Unpublished Disposition, 860 F.2d 1089 (9th Cir. 1988)

MEMORANDUM^* 

Lewis J. Obi and Betty J. Obi appeal the district court's order sending all the Obis' claims to arbitration and staying judicial proceedings pending the outcome of the arbitration. We affirm.

The controversy arises from the sale of the Obis' residence in Florida. According to the Obis' complaint, Shearson Lehman/American Express, through its employee Timothy Kaatz, acted as broker for the purchaser, Zoller Acceptance Corporation. Under the agreement of sale, Zoller assumed an existing mortgage, granted a second mortgage to the Obis, and transferred to the Obis certain bonds held in an account with Shearson. The Obis contend that Shearson, through Kaatz, misrepresented the character and financial ability of the purchaser, Zoller, causing the Obis substantial losses when Zoller defaulted on the mortgages. The Obis asserted claims under RICO, the Securities Exchange Act, and state law.

In connection with the transfer of bonds from Zoller to the Obis, and the subsequent sale of the bonds by the Obis, the Obis opened an account with Shearson. The Shearson customer agreement signed by the Obis contained a clause providing for arbitration of " [a]ny controversy arising out of or relating to [the Obis'] accounts, to transactions with [Shearson] for [the Obis] or to this Agreement or the breach thereof."

The Obis contend that their claims are independent of their account with Shearson, and accordingly fall outside the scope of the arbitration clause. We disagree. The Obis' account with Shearson was an integral part of the consummation of the sales transaction. Representations made in connection with the purchase may therefore be regarded as "relating to" the Obis' accounts. Similarly, the fact that Shearson and Kaatz initiated the transaction as agents for Zoller does not mean that they performed no services for the Obis in completing the sale. The transfer and sale of bonds was clearly of benefit to, and done at least in part for, the Obis. Thus the sales representations and arrangements relate to "transactions with [Shearson] for [the Obis]."

The Obis argue that this broad construction of the arbitration clause is not compelled by the inherent meaning of the term "relating to." But the term is certainly susceptible to the construction we give it, and "any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Bayman v. Smith Barney, Harris Upham & Co., 784 F.2d 1023, 1024 (9th Cir. 1986) (quoting Moses H. Cone Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24-25 (1983)). The Obis have failed to overcome the strong presumption in favor of arbitration. See Cohen v. Wedbush, Noble, Cooke, Inc., 841 F.2d 282, 283 (9th Cir. 1988).

AFFIRMED.