|
A federal court in South Carolina ruled that a corporate nonsignatory must arbitrate claims arising out of a contract containing an arbitration agreement because the person controlling the corporation was a party to the contract.
In Benefits in a Card, LLC v. TALX Corporation, No. 6:06-03655-GRA, 2007 WL 750638 (D. S.C. Mar. 7, 2007), TALX and Stecker, the principal owner, manager, president and CEO of Benefits in a Card, entered into an acquisition agreement relating to the sale of stock.
Upon being sued by Benefits in Card, TALX filed a motion to compel arbitration pursuant to an arbitration clause in the acquisition agreement. In opposing the motion, Stecker argued that Benefits in a Card, the named plaintiff, should not be required to arbitrate because the corporation was not a signatory to the agreement.
The Court found that Benefits in a Card was required to arbitrate because even though the corporation did not sign the arbitration agreement, the person in control of the corporation, Stecker, was a party to the agreement. Moreover, Benefits in a Card was required to arbitrate because its claims arose out of the underlying contract and were an attempt to enforce rights under the contract.
Subscribe to a free weekly update on ADR case law and
legislation
|