In Robinson v. Isaacs, 2011 U.S Dist. LEXIS 118070, the U.S. District Court for the Southern District of California granted a petition to compel arbitration filed an investment advisor who was not a signatory to the advisory services contract containing the arbitration clause.  The plaintiff, an investor, sued a broker dealer and one of its investment advisory representatives for negligence and breach of fiduciary duty in connection with certain investments.  The investments were made in 2005 and the Advisory Services Contract between the plaintiff and the broker-dealer was signed a year later, in 2006.

In ruling that the non-signatory representative was entitled to enforce the arbitration agreement, the court cited the “business relationship” between the plaintiff and the representative which had commenced in 2005.  It also cited the close relationship between, and similarity of claims against, the representative and the individual who signed the agreement on behalf of the broker-dealer.  In light of these considerations, equitable principles applied to allow the representative to enforce the arbitration agreement despite not being a signature to that agreement.

Further, the court ruled that the dispute arising out the of the 2005 investments was within the scope of the arbitration clause in the 2006 Advisory Service Contract because that agreement said that it pertained to “existing investments.”