States District Court, D. Maryland
CATHERINE C. BLAKE UNITED STATES DISTRICT JUDGE
before the court is defendant Financial West Investment
Group, Inc.'s motion to compel arbitration, seeking
dismissal of this case so the parties may resolve this matter
via arbitration. For the reasons stated below, the court will
deny defendant's motion to compel arbitration without
AND PROCEDURAL HISTORY
David Kirkwood is a Maryland resident and former client of
defendant Financial West Investment Group, Inc.
("FWG"). FWG is a broker-dealer agency licensed by
the Financial Industry Regulatory Authority. FWG's
Hampstead, Maryland branch office's registered
representative was Gary Steciuk from 2002 until December
2011. ECF 3 at ¶ 5, 7. Through its regional offices, FWG
solicited clients to invest funds in various financial
instruments, including annuities.
April 5, 2004, FWG opened an annuity account for Mr. Kirkwood
with Mr. Steciuk serving as his FWG stockbroker. ECF 57-4 at
p. 2. Mr. Steciuk oversaw and managed Mr. Kirkwood's
annuity account until 2014. In July 2014, Mr. Kirkwood first
became aware that Mr. Steciuk was engaged in fraudulent
activity related to the annuity account. Mr. Kirkwood claimed
that, beginning in 2006 and continuing until July 2014, Mr.
Steciuk defrauded Mr. Kirkwood by soliciting Mr. Kirkwood to
invest more than $400, 000 in illegitimate annuity
investments. ECF 3 at ¶ 11. Rather than investing Mr.
Kirkwood's funds into legitimate financial instruments,
Mr. Steciuk instead invested them into his own accounts and
used the funds to his benefit, causing Mr. Kirkwood
ultimately to lose more than $350, 000. ECF 3 at ¶¶
12, 16. On March 27, 2015, Mr. Steciuk pleaded guilty in this
district to one count of mail fraud, ECF 3 at p. 56, after
having been charged with several federal offenses in
connection with Mr. Kirkwood's and other defrauded
investors' accounts, ECF 3 at p. 19. Mr. Steciuk remains
incarcerated at a federal facility. ECF 3 at¶7.
18, 2017, Mr. Kirkwood initiated this suit, alleging breach
of contract, fraud, constructive fraud, and negligent
supervision. On June 6, 2018, FWG filed its motion to compel
arbitration. The motion has been fully briefed and no oral
argument is necessary.
United States Supreme Court has identified arbitration
agreements as "a specialized kind of forum-selection
clause that posits not only the situs of suit but also the
procedure to be used in resolving the dispute."
Scherk v. Alberto-Culver Co., 417 U.S. 506, 519
(1974). "[A] motion to dismiss based on a
forum-selection clause should be properly treated under Rule
12(b)(3) as a motion to dismiss on the basis of improper
venue." Sucampo Pharm., Inc. v. Astellas Pharma,
Inc., 471 F.3d 544, 550 (4th Cir. 2006); see also
Aggarao v. MOL Ship Mgmt. Co., 675 F.3d 355, 365-66
& n. 9 (4th Cir. 2012) (analyzing a dismissal in favor of
arbitration under Rule 12(b)(3)). Thus, motions to compel
arbitration may properly be treated as motions to dismiss for
improper venue pursuant to Fed.R.Civ.P. 12(b)(3).
a motion to dismiss under Rule 12(b)(3), the court is
permitted to consider evidence outside the pleadings,"
Aggarao, 675 F.3d at 365-66 (citing
Sucampo, 471 F.3d at 550). Facts should be viewed in
the light most favorable to the plaintiff, and the plaintiff
is obligated "to make only a prima facie showing of
proper venue in order to survive a motion to dismiss."
Id. at 366 (internal citations omitted).
policy has long favored the resolution of disputes through
arbitration. New Prime, Inc. v. Oliveira, __ S.Ct.
__, No. 17-340, 2019 WL 189342, at *9 (U.S. Jan. 15, 2019)
(quoting Moses H. Cone Mem 7 Hosp. v. Mercury
Constr. Corp.. 460 U.S. 1, 24(1983)). Under the Federal
Arbitration Act ("FAA"), arbitration agreements are
"valid, irrevocable, and enforceable, save upon such
grounds as exist at law or in equity for the revocation of
any contract." 9 U.S.C. § 2. Generally, however,
courts may not compel parties to submit to arbitration any
dispute they did not agree to arbitrate. Int 7
Paper Co. v. Schwabedissen Maschinen & Anlagen
GMBH, 206 F.3d 411, 416 (4th Cir. 2000) (internal
to the FAA and related case law, "the question of who
decides arbitrability is itself a question of contract."
Henry Schein, Inc. v. Archer & White Sales, Inc.,
__ S.Ct.__, No. 17-1272, 2019 WL 122164, at *2 (U.S.
Jan. 8, 2019). Jurisdiction to resolve the arbitrability of
an agreement generally resides with the district court unless
the arbitration agreement specifically assigns the issue of
arbitrability to the arbitrator. Simply Wireless, Inc. v.
T-Mobile US, Inc., 877 F.3d 522, 526 (4th Cir. 2017)
(holding that courts should resolve questions of
arbitrability absent clear and unmistakable evidence, beyond
the mere presence of an expansive arbitration clause, that
the parties intended for an arbitrator to determine
arbitrability) (quoting Hayes v. Delbert Servx.
Corp., 811 F.3d 666, 671 n. 1 (4th Cir. 2016) and
Peabody Holding Co. v. United Mine Workers of
Am., Int'l Union, 665 F.3d 96, 102 (4th Cir. 2012))
(internal quotation marks and further internal citations
omitted), abrogatedon other grounds by Schein, 2019
WL 122164 at *4. Courts should consider any challenge to the
validity of the specific agreement to arbitrate (as opposed
to the validity of the entire contract) before ordering a
case to arbitration. Rent-A-Center, West, Inc. v.
Jackson, 561 U.S. 63, 70-71 (2010) (internal citations
and quotation marks omitted).
motion to compel arbitration, FWG requested that the court
dismiss the case so that the parties may resolve their
dispute in arbitration, as the parties purportedly agreed to
do when they signed the new account form. See ECF
57-4 at p. 2. In his opposition, Mr. Kirkwood did not argue
that his claims against FWG were not covered by the
arbitration agreement, nor did he assert that the parties
were not subject to a valid contract. Instead, Mr. Kirkwood
argued, via an affidavit attached to his opposition, that the
specific arbitration agreement, contained within the new
account form, should not be enforced because his signature on
the form was forged, and that, as a result, he never agreed
to arbitrate this or any other dispute with FWG. FWG
responded to Mr. Kirkwood's forgery claims by arguing
that Mr. Kirkwood, in attempting to enforce FWG's
contractual obligations stemming from the allegedly-forged
new account form, was equitably estopped from asserting that
the arbitration agreement contained in the same form was
the court notes that a claim of a forged signature on an
agreement containing an arbitration provision falls under the
court's jurisdiction to resolve because such claims go to
the arbitrability of a dispute and because there is no
indication that the parties assigned the issue of
arbitrability to an arbitrator. In Monk v. Perdue Farms,
Inc., the district court first identified forgery as a
matter of arbitrability rather than a question of
enforceability of a contract in its entirety. 12 F.Supp.2d
508, 509 (D. Md. 1998) ("when the allegation is forgery,
a party is claiming that he or she never entered into the
contract containing an arbitration clause in the first place.
Such a claim is for the Court to resolve prior to staying an
action pending arbitration."). The Fourth Circuit
agreed, finding that "when a party reasonably claims
that it never signed the agreement containing the arbitration
clause, the court, not an arbitrator, must determine if the
party is bound by it." Gregory v. Interstate/Johnson
Lane Corp.,188 F.3d 501, 1999 WL 674765, at * 7 (4th
Cir. Aug. 31, 1999) (per curiam) (citing Monk, 12
F.Supp.2d at 509) (further internal citations omitted),
dispute regarding the signature on an agreement with an
arbitration provision was again identified as an
arbitrability issue as recently as 2015, when Chief Judge
Bredar of this court noted that parties who prove they did
not sign an agreement with an arbitration clause could not be
bound by such a clause. Roach v. Navient Solutions,