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A federal court in Mississippi allowed non-signatories to an arbitration agreement to compel arbitration of a dispute because the parties bringing the claims relied on the agreement containing the arbitration clause in asserting their claims.
In Holston v. Coldwell Banker Real Estate Corp., No. 4:05CV194-P-A, 2007 WL 902810 (N.D. Miss. Mar. 22, 2007), the Holstons signed an arbitration agreement with Option One, a mortgage company. In their complaint, the Holstons alleged that numerous other parties were involved in racketeering activities based upon the loan agreement.
After the Court granted Option One's motion to compel arbitration, the other defendants moved to arbitrate the claims against them. Relying upon the doctrine of "equitable estoppel," the Court agreed that these non-signatories to the agreement containing the arbitration clause could compel the Holstons to arbitrate.
The Court found that the Holstons relied on the terms of the loan agreement in asserting his claims against the non-signatories. Additionally, the Holstons raised "allegations of substantially interdependent and concerted misconduct" on the part of the non-signatory defendants and Option One.
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