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In affirming an order denying arbitration, the Mississippi Supreme Court held that the dispute was outside the temporal scope of the parties’ most recent arbitration agreement because the agreement did not contain an express provision for retroactive application.
In Amsouth Bank v. Quimby, No. 2006-CA-00826-SCT, 2007 WL 2495112 (Miss. Sept. 6, 2007), Quimby opened a line of credit with Deposit Guaranty National Bank, which later merged with Amsouth. When he opened the line of credit, Quimby allegedly requested credit disability insurance.
Several years later, after the merger, Quimby signed a customer agreement with Amsouth – first in 2000 and again in October 2004. Each customer agreement contained an arbitration clause. After signing the 2000 agreement but before signing the 2004 agreement, Quimby applied for disability benefits, but his application was denied.
Subsequently, in 2005, Quimby sued Amsouth to recover disability benefits. In response, Amsouth moved to compel arbitration pursuant to the customer agreement. The trial court denied the motion.
On appeal, Amsouth argued that the trial court erred in concluding that the dispute did not fall within the arbitration agreement. The Court rejected this argument with respect to both the 2000 agreement and the October 2004 agreement.
Specifically, the Court found that the dispute was outside of the 2000 arbitration agreement based on the Court’s conclusion that the 2000 agreement applied only to disputes arising from a depository account and thus did not apply to the line of credit.
The October 2004 arbitration agreement applied to any account, but the Court found that the dispute was outside the temporal scope of the October 2004 agreement because it did not contain an express provision for retroactive application.
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