Court of Appeals of Missouri, Western District, Second Division
from the Circuit Court of Cole County, Missouri The Honorable
Patricia S. Joyce, Judge.
Karen King Mitchell, Presiding Judge, and Cynthia L. Martin
and Gary D. Witt, Judges
King Mitchell, Presiding Judge.
Graves appeals from the trial court's denial of his
motion to dismiss or stay the litigation and compel
arbitration with Central Trust Bank (Central), his former
employer. Graves argues that Central is bound by the
mandatory arbitration provision of Graves's employment
contract with IFC Holdings, Inc. (INVEST), either as a
third-party beneficiary of that contract or by the doctrine
of equitable estoppel. We affirm.
was employed by Central "to engage in marketing and sale
of . . . Investment Products, " which Central apparently
acquired from INVEST. Graves was also employed by INVEST; he
had separate employment contracts with each entity. After
nearly ten years of working for Central, Graves abruptly
departed one day for lunch and never returned. Central
discovered later that day that Graves had begun working for
Wells Fargo Advisors. Within days, Central began receiving
requests from Wells Fargo Advisors to transfer brokerage and
related bank accounts from customers that had been served by
Graves while he was employed with Central and INVEST.
filed suit against Graves, alleging promissory estoppel
(based upon representations Graves had made to Central
regarding his impending retirement and actions taken by
Central in reliance on those representations) and breach of
contract (based upon Graves's solicitation of brokerage
business from Central/INVEST customers for the benefit of
himself in his new position at Wells Fargo
Advisors). Graves filed a Motion to Dismiss, or in
the Alternative, Motion to Stay Proceedings and Compel
Arbitration. Graves argued that Central's claims were
governed by the mandatory arbitration rules of the Financial
Industry Regulatory Authority (FINRA). Central opposed
the motion, arguing that there was no agreement to arbitrate
between Central and Graves. Central argued: (1) that it was
not subject to FINRA's mandatory arbitration rule because
it was neither a member nor an "associated person"
under FINRA's definitions governing the scope of its
mandatory arbitration rule; (2) Graves's agreement to
arbitrate disputes found in FINRA form U-4 did not apply to
Central; and (3) nothing in the contract between Graves and
Central mandated arbitration. Graves responded by arguing
that: (1) his employment contract (with Central) mandated his
compliance with all applicable securities laws and
regulations (including the FINRA arbitration rule); and (2)
Central was a third-party beneficiary of Graves's U-4
form, which authorized him to sell securities and mandated
arbitration. The trial court denied Graves's motions
without explanation. Graves appeals.
raises a single point on appeal. He argues that the trial
court erred in denying his motion to compel arbitration
because Central was bound by FINRA's mandatory
arbitration rule insofar as: (1) Central was a third-party
beneficiary of the employment contract between Graves and
INVEST, thus binding Central to INVEST's obligation to
arbitrate; and (2) Central was estopped from denying its
obligation to arbitrate because it accepted the benefits of
Graves's employment with INVEST. We disagree.
Standard of Review
trial court's judgment will be affirmed unless there is
no substantial evidence to support it, it is against the
weight of the evidence, or it erroneously declares or applies
the law.'" Eaton v. CMH Homes, Inc., 461
S.W.3d 426, 431 (Mo. banc 2015) (quoting Robinson v.
Title Lenders, Inc., 364 S.W.3d 505, 510 (Mo. banc
2012)). "'Missouri contract law applies to determine
whether the parties have entered a valid agreement to
arbitrate.'" Id. (quoting State ex rel.
Vincent v. Schneider, 194 S.W.3d 853, 856 (Mo. banc
2006)). "Whether the trial court should have granted a
motion to compel arbitration is a question of law that [we]
review de novo." Id.
Central does not challenge the preservation of Graves's
point on appeal, we question whether his claim before us is
properly preserved. Though the crux of his claim has always
been that arbitration is required by FINRA rules, his method
of seeking to apply those rules to Central has varied. Below,
he argued that Central's claims were governed by the
mandatory arbitration rule of FINRA because his employment
contract (with Central) mandated his compliance with all
applicable securities laws and regulations (including the
FINRA arbitration rule) and that Central was a third-party
beneficiary of Graves's U-4 form, which authorized him to
sell securities and mandated arbitration. On appeal (in his
point relied on), however, he argues that Central's
claims are governed by the FINRA mandatory arbitration rule
because Central is a third-party beneficiary of his contract
with INVEST, rather than his U-4 form, and that Central is
estopped from denying arbitration, again by accepting
benefits of his contract with INVEST.
appellant must properly preserve their allegations of error
in order to secure review on appeal." Blanks v.
Fluor Corp., 450 S.W.3d 308, 383 (Mo. App. E.D. 2014).
"We generally will not convict the trial court of error
on an issue that was not put before it to decide."
Id. "A point is preserved for appeal only if it
is based on the same theory presented at trial."
Id. at 384. "A party may not advance a new
[theory] on appeal." Id. "Nor may the
party alter or broaden the scope of the [theory] voiced at
trial." Id. "Rather, an appellant must
maintain a consistent theory of [error]." Id.
Here, it appears that Graves's theory has morphed from
that presented below. But as Central raises no complaint, we
will review Graves's claim on the merits.
FINRA's Mandatory Arbitration Rule
has published a manual containing all of its operating rules.
In the manual is FINRA's Code of Arbitration Procedure
for Industry Disputes. In that code, Rule 13200(a) provides:
"Except as otherwise provided in the Code, a dispute
must be arbitrated under the Code if the dispute arises out
of the business activities of a member or an associated
person and is between or among: Members; Members and
Associated Persons; or Associated Persons." FINRA Rule
13100(a) defines "associated person" as "a
person associated with a member, ...