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HomeMy WebLinkAbout03-3622JAMES N. SCIIEUREN and : IN THE COURT OF COMMON PLEAS OF BARBARA D. SCHEUREN, his wife : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiffs VS. NO. CIVIL TERM AMERICAN EXPRESS FINANCIAL ADVISORS, INC.; IDS LIFE INSURANCE COMPANY AND DORIS E. BRYTZ, Defendants : CIVIL ACTION - LAW PRAECIPE FOR ISSUANCE OF A WRIT OF SUMMONS To the Prothonotary: Kindly issue a writ of summons in the above-captioned action. Please forward the writ of summons to the Sheriff of Cumberland County for personal service on the Defendants as follows: American Express Financial Advisors, Inc. and IDS Life Insurance Company Donald Weaver, Vice President 3500 Market Street, Suite 200 Camp Hill, PA 17011 Doris E. Brytz American Express Advisors, Inc. 5500 Carlisle Pike Mechanicsburg, PA 17050 CO E DYNE, P.C i Date: Q [¢i HENRY F. COYNE, QUIRE 3901 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 Pa. S. Ct. No. 06250 Attorneys for Plaintiffs ?? ??? ,? ? ?? ?? ea c< <.? -. t:? c_ '_` ? e: r?_ - y?, i. ? n e.a c >? c Commonwealth of Pennsylvania County of Cumberland WRIT OF SUMMONS JAMES N. SCHEUREN and BARBARA D. SCHEUREN, his wife Court of Common Pleas Plaintiff Vs. No. 03-3622 In CivitAction-Law AMERICAN EXPRESS FINANCIAL ADVISOR, INC., IDS LIFE INSURANCE COMPANY, DONALD WEAVER, VICE PRESIDENT 3500 MARKET ST., STE. 200, CAMP HILL PA 17011 DORIS E. BRYTZ 5500 CARLISLE PIKE, MECHANICSBURG PA 17055 Defendant To 5AMERICAN EXPRESS FINANCIAL ADVISOR, INC., IDS LIFE INS. CO., DOMALD WEAVER,VP AND DORIS E BRYTZ; You are hereby notified that JAMES N. AND BARBARA D. SCHEUREN, HUSBAND AND WIFE the Plaintiff has / have commenced an action in Civil Action- Law against you which you are required to defend or a default judgment may be entered against you. (SEAL) CURTIS R. LONG Prothonotary / Date JULY 30, 2003 By Deputy Attorney: Name: HENRY F. COYNE, ESQ. Address: 3901 MARKET ST. CAMP HILL PA 17011 Attorney for: Plaintiff Telephone: (717) 737-0464 Supreme Court ID No. 6250 FOX ROTHSCHILD LLP BY: Joshua Horn, Esquire and David T. Games, Esquire IDENTIFICATION NO. 71799, 85998 2000 MARKET STREET, TENTH FLOOR PHILADELPHIA, PA 19103-3291 (215 299-2000 JAMES N. SCHEUREN and BARBARA D. SCHEUREN, H/W, Plaintiffs, V. AMERICAN EXPRESS FINANCIAL ADVISORS, INC., IDS LIFE INSURANCE COMPANY, DONALD WEAVER, VICE PRESIDENT and DORIS E. BRYTZ, Defendants: ATTORNEYS FOR DEFENDANTS AMERICAN EXPRESS FINANCIAL ADVISORS, INC. AND IDS LIFE INSURANCE COMPANY COURT OF COMMON PLEAS CUMBERLAND COUNTY NO. 03-3622 IN CIVIL ACTION-LAW ENTRY OF APPEARANCE TO THE PROTHONOTARY: Kindly enter the appearance of Joshua Horn, Esquire and David T. Games, Esquire on behalf of defendants, American Express Financial Advisors, Inc. and IDS rife Insurance Ccyxtpany, ?n the above- captioned matter. David T. Games, Esquire FOX ROTHSCHILD LLP 2000 Market Street, 10'h Floor Philadelphia, PA 19103 Telephone: (215) 299-2000 Telecopier: (215) 299-2150 Attorneys for Defendants American Express Financial Advisors, Inc. and IDS Life Insurance Company r; -c: m , -. - . r;'i v _ u.• ?', ; .. G ?-' ; ?;_ , r: ?' ?_ N .. .:J ..! -? FOX ROTHSCHILD LLP BY: Joshua Hom, Esquire and David T. Games, Esquire IDENTIFICATION NO. 71799, 85998 2000 MARKET STREET, TENTH FLOOR PHILADELPHIA, PA 19103-3291 (215) 299-2000 ATTORNEYS FOR DEFENDANTS AMERICAN EXPRESS FINANCIAL ADVISORS, INC., IDS LIFE INSURANCE COMPANY, DONALD !WEAVER, VICE- PRESIDENT AND DOPE IS E. BRYTZ JAMES N. SCHEUREN and BARBARA D. SCHEUREN, H/W, Plaintiffs, COURT OF COMMON PLEAS CUMBERLAND COUNTY V. AMERICAN EXPRESS FINANCIAL ADVISORS, INC., IDS LIFE INSURANCE COMPANY, DONALD WEAVER, VICE PRESIDENT and DORIS E. BRYTZ, NO. 03-3622 IN CIVIL ACTION-LAW Defendants: ENTRY OF APPEARANCE TO THE PROTHONOTARY: Kindly enter the appearance of Joshua Horn, Esquire and David T. Games, Esquire on behalf of defendants, Donald Weaver, Vice-President and Doris E. Bryt?, i e above-ca 1 atter. r Josh om, Esquire Dav d T. Games, Esquire FOX ROTHSCHILD LLP 2000 Market Street, I0`h Floor Philadelphia, PA 19103 Telephone: (215) 299-2000 Telecopier: (215) 299-2150 Attorneys for Defendants American Express Financial Advisors, Inc., IDS Life Insurance Company, Donald Weaver, Vice-President: and Doris E. Brytz PHI 529345vl 08/16/03 ,_. ?- ???? 'CAL 'c? ?t [; i_ C ? Uc?'.`.: i. ?. SHERIFF'S RETURN - REGULAR CASE NO: 2003-03622 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND SCHEUREN JAMES N ET AL VS AMERICAN EXPRESS FINANCIAL BRYAN WARD , Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, says, the within WRIT OF SUMMONS was served upon BRYTZ DORIS E the DEFENDANT , at 1610:00 HOURS, on the 13th day of August 2003 at 5521 CARLISLE PIKE MECHANICSBURG, PA 17055 by handing to DORIS E BRYTZ a true and attested copy of WRIT OF SUMMONS together with and at the same time directing Her attention to the contents thereof. Sheriff's Costs: Docketing 6.00 Service 6.90 Affidavit .00 Surcharge 10.00 .00 22.90 Sworn and Subscribed to before me this )11 w day of ?JiuLS A.D. i.O / Cy r?thonotary So Answers: R. Thomas Kline 08/15/2003 HENRY COYNE By : Dep y S /her`i?f fV SHERIFF'S RETURN - REGULAR CASE NO: 2003-03622 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND SCHEUREN JAMES N ET AL VS AMERICAN EXPRESS FINANCIAL RONALD HOOVER , Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, says, the within WRIT OF SUMMONS was served upon AMERICAN EXPRESS FINANCIAL ADVISORS INC the DEFENDANT , at 1550:00 HOURS, on the 4th day of August 2003 at 3500 MARKET STREET STE 200 CAMP HILL, PA 17011 by handing to CRAIG STILES, GENERAL VICE PRESIDENT, ADULT IN CHARGE a true and attested copy of WRIT OF SUMMONS together with and at the same time directing His attention to the contents thereof. Sheriff's Costs: Docketing 18.00 Service 9.66 Affidavit .00 Surcharge 10.00 .00 37.66 Sworn and Subscribed to before me this .2? day of ye l ?zo 3 A.D. ,? f p?J QXthonotary So Ans wers: R. Thomas Kline 08/15/2003 HENRY COYNE By: Deputy Sheriff SHERIFF'S RETURN - REGULAR CASE NO: 2003-03622 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND SCHEUREN JAMES N ET AL VS AMERICAN EXPRESS FINANCIAL RONALD HOOVER Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, says, the within WRIT OF SUMMONS was served upon IDS LIFE INSURANCE COMPANY DEFENDANT , at 1550:00 HOURS, on the 4th day of August at 3500 MARKET STREET STE 200 CAMP HILL, PA 17011 by handing to the 2003 CRAIG STILES, GENERAL VICE PRESIDENT, ADULT IN CHARGE a true and attested copy of WRIT OF SUMMONS together with and at the same time directing His attention to the contents thereof. Sheriff's Costs: Docketing 6.00 Service .00 Affidavit .00 Surcharge 10.00 .00 16.00 Sworn and Subscribed to before me this ?-7c-_ day of 2ov-3 A.D. (2 j Prothonotary So Answers: R. Thomas Kline 08/15/2003 HENRY COYNE By: Deputy Sheriff SHERIFF'S RETURN - REGULAR CASE NO: 2003-03622 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND SCHEUREN JAMES N ET AL VS AMERICAN EXPRESS FINANCIAL RONALD HOOVER Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, says, the within WRIT OF SUMMONS was served upon WEAVER DONALD the DEFENDANT , at 1550:00 HOURS, on the 4th day of Auqust 2003 at 3500 MARKET STREET STE 200 CAMP HILL, PA 17011 by handing to CRAIG STILES, ADULT IN CHARGE a true and attested copy of WRIT OF SUMMONS together with and at the same time directing His attention to the contents thereof. Sheriff's Costs: Docketing 6.00 Service .00 Affidavit .00 Surcharge 10.00 .00 16.00 Sworn and Subscribed to before me this d7 0?1 day of o2.(JtL3 A.D. / Q OD.. , (Q,o? Fr thonotary ? So Answers: R. Thomas Kline l 08/15/2003 HENRY COYNE By: Deputy Sheriff PRAECIPE FOR LISTING CASE FOR ARGUMENT COURT TO THE PROTHONOTARY OF CUMBERLAND COUNTY: Please list the within matter for the next Argument Court. IN RE: JAMES N. SCHEUREN AND : IN THE COURT OF COMMON PLEAS OF BARBARA D. SCHEUREN, : CUMBERLAND COUNTY, PENNSYLVANIA Husband and Wife,: Plaintiffs Vs. NO.03-3622 AMERICAN EXPRESS FINANCIAL (ADVISORS, INC. IDS LIFE INSURANCE CIVIL ACTION - ACTION Ci) COMPANY, DONALD WEAVER, VICE r_ PRESIDENT AND DORIS E. BRYTZ, r" r Defendants o, n e. r= _ Matter to be Argued: sv - r- Defendant Brytz's Objections to Plaintiffs' First Set Interrogatories and Plaintiffs' First Request f or Production of Documents. 1. Identify counsel who will argu e case: a. For Plaintiffs: Henry F. Coyne, Esquire Coyne & Coyne,P.C. Address: 3901 Market Street Camp Hill, PA 17011 Telephone: (717) 737-0464 b. For Defendants: Joshua Horn, Esquire Fox Rothchild Address: 2000 Market Street, Tenth Floor Philadelphia, PA 19103-3291 Telephone: (215) 299-2000 2. I will notify all parties in writing within two days that this case has been listed for argument. 3. Argument Court Date: June 1, 2005 4ttoo y forPeti o r 1 01& 16 S TO THE PROTHONOTARY OF CUMBERLAND COUNTY: JAMES N. SCHEUREN AND BARBARA D. SCHEUREN, Husband and Wife,: Plaintiffs VS. AMERICAN EXPRESS FINANCIAL ADVISORS, INC. IDS LIFE INSURANCE COMPANY, DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ, Defendants : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA NO.03-3622 PRAECIPE CIVIL ACTION -ACTION Petitioner request the above captioned case be removed from the argument list schedule for June 1, 2005 and specially set for a discovery conference with The Honorable Kevin A. Hess. Attorney for Petitions 1 r- CERTIFICATE OF SERVICE I, Henry F. Coyne, Esquire, of Coyne & Coyne, P.C., hereby certify that true copy of the foregoing Praecipe was served this date upon the below-referenced individual at the below listed address by way of first class mail, postage pre-paid: Joshua Horn, Esquire Fox Rothschild, LLP 2000 Market Street, Tenth Floor Philadelphia, Pa 19103-3291 Dated: 7 Henry F. Coyne, Esquir Attorney for Plaintiffs 2 _, 'X C' ' , _ _? j=, . ?. } 20 James N. Scheuren and Barbara D. Scheuren, husband and wife v. American Express Financial Advisors, Inc. IDS Life Insurance Company, Donald Weaver, Vice President and Doris E. Brytz IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 03-3622 CIVIL TERM ORDER OF COURT AND NOW, June 2, 2005, the above case is stricken from the June 1, 2005 Argument list as being in violation of Cumberland County Local Rule of Court 210-04 regarding discovery motions. By the Court, IPA+00?) G r E. Hoffer, P.J. Henry F. Coyne, Esquire For the Plaintiff Joshua Horn, Esquire For the Defendant Court Administrator .lhk VINVAIASNN3<4 il1NtlCl, 91 :01 WV £- Nnf 50oz AdVIONGFU.Gad 3H1 3G 3oHljD-43lH JAMES N. SCHEUREN and BARBARA D. SCHEUREN, h/w, Plaintiffs Vs. AMERICAN EXPRESS FINANCIAL ADVISORS, et al., Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. CIVIL 03-366 IN RE: DEFENDANTS' MOTION TO COMPEL ARBITRATION ORDER AND NOW, this Z day of September, 2005, on relation of the Prothonotary that counsel for the defendants is seeking to withdraw his appearance and it further appearing that no complaint has been filed in this case, action on the defendants' motion to compel arbitration is DEFERRED pending disposition of counsel's motion to withdraw his appearance. BY THE COURT, ../1 /d2? Hess, J. Xnry F. Coyne, Esquire For the Plaintiffs r - "hua Horn, Esquire For the Defendants Am bc. V;K? A ks r, -1 di ?I :£ Wd i Z d3s SON 1 tiff G^ i LLB 1 3611.3G T U:0-4,1111A FOX ROTHSCHILD LLP BY: JOSHUA HORN, ESQUIRE IDENTIFICATION NO. 71799 2000 MARKET STREET, TENTH FLOOR PHILADELPHIA, PA 19103-3291 Telephone: (215) 299-2000 Facsimile: (215) 299-2150 JAMES N. SCHEUREN and BARBARA D. SCHEUREN, hlw, Plaintiff, V. AMERICAN EXPRESS FINANCIAL ADVISORS, INC., et al., Defendants. ATTORNEY FOR DEFENDANTS COURT OF COMMON PLEAS CUMBERLAND COUNTY CIVIL ACTION DOCKET NO. 03-3622 MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS' MOTION TO COMPEL ARBITRATION PURSUANT TO 42 PA. C.S.A $ 7304 Defendants, American Express Financial Advisors ("AEFA") (nikla "Ameriprise Financial, Inc."), IDS Life Insurance Company ("IDS") and Doris E. Brytz (`Brytz") (collectively, the "Defendants"), by and through their attorneys, Fox Rothschild LLP, hereby submit the following memorandum of law in support of their motion to compel arbitration and, in support thereof, state as follows: I. INTRODUCTION: Pursuant to the American Express Brokerage IRA Application and client agreement (collectively, the "Agreement") entered into by James N. Scheuren ("Mr. Scheuren") with AEFA, he and Barbara D. Scheuren ("Mrs. Scheuren) (collectively, the "Plaintiffs") must submit any and all disputes to arbitration before the National Association of Securities Dealers ("NASD"). In contravention of the agreement to arbitrate, Plaintiffs filed a writ of summons with this Court concerning services that Defendants provided to them; transactions executed through Defendants; and an account that Mr. Scheuren purchased from IDS through Defendants and maintained with Defendants. Even though defendants requested that Plaintiffs arbitrate these proceedings, Plaintiffs have refused to do so. This attempt to bypass the arbitration provisions of the Agreement does not change the undeniable fact that this proceeding must be arbitrated before the NASD. Therefore, Plaintiffs' writ of summons should be dismissed with prejudice and this matter submitted to arbitration before the NASD. 1 111. FACTUAL BACKGROUND: In or about August 2000, Plaintiffs sought financial planning advice from Brytz, a financial advisor associated with AEFA, with respect to the possible liquidation of a jointly held DRIP account maintained with Mr. Scheuren's employer, PP&L. See Affidavit of Faye Atwood at 13, which is attached to Defendants' motion as Exhibit "B" (the "Atwood Affidavit"). Ultimately, Plaintiffs liquidated that DRIP account and Mr. Scheuren used the proceeds to purchase an annuity from IDS, which he purchased through AEFA and Brytz. On April 10, 2001, Plaintiffs submitted a written complaint to AEFA alleging inadequate services and, in particular, raised issues surrounding the annuity that Mr. Scheuren purchased from Although Mr. Scheuren and Mrs. Scheuren jointly commenced these proceedings, the only "account" that Plaintiffs have placed at issue is an annuity that Mr. Scheuren purchased individually from IDS, which he maintains with Defendants. To the extent that Mrs. Scheuren intends to make claims about any accounts she owns jointly with Mr. Scheuren or services that were provided to her and Mr. Scheuren, she is equally subject to the agreement to arbitrate. To date, Plaintiffs have not made claims regarding any "joint" account maintained with Defendants and Mrs. Scheuren has made no claims in her individual capacity. The only other claims that Plaintiffs have asserted surround the incursion of tax liability from the liquidation of their jointly held DRIP maintained with Mr. Scheuren's employer, Pennsylvania Power & Light ("PP&L"), the proceeds of which were used to fund Mr. Scheuren's investment with IDS. Accordingly, and as set forth more fully below, Plaintiffs must pursue their claims through arbitration. IDS, as well as tax liability Plaintiffs purportedly incurred when they liquidated the PP&L jointly held DRIP that was used to fund Mr. Scheuren's annuity acquisition.2 See Atwood Affidavit at ¶ 4 and Exhibit "1" thereto. After investigating Plaintiffs' complaint, AEFA determined that the complaint was not justified and, on or about June 20, 2001, advised Plaintiffs' counsel accordingly. See Atwood Affidavit at ¶ 5 and Exhibit "2" attached thereto. Not satisfied with the response that they received from AEFA, on or about August 15, 2002, Plaintiffs filed a complaint with the Pennsylvania Securities Commission ("PSC"), making the same allegations as those set forth in their letter complaint to AEFA. See Atwood Affidavit at ¶ 6 and Exhibit "3" attached thereto. The PSC, on October 20, 2002, reached the same conclusion as AEFA, and dismissed Plaintiffs' complaint as not justified. See Atwood Affidavit at ¶ 7 and Exhibit "4" attached thereto. On June 3, 2003, Mr. Scheuren executed an American Express Brokerage IRA Application. Attached to the application was the client agreement that would have been provided to Mr. Scheuren at the time he signed the application (collectively, the "Agreement"). See Atwood Affidavit at 118 and Exhibit "5" attached thereto. Immediately above Mr. Scheuren's signature on the application appeared the following acknowledgement: I acknowledge I have received the American Express Financial Advisors Inc. client agreements and agree to abide by their terms s currently in effect or as they may be amended from time to time. This account is governed by a predispute arbitration clause which is found on Page 1 in Section 7 of the client agreement. I acknowledge receipt of the predispute arbitration clause. Notwithstanding Plaintiffs' two prior complaints to AEFA and the PSC respectively, Mr. Scheuren executed the Agreement and agreed to submit to arbitration any and all disputes with Defendants relating to the services that Defendants provided, transactions with '' In light of the fact that Plaintiffs have not filed a complaint in these proceedings, Defendants rely upon the complaints that Plaintiffs made to AEFA and the PSC for the purposes of this motion. Defendants and accounts maintained with Defendants. Specifically, Section 7 of the client agreement provides in relevant part: Arbitration. (i) Arbitration is final and binding on the parties. (ii) The parties are waiving their right to seek remedies in court, including the right to a jury trial. (iii) Pre-arbitration discovery is generally more limited than, and different from, court proceedings. (iv) The arbitrator's award is not required to include factual findings or legal reasoning and any party's right to appeal or to seek modification of rulings by the arbitrators strictly limited. (v) The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. Any controversy arising out of, or relating to, my accounts, to transactions with you or your Brokers and/or employees for me or to this agreement or the breach thereof, shall be settled by arbitration and conducted pursuant to the Federal Arbitration Act, before the American Arbitration Association or the National association of Securities Dealers Inc., Chicago Stock Exchange Inc., the New York Stock Exchange, the American Stock Exchange to the extent you may be a member of such exchange or the Municipal Securities Rulemaking Board or the independent nonindustry arbitration forum as I may elect. If I do not make such an election by registered mail addressed to you at your main office within 10 days after demand by you that I make such election, then you may make such election. Judgment upon any award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Over one month after Mr. Scheuren signed the Agreement, on or about July 30, 2003, Plaintiffs commenced these proceedings by filing a praecipe to issue a writ of summons.3 In light of the arbitration provision contained within the Agreement, on October 1, 2004, counsel for AEFA wrote to Plaintiffs' counsel requesting that Plaintiffs withdraw their writ ' The praecipe only named AEFA, IDS and Brytz as Defendants; a true and correct copy of which is attached to the motion as Exhibit "A". of summons and resubmit their claims to the NASD, but Plaintiffs declined AEFA's request. See Atwood Affidavit at ¶ 12 and Exhibit "6" attached thereto. For the reasons set forth more fully below, this Court should compel the arbitration of these proceedings. III. QUESTION PRESENTED: Whether Plaintiffs must submit their claims to arbitration pursuant to the express terms of an agreement that requires any dispute concerning accounts maintained with Defendants and/or transactions with Defendants be submitted to arbitration? Suggested answer: yes. IV. ARGUMENT: A. Enforcement Of Arbitration Agreements Is Favored The writ of summons should be dismissed and Plaintiffs be compelled to submit their claims to arbitration before the NASD because a legally binding agreement to arbitrate "any controversy or claim arising out of their relationship with Defendants compels them to do so. Because there is a valid agreement to arbitrate and that agreement requires arbitration regarding accounts maintained with Defendants and/or transactions or services that Defendants provided, Plaintiffs' writ of summons should: (1) be dismissed with prejudice; and (2) Plaintiffs be compelled to resubmit their claims to arbitration before the NASD. Pennsylvania courts have routinely enforced agreements to arbitrate similar to that which is included in the Agreement. See L.g, Elkins & Co. v. Suplee, 538 A.2d 883, 885 (Pa. Super. 1988) (citing Waddell v. Shriber, 348 A.2d 96, 100 (Pa. 1975)); and Williams v. Gruntal & Co., 669 A.2d ° In accordance with the terms of the Agreement, the October 1, 2004 request for Plaintiffs to proceed with arbitration before the NASD constituted a demand on Plaintiffs. Plaintiffs never made a request for the arbitration to occur before an alternate forum. If this Court compels arbitration, in accordance with the Agreement, the arbitration must be conducted before the NASD because Plaintiffs never requested an alternate forum after Defendants demanded that they proceed before the NASD. 387, 388-89 (Pa. Super. 1995). The Pennsylvania courts have held that, where a contract provides for arbitration of all claims or disputes arising out of, or relating to, the contract, those claims must be submitted to arbitration as the parties agreed - regardless of whether the claim sounds in contract or tort. See Midomo Co v Presbyterian Housing Development Co., 739 A.2d 180, 188 (Pa. Super. 1999) (citing Flightways Corp v Keystone Helicopter Corp., 331 A.2d 184, 185 (Pa. 1975)); and Williams, 669 A.2d at 388 (arbitration of conversation claim pursuant to contract terms). Indeed, any doubts concerning an agreement to arbitrate should be resolved in favor of arbitration. The Pennsylvania legislature has also endorsed the strong public policy in favor of arbitration by codifying procedures to compel arbitration and to stay litigation pending arbitration. The statute states: (a) Compelling arbitration. - On application to a court to compel arbitration made by a party showing an agreement described in section 7303 (relating to validity of agreement to arbitrate) and a showing that an opposing party refused to arbitrate, the court shall order the parties to proceed with arbitration. If the opposing party denies the existence of an agreement to arbitrate, the court shall proceed summarily to determine the issue so raised and shall order the parties to proceed with arbitration if it finds for the moving party. Otherwise, the application shall be denied. (d) Stay of judicial proceedings. - An action or proceeding, allegedly involving an issue subject to arbitration, shall be stayed if a court order to proceed with arbitration has been made or an application for such an order has been made under this section. If the issue allegedly subject to arbitration is severable, the stay of the court action or proceeding may be made with respect to the severable issue only. If the application for an order to proceed with arbitration is made in such action or proceeding and is granted, the court order to proceed with arbitration shall include a stay of the action or proceeding. 42 Pa. C.S.A. § 7304 (a) and (d) The United States Supreme Court has similarly recognized the importance of and policy reasons behind upholding agreements to arbitrate, including those in standard agreements like the one at issue in these proceedings. See Shearson/American Express v. McMahon, 482 U.S. 220 6 (1987) (upholding industry-wide agreement for arbitration enforceable against investors); and Dean Witter, Inc. v. Byrd, 470 U.S. 213, 213 (1985) (if there is a valid agreement to arbitrate, the court has no discretion, but rather shall direct the parties to arbitration). Here, both Pennsylvania and Federal law supports Defendants' position that Plaintiffs' claims must be submitted to arbitration before the NASD. B. The Agreement And The Allegations In Plaintiffs' Complaints Demonstrate That Plaintiffs' Claims Must Be Arbitrated As evidenced by the allegations contained in the written complaints that the Plaintiffs submitted to AEFA and PSC respectively, Plaintiffs' claims against Defendants specifically relate to the services that Defendants provided, transactions Plaintiffs executed through Defendants, and an account that Mr. Scheuren purchased from IDS and maintained with Defendants. For example, in the letter complaint that Plaintiffs' submitted to AEFA, Plaintiffs' allege that AEFA's investment strategy was not suitable for them, and that Plaintiffs' liquidation of certain PP&L stock (purportedly at Defendants' suggestion) used for Mr. Scheuren's purchase of an annuity resulted in an improper incursion of tax liability. In Plaintiffs' letter complaint to the PCS, Plaintiffs resubmitted their complaint directed to AEFA. In these complaints, Plaintiffs placed at issue: (1) the services that Defendants provided; (2) transactions that Defendants executed on behalf of Plaintiffs that were allegedly at Defendants' suggestion; and (3) an account that Mr. Scheuren purchased from IDS and maintained with Defendants. By its terms, the Agreement governs all of the transaction that Plaintiffs executed through Defendants and accounts maintained with Defendants. Moreover, the agreement to arbitrate specifically covers an controversy arising out of, or relating to accounts and transactions with Defendants. See Agreement at § 7. Due to the fact that all of the allegations in Plaintiffs' complaints focus on the transactions executed through Defendants and an account that Mr. Scheuren maintained with Defendants, Plaintiffs' claims are subject to the arbitration provision in the Agreement. Accordingly, this Court should dismiss the writ of summons and order that Plaintiffs' claims be submitted to arbitration before the NASD. C. The Agreement To Arbitrate Is Not Limited To Transactions That Occurred After the Agreement Was Signed The above analysis does not change simply because the Agreement to arbitrate was signed after the transactions in question occurred. For example, in Hamilton v. Dean Witter Reynolds, Inc., 1989 WL 89434 (W.D. Pa. July 19, 1989), the plaintiff invested in a margin account with Dean Witter. Id. at * 1. After investing for a period of time, Dean Witter asked the plaintiff to execute a customer agreement that contained an arbitration clause. Id. The investor signed the customer agreement and continued to invest with Dean Witter. Id. The investor/plaintiff then sued Dean Witter for his losses and Dean Witter moved to compel arbitration. Id. The court in Hamilton noted that the arbitration clause was free of any ambiguity, clear in its scope, and could have been readily comprehended by the investor. Id. at *3. The Hamilton court further held that the scope of the arbitration clause was broad, and that the terms of the agreement to arbitrate were not limited to transactions occurring after the investor signed the agreement. Id. at *4. As a result, the court in Hamilton compelled the investor to submit his dispute to arbitration despite his contention that the arbitration clause must be limited to transactions occurring after he signed the agreement. Id. Similarly, in Prestera v. Shearson Lehman Bros., Inc., 1986 WL 10095 (D. Mass. 1986), the plaintiff signed an agreement with an arbitration clause after the transactions giving rise to the complaint occurred. Id. at *L The plaintiff asserted that the arbitration agreement did not apply because the transactions complained of took place before the plaintiff signed the agreement. Id. at *2. The Prestera court rejected this argument and held that the arbitration clause was not limited to transactions occurring after the plaintiff signed the agreement. Id. at *5. More specifically, the arbitration clause in Prestera provided: [a]ny controversy arising out of or relating to my accounts, to transactions with you for me or to this agreement or the breach thereof, shall be settled by arbitration in accordance with the rules, then in effect, of the National Association of Securities Dealers, Inc. or the Boards of Directors of the New York Stock Exchange, Inc. as I may elect.5 Id. at *5. Accordingly, the Court in Prestera compelled arbitration. As the courts in Hamilton and Prestera instruct, the fact that Mr. Scheuren signed the Agreement after the alleged improper acts occurred has no bearing on the enforceability of a broad agreement to arbitrate. As long as there was a valid agreement to arbitrate when Plaintiffs commenced these proceedings (which there was), Plaintiffs are obligated to pursue their claims in arbitration. In fact, the situation before this Court is even more compelling than Hamilton and Prestera. Plaintiffs in these proceedings contend that the purported wrongdoing occurred in 2000. Indeed, Plaintiffs lodged complaints about Defendants' services in 2001 (with AEFA) and 2002 (with the PSC), respectively. On June 3, 2003, Mr. Scheuren signed the Agreement which contained an acknowledgement of the agreement to arbitrate and an agreement to arbitrate. Plaintiffs commenced these proceedings on July 30, 2003. By executing the Agreement after making two separate complaints over a year before commencing these proceedings and nearly two months before commencing these proceedings, Plaintiffs are in no position to claim that they should not have to arbitrate their claims. If Plaintiffs did not want to arbitrate their claims, the choice was clear; Mr. Scheuren could have opted against signing the Agreement. His failure to do so (in view of the acknowledgement above his signature) can only mean one thing - Mr. Scheuren willingly signed the Agreement with the understanding that s Here, the language in the Agreement is almost identical to the language in Prestera. The Agreement provides that "any controversy or claim arising out of, or relating to, my accounts, to transactions with you or your Brokers and/or employees for me or this agreement or the breach thereof, shall be settled by arbitration ...... Agreement at § 7. any claims against Defendants would have to be arbitrated. Accordingly, this Court should compel arbitration of these proceedings before the NASD. V. CONCLUSION: For the foregoing reasons, defendants American Express Financial Advisors, Inc, IDS Life Insurance and Doris E. Brytz, respectfully request that this Honorable Court grant their motion to compel arbitration pursuant to 42 Pa. C.S.A. § 7304, and dismiss with prejudice Plaintiffs' writ of summons and compel the submission of these proceedings to arbitration before the NASD. k.. Joshu Porn, Esquire Identi cation No. 71799 FOX ROTHSCHILD LLP 2000 Market Street, IO'h Floor Philadelphia, PA 19103 Telephone: (215) 299-2000 Telecopier: (215) 299-2150 Attorneys for Defendants Dated: August 29, 2005 10 CERTIFICATE OF SERVICE I, Joshua Horn, Esquire, hereby certify that a true and correct copy of defendants memorandum of law in support of the Motion to Compel arbitration was served by first-class U.S. mail, postage prepaid, on plaintiff's counsel of record, addresses as follows: Henry F. Coyne, Esquire Coyne & Coyne P.C. 3901 Market Street Camp Hill, PA 17011-4227 Counsel for Plaintiffs James N. Scheuren and Barbara D. Scheuren Horn, Esquire Dated: August 29, 2005 FOX ROTHSCHILD LLP BY: JOSHUA HORN, ESQUIRE IDENTIFICATION NO. 71799 2000 MARKET STREET, TENTH FLOOR PHILADELPHIA, PA 19103-3291 Telephone: (215) 299-2000 Facsimile: (215) 299-2150 JAMES N. SCHEUREN and BARBARA D. SCHEUREN, h/w, Plaintiff, V. AMERICAN EXPRESS FINANCIAL ADVISORS, INC., et al., Defendants. ATTORNEY FOR DEFENDANTS COURT OF COMMON PLEAS CUMBERLAND COUNTY CIVIL ACTION DOCKET NO. 03-3622 MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS' MOTION TO COMPEL ARBITRATION PURSUANT TO 42 PA. C.S.A § 7304 Defendants, American Express Financial Advisors ("AEFA") (nWa "Ameriprise Financial, Inc."), IDS Life Insurance Company ("IDS") and Doris E. Brytz (`Brytz") (collectively, the "Defendants"), by and through their attorneys, Fox Rothschild LLP, hereby submit the following memorandum of law in support of their motion to compel arbitration and, in support thereof, state as follows: 1. INTRODUCTION: Pursuant to the American Express Brokerage IRA Application and client agreement (collectively, the "Agreement") entered into by James N. Scheuren ("Mr. Scheuren") with AEFA, he and Barbara D. Scheuren ("Mrs. Scheuren) (collectively, the "Plaintiffs") must submit any and all disputes to arbitration before the National Association of Securities Dealers ("NASD"). In contravention of the agreement to arbitrate, Plaintiffs filed a writ of summons with this Court concerning services that Defendants provided to them; transactions executed through Defendants; and an account that Mr. Scheuren purchased from IDS through Defendants and maintained with Defendants. Even though defendants requested that Plaintiffs arbitrate these proceedings, Plaintiffs have refused to do so. This attempt to bypass the arbitration provisions of the Agreement does not change the undeniable fact that this proceeding must be arbitrated before the NASD. Therefore, Plaintiffs' writ of summons should be dismissed with prejudice and this matter submitted to arbitration before the NASD.' II. FACTUAL BACKGROUND: In or about August 2000, Plaintiffs sought financial planning advice from Brytz, a financial advisor associated with AEFA, with respect to the possible liquidation of a jointly held DRIP account maintained with Mr. Scheuren's employer, PP&L. See Affidavit of Faye Atwood at ¶ 3, which is attached to Defendants' motion as Exhibit "B" (the "Atwood Affidavit"). Ultimately, Plaintiffs liquidated that DRIP account and Mr. Scheuren used the proceeds to purchase an annuity from IDS, which he purchased through AEFA and Brytz. On April 10, 2001, Plaintiffs submitted a written complaint to AEFA alleging inadequate services and, in particular, raised issues surrounding the annuity that Mr. Scheuren purchased from Although Mr. Scheuren and Mrs. Scheuren jointly commenced these the only proceedings, "account" that Plaintiffs have placed at issue is an annuity that Mr. Scheuren purchased individually from IDS, which he maintains with Defendants. To the extent that Mrs. Scheuren intends to make claims about any accounts she owns jointly with Mr. Scheuren or services that were provided to her and Mr. Scheuren, she is equally subject to the agreement to arbitrate. To date, Plaintiffs have not made claims regarding any "joint" account maintained with Defendants and Mrs. Scheuren has made no claims in her individual capacity. The only other claims that Plaintiffs have asserted surround the incursion of tax liability from the liquidation of their jointly held DRIP maintained with Mr. Scheuren's employer, Pennsylvania Power & Light ("PP&L"), the proceeds of which were used to fund Mr. Schemen's investment with IDS. Accordingly, and as set forth more fully below, Plaintiffs must pursue their claims through arbitration. IDS, as well as tax liability Plaintiffs purportedly incurred when they liquidated the PP&L jointly held DRIP that was used to fund Mr. Scheuren's annuity acquisition.2 See Atwood Affidavit at ¶ 4 and Exhibit "1" thereto. After investigating Plaintiffs' complaint, AEFA determined that the complaint was not justified and, on or about June 20, 2001, advised Plaintiffs' counsel accordingly. See Atwood Affidavit at ? 5 and Exhibit "2" attached thereto. Not satisfied with the response that they received from AEFA, on or about August 15, 2002, Plaintiffs filed a complaint with the Pennsylvania Securities Commission ("PSC"), making the same allegations as those set forth in their letter complaint to AEFA. See Atwood Affidavit at 16 and Exhibit "3" attached thereto. The PSC, on October 20, 2002, reached the same conclusion as AEFA, and dismissed Plaintiffs' complaint as not justified. See Atwood Affidavit at ¶ 7 and Exhibit "4" attached thereto. On June 3, 2003, Mr. Scheuren executed an American Express Brokerage IRA Application. Attached to the application was the client agreement that would have been provided to Mr. Scheuren at the time he signed the application (collectively, the "Agreement"). See Atwood Affidavit at 18 and Exhibit "5" attached thereto. Immediately above Mr. Scheuren's signature on the application appeared the following acknowledgement: I acknowledge I have received the American Express Financial Advisors Inc. client agreements and agree to abide by their terms s currently in effect or as they may be amended from time to time. This account is governed by a predispute arbitration clause which is found on Page 1 in Section 7 of the client agreement. I acknowledge receipt of the predispute arbitration clause. Notwithstanding Plaintiffs' two prior complaints to AEFA and the PSC respectively, Mr. Scheuren executed the Agreement and agreed to submit to arbitration any and all disputes with Defendants relating to the services that Defendants provided, transactions with 2 In light of the fact that Plaintiffs have not filed a complaint in these proceedings, Defendants rely upon the complaints that Plaintiffs made to AEFA and the PSC for the purposes of this motion. Defendants and accounts maintained with Defendants. Specifically, Section 7 of the client agreement provides in relevant part: Arbitration. (i) Arbitration is final and binding on the parties. (ii) The parties are waiving their right to seek remedies in court, including the right to a jury trial. (iii) Pre-arbitration discovery is generally more limited than, and different from, court proceedings. (iv) The arbitrator's award is not required to include factual findings or legal reasoning and any party's right to appeal or to seek modification of rulings by the arbitrators strictly limited. (v) The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. Any controversy arising out of, or relating to, my accounts, to transactions with you or your Brokers and/or employees for me or to this agreement or the breach thereof, shall be settled by arbitration and conducted pursuant to the Federal Arbitration Act, before the American Arbitration Association or the National association of Securities Dealers Inc., Chicago Stock Exchange Inc., the New York Stock Exchange, the American Stock Exchange to the extent you may be a member of such exchange or the Municipal Securities Rulemaking Board or the independent nonindustry arbitration forum as I may elect. If I do not make such an election by registered mail addressed to you at your main office within 10 days after demand by you that I make such election, then you may make such election. Judgment upon any award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Over one month after Mr. Schemen signed the Agreement, on or about July 30, 2003, Plaintiffs commenced these proceedings by filing a praecipe to issue a writ of summons,3 In light of the arbitration provision contained within the Agreement, on October 1, 2004, counsel for AEFA wrote to Plaintiffs' counsel requesting that Plaintiffs withdraw their writ 3 The praecipe only named AEFA, IDS and Brytz as Defendants; a true and correct copy of which is attached to the motion as Exhibit "A". of summons and resubmit their claims to the NASD, but Plaintiffs declined AEFA's request. See Atwood Affidavit at ¶ 12 and Exhibit "6" attached thereto.4 For the reasons set forth more fully below, this Court should compel the arbitration of these proceedings. III, QUESTION PRESENTED: Whether Plaintiffs must submit their claims to arbitration pursuant to the express terms of an agreement that requires any dispute concerning accounts maintained with Defendants and/or transactions with Defendants be submitted to arbitration? Suggested answer: yes. IV. ARGUMENT: A. Enforcement Of Arbitration Agreements Is Favored The writ of summons should be dismissed and Plaintiffs be compelled to submit their claims to arbitration before the NASD because a legally binding agreement to arbitrate "any controversy or claim arising out of their relationship with Defendants compels them to do so. Because there is a valid agreement to arbitrate and that agreement requires arbitration regarding accounts maintained with Defendants and/or transactions or services that Defendants provided, Plaintiffs' writ of summons should: (1) be dismissed with prejudice; and (2) Plaintiffs be compelled to resubmit their claims to arbitration before the NASD. Pennsylvania courts have routinely enforced agreements to arbitrate similar to that which is included in the Agreement. See eg., Elkins & Co. v. Sunlee, 538 A.2d 883, 885 (Pa. Super. 1988) (citing Waddell Y. Shriber, 348 A.2d 96, 100 (Pa. 1975)); and Williams v. Gruntal & Co., 669 A.2d In accordance with the terms of the Agreement, the October 1, 2004 request for Plaintiffs to proceed with arbitration before the NASD constituted a demand on Plaintiffs. Plaintiffs never made a request for the arbitration to occur before an alternate forum. If this Court compels arbitration, in accordance with the Agreement, the arbitration must be conducted before the NASD because Plaintiffs never requested an alternate forum after Defendants demanded that they proceed before the NASD. 387, 388-89 (Pa. Super. 1995). The Pennsylvania courts have held that, where a contract provides for arbitration of all claims or disputes arising out of, or relating to, the contract, those claims must be submitted to arbitration as the parties agreed - regardless of whether the claim sounds in contract or tort. See Midomo Co. v. Presbyterian Housing Development Co., 739 A.2d 180, 188 (Pa. Super. 1999) (citing Flightways Corp. v. Keystone Helicopter Corp., 331 A.2d 184, 185 (Pa. 1975)); and Williams, 669 A.2d at 388 (arbitration of conversation claim pursuant to contract terms). Indeed, any doubts concerning an agreement to arbitrate should be resolved in favor of arbitration. The Pennsylvania legislature has also endorsed the strong public policy in favor of arbitration by codifying procedures to compel arbitration and to stay litigation pending arbitration. The statute states: (a) Compelling arbitration. - On application to a court to compel arbitration made by a party showing an agreement described in section 7303 (relating to validity of agreement to arbitrate) and a showing that an opposing party refused to arbitrate, the court shall order the parties to proceed with arbitration. If the opposing party denies the existence of an agreement to arbitrate, the court shall proceed summarily to determine the issue so raised and shall order the parties to proceed with arbitration if it finds for the moving party. Otherwise, the application shall be denied. (d) Stay of judicial proceedings. - An action or proceeding, allegedly involving an issue subject to arbitration, shall be stayed if a court order to proceed with arbitration has been made or an application for such an order has been made under this section. If the issue allegedly subject to arbitration is severable, the stay of the court action or proceeding may be made with respect to the severable issue only. If the application for an order to proceed with arbitration is made in such action or proceeding and is granted, the court order to proceed with arbitration shall include a stay of the action or proceeding. 42 Pa. C.S.A. § 7304 (a) and (d) The United States Supreme Court has similarly recognized the importance of and policy reasons behind upholding agreements to arbitrate, including those in standard agreements like the one at issue in these proceedings. See Shearson/American Express v. McMahon, 482 U.S. 220 6 (1987) (upholding industry-wide agreement for arbitration enforceable against investors); and Dean Witter. Inc. v. Byrd, 470 U.S. 213, 213 (1985) (if there is a valid agreement to arbitrate, the court has no discretion, but rather shall direct the parties to arbitration). Here, both Pennsylvania and Federal law supports Defendants' position that Plaintiffs' claims must be submitted to arbitration before the NASD. B. The Agreement And The Allegations In Plaintiffs' Complaints Demonstrate That Plaintiffs' Claims Must Be Arbitrated As evidenced by the allegations contained in the written complaints that the Plaintiffs submitted to AEFA and PSC respectively, Plaintiffs' claims against Defendants specifically relate to the services that Defendants provided, transactions Plaintiffs executed through Defendants, and an account that Mr. Scheuren purchased from IDS and maintained with Defendants. For example, in the letter complaint that Plaintiffs' submitted to AEFA, Plaintiffs' allege that AEFA's investment strategy was not suitable for them, and that Plaintiffs' liquidation of certain PP&L stock (purportedly at Defendants' suggestion) used for Mr. Scheuren's purchase of an annuity resulted in an improper incursion of tax liability. In Plaintiffs' letter complaint to the PCS, Plaintiffs resubmitted their complaint directed to AEFA. In these complaints, Plaintiffs placed at issue: (1) the services that Defendants provided; (2) transactions that Defendants executed on behalf of Plaintiffs that were allegedly at Defendants' suggestion; and (3) an account that Mr. Scheuren purchased from IDS and maintained with Defendants. By its terms, the Agreement governs all of the transaction that Plaintiffs executed through Defendants and accounts maintained with Defendants. Moreover, the agreement to arbitrate specifically covers any controversy arising out of, or relating to accounts and transactions with Defendants. See Agreement at § 7. Due to the fact that all of the allegations in Plaintiffs' complaints focus on the transactions executed through Defendants and an account that Mr. Scheuren maintained with Defendants, Plaintiffs' claims are subject to the arbitration provision in the Agreement. Accordingly, this Court should dismiss the writ of summons and order that Plaintiffs' claims be submitted to arbitration before the NASD. C. The Agreement To Arbitrate Is Not Limited To Transactions That Occurred After the Agreement Was Signed The above analysis does not change simply because the Agreement to arbitrate was signed after the transactions in question occurred. For example, in Hamilton v. Dean Witter Remolds, Inc., 1989 WL 89434 (W.D. Pa. July 19, 1989), the plaintiff invested in a margin account with Dean Witter. Id. at * 1. After investing for a period of time, Dean Witter asked the plaintiff to execute a customer agreement that contained an arbitration clause. Id. The investor signed the customer agreement and continued to invest with Dean Witter. Id. The investor/plaintiff then sued Dean Witter for his losses and Dean Witter moved to compel arbitration. Id. The court in Hamilton noted that the arbitration clause was free of any ambiguity, clear in its scope, and could have been readily comprehended by the investor. Id. at *3. The Hamilton court further held that the scope of the arbitration clause was broad, and that the terms of the agreement to arbitrate were not limited to transactions occurring after the investor signed the agreement. Id. at *4. As a result, the court in Hamilton compelled the investor to submit his dispute to arbitration despite his contention that the arbitration clause must be limited to transactions occurring after he signed the agreement. Id. Similarly, in Prestera v. Shearson Lehman Bros., Inc., 1986 WL 10095 (D. Mass. 1986), the plaintiff signed an agreement with an arbitration clause after the transactions giving rise to the complaint occurred. Id. at * 1. The plaintiff asserted that the arbitration agreement did not apply because the transactions complained of took place before the plaintiff signed the agreement. Id, at *2. The Prestera court rejected this argument and held that the arbitration clause was not limited to transactions occurring after the plaintiff signed the agreement. Id. at *5. More specifically, the arbitration clause in Prestera provided: [a]ny controversy arising out of or relating to my accounts, to transactions with you for me or to this agreement or the breach thereof, shall be settled by arbitration in accordance with the rules, then in effect, of the National Association of Securities Dealers, Inc. or the Boards of Directors of the New York Stock Exchange, Inc. as I may elect.5 Id. at *5. Accordingly, the Court in Prestera compelled arbitration. As the courts in Hamilton and Prestera instruct, the fact that Mr. Scheuren signed the Agreement after the alleged improper acts occurred has no bearing on the enforceability of a broad agreement to arbitrate. As long as there was a valid agreement to arbitrate when Plaintiffs commenced these proceedings (which there was), Plaintiffs are obligated to pursue their claims in arbitration. In fact, the situation before this Court is even more compelling than Hamilton and Prestera. Plaintiffs in these proceedings contend that the purported wrongdoing occurred in 2000. Indeed, Plaintiffs lodged complaints about Defendants' services in 2001 (with AEFA) and 2002 (with the PSC), respectively. On June 3, 2003, Mr. Scheuuen signed the Agreement which contained an acknowledgement of the agreement to arbitrate and an agreement to arbitrate. Plaintiffs commenced these proceedings on July 30, 2003. By executing the Agreement after making two separate complaints over a year before commencing these proceedings and nearly two months before commencing these proceedings, Plaintiffs are in no position to claim that they should not have to arbitrate their claims. If Plaintiffs did not want to arbitrate their claims, the choice was clear; Mr. Scheuren could have opted against signing the Agreement. His failure to do so (in view of the acknowledgement above his signature) can only mean one thing - Mr. Scheuren willingly signed the Agreement with the understanding that s Here, the language in the Agreement is almost identical to the language in Prestera. The Agreement provides that "any controversy or claim arising out of, or relating to, my accounts, to transactions with you or your Brokers and/or employees for me or this agreement or the breach thereof, shall be settled by arbitration ...." Agreement at § 7. any claims against Defendants would have to be arbitrated. Accordingly, this Court should compel arbitration of these proceedings before the NASD. V. CONCLUSION: For the foregoing reasons, defendants American Express Financial Advisors, Inc, IDS Life Insurance and Doris E. Brytz, respectfully request that this Honorable Court grant their motion to compel arbitration pursuant to 42 Pa. C.S.A. § 7304, and dismiss with prejudice Plaintiffs' writ of summons and compel the submission of these proceedings to arbitration before the NASD. k. Joshu orn, Esquire Tdenti cation No. 71799 FOX ROTHSCHILD LLP 2000 Market Street, 10"' Floor Philadelphia, PA 19103 Telephone: (215) 299-2000 Telecopier: (215) 299-2150 Attorneys for Defendants Dated: August 29, 2005 10 CERTIFICATE OF SERVICE I, Joshua Horn, Esquire, hereby certify that a true and correct copy of defendants memorandum of law in support of the Motion to Compel arbitration was served by first-class U.S. mail, postage prepaid, on plaintiffs counsel of record, addresses as follows: Henry F. Coyne, Esquire Coyne & Coyne P.C. 3901 Market Street Camp Hill, PA 17011-4227 Counsel for Plaintiffs James N. Scheuren and Barbara D. Scheuren k. Horn, Esquire Dated: August 29, 2005 FOX ROTHSCHILD LLP BY: JOSHUA HORN, ESQUIRE IDENTIFICATION NO. 71799 2000 MARKET STREET, TENTH FLOOR PHILADELPHIA, PA 19103-3291 Telephone: (215) 299-2000 Facsimile: (215) 299-2150 JAMES N. SCHEUREN and BARBARA D. SCHEUREN, h/w, Plaintiff, V. AMERICAN EXPRESS FINANCIAL ADVISORS, INC., et al., Defendants. ATTORNEY FOR DEFENDANTS COURT OF COMMON PLEAS CUMBERLAND COUNTY CIVIL ACTION DOCKET NO. 03-3622 MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS' MOTION TO COMPEL ARBITRATION PURSUANT TO 42 PA. C.S.A § 7304 Defendants, American Express Financial Advisors ("AEFA") (n/k/a "Ameriprise Financial, Inc."), IDS Life Insurance Company ("IDS") and Doris E. Brytz (`Brytz") (collectively, the "Defendants"), by and through their attorneys, Fox Rothschild LLP, hereby submit the following memorandum of law in support of their motion to compel arbitration and, in support thereof, state as follows: 1. INTRODUCTION: Pursuant to the American Express Brokerage IRA Application and client agreement (collectively, the "Agreement") entered into by James N. Scheuren ("Mr. Scheuren") with AEFA, he and Barbara D. Scheuren ("Mrs. Scheuren) (collectively, the "Plaintiffs") must submit any and all disputes to arbitration before the National Association of Securities Dealers ("NASD"). In contravention of the agreement to arbitrate, Plaintiffs filed a writ of summons with this Court concerning services that Defendants provided to them; transactions executed through Defendants; and an account that Mr. Scheuren purchased from IDS through Defendants and maintained with Defendants. Even though defendants requested that Plaintiffs arbitrate these proceedings, Plaintiffs have refused to do so. This attempt to bypass the arbitration provisions of the Agreement does not change the undeniable fact that this proceeding must be arbitrated before the NASD. Therefore, Plaintiffs' writ of summons should be dismissed with prejudice and this matter submitted to arbitration before the NASD,' II. FACTUAL BACKGROUND: In or about August 2000, Plaintiffs sought financial planning advice from Brytz, a financial advisor associated with AEFA, with respect to the possible liquidation of a jointly held DRIP account maintained with Mr. Scheuren's employer, PP&L. See Affidavit of Faye Atwood at 13, which is attached to Defendants' motion as Exhibit "B" (the "Atwood Affidavit"). Ultimately, Plaintiffs liquidated that DRIP account and Mr. Scheuren used the proceeds to purchase an annuity from IDS, which he purchased through AEFA and Brytz. On April 10, 2001, Plaintiffs submitted a written complaint to AEFA alleging inadequate services and, in particular, raised issues surrounding the annuity that Mr. Scheuren purchased from ' Although Mr. Scheuren and Mrs. Scheuren jointly commenced these proceedings, the only "account" that Plaintiffs have placed at issue is an annuity that Mr. Scheuren purchased individually from IDS, which he maintains with Defendants. To the extent that Mrs. Scheuren intends to make claims about any accounts she owns jointly with Mr. Scheuren or services that were provided to her and Mr. Scheuren, she is equally subject to the agreement to arbitrate. To date, Plaintiffs have not made claims regarding any "joint" account maintained with Defendants and Mrs. Scheuren has made no claims in her individual capacity. The only other claims that Plaintiffs have asserted surround the incursion of tax liability from the liquidation of their jointly held DRIP maintained with Mr. Scheuren's employer, Pennsylvania Power & Light ("PP&L"), the proceeds of which were used to fund Mr. Schemen's investment with IDS. Accordingly, and as set forth more fully below, Plaintiffs must pursue their claims through arbitration. IDS, as well as tax liability Plaintiffs purportedly incurred when they liquidated the PP&L jointly held DRIP that was used to fund Mr. Scheuren's annuity acquisition.2 See Atwood Affidavit at ¶ 4 and Exhibit "I" thereto. After investigating Plaintiffs' complaint, AEFA determined that the complaint was not justified and, on or about June 20, 2001, advised Plaintiffs' counsel accordingly. See Atwood Affidavit at 15 and Exhibit "2" attached thereto. Not satisfied with the response that they received from AEFA, on or about August 15, 2002, Plaintiffs filed a complaint with the Pennsylvania Securities Commission ("PSC"), making the same allegations as those set forth in their letter complaint to AEFA. See Atwood Affidavit at ¶ 6 and Exhibit "3" attached thereto. The PSC, on October 20, 2002, reached the same conclusion as AEFA, and dismissed Plaintiffs' complaint as not justified. See Atwood Affidavit at If 7 and Exhibit "4" attached thereto. On June 3, 2003, Mr. Scheuren executed an American Express Brokerage IRA Application. Attached to the application was the client agreement that would have been provided to Mr. Scheuren at the time he signed the application (collectively, the "Agreement"). See Atwood Affidavit at ¶ 8 and Exhibit "5" attached thereto. Immediately above Mr. Scheuren's signature on the application appeared the following acknowledgement: I acknowledge I have received the American Express Financial Advisors Inc. client agreements and agree to abide by their terms s currently in effect or as they may be amended from time to time. This account is governed by a predispute arbitration clause which is found on Page 1 in Section 7 of the client agreement. I acknowledge receipt of the predispute arbitration clause. Notwithstanding Plaintiffs' two prior complaints to AEFA and the PSC respectively, Mr. Scheuren executed the Agreement and agreed to submit to arbitration any and all disputes with Defendants relating to the services that Defendants provided, transactions with z In light of the fact that Plaintiffs have not filed a complaint in these proceedings, Defendants rely upon the complaints that Plaintiffs made to AEFA and the PSC for the purposes of this motion. Defendants and accounts maintained with Defendants. Specifically, Section 7 of the client agreement provides in relevant part: Arbitration. (i) Arbitration is final and binding on the parties. (ii) The parties are waiving their right to seek remedies in court, including the right to a jury trial. (iii) Pre-arbitration discovery is generally more limited than, and different from, court proceedings. (iv) The arbitrator's award is not required to include factual findings or legal reasoning and any party's right to appeal or to seek modification of rulings by the arbitrators strictly limited. (v) The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. Any controversy arising out of, or relating to, my accounts, to transactions with you or your Brokers and/or employees for me or to this agreement or the breach thereof, shall be settled by arbitration and conducted pursuant to the Federal Arbitration Act, before the American Arbitration Association or the National association of Securities Dealers Inc., Chicago Stock Exchange Inc., the New York Stock Exchange, the American Stock Exchange to the extent you may be a member of such exchange or the Municipal Securities Rulemaking Board or the independent nonindustry arbitration forum as I may elect. If I do not make such an election by registered mail addressed to you at your main office within 10 days after demand by you that I make such election, then you may make such election. Judgment upon any award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Over one month after Mr. Schemen signed the Agreement, on or about July 30, 2003, Plaintiffs commenced these proceedings by filing a praecipe to issue a writ of summons 3 In light of the arbitration provision contained within the Agreement, on October 1, 2004, counsel for AEFA wrote to Plaintiffs' counsel requesting that Plaintiffs withdraw their writ ' The praecipe only named AEFA, IDS and Brytz as Defendants; a true and correct copy of which is attached to the motion as Exhibit "A". of summons and resubmit their claims to the NASD, but Plaintiffs declined AEFA's request. See Atwood Affidavit at ¶ 12 and Exhibit "6" attached thereto,4 For the reasons set forth more fully below, this Court should compel the arbitration of these proceedings. III. (QUESTION PRESENTED: Whether Plaintiffs must submit their claims to arbitration pursuant to the express terms of an agreement that requires any dispute concerning accounts maintained with Defendants and/or transactions with Defendants be submitted to arbitration? Suggested answer: yes. IV. ARGUMENT: A. Enforcement Of Arbitration Agreements Is Favored The writ of summons should be dismissed and Plaintiffs be compelled to submit their claims to arbitration before the NASD because a legally binding agreement to arbitrate "any controversy or claim arising out of "their relationship with Defendants compels them to do so. Because there is a valid agreement to arbitrate and that agreement requires arbitration regarding accounts maintained with Defendants and/or transactions or services that Defendants provided, Plaintiffs' writ of summons should: (1) be dismissed with prejudice; and (2) Plaintiffs be compelled to resubmit their claims to arbitration before the NASD. Pennsylvania courts have routinely enforced agreements to arbitrate similar to that which is included in the Agreement. See, L.&., Elkins & Co. v. Sunlee, 538 A.2d 883, 885 (Pa. Super. 1988) (citing Waddell v. Shriber, 348 A.2d 96, 100 (Pa. 1975)); and Williams v. Gruntal & Co., 669 A.2d ° In accordance with the terms of the Agreement, the October 1, 2004 request for Plaintiffs to proceed with arbitration before the NASD constituted a demand on Plaintiffs. Plaintiffs never made a request for the arbitration to occur before an alternate forum. If this Court compels arbitration, in accordance with the Agreement, the arbitration must be conducted before the NASD because Plaintiffs never requested an alternate forum after Defendants demanded that they proceed before the NASD. 387, 388-89 (Pa. Super. 1995). The Pennsylvania courts have held that, where a contract provides for arbitration of all claims or disputes arising out of, or relating to, the contract, those claims must be submitted to arbitration as the parties agreed - regardless of whether the claim sounds in contract or tort. See Midomo Co. v. Presbyterian Housing Development Co., 739 A.2d 180, 188 (Pa. Super. 1999) (citing Flightways Con?. v. Keystone Helicopter Corp., 331 A.2d 184, 185 (Pa. 1975)); and Williams, 669 A.2d at 388 (arbitration of conversation claim pursuant to contract terms). Indeed, any doubts concerning an agreement to arbitrate should be resolved in favor of arbitration. The Pennsylvania legislature has also endorsed the strong public policy in favor of arbitration by codifying procedures to compel arbitration and to stay litigation pending arbitration. The statute states: (a) Compelling arbitration. - On application to a court to compel arbitration made by a party showing an agreement described in section 7303 (relating to validity of agreement to arbitrate) and a showing that an opposing party refused to arbitrate, the court shall order the parties to proceed with arbitration. If the opposing party denies the existence of an agreement to arbitrate, the court shall proceed summarily to determine the issue so raised and shall order the parties to proceed with arbitration if it finds for the moving party. Otherwise, the application shall be denied. (d) Stay of judicial proceedings. - An action or proceeding, allegedly involving an issue subject to arbitration, shall be stayed if a court order to proceed with arbitration has been made or an application for such an order has been made under this section. If the issue allegedly subject to arbitration is severable, the stay of the court action or proceeding may be made with respect to the severable issue only. If the application for an order to proceed with arbitration is made in such action or proceeding and is granted, the court order to proceed with arbitration shall include a stay of the action or proceeding. 42 Pa. C.S.A. § 7304 (a) and (d) The United States Supreme Court has similarly recognized the importance of and policy reasons behind upholding agreements to arbitrate, including those in standard agreements like the one at issue in these proceedings. See Shearson/American Express v. McMahon, 482 U.S. 220 (1987) (upholding industry-wide agreement for arbitration enforceable against investors); and Dean Witter, Inc. v. Byrd, 470 U.S. 213, 213 (1985) (if there is a valid agreement to arbitrate, the court has no discretion, but rather shall direct the parties to arbitration). Here, both Pennsylvania and Federal law supports Defendants' position that Plaintiffs' claims must be submitted to arbitration before the NASD. B. The Agreement And The Allegations In Plaintiffs' Complaints Demonstrate That Plaintiffs' Claims Must Be Arbitrated As evidenced by the allegations contained in the written complaints that the Plaintiffs submitted to AEFA and PSC respectively, Plaintiffs' claims against Defendants specifically relate to the services that Defendants provided, transactions Plaintiffs executed through Defendants, and an account that Mr. Scheuren purchased from IDS and maintained with Defendants. For example, in the letter complaint that Plaintiffs' submitted to AEFA, Plaintiffs' allege that AEFA's investment strategy was not suitable for them, and that Plaintiffs' liquidation of certain PP&L stock (purportedly at Defendants' suggestion) used for Mr. Scheuren's purchase of an annuity resulted in an improper incursion of tax liability. In Plaintiffs' letter complaint to the PCS, Plaintiffs resubmitted their complaint directed to AEFA. In these complaints, Plaintiffs placed at issue: (1) the services that Defendants provided; (2) transactions that Defendants executed on behalf of Plaintiffs that were allegedly at Defendants' suggestion; and (3) an account that Mr. Scheuren purchased from IDS and maintained with Defendants. By its terms, the Agreement governs all of the transaction that Plaintiffs executed through Defendants and accounts maintained with Defendants. Moreover, the agreement to arbitrate specifically covers any controversy arising out of, or relating to accounts and transactions with Defendants. See Agreement at § 7. Due to the fact that all of the allegations in Plaintiffs' complaints focus on the transactions executed through Defendants and an account that Mr. Scheuren maintained with Defendants, Plaintiffs' claims are subject to the arbitration provision in the Agreement. Accordingly, this Court should dismiss the writ of summons and order that Plaintiffs' claims be submitted to arbitration before the NASD. C. The Agreement To Arbitrate Is Not Limited To Transactions That Occurred After the Agreement Was Signed The above analysis does not change simply because the Agreement to arbitrate was signed after the transactions in question occurred. For example, in Hamilton v. Dean Witter Remolds, Inc., 1989 WL 89434 (W.D. Pa. July 19, 1989), the plaintiff invested in a margin account with Dean Witter. Id. at * 1. After investing for a period of time, Dean Witter asked the plaintiff to execute a customer agreement that contained an arbitration clause. Id. The investor signed the customer agreement and continued to invest with Dean Witter. Id. The investor/plaintiff then sued Dean Witter for his losses and Dean Witter moved to compel arbitration. Id. The court in Hamilton noted that the arbitration clause was free of any ambiguity, clear in its scope, and could have been readily comprehended by the investor. Id. at *3. The Hamilton court further held that the scope of the arbitration clause was broad, and that the terms of the agreement to arbitrate were not limited to transactions occurring after the investor signed the agreement. Id. at *4. As a result, the court in Hamilton compelled the investor to submit his dispute to arbitration despite his contention that the arbitration clause must be limited to transactions occurring after he signed the agreement. Id. Similarly, in Prestera v. Shearson Lehman Bros., Inc., 1986 WL 10095 (D. Mass. 1986), the plaintiff signed an agreement with an arbitration clause after the transactions giving rise to the complaint occurred. Id. at *1. The plaintiff asserted that the arbitration agreement did not apply because the transactions complained of took place before the plaintiff signed the agreement. Id. at *2. The Prestera court rejected this argument and held that the arbitration clause was not limited to transactions occurring after the plaintiff signed the agreement. Id. at *5. More specifically, the arbitration clause in Prestera provided: [a]ny controversy arising out of or relating to my accounts, to transactions with you for me or to this agreement or the breach thereof, shall be settled by arbitration in accordance with the rules, then in effect, of the National Association of Securities Dealers, Inc. or the Boards of Directors of the New York Stock Exchange, Inc. as I may elect.5 id. at *5. Accordingly, the Court in Prestera compelled arbitration. As the courts in Hamilton and Prestera instruct, the fact that Mr. Scheuren signed the Agreement after the alleged improper acts occurred has no bearing on the enforceability of a broad agreement to arbitrate. As long as there was a valid agreement to arbitrate when Plaintiffs commenced these proceedings (which there was), Plaintiffs are obligated to pursue their claims in arbitration. In fact, the situation before this Court is even more compelling than Hamilton and Prestera. Plaintiffs in these proceedings contend that the purported wrongdoing occurred in 2000. Indeed, Plaintiffs lodged complaints about Defendants' services in 2001 (with AEFA) and 2002 (with the PSC), respectively. On June 3, 2003, Mr. Scheuren signed the Agreement which contained an acknowledgement of the agreement to arbitrate and an agreement to arbitrate. Plaintiffs commenced these proceedings on July 30, 2003. By executing the Agreement after making two separate complaints over a year before commencing these proceedings and nearly two months before commencing these proceedings, Plaintiffs are in no position to claim that they should not have to arbitrate their claims. If Plaintiffs did not want to arbitrate their claims, the choice was clear; Mr. Scheuren could have opted against signing the Agreement. His failure to do so (in view of the acknowledgement above his signature) can only mean one thing - Mr. Scheuren willingly signed the Agreement with the understanding that s Here, the language in the Agreement is almost identical to the language in Prestera. The Agreement provides that "any controversy or claim arising out of, or relating to, my accounts, to transactions with you or your Brokers and/or employees for me or this agreement or the breach thereof, shall be settled by arbitration ...." Agreement at § 7. any claims against Defendants would have to be arbitrated. Accordingly, this Court should compel arbitration of these proceedings before the NASD. V. CONCLUSION: For the foregoing reasons, defendants American Express Financial Advisors, Inc, IDS Life Insurance and Doris E. Brytz, respectfully request that this Honorable Court grant their motion to compel arbitration pursuant to 42 Pa. C.S.A. § 7304, and dismiss with prejudice Plaintiffs' writ of summons and compel the submission of these proceedings to arbitration before the NASD. Joshu om, Esquire Identi cation No. 71799 FOX ROTHSCHILD LLP 2000 Market Street, I Om Floor Philadelphia, PA 19103 Telephone: (215) 299-2000 Telecopier: (215) 299-2150 Attorneys for Defendants Dated: August 29, 2005 10 CERTIFICATE OF SERVICE I, Joshua Horn, Esquire, hereby certify that a true and correct copy of defendants memorandum of law in support of the Motion to Compel arbitration was served by first-class U.S. mail, postage prepaid, on plaintiff's counsel of record, addresses as follows: Henry F. Coyne, Esquire Coyne & Coyne P.C. 3901 Market Street Camp Hill, PA 17011-4227 Counsel for Plaintiffs James N. Scheuren and Barbara D. Scheuren TL- Horn, Esquire Dated: August 29, 2005 FOX ROTHSCHILD LLP BY: JOSHUA HORN, ESQUIRE IDENTIFICATION NO. 71799 2000 MARKET STREET, TENTH FLOOR PHILADELPHIA, PA 19103-3291 Telephone: (215) 299-2000 Facsimile: (215) 299-2150 JAMES N. SCHEUREN and BARBARA D. SCHEUREN, h/w, Plaintiff, V. AMERICAN EXPRESS FINANCIAL ADVISORS, INC., et al., Defendants. ATTORNEY FOR DEFENDANTS COURT OF COMMON PLEAS CUMBERLAND COUNTY CIVIL ACTION DOCKET NO. 03-3622 MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS' MOTION TO COMPEL ARBITRATION PURSUANT TO 42 PA. C.S.A k 7304 Defendants, American Express Financial Advisors ("AEFA") (nWa "Ameriprise Financial, Inc."), IDS Life Insurance Company ("IDS") and Doris E. Brytz ("Brytz") (collectively, the "Defendants"), by and through their attorneys, Fox Rothschild LLP, hereby submit the following memorandum of law in support of their motion to compel arbitration and, in support thereof, state as follows: 1. INTRODUCTION: Pursuant to the American Express Brokerage IRA Application and client agreement (collectively, the "Agreement") entered into by James N. Scheuren ("Mr. Scheuren") with AEFA, he and Barbara D, Scheuren ("Mrs. Scheuren) (collectively, the "Plaintiffs") must submit any and all disputes to arbitration before the National Association of Securities Dealers ("NASD"). In contravention of the agreement to arbitrate, Plaintiffs filed a writ of summons with this Court concerning services that Defendants provided to them; transactions executed through Defendants; and an account that Mr. Scheuren purchased from IDS through Defendants and maintained with Defendants. Even though defendants requested that Plaintiffs arbitrate these proceedings, Plaintiffs have refused to do so. This attempt to bypass the arbitration provisions of the Agreement does not change the undeniable fact that this proceeding must be arbitrated before the NASD. Therefore, Plaintiffs' writ of summons should be dismissed with prejudice and this matter submitted to arbitration before the NASD. II. FACTUAL BACKGROUND: In or about August 2000, Plaintiffs sought financial planning advice from Brytz, a financial advisor associated with AEFA, with respect to the possible liquidation of a jointly held DRIP account maintained with Mr. Scheuren's employer, PP&L. See Affidavit of Faye Atwood at 13, which is attached to Defendants' motion as Exhibit "B" (the "Atwood Affidavit"). Ultimately, Plaintiffs liquidated that DRIP account and Mr. Scheuren used the proceeds to purchase an annuity from IDS, which he purchased through AEFA and Brytz. On April 10, 2001, Plaintiffs submitted a written complaint to AEFA alleging inadequate services and, in particular, raised issues surrounding the annuity that Mr. Scheuren purchased from ' Although Mr. Scheuren and Mrs. Scheuren jointly commenced these proceedings, the only "account" that Plaintiffs have placed at issue is an annuity that Mr. Scheuren purchased individually from IDS, which he maintains with Defendants. To the extent that Mrs. Scheuren intends to make claims about any accounts she owns jointly with Mr. Scheuren or services that were provided to her and Mr. Scheuren, she is equally subject to the agreement to arbitrate. To date, Plaintiffs have not made claims regarding any "joint" account maintained with Defendants and Mrs. Scheuren has made no claims in her individual capacity. The only other claims that Plaintiffs have asserted surround the incursion of tax liability from the liquidation of theirjointly held DRIP maintained with Mr. Scheuren's employer, Pennsylvania Power & Light ("PP&L"), the proceeds of which were used to fund Mr. Scheuren's investment with IDS. Accordingly, and as set forth more fully below, Plaintiffs must pursue their claims through arbitration. IDS, as well as tax liability Plaintiffs purportedly incurred when they liquidated the PP&L jointly held DRIP that was used to fund Mr. Scheuren's annuity acquisition.2 See Atwood Affidavit at ¶ 4 and Exhibit "I" thereto. After investigating Plaintiffs' complaint, AEFA determined that the complaint was not justified and, on or about June 20, 2001, advised Plaintiffs' counsel accordingly. See Atwood Affidavit at 15 and Exhibit "2" attached thereto. Not satisfied with the response that they received from AEFA, on or about August 15, 2002, Plaintiffs filed a complaint with the Pennsylvania Securities Commission ("PSC"), making the same allegations as those set forth in their letter complaint to AEFA. See Atwood Affidavit at ¶ 6 and Exhibit "3" attached thereto. The PSC, on October 20, 2002, reached the same conclusion as AEFA, and dismissed Plaintiffs' complaint as not justified. See Atwood Affidavit at ¶ 7 and Exhibit "4" attached thereto. On June 3, 2003, Mr. Scheuren executed an American Express Brokerage IRA Application. Attached to the application was the client agreement that would have been provided to Mr. Scheuren at the time he signed the application (collectively, the "Agreement"). See Atwood Affidavit at ¶ 8 and Exhibit "5" attached thereto. Immediately above Mr. Scheuren's signature on the application appeared the following acknowledgement: I acknowledge I have received the American Express Financial Advisors Inc. client agreements and agree to abide by their terms s currently in effect or as they may be amended from time to time. This account is governed by a predispute arbitration clause which is found on Page I in Section 7 of the client agreement. I acknowledge receipt of the predispute arbitration clause. Notwithstanding Plaintiffs' two prior complaints to AEFA and the PSC respectively, Mr. Scheuren executed the Agreement and agreed to submit to arbitration any and all disputes with Defendants relating to the services that Defendants provided, transactions with z In light of the fact that Plaintiffs have not filed a complaint in these proceedings, Defendants rely upon the complaints that Plaintiffs made to AEFA and the PSC for the purposes of this motion. Defendants and accounts maintained with Defendants. Specifically, Section 7 of the client agreement provides in relevant part: Arbitration. (i) Arbitration is final and binding on the parties. (ii) The parties are waiving their right to seek remedies in court, including the right to a jury trial. (iii) Pre-arbitration discovery is generally more limited than, and different from, court proceedings. (iv) The arbitrator's award is not required to include factual findings or legal reasoning and any party's right to appeal or to seek modification of rulings by the arbitrators strictly limited. (v) The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. Any controversy arising out of, or relating to, my accounts, to transactions with you or your Brokers and/or employees for me or to this agreement or the breach thereof, shall be settled by arbitration and conducted pursuant to the Federal Arbitration Act, before the American Arbitration Association or the National association of Securities Dealers Inc., Chicago Stock Exchange Inc., the New York Stock Exchange, the American Stock Exchange to the extent you may be a member of such exchange or the Municipal Securities Rulemaking Board or the independent nonindustry arbitration forum as I may elect. If I do not make such an election by registered mail addressed to you at your main office within lh days after demand by you that I make such election, then you may make such election. Judgment upon any award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Over one month after Mr. Scheuren signed the Agreement, on or about July 30, 2003, Plaintiffs commenced these proceedings by filing a praecipe to issue a writ of summons.3 In light of the arbitration provision contained within the Agreement, on October 1, 2004, counsel for AEFA wrote to Plaintiffs' counsel requesting that Plaintiffs withdraw their writ ' The praecipe only named AEFA, IDS and Brytz as Defendants; a true and correct copy of which is attached to the motion as Exhibit "A". of summons and resubmit their claims to the NASD, but Plaintiffs declined AEFA's request. See Atwood Affidavit at 112 and Exhibit "6" attached thereto.4 For the reasons set forth more fully below, this Court should compel the arbitration of these proceedings. M. QUESTION PRESENTED: Whether Plaintiffs must submit their claims to arbitration pursuant to the express terms of an agreement that requires any dispute concerning accounts maintained with Defendants and/or transactions with Defendants be submitted to arbitration? Suggested answer: yes. IV. ARGUMENT: A. Enforcement Of Arbitration Agreements Is Favored The writ of summons should be dismissed and Plaintiffs be compelled to submit their claims to arbitration before the NASD because a legally binding agreement to arbitrate "any controversy or claim arising out of their relationship with Defendants compels them to do so. Because there is a valid agreement to arbitrate and that agreement requires arbitration regarding accounts maintained with Defendants and/or transactions or services that Defendants provided, Plaintiffs' writ of summons should: (1) be dismissed with prejudice; and (2) Plaintiffs be compelled to resubmit their claims to arbitration before the NASD. Pennsylvania courts have routinely enforced agreements to arbitrate similar to that which is included in the Agreement. See, e.g., Elkins & Co. v. Suplee, 538 A.2d 883, 885 (Pa. Super. 1988) (citing Waddell v. Shriber, 348 A.2d 96, 100 (Pa. 1975)); and Williams v. Gruntal & Co., 669 A.2d 4 In accordance with the terms of the Agreement, the October 1, 2004 request for Plaintiffs to proceed with arbitration before the NASD constituted a demand on Plaintiffs. Plaintiffs never made a request for the arbitration to occur before an alternate forum. If this Court compels arbitration, in accordance with the Agreement, the arbitration must be conducted before the NASD because Plaintiffs never requested an alternate forum after Defendants demanded that they proceed before the NASD. 387, 388-89 (Pa. Super. 1995). The Pennsylvania courts have held that, where a contract provides for arbitration of all claims or disputes arising out of, or relating to, the contract, those claims must be submitted to arbitration as the parties agreed - regardless of whether the claim sounds in contract or tort. See Midomo Co v Presbyterian Housing Development Co., 739 A.2d 180, 188 (Pa. Super. 1999) (citing Flightways Corp. v. Keystone Helicopter Corp., 331 A.2d 184, 185 (Pa. 1975)); and Williams, 669 A.2d at 388 (arbitration of conversation claim pursuant to contract terms). Indeed, any doubts concerning an agreement to arbitrate should be resolved in favor of arbitration. The Pennsylvania legislature has also endorsed the strong public policy in favor of arbitration by codifying procedures to compel arbitration and to stay litigation pending arbitration. The statute states: (a) Compelling arbitration. - On application to a court to compel arbitration made by a party showing an agreement described in section 7303 (relating to validity of agreement to arbitrate) and a showing that an opposing party refused to arbitrate, the court shall order the parties to proceed with arbitration. If the opposing party denies the existence of an agreement to arbitrate, the court shall proceed summarily to determine the issue so raised and shall order the parties to proceed with arbitration if it finds for the moving party. Otherwise, the application shall be denied. (d) Stay of judicial proceedings. - An action or proceeding, allegedly involving an issue subject to arbitration, shall be stayed if a court order to proceed with arbitration has been made or an application for such an order has been made under this section. If the issue allegedly subject to arbitration is severable, the stay of the court action or proceeding may be made with respect to the severable issue only. If the application for an order to proceed with arbitration is made in such action or proceeding and is granted, the court order to proceed with arbitration shall include a stay of the action or proceeding. 42 Pa. C.S.A. § 7304 (a) and (d) The United States Supreme Court has similarly recognized the importance of and policy reasons behind upholding agreements to arbitrate, including those in standard agreements like the one at issue in these proceedings. See Shearson/American Express v. McMahon, 482 U.S. 220 (1987) (upholding industry-wide agreement for arbitration enforceable against investors); and Dean Witter. Inc. v. Byrd, 470 U.S. 213, 213 (1985) (if there is a valid agreement to arbitrate, the court has no discretion, but rather shall direct the parties to arbitration). Here, both Pennsylvania and Federal law supports Defendants' position that Plaintiffs' claims must be submitted to arbitration before the NASD. B. The Agreement And The Allegations In Plaintiffs' Complaints Demonstrate That Plaintiffs' Claims Must Be Arbitrated As evidenced by the allegations contained in the written complaints that the Plaintiffs submitted to AEFA and PSC respectively, Plaintiffs' claims against Defendants specifically relate to the services that Defendants provided, transactions Plaintiffs executed through Defendants, and an account that Mr. Scheuren purchased from IDS and maintained with Defendants. For example, in the letter complaint that Plaintiffs' submitted to AEFA, Plaintiffs' allege that AEFA's investment strategy was not suitable for them, and that Plaintiffs' liquidation of certain PP&L stock (purportedly at Defendants' suggestion) used for Mr. Scheuren's purchase of an annuity resulted in an improper incursion of tax liability. In Plaintiffs' letter complaint to the PCS, Plaintiffs resubmitted their complaint directed to AEFA. In these complaints, Plaintiffs placed at issue: (1) the services that Defendants provided; (2) transactions that Defendants executed on behalf of Plaintiffs that were allegedly at Defendants' suggestion; and (3) an account that Mr. Scheuren purchased from IDS and maintained with Defendants. By its terms, the Agreement governs all of the transaction that Plaintiffs executed through Defendants and accounts maintained with Defendants. Moreover, the agreement to arbitrate specifically covers any controversy arising out of, or relating to accounts and transactions with Defendants. See Agreement at § 7, Due to the fact that all of the allegations in Plaintiffs' complaints focus on the transactions executed through Defendants and an account that Mr. Scheuren maintained with Defendants, Plaintiffs' claims are subject to the arbitration provision in the Agreement. Accordingly, this Court should dismiss the writ of summons and order that Plaintiffs' claims be submitted to arbitration before the NASD. C. The Agreement To Arbitrate Is Not Limited To Transactions That Occurred After the Agreement Was Signed The above analysis does not change simply because the Agreement to arbitrate was signed after the transactions in question occurred. For example, in Hamilton v. Dean Witter Reynolds Inc., 1989 WL 89434 (W.D. Pa. July 19, 1989), the plaintiff invested in a margin account with Dean Witter. Id. at * 1. After investing for a period of time, Dean Witter asked the plaintiff to execute a customer agreement that contained an arbitration clause. Id. The investor signed the customer agreement and continued to invest with Dean Witter. Id. The investor/plaintiff then sued Dean Witter for his losses and Dean Witter moved to compel arbitration. ld. The court in Hamilton noted that the arbitration clause was free of any ambiguity, clear in its scope, and could have been readily comprehended by the investor. Id. at *3. The Hamilton court further held that the scope of the arbitration clause was broad, and that the terms of the agreement to arbitrate were not limited to transactions occurring after the investor signed the agreement. Id. at *4. As a result, the court in Hamilton compelled the investor to submit his dispute to arbitration despite his contention that the arbitration clause must be limited to transactions occurring after he signed the agreement. Id. Similarly, in Prestera v. Shearson Lehman Bros., Inc., 1986 WL 10095 (D. Mass. 1986), the plaintiff signed an agreement with an arbitration clause after the transactions giving rise to the complaint occurred. Id. at *1. The plaintiff asserted that the arbitration agreement did not apply because the transactions complained of took place before the plaintiff signed the agreement. Id. at *2. The Prestera court rejected this argument and held that the arbitration clause was not limited to transactions occurring after the plaintiff signed the agreement. Id. at *5. More specifically, the arbitration clause in Prestera provided: [a]ny controversy arising out of or relating to my accounts, to transactions with you for me or to this agreement or the breach thereof, shall be settled by arbitration in accordance with the rules, then in effect, of the National Association of Securities Dealers, Inc. or the Boards of Directors of the New York Stock Exchange, Inc. as I may elect.5 Id. at *5. Accordingly, the Court in Prestera compelled arbitration. As the courts in Hamilton and Prestera instruct, the fact that Mr. Scheuren signed the Agreement after the alleged improper acts occurred has no bearing on the enforceability of a broad agreement to arbitrate. As long as there was a valid agreement to arbitrate when Plaintiffs commenced these proceedings (which there was), Plaintiffs are obligated to pursue their claims in arbitration. In fact, the situation before this Court is even more compelling than Hamilton and Prestera. Plaintiffs in these proceedings contend that the purported wrongdoing occurred in 2000. Indeed, Plaintiffs lodged complaints about Defendants' services in 2001 (with AEFA) and 2002 (with the PSC), respectively. On June 3, 2003, Mr. Scheuren signed the Agreement which contained an acknowledgement of the agreement to arbitrate and an agreement to arbitrate. Plaintiffs commenced these proceedings on July 30, 2003. By executing the Agreement after making two separate complaints over a year before commencing these proceedings and nearly two months before commencing these proceedings, Plaintiffs are in no position to claim that they should not have to arbitrate their claims. If Plaintiffs did not want to arbitrate their claims, the choice was clear; Mr. Scheuren could have opted against signing the Agreement. His failure to do so (in view of the acknowledgement above his signature) can only mean one thing - Mr. Scheuren willingly signed the Agreement with the understanding that s Here, the language in the Agreement is almost identical to the language in Prestera. The Agreement provides that "any controversy or claim arising out of, or relating to, my accounts, to transactions with you or your Brokers and/or employees for me or this agreement or the breach thereof, shall be settled by arbitration ...." Agreement at § 7. any claims against Defendants would have to be arbitrated. Accordingly, this Court should compel arbitration of these proceedings before the NASD. V. CONCLUSION: For the foregoing reasons, defendants American Express Financial Advisors, Inc, IDS Life Insurance and Doris E. Brytz, respectfully request that this Honorable Court grant their motion to compel arbitration pursuant to 42 Pa. C.S.A. § 7304, and dismiss with prejudice Plaintiffs' writ of summons and compel the submission of these proceedings to arbitration before the NASD. Joshu .[orn, Esquire Identi cation No. 71799 FOX ROTHSCHILD LLP 2000 Market Street, 10`1' Floor Philadelphia, PA 19103 Telephone: (215) 299-2000 Telecopier: (215) 299-2150 Attorneys for Defendants Dated: August 29, 2005 10 CERTIFICATE OF SERVICE I, Joshua Horn, Esquire, hereby certify that a true and correct copy of defendants memorandum of law in support of the Motion to Compel arbitration was served by first-class U.S. mail, postage prepaid, on plaintiffs counsel of record, addresses as follows: Henry F. Coyne, Esquire Coyne & Coyne P.C. 3901 Market Street Camp Hill, PA 17011-4227 Counsel for Plaintiffs James N. Scheuren and Barbara D. Scheuren k. Horn, Esquire Dated: August 29, 2005 ? r JAMES N. SCHEUREN AND BARBARA D. SCHEUREN, Husband and Wife, Plaintiffs Vs. : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA : NO.03-3622 AMERICAN EXPRESS FINANCIAL , ADVISORS, INC. (n/k/a AMERIPRISE FINANCIAL, INC.), IDS LIFE INSURANCE CIVIL ACTION - ACTION COMPANY, DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ, , Defendants NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Notice is served, by entering a written appearance personally or by an attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Defendant. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Lawyer Referral Service Cumberland County Bar Association 32 S. Bedford Street Carlisle, PA 17013 (800) 990-9108 JAMES N. SCHEUREN AND BARBARA D. SCHEUREN, Husband and Wife, Plaintiffs VS. AMERICAN EXPRESS FINANCIAL ADVISORS, INC. (n/k/a AMERIPRISE FINANCIAL, INC.), IDS LIFE INSURANCE COMPANY, DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ, Defendants : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA NO.03-3622 CIVIL TERM CIVIL ACTION -ACTION COMPLAINT AND NOW COME Plaintiffs, James N. Scheuren and Barbara D. Scheuren, husband and wife, by and through their Attorney, Henry F. Coyne of Coyne & Coyne, P.C., and file this Complaint against the Defendants, alleging as follows: 1. Plaintiff, James N. Scheuren, is an adult individual sui juris, with a current residence of 4 Gale Road, Camp Hill, East Pennsboro Township, Cumberland County, Pennsylvania. 2. Plaintiff, Barbara D. Scheuren is an adult individual sui juris with a current residence of 4 Gale Road, Camp Hill, East Pennsboro Township, Cumberland County, Pennsylvania. 3. At all times during the events described hereinafter, Plaintiffs James N. Scheuren and Barbara D. Scheuren were married to each other. 4. Defendant Doris E. Brytz (hereinafter referred to as `Brytz") is an adult individual who resides at 11 Triplett Court, Suite 101, Dillsburg, York County, Pennsylvania. 5. At all times relevant herein, Defendant Brytz was employed by Defendant American Express Financial Advisors, Inc., now known as Ameriprise Financial, Inc. (hereinafter referred to as "AEFA") as Defendant AEFA's employee, servant or agent, and was identified with Advisor ID Number 61621-9. 2 6. At all times relevant hereto, Defendant Brytz was also employed by Defendant IDS Life Insurance Company (hereinafter referred to as "IDS") as Defendant IDS' employee, servant or agent and was identified with Advisor ID Number 61621-9. 7. At all times relevant hereto, Plaintiffs believed Defendant Brytz was licensed by the Securities Commission, Commonwealth of Pennsylvania to sell securities. 8. At all times relevant hereto, Plaintiffs believed Defendant Brytz was licensed by the Insurance Commission, Commonwealth of Pennsylvania to sell insurance products. 9. At all times relevant hereto, Defendant AEFA was a foreign corporation, licensed and authorized by the Securities Commission and Department of State to conduct business within the Commonwealth of Pennsylvania, with power to offer financial services. 10. At all times relevant hereto, Defendant IDS, which Plaintiffs believed was a foreign corporation, was licensed and authorized to conduct business by the Securities Commission within the Commonwealth of Pennsylvania, with power to issue accident and health insurance policies, life insurance policies, annuities, separate account (variable life account annuities) and other insurance products. 11. From 1962 to 1998, Plaintiff James N. Scheuren was employed as an electrical foreman by PPL Corporation (hereinafter referred to as "PPL" ), a domestic corporation located at Two North Ninth Street, Allentown, PA 18101-1179. 12. On February 1, 1998, Plaintiff James N. Scheuren retired from employment with PPL. 13. As a result of his employment with PPL, at the date of his retirement Plaintiff James N. Scheuren had vested the following accounts: A. #3097166958 with a balance of $91,527.98 - Dividend Reinvestment Plan (DRIP) owned by Plaintiffs, James N. Scheuren and Barbara D. Scheuren. 3 B. #98974869 with a balance of $47,811.76 - PPL Employee Stock Ownership Plan (ESOP) owned by Plaintiff James N. Scheuren. 14. On numerous dates prior to August 29, 2000, Defendant Brytz encouraged the Plaintiffs to liquidate their stockholdings in the Plaintiffs' DRIP Account and Plaintiff s ESOP Account set forth in Paragraph 13, supra and purchase various products offered by the Defendants, namely an IDS Life, AEFA Retirement Advisor Variable Annuity, Account #930-0665-8273-3-004 and AEFA Federal Income Fund Class B, Account #00124746-8802-6-002. 15. On numerous dates prior to August 29, 2000, Plaintiffs told Defendant Brytz they would consider liquidating their stockholdings as identified in Paragraph 13 supra, as Defendant Brytz suggested and advised, provided that there would be no tax due to the Internal Revenue Service (hereinafter referred to as "IRS") or due the Commonwealth of Pennsylvania (hereinafter referred to as "the Commonwealth'), as a result of the liquidation. 16. Defendant Brytz, on numerous occasions prior to August 29, 2000 assured and advised the Plaintiffs that there would be no taxes due to the IRS or the Commonwealth regarding the Plaintiffs' liquidation of the said PPL stock in the accounts identified in Paragraph 13, supra. 17. On August 29, 2000, based upon the repeated assurances and advice from Defendant Brytz, Plaintiffs, with the assistance of Defendant Brytz, issued written authorization to PPL to liquidate their stockholdings and issue checks for the proceeds, payable to the order of Plaintiffs. PPL issued a check for the sum of $47,811.76, payable to the order of Plaintiffs and remitted the check directly to IDS as per Defendant Brytz's instructions. PPL also issued another check for the sum of $91,257.98 payable to the order of Plaintiffs who endorsed the check and gave it to Defendant Brytz as per her instructions, as she told them that PPL had made an error in sending this check to Plaintiffs rather than Defendant Brytz. 4 18. On or about March 21, 2001, Plaintiffs received an IRS Form 1099 informing them they owed taxes due to the liquidation of the said PPL stockholdings. 19. On or about March 21, 2001, Defendants provided to Defendant Brytz the said IRS Form 1099 and Defendant Brytz told the Plaintiffs that they did in fact owe the IRS the additional taxes. 20. Subsequently, in March 2001, Plaintiffs sought the professional services of Deborah Wartell, EA of Parks & Company for the preparation of their personal federal and state tax returns for 2000. The federal and state returns resulted in Plaintiffs owing additional taxes to the IRS of $7,708.00 and to the Commonwealth of $1,224.00, both due to the ill advised liquidation of Plaintiffs' PPL stockholdings. 21. On November 5, 2003, Plaintiffs paid to Parks & Company an additional professional fee in the amount of $60.00 for the said preparation of the tax returns. COUNT NO.1 Plaintiffs v. Doris F. Brytz, Defendant 22. The allegations contained in Paragraphs 1 through 21 are incorporated herein as though set forth in their entirety. 23. As a result of Plaintiffs' justified reliance upon Defendant Brytz's professional expertise and numerous assurances that no additional taxes would be due the IRS and the Commonwealth upon the liquidation of Plaintiffs' PPL stockholdings, Plaintiffs suffered loss of dividend income and appreciation of the value of their PPL stock from the September 15, 2000 date of liquidation, in the amount of $41,017.02 as of May 31, 2004, plus continuing losses. 24. As a result of Plaintiff's justified reliance upon Defendant Brytz's professional expertise and numerous assurances that no additional taxes would be due to the IRS or the Commonwealth upon 5 the liquidation of Plaintiff's PPL stockholdings, Plaintiffs were required to withdraw funds in the amount of $8,932.00 from the AEFA policy, and were assessed a ten percent fee of $900.00 for early withdrawal, said funds being used to pay the additional taxes for the liquidation of the PPL stock. 25. Defendant Brytz presented herself to Plaintiffs as having substantial experience and qualifications with regard to financial services, insurance products and tax consequences. 26. Based upon the professed areas of specialization and expertise and repeated advice of Defendant Brytz, Plaintiffs utilized her services involving the liquidation of Plaintiffs' PPL stockholdings and the acquisition of a Defendant IDS Life, AEFA Retirement Advisor Variable Annuity, Account #930- 0665-8273-3-004 and AEFA Federal Income Fund Class B, Account #0012-4746-8802-"02 with the understanding the said liquidation of Plaintiffs' PPL stockholdings would not have any tax consequence. 27. Defendant Brytz knew or should have known the liquidation of the Plaintiffs' PPL stockholdings, which she advised, encouraged, orchestrated and completed, would have tax consequences, and failed to advise Plaintiffs of the said consequences, and in fact repeatedly assured Plaintiffs that the sale of the PPL stockholdings would have no adverse tax consequences. 28. Defendant Brytz, as Plaintiffs' trusted financial advisor, owed a duty of care to Plaintiffs to provide accurate and prudent financial advice consistent with applicable laws and regulations in accordance with the applicable standards of knowledge, skill and care. 29. Defendant Brytz breached her fiduciary duty to Plaintiffs and was negligent and recklessly indifferent by informing, advising and encouraging the Plaintiffs that the liquidation of the Plaintiffs' PPL stockholdings would not be subject to any tax by the IRS or the Commonwealth of Pennsylvania and that such negligent, careless, reckless and indifferent conduct by Defendant Brytz resulted in substantial tax liabilities and other losses realized by the Plaintiffs. 6 30. Defendant Brytz breached her duty to the Plaintiffs and her implied obligation of good faith and fair dealing when Defendant Brytz acted in bad faith and in a commercially unreasonable manner in counseling, advising and encouraging Plaintiffs to liquidate their PPL stockholdings resulting in substantial tax liabilities and other losses realized by the Plaintiffs. 31. Defendant Brytz also breached her fiduciary duty to Plaintiffs and was negligent by informing, advising and encouraging Plaintiffs that the liquidation of the Plaintiffs' PPL stockholdings would not be subject to tax by the IRS and the Commonwealth of Pennsylvania and such negligence and recklessly indifferent conduct by Defendant Brytz resulted in substantial liabilities and losses realized by the Plaintiffs and such conduct by Defendant Brytz was unfair and deceptive conduct of trade and commerce regarding the sale and utilization of Defendant Brytz's services and as such is in violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL, 73 Pa.C.S. § 201, et. seq.), warranting imposition of treble damages under Section 201-9.2(a) of the UTPCPL and payment of Plaintiffs' counsel fees. 32. The above described actions by Defendant Brytz were wanton, outrageous, reckless, willful and oppressive, which justifies the imposition of punitive damages. 33. The Plaintiffs had a justifiable right to rely on the advice and recommendation of Defendant Brytz regarding Defendant Brytz's service in liquidation of the PPL stockholdings based upon Defendant Brytz's holding herself out as having the requisite skill, knowledge and expertise in financial planning transactions and Plaintiffs' reliance upon such expertise was justifiable and reasonable. Wherefore, Plaintiffs pray that a judgment be entered in their favor and against Defendant Brytz, in an amount in excess of $25,000.00 in incidental, consequential and compensatory damages; treble damages; Plaintiffs' counsel fees and punitive damages, together with interest, costs of suit and any other remedy this Court deems just and proper. 7 COUNT II: Plaintiffs v. American Express Financial Services, Inc., (n/k/a Ameriprise Financial, Inc.), Defendant 34. The allegations contained in Paragraphs 1 through 33 are incorporated herein as though set forth in their entirety. 35. The Plaintiffs had a justifiable expectation that Defendant Brytz would competently and diligently represent them in all matters related to the financial services referred to above and for which the Plaintiffs retained Defendant Brytz and paid her for her services, which expectation was reasonable and justified under the circumstances. 36. The negligence and reckless indifference by Defendant Brytz is imputed to her employer, AEFA, on the basis of respondent superior liability. 37. Defendant Brytz, acting as an employee of AEFA, breached her fiduciary duty to Plaintiffs and was negligent by informing, advising and encouraging Plaintiffs that the liquidation of the Plaintiffs' PPL stockholdings would not be subject to tax by the IRS or the Commonwealth of Pennsylvania and such negligence and recklessly indifferent conduct by Defendant Brytz, as AEFA's employee, resulted in substantial liabilities and losses realized by the Plaintiffs and such conduct by Defendant Brytz, as AEFA's employee, was unfair and deceptive conduct of trade and commerce regarding the sale and utilization of Defendant Brytz's and AEFA's services and as such is in violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL, 73 Pa.C.S. § 201, et. seq.), warranting imposition of treble damages under Section 201-9.2(a) of the UTPCPL and payment of Plaintiffs' counsel fees. 38. The Defendant, AEFA, was negligent and recklessly indifferent in failing to control, supervise and monitor Defendant Brytz, its agent, employee or servant, by allowing Defendant Brytz to 8 provide services and guidance to the Plaintiffs to liquidate their PPL stockholdings and advise Plaintiffs that such transactions would not have adverse tax consequences and by Defendant Brytz ultimately advising Plaintiffs to purchase shares of AEFA Federal Income Fund Class B, Account #00124746- 8802-6-002. 39. The above described actions by Defendant Brytz, acting as AEFA's employee, were wanton, outrageous, reckless, willful and oppressive, which justifies the imposition of punitive damages. Wherefore, Plaintiffs pray that a judgment be entered in their favor and against Defendant AEFA, in an amount in excess of $25,000.00 in incidental, consequential and compensatory damages; treble damages; Plaintiffs' counsel fees and punitive damages, together with interest, costs of suit and any other remedy this Court deems just and proper. COUNT III: Plaintiffs v. IDS Life Insurance Company, Defendant 40. The allegations contained in Paragraphs 1 through 39 are incorporated herein as though set forth in their entirety. 41. The Plaintiffs had a justifiable expectation that Defendant Brytz would competently and diligently represent them in all matters related to the financial services referred to above and for which the Plaintiffs retained Defendant Brytz and paid her for her services, which expectation was reasonable and justified under the circumstances. 42. The negligence and reckless indifference by Defendant Brytz is imputed to her employer, IDS, on the basis of respondent superior liability. 9 43. Defendant Brytz, acting as an employee of IDS, breached her fiduciary duty to Plaintiffs and was negligent by informing, advising and encouraging Plaintiffs that the liquidation of the Plaintiffs' PPL stockholdings would not be subject to tax by the IRS and the Commonwealth of Pennsylvania and such negligence and recklessly indifferent conduct by Defendant Brytz, as IDS's employee, resulted in substantial liabilities and losses realized by the Plaintiffs and such conduct by Defendant Brytz, as IDS's employee, was unfair and deceptive conduct of trade and commerce regarding the sale and utilization of Defendant Brytz's and IDS's services and as such is in violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL, 73 Pa.C.S. § 201, et. seq.), warranting imposition of treble damages under Section 201-9.2(a) of the UTPCPL and payment of Plaintiffs' counsel fees 44. The Defendant, IDS was negligent and recklessly indifferent in failing to control, supervise and monitor Defendant Brytz, its agent, employee or servant by allowing Defendant Brytz to provide services and guidance to the Plaintiffs to liquidate their PPL stockholdings and advise Plaintiffs that such transactions would not have adverse tax consequences and that Defendant Brytz ultimately advised Plaintiffs to purchase insurance product identified as Defendant IDS, AEFA Retirement Advisor Variable Annuity, Account #930-0665-8273-3-004 from Defendant IDS. 45. The above described actions by Defendant Brytz, acting as IDS's employee, were wanton, outrageous, reckless, willful and oppressive, which justifies the imposition of punitive damages. Wherefore, Plaintiffs pray that a judgment be entered in their favor and against Defendant IDS, in an amount in excess of $25,000.00 in incidental, consequential and compensatory damages; treble damages; Plaintiffs' counsel fees and punitive damages, together with interest, costs of suit and any other remedy this Court deems just and proper. 10 Respectfully submitted: Dated: '4?- li'll Q COYNE & COYNE, P.C. By: ?L? Henry 4CCoe, ir e Pa. S. Ct. No. 06250 3901 Market Street Camp Hill, PA 170114227 (717) 737-0464 Attorney for Plaintiffs 11 VERIFICATION The facts set forth in the foregoing are true and correct to the best of the undersigned's knowledge, information and belief and are verified subject to the penalties for unworn falsification to authorities under 18 Pa. C.S.A. § 4904. Dated: 2 Z- V O Date: a .? :Z O (S -6 AAII 0 J -A ?A J N. SCHEUREN BARBARA D. SCHEUREN CERTIFICATE OF SERVICE I, Henry F. Coyne, Esquire, of Coyne & Coyne, P.C., hereby certify that true copy of the foregoing Complaint was served this date upon the below-referenced individual at the below listed address by way of first class mail, postage pre-paid: Joshua Horn, Esquire A. Wesley Bridges, Esquire Fox Rothschild, LLP 2000 Market Street, Tenth Floor Philadelphia, PA 19103-3291 Attorneys for Defendants Dated: g (" A (7 0 Henry F. Coyne, a ire Pa. S. Ct. No. 06250 3901 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 12 t; TO THE PLAINTIFFS: YOU ARE HEREBY NOTIFIED TO FILE A WRITTEN RESPONSE TO THE PRELIMINARY OBJECTIONS TO PLAINTIFFS' COMPLAINT WITHIN TWENTY (20) DAYS FROM SERVICE HE OF OR A JUDGMENT MAY BE EN D AGAINST YOU. HORN, FOX ROTHSCHILD LLP BY: JOSHUA HORN and JESSICA P. MATHEWSON, ESQUIRES IDENTIFICATION NO. 71799 AND 202176 ATTORNEYS FOR DEFENDANTS 2000 MARKET STREET, TENTH FLOOR PHILADELPHIA, PA 19103-3291 (215)299-2000 JAMES N. SCHEUREN and BARBARA SCHEUREN, COUNTY Plaintiffs, V. AMERICAN EXPRESS FINANCIAL ADVISORS, INC. (n/k/a AMERIPRISE FINANCIAL SERVICES, INC.), IDS LIFE INSURANCE COMPANY, DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ, Defendants. COURT OF COMMON PLEAS OF CUMBERLAND CIVIL ACTION NO. 03-3622 PRELIMINARY OBJECTIONS OF DEFENDANTS AMERIPRISE FINANCIAL SERVICES, INC., DORIS E. BRYTZ AND DONALD WEAVER IN THE NATURE OF A MOTION TO COMPEL ARBITRATION PURSUANT TO PENNSYLVANIA RULE OF CIVIL PROCEDURE 1028(a)(6) AND 42 PA.C.S.A. § 7304 AND PRELIMINARY OBJECTIONS TO THE COMPLAINT Defendants, American Express Financial Advisors (n/k/a Ameriprise Financial Services, Inc. ("Ameriprise"), IDS Life Insurance Co., ("IDS"), Donald Weaver ("Weaver") and Doris E. Brytz (`Brytz"), (collectively, the "Defendants") by and through their attorneys, hereby assert the following preliminary objections to the complaint (the "Complaint") of James N. Scheuren ("Mr. Scheuren") and Barbara Scheuren ("Mrs. Scheuren") (collectively, the "Plaintiffs"), pursuant to Pennsylvania Rule of Civil Procedure 1028, and request that Plaintiffs' Complaint be dismissed with prejudice for the following reasons: 1. PROCEDURAL BACKGROUND 1. On or about July 30, 2003, Plaintiffs commenced these proceedings against Defendants by filing a praecipe to issue a writ of summons; the praecipe did not name Weaver as a defendant. 2. On July 26, 2006, Plaintiffs filed a complaint, alleging, among other things, breach of fiduciary duty and negligence on the part of Ameriprise, IDS and Brytz. A true and correct copy of the Complaint is attached hereto as Exhibit "A". II. FACTUAL BACKGROUND 3. In or about August 2000, Plaintiffs sought financial planning advice from Brytz, a financial advisor associated with Ameriprise, with respect to the possible liquidation of a jointly held DRIP account maintained with Mr. Scheuren's employer, Pennsylvania Power & Light ("PP&L"). See Affidavit of Faye Atwood attached hereto and made a part hereof as Exhibit "B" ("Atwood Affidavit"). 4. On April 10, 2001, Plaintiffs submitted a written complaint to Ameriprise alleging inadequate services with respect to their accounts and, in particular, issues surrounding an annuity that Mr. Scheuren purchased, as well as tax liability Plaintiffs purportedly incurred when they liquidated the PP&L jointly held DRIP to fund Mr. Scheuren's annuity with IDS Life Insurance. A true and correct copy of the April 10, 2001 complaint is attached to the Atwood Affidavit as Exhibit "I". 5. Ameriprise determined that the complaint was not justified and, on or about June 20, 2001, advised Plaintiffs' counsel accordingly. See June 20, 2001 letter from Ameriprise to Plaintiffs' counsel, a true and correct copy of which (sans attachments) is attached to the Atwood Affidavit as Exhibit "2". 6. On or about August 15, 2002, Plaintiffs filed a complaint with the Pennsylvania Securities Commission ("PSC"), making the same allegations as those set forth in their letter complaint to Ameriprise. A true and correct copy of the August 15, 2002 complaint is attached to the Atwood Affidavit as Exhibit "3". 7. On October 20, 2002, the PSC dismissed Plaintiffs' complaint as not justified. See October 20, 2002 letter from PSC addressed to Mr. Scheuren, a true and correct copy of which is attached to the Atwood Affidavit as Exhibit' 4". 8. On June 3, 2003, Mr. Scheuren executed an American Express Brokerage IRA Application. Attached to the application was the client agreement that would have been provided to Mr. Scheuren at the time he signed the application (collectively, the "Agreement"). A true and correct copy of the Agreement (including the applicable client agreement) is attached to the Atwood Affidavit as Exhibit "5". 9. Immediately above Mr. Scheuren's signature on the application appeared the following acknowledgement: I acknowledge I have received the American Express Financial Advisors Inc, client agreements and agree to abide by their terms currently in effect or as they may be amended from time to time. This account is governed by a predispute arbitration clause which is found on Page I in Section 7 of the client agreement. I acknowledge receipt of the predispute arbitration clause. 10. Notwithstanding Plaintiffs' two prior complaints to Ameriprise and the PSC respectively, Mr. Scheuren executed the Agreement and agreed to submit to arbitration any and all disputes with Ameriprise relating to the services provided and accounts maintained with Ameriprise. 11. Specifically, Section 7 of the Agreement provides in relevant part: Arbitration. Arbitration is final and binding on the parties. ii. The parties are waiving their right to seek remedies in court, including the right to a jury trial. iii. Pre-arbitration discovery is generally more limited than, and different from, court proceedings. iv. The arbitrator's award is not required to include factual findings or legal reasoning and any party's right to appeal or to seek modification of rulings by the arbitrators is strictly limited. V. The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. Any controversy arising out of, or relating to, my accounts, to transactions with you or your Brokers and/or employees for me or to this agreement or the breach thereof, shall be settled by arbitration and conducted pursuant to the Federal Arbitration Act, before the American Arbitration Association or the National Association of Securities Dealers Inc., Chicago Stock Exchange Inc., the New York Stock Exchange, the American Stock Exchange to the extent you may be a member of such exchange or the Municipal Securities Rulemaking Board or the independent nonindustry arbitration forum as I may elect. If I do not make such an election by registered mail addressed to you at your main office within 10 days after demand by you that I make such election, then you may make such election. Judgment upon any award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 12. In light of the arbitration provision contained within the Agreement, on • October 1, 2004, counsel for Ameriprise wrote to Plaintiffs' counsel requesting that Plaintiffs withdraw their Writ of Summons and resubmit their claims with the National Association of Securities Dealers, Inc. ("NASD"), but Plaintiffs declined Ameriprise's request. A true and correct copy of counsel for Ameriprise's October 1, 2004 letter is attached to the Atwood Affidavit as Exhibit "6". 0 13. On August 29, 2005, defendants filed a motion to compel arbitration. III. PRELIMINARY OBJECTIONS IN THE NATURE OF A MOTION TC COMPEL ARBITRATION PURSUANT TO PENNSYLVANIA RULE OF CIVIL PROCEDURE 1028(a)(6) and 42 Pa.C.S.A. & 7304 0 14. Defendants incorporate by reference paragraphs 1 through 13 above as though fully set forth herein. . 15. Plaintiffs, by commencing these proceedings rather than initiating private arbitration, have breached the Agreement. 16. Pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(6) and 42 Pa.C.S.A. § 7304(a), this Court should (1) dismiss the Complaint with prejudice because there is an agreement for alternative dispute resolution, and (2) enter an order compelling the submission of these proceedings to arbitration pursuant to the • Agreement. 0 0 compelling the submission of these proceedings to arbitration pursuant to the r Agreement. 17. Pennsylvania Rule of Civil Procedure 1028(a)(6) states in pertinent part: • i. Preliminary objections maybe filed by any party to any pleading and are limited to the following grounds: • (6) pendency of a prior action or agreement for alternative dispute resolution. 18. Additionally, the comment to Rule 1028 provides that an agreement to • arbitrate may be asserted by way of preliminary objection or by petition to compel arbitration. 19. Pennsylvania courts have routinely enforced agreements to arbitrate :J similar to that which is included in the Agreement. See Elkins & Co. v. Suklee, 538 A.2d 883 (Pa. Super. 1988) (citing Waddell v. Shriber, 348 A.2d 96, 100 (Pa. 1975)); • and Williams v. Gruntal & Co., 447 Pa. Super. 357, 359,669 A.2d 387, 388 (Pa. Super. 1995), see also Hamilton v. Dean Witter Reynolds. Inc., 1989 WL 894 (W.D. Pa. July 19, 1989) (arbitration agreement enforced even though investments preceded • execution of agreement). 20. The Pennsylvania courts have held that, where a contract provides for arbitration of all claims or disputes arising out of or relating to the contract, all claims are to be submitted to arbitration as the parties agreed regardless if the claim is in contract or tort. See Midomo Co. v. Presbyterian Housing Development Co., 739 A.2d 180, 188 (Pa. Super. 1999) (citing Flightwavs Corp. v. Keystone Helicopter 0 Coro, 459 Pa. 660, 661-63, 331 A.2d 184, 185 (1975)); and Williams, 669 A.2d at • 388 (claim for conversion covered by arbitration provision in contract). Indeed, any doubts concerning an agreement to arbitrate should be resolved in favor of arbitration. 21. The Pennsylvania legislature has also endorsed a strong public policy 0 in favor of arbitration by codifying procedures to compel arbitration and to stay litigation pending arbitration. That statute states: (a) Compelling arbitration. - On application to a court to compel • arbitration made by a party showing an agreement described in section 7303 (relating to validity of agreement to arbitrate) and a showing that an opposing party refused to arbitrate, the court shall order the parties to proceed with arbitration. If the opposing party denies the existence of an agreement to arbitrate, the court shall proceed summarily to • determine the issue so raised and shall order the parties to proceed with arbitration if it finds for the moving party. Otherwise, the application shall be denied. • (d) Stay of judicial proceedings. - An action or proceeding, allegedly involving an issue subject to arbitration, shall be stayed if a court order to proceed with arbitration has been made or an application for such an order has been made under this section. If the issue • allegedly subject to arbitration is severable, the stay of the court action or proceeding may be made with respect to the severable issue only. If the application for an order to proceed with arbitration is made in such action or proceeding and is granted, the court order to proceed with arbitration shall include a stay of the action or proceeding. • 42 Pa.C.S.A. § 7304(a) and (d). 22. The United States Supreme Court has similarly recognized the importance of and policy reasons behind upholding agreements to arbitrate, including • those in standard agreements like the one at issue in these proceedings. See Shearson/American Express v. McMahon, 482 U.S. 220 (1987) (upholding industry- wide agreement for arbitration which is enforceable against investors), Dean Witter b Reynolds. Inc. v. Byrd, 470 U.S. 213 (1985) (if there is a valid agreement to arbitrate, • the court has no discretion, but rather shall direct the parties to arbitration); and Moses H Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 22-23 (1983) (pursuant to the Federal Arbitration Act, any doubts concerning an agreement • to arbitrate should be resolved in favor of arbitration). 23. Here, the Agreement specifically provides that any controversy arising • out of, or relating to, Plaintiffs' accounts or transactions with Ameriprise, its brokers and/or employees shall be settled by arbitration. 24. All of the claims and damages alleged in the Complaint originate from • or relate to Plaintiffs' accounts or from Plaintiffs' purported transactions with Ameriprise, IDS, their brokers and/or employees; all of Plaintiffs' allegations and the parties to these proceedings are covered by Section 7 of the Agreement. Accordingly, • this Court should dismiss these proceedings and order the submission of this matter to arbitration before the NASD. In the alternative, this Court should compel arbitration • and stay these proceedings pending disposition of the arbitration. WHEREFORE, defendants respectfully request that this Court sustain their preliminary objections in the nature of a motion to compel arbitration pursuant to • Pennsylvania Rule of Civil Procedure 1028(a)(6) and 42 Pa.C.S.A. § 7304 and dismiss the Complaint with prejudice and compel the submission of these 11 1• proceedings to arbitration before the NASD. In the alternative, this Court should stay these proceedings and order that Plaintiffs pursue the claims in arbitration pursuant to the Agreement and before the NASD. 10 0 • IV. PRELIMINARY OBJECTIONS FOR LEGAL INSUFFICIENCY OF A PLEADING (DEMURRER) PURSUANT TO PENNSYLVANIA RULE OF CIVIL PROCEDURE 1028(a)(4) A. The "Gist of the Action" Doctrine Precludes Plaintiffs From Brineine Tort Claims Aeainst the Defendants • 25. Defendants incorporate by reference paragraphs 1 through 24 above as though fully set forth herein. • 26. Pennsylvania Rule of Civil Procedure 1028(a)(4) provides: "[p]reliminary objections may be filed by any party to any pleading and are limited to the following grounds ... (4) legal insufficiency of a pleading." 11 27. Pursuant to the "gist of the action" doctrine, "in order for a claim to be construed as a tort action, the wrong ascribed to the defendants must be the gist of the • action with the contract being collateral." Phico Ins. Co. v. Presbyterian Medical Services Corp., 444 Pa. Super 221, 228, 663 A.2d 753, 757 (1995). 28. A purported tort allegedly committed in the course of carrying out a • contractual agreement warrants dismissal if the "gist" of the claim sounds in contract instead of tort. See id. 29. In these proceedings, the "gist" of the action is the alleged failure to provide services pursuant to and in breach of the Agreement. 30. The tort claims set forth in Counts one, two and three of the Complaint • (negligence, breach of fiduciary duty and violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law) are premised upon the allegation that n defendants breached the Agreement. 0 a 31. Accordingly, the tort claims in Counts one, two and three of the Complaint 0 should be dismissed with prejudice for failure to state claims upon which relief can be granted. WHEREFORE, defendants respectfully request that this Court sustain their preliminary objections in the nature of a demurrer and dismiss with prejudice the tort claims in Counts one through three of Plaintiffs' Complaint for failure to state claims upon which relief can be granted. • I• B. Preliminary Objections of Defendants to the Complaint Pursuant To Pennsylvania Rule of Civil Procedure 1028(a)(4) 32. Defendants incorporate paragraphs I through 31 above as though fully set forth herein. 33. in paragraphs 31, 37 and 43 of the Complaint, Plaintiffs allege that I* defendants violated the Pennsylvania Unfair Trade Practices & Consumer Protection Law (UTPCPL, 73 Pa.C.S. § 201 et seq.) without identifying what, if any, acts or omissions on the part of defendants violated any provision of the statute. 1* 34. Accordingly, paragraphs 31, 37 and 43 of the Complaint should be stricken for failure to state a claim upon which relief can be granted. I • WHEREFORE, defendants respectfully request that this Court sustain their preliminary objections in the nature of a demurrer and strike paragraphs 31, 37 and 43 of Plaintiffs' Complaint with prejudice for failure to state a claim upon which relief • can be granted. I• is V. PRELIMINARY OBJECTIONS FOR FAILURE OF PLEADING TO CONFORM TO LAW OR RULE OF COURT PURSUANT • TO PENNSYLVANIA RULE OF CIVIL PROCEDURE 1028(a)(2) A. Preliminary Objections of Defendants to Counts One, Two and Three Pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(2) • 35. Defendants incorporate by reference paragraphs 1 through 34 above as though fully set forth herein. 36. Pennsylvania Rule of Civil Procedure 1028(a)(2) provides: "(p]reliminary • objections may be filed by any party to any pleading and are limited to the following grounds ... (2) for failure of a pleading to conform to law or rule of court or 1• inclusion of scandalous or impertinent matter." 37. Pennsylvania Rule of Civil Procedure 1020(a) provides: "each cause of action and any special damage related thereto shall be stated in a separate count • containing a demand for relief." 38. A count of a complaint maybe stricken for failure to comply with Rule 1020(a). See General State Auth. v. Lawrie & Green, 356 A.2d 851, 853 (Pa. 1 • Cmwlth. 1976). 39. Counts one, two and three of the Complaint violate Pennsylvania Rule of I* Civil Procedure 1020(a) in that Plaintiffs purport to allege three separate causes in each count. 40. As a result, Counts one, two and three of the Complaint should be stricken • with prejudice. WHEREFORE, defendants respectfully request that this Court sustain their 1• preliminary objections in the nature of a motion to strike Counts 1, 2 and 3 of Plaintiffs' Complaint, for failure to comply with law or rule of court. 1• • V1. PRELIMINARY OBJECTIONS OF WEAVER FOR INSUFFICIENT SPECIFICITY OF A PLEADING PURSUANT • TO PENNSYLVANIA RULE OF CIVIL PROCEDURE 1028(a)(3) AND 1028(a)(4 u 41. Defendants incorporate by reference paragraphs 1 through 40 above as though fully set forth herein. 42. Rule 1019(a) of the Pennsylvania Rules of Civil Procedure requires that the Complaint state in a concise and summary form the material facts upon which each • cause of action is based. 43. In order to comply with the Pennsylvania Rules of Civil Procedure, a complaint "must state clearly and concisely all the relevant facts so that the defendant I . may be fully advised as to what he is called to meet." Drauo Corp. v. Key Bellevilles. 75 Pa. D.&C.2d 656, 660 (Westmoreland Co. 1976). I • 44. Further, "[a] complaint is sufficiently specific if it provides the adverse party with enough facts to enable him to frame a proper answer and prepare a defense." Commonwealth ex rel. Milk Marketing_Bd. v. Sunnybrook Dairies, 370 • A.2d 765, 768 (Cmwlth. Ct. 1977) (citing Stredny v. Wyeth Laboratories, 62 Lz.L.Reg. 175 (1972)). [l 45. Although Plaintiffs name Weaver as a defendant, Plaintiffs' have failed to assert gay allegations against him anywhere in the Complaint. Indeed, there are not even any factual allegations as to Weaver in the Complaint. • 46. In light of the fact that the Complaint does not assert one allegation against Weaver (let along mention Weaver in the body of the Complaint), the Complaint should be dismissed as to Weaver for failure to state a claim upon which relief can be 1 . granted. 1• • WHEREFORE, defendant, Donald Weaver, respectfully requests that this 0 Court sustain his preliminary objections and dismiss the Complaint for failure to state a claim upon which relief can be granted. submitted, Imo"" I0 1• I• 1• 1• 1• 1• Dated: August 10, 2006 JOS A HORN, ESQUIRE JES CA P. MATHEWSON, ESQUIRE FOX ROTHSCHILD LLP 2000 Market Street, Tenth Floor Philadelphia, PA 19103 (215) 299-2000 Attorneys for Defendants 1• 0 . . . 0 . C,-,Kk?o-A 9 i JAMES N.SCHEUREN AND : IN THE COURT OF COMMON PLEAS OF BARBARA D. SCHEUREN, : CUMBERLAND COUNTY, PENNSYLVANIA Husband and Wife, Ptaintim Va. NO.03-3622 AMERICAN EXPRESS FINANCIAL ADVISORS, INC. (uW& AMERIPRISE FINANCIAL, INC.), IDS LIFE INSURANCE CML ACTION - ACTION • COMPANY, DONALD WEAVER, VICE : PRESIDENT AND DORIS E. BRYT7., Defendants 10 1• 1• 1• No No NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Notice is served, by entering a written appearance personally or by an attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may'proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Defendant. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP, Cumberland County Lawyer Referral Service Cumberland County Bar Association 32 S. Bedford Street Carlisle, PA 17013 (800) 990-9108 I RUE COPY FROM 1- iZ R- +n TOOMOrry wrIX70, 1)%9re unto %'4"''i'X7 f and the mW of said Court xt?Car***. h. wsxhonota? 1 0 P r a JAMES N, SCHEUREN AND : IN THE COURT OF COMMON PLEAS OF BARBARA D. SCHEUREN, : CUMBERLAND COUNTY, PENNSYLVANIA • Husband and Rife, Plalutltfs Vs. NO.03-3622 CIVIL TERM AMERICAN EXPRESS FINANCIAL ADVISORS, INC. (nWa AMERIPRISE • FINANCIAL, INC.), IDS LIFE INSURANCE : CIVIL ACTION - ACTION COMPANY. DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRM Defendants • COMPLAINT AND NOW COME Plaintiffs, James N. Seheuren and Barbara D. Scheuren, husband and wife, by and through their Attorney, Henry F..Coyne of Coyne & Coyne, P.C., and file this Complaint against • the Defendants, alleging as follows: 1. Plaintiff, Jams N. Schemen, is an adult individual sui juris, with a current residence of4 Gale Road, Camp Hill, East Permsboto Township, Cumberland County, Pennsylvania. • 2. Plaintiff, Barbara D. Scheuren is an adult individual sui juris with a current residence of 4 Gale Road, Camp Hill, East Pennmboro Township, Cumberland County, Pennsylvania. 3. At all times during the events described hereinafter, Plaintiffs Jams N. Schemen and • Barbara D. Schemen were married to each other. 4. Defendant Doris E. Brytz (hereinafter referred to as 'Brytz ) is an adult individual who resides at 11 Triplett Court, Suite 101, Dillsburg, York County, Pennsylvania. 5. At all times relevant herein, Defendant Brytz was employed by Defendant American Express Financial Advisors, Inc., now known as Ameriprise Financial, Inc. (hereinafter referred to as "AEFA') as Defendant AEFA's employee, servant or agent, and was identified with Advisor M Number • 61621-9. 2 • • • t 6. At all times relevant hereto, Defendant Brytz was also employed by Defendant IDS Life Insurance Company (hereinafter referred to as IDS' j as Defendant IDS' employee, servant or agent and was identified with Advisor ID Nambet 61621-9. 7. At all times relevant hereto, Plaintiffs believed Defendant Brytz was licensed by the Securities Commission, Commonwealth of Pennsylvania to sell securities. 8. At all times relevant hereto, Plaintiffs believed Defendant Brytz was licensed by the 1• 1• 1• Insurance Commission, Commonwealth' of Pennsylvania to sell insurance products. 9. At all times relevant hereto, Defendant AEFA was a foreign corporation, licensed and authorized by the Securities Commission and Department of State to conduct business within the Commonwealth of Pennsylvania, with power to offer financial services. 10. At all times relevant hereto, Defendant IDS, which Plaintiffs believed was a foreign corporation, was licensed and authorized to conduct business by the Securities Commission within the Commonwealth of Pernsylvania, wif, power to issue accident and health insurance policies, life insurance policies, annuities, separate.,.account (variable life account annuities) and other insurance products. 11. From 1962 to 1998, Plaintiff James N. Scheuren was employed as an electrical foreman is ¦• by PPL Corporation (hereinafter referred to as 'TPV'), a domestic corporation located at Two North Ninth Street, Allentown, PA 18101-1179. 12. On February 1, 1998, Plaintiff James N. Scheuren.retired from employment with PPL. 13. As a result of his employment with PPL, at the date of his retirement Plaintiff James N. Scheuren had vested the following accounts: A. #3097166958 with a balance of $91,52798 - Dividend Reinvestment Plan (DRIP) No owned,by Plaintiffs, James N. Scheuren and Barbara D. Sebeuren. 3 0 a a B. #98974869 with a'balance of $47,811.76 - PPL Employee Stock Ownership Plan • (ESOP) owned by Plaintiff James N. Scheuren. 14. On numerous dates prior to August 29, 2000, Defendant Brytz encouraged the Plaintiffs to liquidate their stockholdings in the Plaintiffs' DRIP Account and Plaintiff a ESOP Account set forth in s Paragraph 13, supra and purchase various products offered by the Defendants, namely an IDS Life, AEFA Retirement Advisor Variable Annuity, Account #930-0665-8273-3-004 and AEFA Federal Income Fund Class B, Account #0012.4746-8802-6-002. 15. On numerous dates prior to August 29, 2000, Plaintiffs told Defendant Brytz they would consider liquidating their stockholdings as identified in Paragraph 13 supra, as Defendant Brytz suggested and advised, provided that there would be no tax due to the Internal Revenue Service • (hereinafter referred to as "Il2S'? or due the Commonwealth of Pennsylvania (hereinafter referred to as "the Commonwealth'l, as a result of the liquidation. 16. Defendant Brytz, on numerous occasions prior to August 29, 2000 assured and advised • the Plaintiffs that there would be no taxes due to the IRS or the Commonwealth regarding the Plaintiffs' liquidation of the said PPL stock in the accounts identified in Paragraph 13, supra. 17. On August 29, 2000, based upon the repeated assurances and advice from Defendant 1 Brytz, Plaintiffs, with the assistance of Defendant Brytz, issued written authorization to PPL to liquidate their stockholdings and issue checks for the proceeds, payable to the order of Plaintiffs. PPL issued a check for the sum of $47,811.76, payable to the order of Plaintiffs and remitted the check directly to IDS • as per Defendant Brytz's instructions. PPL also issued another check for the sum of $91,257.98 payable to the order of Plaintiffs who endorsed the chuck and gave it to Defendant Brytz as per her instructions, as she told them that PPL had made merror in sending this check to Plaintiffs rather than Defendant Bryta. • I 4 0 ' Y 18. On or about March 21,2001, Plaintiffs received an IRS Form 1099 informing them they owed taxes due to the liquidation of the said PPL stockholdings. 19. On or about March 242001, Defendants provided to Defendant Brytz the said IRS Form 1099 and Defendant Brytz told the Plaintiffs that they did in fact owe the HtS the additional taxes. 20. Subsequently, in March 2001, Plaintiffs sought the professional services of Deborah Wartell, EA of Parks & Company for the preparation of their personal federal and state tax returns for 2000. The federal and state retums resulted in Plaintiffs owing additional taxes to the IRS of $7,708.00 and to the Commonwealth of $1,224.00, both due to the ill advised liquidation of Plaintiffs' PPL stockholdings. 21. On November 5, 2003, Plaintiffs paid to Parks & Company an additional professional fee in the amount of $60.00 for the said preparation of the tax returns. COUNT NO.1 Plaintiffs v. Doris F. Brytz, Defendant 22. The allegations contained in Paragraphs 1 through 21 are incorporated herein as though set forth in their entirety. 23. As a result of Plaintiffs' justified reliance upon Defendant Brytz's professional expertise and numerous assurances that no additional taxes would be due the IRS and the Commonwealth upon the liquidation of Plaintiffs' PPL stockholdings, Plaintiffs suffered loss of dividend income and appreciation of the value of their PPL stock from the September 15, 2000 date of liquidation, in the amount of $41,017.02 as of May 31, 2004, plus continuing losses. 24. As a result of Plaimtifrs justified reliance upon Defendant Brytz's professional expertise and numerous assurances that no additional taxes would be due to the IRS or the Commonwealth upon 5 the liquidation of Plaintiff's PPL stockholdings, Plaintiffs were required to withdraw fiords in the amount of $8,932.00 from the AEFA policy, and were assessed a ten percent fee of $900.00 for early withdrawal, said funds being used to pay the additional taxes for the liquidation of the PPL stock. 25. Defendant Brytz presented herself to Plaintiffs as having substantial experience and qualifications with regard to financial services, insurance products and tax consequences. 26. Based upon the professed areas of specialization and expertise and repeated advice of Defendant Brytz, Plaintiffs utilized her services involving the liquidation of Plaintiffs' PPL stockholdings and the acquisition of a Defendant IDS Life, AEFA Retirement Advisor Variable Annuity, Account #930- 0665-8273-3-004 and AEFA Federal Income Fiord Class B, Account #00124746-8802-6-002 with the understanding the said liquidation of Plaintiffs' PPL stockholdings would not have any tax consequence. 27. Defendant Brytz knew or should have known the liquidation of the Plaintiffs' PPL stockholdings, which she advised, encouraged, orchestrated. and completed, would have tax consequences, and failed to advise Plaintiffs of the said consequences, and in fact repeatedly assured Plaintiffs that the We of the PPL stockholdings would have no adverse tax consequences. 28. Defendant Brytz, as Plaintiffs' trusted financial advisor, owed a duty of care to Plaintiffs to provide accurate and prudent financial advice consistent with applicable laws and regulations in accordance with the applicable standards of knowledge, skill and care. 29. Defendant Brytz breached her fiduciary duty to Plaintiffs and. was negligent and recklessly indifferent by informing, advising and encouraging the Plaintiffs that the liquidation of the Plaintiffs' PPL stockholdings would not be subject to any tax by the IRS or the Commonwealth of Pennsylvania and that such negligent,' careless, reckless and indifferent conduct by Defendant Brytz resulted in substantial tax liabilities and other losses realized by the Plaintiffs. 6 30. Defendant Brytz breached her duty to the Plaintiffs and her implied obligation of good faith and fair dealing when Defendant Brytz acted in bad faith and in a commercially unreasonable manner in counseling, advising and encouraging Plaintiffs to liquidate their PPL stockholdings resulting in substantial tax liabilities and other losses realized by the Plaintiffs. 31. Defendant Brytz also breached her fiduciary duty to Plaintiffs and was negligent by informing, advising and encouraging Plaintiffs that the liquidation of the Plaintiffs' PPL stockholdings would not be subject to tax by the IRS and the. Commonwealth of Pennsylvania and such negligence and recklessly indifferent conduct by Defendant Brytz resulted in substantial liabilities and losses realized by the Plaintiffs and such conduct by Defendant Brytz was unfair and deceptive conduct of trade and commerce regarding the sale and utilization of Defendant Brytz's services and as such is in violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (U WPL, 73 Pa.C.S. § 201, et. seq.), warranting imposition of treble damages under Section 201-9.2(a) of the UTPCPL and payment of Plaintiffs' counsel fees. 32. The above described actions by Defendant Brytz were wanton, outrageous, reckless, willful and oppressive, which justifies the imposition of punitive damages. 33. The Plaintiffs had a justifiable right to rely on the advice and recommendation of Defendant Brytz regarding Defendant Brytz's service in liquidation of the PPL stockholdings based upon Defendant Brytz's holding herself out as having the requisite skill, knowledge and expertise in financial planning transactions and Plaintiffs' reliance upon such expertise was justifiable and reasonable. Wherefore. Plaintiffs pray that a judgment be entered in their favor and against Defendant Bryn, in an amount in excess of $25,000.00 in incidental, consequential and compensatory damages; treble damages; Plaintiff's' counsel fees and punitive damages, together with interesk costs of suit and any other remedy this Court deems just and proper. 7 COUNT H: Plaintiffs v. American Express Flnandal Services, Inc., (nlWa Ameriprkse Financial, Inc.), Defendant 34. The allegations contained in Paragraphs l through 33 are incorporated herein as though set forth in their entirety. 35. The Plaintiffs had a junifiable expectation that Defendant Brytz would competently and diligently represent them in all matters related to the financial services referred to above and for which the Plaintiffs retained Defendant Brytz and paid her for her services, which expectation was reasonable and c justified under the circumstances. 36. The negligence and reckless indifference by Defendant Brytz is imputed to her employer, AEFA, on the basis of respondent superior liability. 37. Defendant Brytz, acting as an employee of AIFA, breached her fiduciary duty to Plaintiffs and was negligent by informing, advising and encouraging Plaintiffs that the liquidation of the Plaintiffs' PPL stockholdings would not be subject to tax by the IRS or the Commonwealth of i Pennsylvania and such negligence and recklessly indifferent conduct by Defendant Brytz, as AEFA's employee, resulted in substantial liabilities and losses realized by the Plaintiffs and such conduct by Defendant Brytz, as AEFA's employee, was unfair and deceptive conduct of trade and commerce regarding the We and utilization of Defendant Brytz's and AEFA's services and u such is in violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (U7PCPL, 73 Pa.C.S. § 201, et. seq.), warranting imposition of treble damages under Section 201-9.2(a) of the UTPCPL and payment of Plaintiffs' counsel fees. 38. The Defendant, AEFA, was negligent and recklessly indifferent in failing to control, supervise and monitor Defendant Brytz, its agent, employee or servant, by allowing Defendant Brytz to 8 { provide services and guidance to the Plaintiffs to liquidate their PPL stockholdings and advise Plaintiffs that such transactions would not have adverse tax consequences and by Defendant Brytz ultimately advising Plaintiffs to purchase shares of ABFA Federal Income Fund Class B, Account #00124746- 8802-6-002. 39. The above described actions by Defendant Brytz, acting as AEFA's employee, were wanton, outrageous, reckless, willful and oppressive, which justifies the imiwsition of punitive damages. Wherefore, plaintiffs pray that a judgment be entered in their favor and against Defendant AEFA, V in an amount in excess of $25,000.00 in incidental, consequential and compensatory damages; treble damages; Plaintiffs' counsel fees and punitive damages, together with interest, costs of suit and any other remedy this Court deems just and proper. Phdatiffs v. IDS Life Insurance Company, Defendant 40. The allegations contained in Paragraphs 1 through 39 are incorporated herein as though set forth in their entirety., 41. The Plaintiffs had a justifiable expectation that Defendant Brytz would competently and diligently represent them in all matters related to the financial services referred to above and for which the , Plaintiffs retained Defendant Brytz and paid her for her services, which expectation was reasonable and justified under the circumstances. 42. The negligence and reckless indifference by Defendant Brytz is imputed to her employer, IDS, on the basis of respondent superior liability. 9 I 43. Defendant Brytz, acting as an employee of IDS, breached her fiduciary duty to Plaintiff; and was negligent by informing, advising and encouraging Plaintiffs that the liquidation of the Plaintiffs' PPL stockholdings would not be subject to tax by the IRS and the Commonwealth of Pennsylvania and such negligence and recklessly indifferent conduct by Defendant Brytz, as IDS's employee, resulted in substantial liabilities and losses realized by the Plaintiffs and such conduct by Defendant Brytz, as IDS's employee, was unfair and deceptive conduct of trade and commerce regarding the sale and utilization of Defendant Brytz's and IDS's services and as such is in violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (Ul'PCPL, 73 Pa.C.S. § 201, et. seq.), warranting imposition of treble damages under Section 201-9.2(a) of the UfPCPL and payment of Plaintiffs' counsel fees 44. The Defendant, IDS was negligent and recklessly indifferent in failing to control, supervise and monitor Defendant Brytz, its agent, employee or servant by allowing Defendant Brytz to provide services and guidance to the Plaintiffs to liquidate their PPL stockholdings and advise Plaintiffs that such transactions would not have adverse tax consequences and that Defendant Btytz ultimately advised Plaintiffs to purchase insurance product identified as Defendant IDS, AEFA Retirement Advisor Variable Annuity, Account #930-0665-8273-3-004 from Defendant IDS. 45. The above described actions by Defendant Brytz, acting as IDS's employee, were wanton, outrageous, reckless, willful and oppressive, which justifies_the imposition of punitive damages. Wherefore, Plaintiffs pray that a judgment be entered in their favor and against Defendant IDS, in an amount in excess of $25,000.00 in incidental, consequential and compensatory damages; treble damages; Plaintiffs' counsel fees and punitive damages, together with interest, costs of suit and any other remedy this Court deems just and proper. 10 Respectfully submitted: Dated: f 11 COYNE & CCOYNE, P.C. By: -)Javt? Hemy F. CojoZ Esquire Pa. S. Ct. No. 06250 3901 Marlwt Street Camp Hill, PA 17011-4227 (717) 737-0464 Attorney for Plaintiffs VERIFICATION The facts set forth in the foregoing are true and correct to the best of the undersigned's knowledge, information and belief and are verified subject to the penalties for unswom falsification to authorities under 18 Pa. C.SA. § 4904. Dated: 'L d O i J N.SCHEUREN Date: JAA0 a s, Zo 15.6 rtt. ?. ?. or k BARBARA D. SCHEUREN OF SERVICE I, Henry F. Coyne, Esquire, of Coyne & Coyne, P.C., hereby certify that true copy of the foregoing Complaint was served this date upon the below-referenced individual at the below listed address by way of In* class mail, postage pre-paid: Joshua Hom, Esquire A. Wesley Bridges, Esquire Fox Rothschild, LLP 2000 Market Sheet, Tepth Floor Philadelphia, PA 19103-3291 Attorneys for Defendants Dated: Henry F. Coyne, EsqGire Pa. S. Ct. No. 0625 3901 Market Street Camp Hill, PA 17011.4227 (717) 737-0464 12 S c r'?q? COURT OF COMMON PLEAS OF CUMBERLAND COUNTY JAMES N. SCHEUREN and BARBARA D. SCHEUREN, h/w CIVIL ACTION Plaintiffs, NO. 03-3622 V. AMERICAN EXPRESS FINANCIAL ADVISORS, INC. et al.. Defendants. AFFIDAVIT OF FAYE ATWOOD State of Minnesota County of Hennepin S.S. I, Faye Atwood, being duly sworn, depose and say that the following is based upon personal knowledge: I am a manager legal affairs with Amerprise Financial, Inc., formerly American Express Financial Advisors. Inc. ("AEFA") and IDS Life Insurance. 2. I am authorized to take this affidavit on behalf of the defendants in these proceedings. In or about August 2000, Plaintiffs sought financial planning advice from Doris E. Brytz, a financial advisor associated with AEFA, with respect to the possible liquidation of a jointly held DRIP account maintained with Mr. Scheuren's employer, Pennsylvania Power & Light ("PP&L" ). 4. On April 10, 2001, Plaintiffs submitted a written complaint to AEFA alleging inadequate services with respect to their accounts and, in particular, issues surrounding an annuity that Mr. Scheuren purchased, as well as tax liability Plaintiffs purportedly incurred when they liquidated the PP&L jointly held DRIP to fund Mr. Scheuren's annuity with IDS Life Insurance. A true and correct copy of the April 10, 2001 complaint is attached hereto as Exhibit "1" AEFA determined that the complaint was not justified and, on or about June 20, 2001, advised Plaintiffs' counsel accordingly. See June 20, 2001 letter from AEFA to Plaintiffs' counsel, a true and correct copy of which (sans attachments) is attached hereto as Exhibit "2" On or about August 15, 2002, Plaintiffs filed a complaint with the Pennsylvania Securities Commission ("PSC"), making the same allegations as those set forth in their letter complaint to AEFA. A true and correct copy of the August 15, 2002 complaint is attached to the Atwood Affidavit as Exhibit «3„ On October 20, 2002, the PSC dismissed Plaintiffs' complaint as not justified. See October 20, 2002 letter from PSC addressed to Mr. Scheuren, a true and correct copy of which is attached hereto as Exhibit 'W'. On June 3, 2003, Mr. Scheuren executed an American Express Brokerage IRA Application. Attached to the application was the client agreement that would have been provided to Mr. Scheuren at the time he signed the application (collectively, the "Agreement"). A true and correct copy of the Agreement (including the applicable client agreement) is attached hereto as Exhibit "5". 9. Immediately above Mr. Scheuren's signature on the application appeared the following acknowledgement: I acknowledge I have received the American Express Financial Advisors Inc. client agreements and agree to abide by their terms s currently in effect or as they may be amended from time to time. This account is governed by a predispute arbitration clause which is found on Page 1 in Section 7 of the client agreement. I acknowledge receipt of the predispute arbitration clause. 10. Specifically, Section 7 of the Agreement provides in relevant part: Arbitration. (i) Arbitration is final and binding on the parties. (ii) The parties are waiving their right to seek remedies in court, including the right to a jury trial. (iii) Pre-arbitration discovery is generally more limited than, and different from, court proceedings. (iv) The arbitrator's award is not required to include factual findings or legal reasoning and any party's right to appeal or to seek modification of rulings by the arbitrators strictly limited. (v) The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. Any controversy arising out of, or relating to, my accounts, to transactions with you or your Brokers and/or employees for me or to this agreement or the breach thereof, shall be settled by arbitration and conducted pursuant to the Federal Arbitration Act, before the American Arbitration Association or the National association of Securities Dealers Inc., Chicago Stock Exchange Inc., the New York Stock Exchange, the American Stock Exchange to the extent you may be a member of such exchange or the Municipal Securities Rulemaking Board or the independent nonindustry arbitration forum as I may elect. If I do not make such an election by registered mail addressed to you at your main office within 10 days after demand by you that I make such election, then you may make such election. Judgment upon any award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 11. On or about July 30, 2003, Plaintiffs commenced these proceedings by filing a praecipe to issue a writ of summons. 12. In light of the arbitration provision contained within the Agreement, on October 1, 2004, counsel for AEFA wrote to Plaintiffs' counsel requesting that Plaintiffs withdraw their writ of summons and resubmit their claims with the National Association of Securities Dealers ("NASD"), but Plaintiffs declined AEFA's request. A true and correct copy of counsel for AEFA's October 1, 2004 letter is attached hereto as Exhibit "6" FA WOOD Sworn to and Subscribed Before me this I$ Day of 2005. ' Q. V4k-? Notary Public My Commission Expires: -MIIL SHIRLEdary qYl N Mkwdsote MC*M*"E*"ArUrY3l,2010 4 I i. 407 Robert S':reet Lechania.bur,:,, Ps,. 17059 A:ril G, 2vG1 ?' `U/ American F.?:-recs r`in&ncial Advisors CY=O ?ottu i-Arri& Biel' Co=pliance Direc:cr ' Suite 23C 3503 :arket Street Cam. Hill, ^a. 17011 :'err C;mdy Potts orris, ine ivllo•wir.8 is an account of ..'nst hs:.enea -d4th dealings 4f ii.ancial ;.lanner with P.-,erican EX)reze. Loris :rytz has my .rife as a client for approx. 14 yrs. I met :,Cris through CsociAe, Mb 'aif2 '+wiier. 4e 'were en_aLed to be married in 1997. Loris convircecathen to buy a tern life insurance _olicy for 5226 °oa quarter in October 1957 and after a short time = i)ackec cut of crcissi this policy on ::iarca 17, 199t realizing I had encu6h insurance havin. fair other ;;clicies alread;,r. L,..a has consis:antl beer suiiestin- that I sell ??L stcck to do away ;wit:: axa:Ie ivi-0eniis. I screed to as Ion; as this transaction could ',e cone ::itrout any tax liability for selling the stcck. Ire insister: or, this numerous tires et'meetings with ;crisand she assured us that this stock was a rollover and there would be no taxes. She also su&?.ested that I sell 5'y fidelity funds and invest with her in the future. I outright said no to this due to falling stock prices. August 3, 20GC `!e went to Doris for Long, Term Care info. and also spoke of ;;! stock sale as lo:.;; as there is no tax liability. de stresses this again to her and she again tci:i us this wrould be a rollover. August 2t, _ ioris at our house , Toric is cellin :?L stock w,., rCllir.g over into IL"d .ratios. h.4ain atressec ::0 tar. lishilLty, „Ise she :e_ _ c'-t -} L: 1 yrin saV:, no nct until the, ccr..s sack Dog. .? G F Laigned P. rollover :4r-. for one account for 147, ill.. d to be rut into an annunit;., an,.! we both sineet a r..llcver form for :VI,6?7.96 to ce :hut into ar.other ezi,,unity. %oris rrcieveu a ci:ecr. _nr the ::47,b11.7_. emj;r.t but no-, tilt' i&rgcRct e. 7L- Ct?llt us a:.d :•:on6ered where ei.e other check r:as. I called ?rl &116 t,e seiS that I didn't ssc for the other ar..ouat to be sold out Loris said she end that she sent the rollover for-. to =?1. She called PPL and refaxorl the fcr::s. She calleC, re back and said that hoofed and she wasn't sure if the check•.;oul3 core to her or ma. S`he s$id tat if tie receive the check that ::e should send it to her. The check came to us from :?L andsiloned it over to her and ILS. - Both accounts were orened October 1:, 2' 10C, :arch 21, 2'*C: =oris ca:-.e to our house er." sair: that Z; a :.one Tern Care ?olic; ;:oulc rout pore Chan she Quotod, that I took our oa oe*t.3, 20Co I aske : „? I sine: con'A act last year and she 'has no knowle?ie nor the increase. I refuse.: an'. said that 1'Ta going: to think about it. "I is is when she brc:;e the n w?s to US a:;out the ??L stock sale that I woulz owe razes on the ,jai.-.s. cou Jn't believe this and I "gas in shocX that this was hapyeninj ever, after .; repeate statements to :^.er not to sell anythin: that would cost .-.e ta.:ss at tide err of the year. a:e told her this over and over m=ain that if this :was goings to create taxes at the end of the year to leave the ??L stock alone4 Her exact words were t1ha . no taxes to pay as long as none; was rolled over into annunities. ;arch 21, cOCl I called George Kiipe ( retired 3/30/oC) investors services He fearer: to me all the information that I wound need to do My taxes which I had scheduled with Parks ? Cc. on 3/26/2001. Crn 3/21/01 I caller: ZCris and laid it out to her t::-.at she causer? :e to owe EAGut 211,600.00 in tares. _7he -roceaded to tell me that I could het atoout .,,4,OCC.DC out of ce%h :.anabe.ient which was in the one anauni v +rtich I have . ith wasn't werri•:-' a:wut :'.e or sorr; about this big r..istake! I have : een 30 u,set z_.._z this $ituatic, that J10ca -rag Eur a itas gone u^ e. d 3 I have ::e: to seek ne:ic41 s.tte ration. %y doctor has ircreaseci :. :,loo- .ressure medication. ::arch 23,2CO1, we ':a:: our taxes clone and our tF:: ; rscn was su risEC the- Loris had cause^, us such a lEr?;e ta:: liability. She said; that Loris should have I{nown that -he one account that she sold t:as not a rollover. Our ax erson also in- formed us that there c:as also a 2&. 1/2- state tax due . Cur tar: ;:re: aver asked if we coulf buy back. t`e stock and W1Lo this _T L£ annunit,? L.ey st- -oulz cake G$a9 >11e for such a lar„e -_cstake. . April 2, 2'301 I cai'_e.: z la:! er c:etr Coyne and ne feel= thati :._ =_ve a very soli.,3 case to aakC __, ras GIIc1 1C for -his ?J1' -a ES. Sal. :rite L::e facts O. a_".". '.:EarG _ z-Fd: , '.;e :ill fill a i.Gi.?:l:.l:lt. . e_ci• ,,, nLt:lted "Ai as £C:mot:.or la.. c5 ...E: _??.:... c..,. fci3 tG14 ...,. selli t:._., stoc:. s:-. us t:;¢t this ..as a rollover fro... c-e acczuat to anct3er, v .:. that crn::7_tir.- a ':as the ri_ w._ .. to c.c. Argil S. 21_.1 I caked ??L irvestc'rs services an_ s;.-oke e:ith Claire nyl::ard who took over for George F:jjne who retired. She will .-rake a ccoy c: all correspondence and sera us a copy. Our taxes cost us VS rare to do tLis year due to this goof up. If •ae had :.:loan that there would be tax due on this stock sale ee aoul4 NCT 'have solo t::is stock. Loris insisted that this was rollover with no ta:ces due. 'ale Wl eertainl;- ::ould havOaxes '.ath held instead of irvestin;, the tctal asacunt of the =ale in an arzunitr has a 'enality _or withdraral "'.re :7aturimj, Ho:: ?H•'_ she a:.- ect L's to :;a;; the tartes :ue because of ,.er rds'a'e i : advising that this stcc:: sale %oul : e rollover. Cua to sell-'7- this stock tre ' .•.are net receive:. the divic.e :'s -.:hick '.:e :Xult: have received if ::e had rot cold t his stock. PeaWAC :hero_has Seen e..: ro::. vC zyminAon this stock since the Gale. a June 20, 2001 Coyne & Coyne Attn: Henry F. Coyne Attorneys At Law 3901 Market Street Camp Hill, PA 17011-4227 Financial Advisors IDS We Insurance Company 50031 AXP Financial Center Minneapdfs, MN 55474 RE: IDS Life Retirement Advisor Variable Annuity Contract #9300 665 8273 3 004 Contract Owner & Annuitant: James N. Scheuren t Dear Mr. Coyne: We have completed our review of the concerns raised in your letter dated April 10, 2001. In addition, we have reviewed the documentation provided in your letter dated May 14, 2001. We understand that Mr: ?Seheurenis alleging that.he and his wife Barbara Seheuren were advised by their financial. advisor; Dbris Brytz; that the sale of stock in theirjointly- owned dividend reinvestment plan (DRIP) through PPL Electric Utilities, Corporation and subsequent purchase of the above-referenced IDS RAVA with the sale proceeds, would be a tax-free rollover. We were unable to substantiate Mr. Scheuren's allegation that he was advised by Ms. Brytz that this transaction would qualify as a tax-free rollover. We base this decision on the following points: ? Enclosed is a copy of the `.Dividend Reinvestment Plan - Statement of Account' which Mr. and Mrs. Scheuren signed requesting a sale of all of their shares in the plan and a check be issued. No place on this form is there information indicating that this plan is some type of qualified plan and would qualify for a tax-free rollover. In addition, the, fact that the account is jointly-held indicates it is funded with after-tax monies. ? Enclosed is a copy of the `PP&L Employee Stock Ownership (ESOP) Request to Withdraw Shares.- Lump Sum Distribution' which Mr. Scheuren. signed requesting a sale.of all of his shares in the plan and a check be issued to an IRA Custodian. This form does indicate that the proceeds are eligible for a direct rollover into an IRA. June 20, 2001 James N Scheuren Page 2 ? Enclosed is a copy of a letter dated September 12, 2000 from George Kline addressed to Ms. Brytz stating that a check for $47,811.76, representing a direct rollover of funds from Mr. Scheuren's ESOP was enclosed. Mr. Scheuren was copied on this letter and informed that `enclosed is your check covering the non- rollover portion of your account and your statement of account.' This confirmed that the proceeds from the DRIP were not eligible for a rollover. ? Mr. Scheuren has acknowledged paying taxes on the dividends paid from the DRIP every year. This is another indication that this plan is not tax-qualified. Based on our review of this information, we are unable to confirm Mr. Scheuren's allegation that he was told this transaction would be tax-free. Further, with the enclosed information, it appears that Mr. Scheuren received notice of the tax consequences of this transaction. Therefore, we are not reimbursing Mr. Scheuren for the additional taxes, attorney and accountant fees or the opportunity cost of holding the shares in his DRIP through present. While we realize this is not the resolution you were seeking, we trust you understand our position based on the information we have presented. Sincerely, Dan Olson Compliance Department (612) 671-6925 (612) 671-8947 (Fax) Enclosures .cc James N. Scheuren 607 Robert St Mechanicsburg PA 17055-3457 File: 48734-0-4.doc r COYNE & COYNE A PROFESSIONAL CORPORATION ATTORNEYS AT LAW Henry F. Coyne 3901 Market Street 717.737-0464 Lisa Marie Coyne Camp Hill, Pennsylvania Fax. 717.737.5161 RECEIVED 17011.4227 PENNA. SEC. COMM. August 14, 2002 AUG 15 2002 OFFICE OF THE SECRETARY Pennsylvania Securities Commission AWN: Office of Secretary 1010 N. Seventh Street, 2nd Floor Eastgate Office Building Harrisburg, PA 17102-1410 Re: James N. Scheuren Dear Sir or Madam: Enclosed please find Mr. James N. Scheuren's complaint concerning American Express Financial Advisors. Kindly docket the original and return to me a clocked-in and returned to me with the enclosed stamped envelope. Thank you for your assistance. Very truly yours, & COYNE, P.C. LMC/cmc Encls. Cc: Mr. James N. Scheuren, w/encl. CO)IMONWEALTH OF PENNSYLVANIA PR ;YLVANIA SECURITIES COMMIS, iN t? S?I'??'CE1 COMPLAINT FORM 1Gt, s?CVi Please review the attached instructions before completing this form. (??.,, - c? '{by? h, This complaint is being filed on behalf of Self (Skip Part A; proceed directly PART A - FILER'S INFORMATION (Complete'Part A if you are filing this Complaint on?y je .) someone other than yourself. Otherwise, skip Part A and proceed directly to Part B.) PART B - INVESTOR'S INFORMATION lames N. Seheuren 4 Gale Road Camp Hill, PA 17011 Home Phone (717) 731-8476 PART C - COMPLAINT IS AGAINST: Firm, business, or company individual 1. American Express Financial Advisors IDS Tower 10 Minneapolis, MN 55440-0010 Telephone: (612) 671-6925 Dan Olson Has the firm, business, or company been made aware of this matter? Yes If yes, person and title to whom you communicated: Dan Olson, Cyndy Potts Moms. What were the results? Rejected our complaint. Overlooking the fact that the advisor convinced us that there would be no tax on transferring my PPL Company stocks. Advisor repeatedly said all were tax free rollovers. 2. Names of individual and her home address: Doris Brytz I 1 Triplett Court Dillsburg, PA 17019-9490 Telephone: (717) 432-7722 / 800-311-4067 Has the individual been made aware of this matter? Yes If yes, what were the results? American Express handling the case for her with no concern for me as the investor. 3. How long have you dealt with the firm? 10/97 With the individual? 10/97 PART D - DESCRIPTION OF COMPLAINT- See attached statement. Date of initial investment: 9125100 At the time of your most recent investment, were you age 65 or older? No - Date of Birth 11/9/39 Page 2 PART E - RESOLUTION I would like this resolved so that no one else is taken advantage of by Doris Brytz and American Express Financial Advisors. I would like to have refunded to me the taxes I had to pay and the dividends .1 lost as a result of Ms. Brytz's negligent advice she gave and upon which I relied. Have you brought this complaint to the attention of others? Yes, I tried to resolve this directly with American Express; however, they rejected my challenge. Your attorney: Lisa Marie Coyne, Esq., 3901 Market St., Camp Hill, PA 17011 If necessary, are you willing to appear as a witness, be sworn, testify and be cross-examined concerning the allegations made in this complaint? Yes I have read this complaint, I fully understand its contents, and 1 certify that it and photocopies of attached documents are true and correct to the best of my knowledge and belief. . - A I J ? - &LA'ez? 8,114,ld ;: J e N. Scheuren Date 'i {A 4 r Robert M. Lam, Chalrman ?y y1,?t A. Rldwd Garber, Faq„ Cdnmlaslarar M P. 47 John A. Maher, Canmlaalarer M. Joanne Cumminge, Secretary G. Ptalip Ruaedge, Chief Counsel Lynn D. Naefaoh, Deputy Chief Cwml COMMONWEALTH OF PENNSYLVANIA PENNSYLVANIA SECURITIES COMMISSION October 30, 2002 James N. Scheuren 4 Gale Road Camp Hill, PA 17011 RE' American Express Financial Advisors Doris E. Brytz Complaint Docket No. 2002-08-027 Dear Mr. Scheuren: Staff of the Pennsylvania Securities Commission (Commission) has contacted the above-referenced firm concerning your complaint and received their response. American Express Financial Advisors provided a copy of the PP&L Corporation Dividend Reinvestment Plan - Statement of Account, which you signed, requesting to sell all shares held and to mail you a check. American Express Financial Advisors provided a copy of the PP&L Employee Stock Ownership Plan (ESOP) Request to Withdraw Shares - Lump Sum Distribution, signed by you on August 19, 2000, requesting a sale of all your shares in the plan and a check be issued to an IRA Custodian. Also, you received a copy of a letter from PP&L to Doris Brytz, enclosing a check in the amount of $47,811.76, representing a Direct Rollover of funds from PP&L's Employee Stock Ownership Plan credited to your account #208304606. We are unable to determine a violation of the 1972 Act, that warrants a recommendation for enforcement action against American Express Financial Advisors. Accordingly, our file on this matter will be closed. If you have any questions, please call me at (717) 783-5177. Very truly yours, Cry stal Roach Securities Compliance Examiner Division of Enforcement, Litigation and Compliance Eastgate OMoe Building, 2nd Floor, 1010 North Seventh Street, HaMsbOrg, PA 17102.1410 Telephone 717-787.8081 4 Fax 717.789-5122 4 TDD/M&T Relay Center 1.500.554.5984 ;;'<s't American Expren Wokerage Amerlcss Edemas f7aeseialAfxfeere lxc. IRA ? /IWdil AIg' I tdxxud funnn M,m:x.yxmx MN `.fro/A .9 .t1154xtlws Must be corryllotvxf. Pleasetoorprsd tn:• r, •. .xp, ux•ryryflraotm Cwporabe office Use Otdy ?? CYO T S 1 C8.1 : ti,r,^? APP TRANS SPO D y ! GENE BA 1.AaowatNeNerlMmrMlr??• ;; --..... _ .. __ _ _ . ----__---- Plane complete with the Beam alas eppikahx All Nm--1,,1,-tollva xv rluouryt antrum lxlurts Evxu m(Adwalrs ox: fexduditel udkx;a offered throtfgh Arrxxtean I VirrK5l.W1/WXx7B.Wxk)W/UlA?onrlEdDyAarwklwlEX/xUSV 1...•,'.-jApa ,a. rtdlaA,xttd pax IRA Nan nstMx e?ltsl„4ai 90-hea-e. ! Address IN dnx Not Suthclunt)?••y ` 3 L, j1Llfo ?.?•• '(???J'( ?I Ifolne Pharx: HUany:R%IWIL 411 1 -7 s R(rvx)mg yrwr c-rmul address to American Express wdl rawly •.•r:?':,v,r.n: ti,xrwl Mtars, srmad to vmv rx!Ix!;' I vaxdd like Illtetrw.l tars to myaMOUM. aldoeeyUelbatsaloprw ` Gxxel SIX Naldwt fix can 11) Nu xu L v 1 •30 loG? PA IOc I ,Iyit100 cq ? ? 3q I 1 Select (tom oa of the follmahhg "phis, Was portfolio is indicated, American Express Inured Money Market Account (AEIMMM vvill be selected, All patolios except AEIMMA we woe" market mutual fund pordollos of the Ressrxo Fund, AEIMMA is an FM insoted. Macaw baring wXoaw, FDIC immune of sp to SIODAW per eeeomd oe your cash deposits. for mere fabrmeten, see the AEOMMA Tema and Bendithm M your Gient Aemment AEIMMA imary US Gnc•• ••,, US freasrxy fkservnbumf Rntfubo ishpholances Duly swwp of unurveslerl c •. Type Gf cow"" -Xi", Check the box which desctlMe dw type of contribution you are making to yaw IRA and complete the istarnation (chock only coal. fkgulat lactlve) contribution in the amount of $ Ire tax yeat. ,. m/flmmove1 amtndawninthearrahmtofSJICR,-4r / /6? •33? (:Math method al funding. 4:21imlosed c.: n h.in.v?a ax.unnes made payabm ur Annntcau kxavuss husl Culnpal-v V! Achock ano -11111 Iw scut dnectly to A imie.an kxpuss Ihakeldge Irmo Illy umlxnwx IAlso conyyl'. I:...L.• ..r rw l lurxa ffulkmu konn H lrlG l CU\tndtanIn-custodian tranffafmmarlahBrIRA •t"t••/'•n',.?U:IS AICIfarlplClraalxllxhdlll' 6 txmd/ail f vtggovxr comn!ouon under a SEP in the amoanc fur tax year _ Enp,oym cwnnlhutlon under a SRA in the amnun, - tm lax year Nnth cmm:rsxnr nlS - As-, +rt,••,:-:wr:•narloun 473H1 -ION ?t•i 3 N',%a Ui?Alh 'r 61ypdFAA -- Sabnk a seperate oppliaMlwllrpok MA type. Checkmate IRA %W N,lew. `Fear Cov*nkN Edaotiaa Swbp Amount, the Form 42110 Rogular (active) MA ' `Rollover purchases maybe made too repular IHA d,•.nl.ly 1mvinem in the 'Iy oo of Eonrlbulfofl secllol ds art active contrlbutfuff, rollover contribution. of hinfsfor purchase. Segregated (rollover) IRA Orrick this box if the moneyoriginates from a tprrr f-I Nail distribution (corpaetu, Keoeh, 401(k1.4031bll ant thu cbent wishes to keep #"@ assets segregated from other IRA assets. SEP IRA Lngdoytx of Employee Name of Currpany SE P Adfptfen Agreement is with another teen-1 n anctirohon Employer 10 SIMPLE Rks (SRA) Linployin of Employee Name of Company .. Employer ID Addfess of Cumpany, _ Oale first participated man Elrployerlt SIMPI I I'•,: f SIMPLE Plan Adoption Agresmem is with of...:- I-- h:aaxxal uetitutfml Benarlictal IRA ( I ' lye 1116" VIA or Rah IRAI 1--f rnowalncffstudiaftransftrofWe after dead- x•r, as beneficiary of the deceased IRA Roth Cow bu" IRA Only Regular Roth contributions can be made ft, uafdadtxy lkfHl Roth Conversion IRA A Ili gfdaf, Roliowt, SEP or SIMPLE (after twr. yr.n . IIIA ra•t fxe converted to a Conyetsmrf Hoth This is a taxable distribution hv3 t 111:111) 3 fL - - How This Dene salary Designsden Applies to lour IRAN) (Does not apply to annuities) • The bemrmary dosignatiea revokes Irplaeas) my prurtaes IM INSagciary d*O mdaes you my haw dada a Vide MA pan. • Tkis keaaftWy designation applies to all inauatrrw accounts wkkie Us IRA plan battl by Nwieac lkdpreas That Ceesoeery asoustsdion. Fur eaanpk R tee kevesbaareareelyddsRIAplanrwesieattwonubrallands,oneliriadprUwrahlP.andusecertiRratu,ileaheredklarydadp &% endpplytoamlaur isratreat sn:ear,sr eaMrtlds Mll plea. • d as keaelcary designation is for a beneficial IRA, year sigsakau acknowledges year understanding dial H tide designation is all racapa4N to der4a have of the)ar"alloe arrears yea m /nor I led a IM dre of vow dark Ike compunr ray,aYvoat wells area may parent do" to bare an Infantile fear aeeadi" tmashrdesbauftWIMNym baea6, arylas) pursuaattadds buasikary tu%u ttl Ifwtliur ogreeve WAnu ytia em"m gakntand bald WA alone" bwresaes brow any ad aR W all, ad tke pnvaam eftlha acI edgereat and bunefkary fame shall be Wadkeg pow my hen. Ipateas, exeaera, aMidstnan, personal represerothr" sedges ad ben W ies. Destaftery Designation for Client (Choose only ONE option) A Spouse H Living, Heat, living, lawhti Children WRY Right of Sorrirorsblp. Beneficiary is: Ownefs spouse.' H living, if not the beneficiaries are the living lawhd children of the owner and they will receive equal shares of the proceeds; provided, however, that if a child of the owner has died before the owner, the share which the child would have received if he or she survived the owner will be equally divided among the surviving children. I H. Spouse and Per Sdrpas. Beneficiary is: IRA owner's spouse,' H living, if rot the lawful children of due ewrer squaw, the survivors equally, or the survivor, provided, however, that if a child of the owner has died before the owner. ft shere which the M would hew received Hue or she survived the owner will be paid to his or her hiving lawful children or their direct descendants in equal shares. C. Children Luring, tanrlul, Equally With Rights of Survivorship. Beneficiary is. The living lawful children of the over and they will receive equal shares of the proceeds; provided, however, that if a child of the owner has died before the owner, the share which the cold would have reseived if he or she survived the owner will be equally divided among the surviving children. 0 CYHdm Per Sdrpes. Beneficiary is: The awful children of the IRA owner equally, the survivors equally, or the survivor, provided, however that if a child of the owner has wad before the owner, the share which the child would have received if he or she survived the owner will be paid to his or her living lawful children or their direct descendants in equal shares. E. Direr. Be sure that Primary and Secondary designations slvh total 100%. If an attachment is required to complete tie beneficiary designation, make sure that the attachment is signed and dated by the owneral. This designation will be considered with tights of survivorship unless otherwise indicated. Primary/ • Full Name of Individual • Relationship of Individual • Date of Trust Secondary Icheck • Organization or to Owner • Article Number of Win one per lire) % • Name of Trust • Address of Organization for Testamentary Trust Date of Birth SSN/HN Ra pdred Required Required Required Required NR NR P / S 79/0 " f tf?y Daa94a4 S f 12.17.65^ s A 25 ones . JC ew V1 on 03 22 6$ i(Ps 251,6 a1T?na 96tioli b9 loser if•02•74 YP /' S 2SO W i s 4196 1AIIIg(1' 16, 91yeRdop MiNciv , /-loll m,I ter,Qc3 4A;14VN Oyu `Both Primary and Secondary must equal 100%. yV(VQ?S'pp(?a??(? Y h? S rVfVQ Sections marked as Required are required for processe fem. `7 J Q Sections marked as NR are not required for processing the form, but may provide useful information in the event of a claim. F Text Odtw. Be sure that Primary and Secondary designations fiiCh total 100%. This designation is subject to the approval of the corporate office. Use of the term -equally" shall be interpreted to mean with rights of survivorship.) If an attachment is required to complete the beneficiary designation, make sure that the attachment is signed and dated by the owner(s). Cbsek approprione box to indicate MorHel Sutra: , I Single )(Manned (see Consent of Spouse) 1 1 Widdowed or OHorced Consent of Spouse: The Consent of Spouse must be signed if an of the following conditions are present (a) tie spouse of the wW owner is living, (W the spouse is not des primary beneficiary named and Ic) the IRA owner and spouse are residents of a community property sate. (Argon. California. kohn. Louisiana. Neveda, New Mexico, Texas. Mshapton and Wisconsin.) I have reviewed the above beneficiary designation and, as the sparse of the IRA owner, I consom to the beneficiary designation and all contributions u( many or property to be used for the purchase of such accounts to be issued in my spouse's name, whether hereatae, now or hereafter, and I relinquish all my statuary or 000 rights dereo: IRA Owners Spouse's Signature Date X W231.01/011 9. ?IMdllnd - • The Account II~ Uded on Wefsod of application moo read IMs agrunnlMd oMSlsllyend ibi sip ad Am" Inflation. liv ulonpl ilia aigdralerl. iNxl .I, inotsho* the t04mwlp. •App i I I. h appent Anleican ExpressTMfG1111par1yaxp,•1,I„u:•I';n drA.lyd IpMAntIWMIlwx tip'xMnwpNNIp!Ixrl•x•II IAItiIIldlal 14Txxml Atomnml M'Y11W Wife-In MAN" • 41 any IRA Application, cogxise my mAto ilal apfaemet with As •.,.,+., I qx•••x. Post CWMIV • AADQUW Iatonvedo.I adnoWledps Mid aQtae to be boW V,:r. w-n%, J 'Vino IiIWh: to 1W,ind.nn"•MV+n IvincirlgNro' in the um:sppMesl nllphrd IM I Vkl w hxjp ad que to the foes that will be c ew opaimt my FA Amount • RespmriWllgfor Tax Canapasces. I aterm al4gslxu:un,','„I run:,,x,.prlxpnlnu!F and mituaiwIiAtnmyne.41 final l'NIkIn,I ln11111JI111Np1x IU, 118n%AGlanst WlllL and .pctobutio s troll mY IRA • Ttedidount MAte Rath IRA oowwslmM f Wldanie l dwl!•.. ,a,.•+n,;I cry "fitiond IRA lu a INlth NM. I win tone uuom I,Ix an all iwi!Wx aaa4t Inawmlld Itin detluun whetherto convert mY traditlwlal IRA to a Roth IRA was made a ,xyl .,:.di ,,Amuu tulnrrlal xdanwiWa, nut u, pMIW1s1uY1 wnh my pldcsaxuwM fax alwse •',Wthinuo American EXeesa Gast Cw MWTo invest, dpecfN•"Au.,g1,r'4.1mllF (.1 Mgt W ON aRdpihas 1101 WMro lamskille rata elmuMxl In In[1111810 coal 5NVep xnvavn • ,wgva, that i am at keg l9ysarsa(ap will of tug iegalax',n.r, %,Ienlll.ngkntCn: • ! AodXklJf. Amerrei Eatctprire Mweahnent SeYiCet Ire to pT • , . M:r: r' n' ntlNn<, enxp 91Wpdtliry W Ir• l]VIMXIn, Mry rlnfdnnl111 n1Y,MaaxNlt tlwl Arniwi AIIIa ican Fxpmas r.narlal Adwwrs Inc."be carlldilg for ale. • trrnbmthaltl:eleanngaWt.Ameritan Emaprisehmstn+n•n+:n,•..kY. WIlI1PMNS1;n1Y/la1M,•gkpltt}.xx1 xCL'rprlY lphANM Ip 11pNN'11gNr e,NrNrdllp!.T xn NdINI1 M1eIM:d11 l ntwlnsc llwesllNenl Services klc lloldt Mlaaltieata my ail 'ur x'.w:,l?xxary mlwvnsle In Ananxn1l gnrs.fmMMXY tuATanxhr Sanb Aldherbs etka . 1 Ihntaxle Alnefic n ExPessFNencel Advisers Inc to Ifiagy'r: •,.:,,,:., •u eX:IYW IGal NIsIllohnp nalxxt IYXM' hl PW IIvI WIaMXn AIdICAU.xi will' MY OVl -I Malwve the financial minja in asned above to Mom tp•'a• •'•.Y.p )lu lMVxxvlts. Jt 118My WIMr tupN.v! Iw nN`. aMl • I Ividy Ihls agna ne.ni well rainan in effect Iplat I W11fy VIU, "' ',: ','LNti hI: ,11: I1t1ANx1 MW10111g tocMbn:I'! aaawXNI In,t4Nhal4lf IMY)11) •x:l n: vlV Iwwrvllalaf . MvesGrsttss: I mderstard pre irlt'eebnlMlt abjsctiws Md n:,: ' •' ni; sm•.mnmt I:nn nMtnq lixgr rs no'punamea tl•1 fix ow.t nis WR IN, In WroWI I,XKlaaugid Ilet ttce ralm+ nI •nveummis Iluclmte daily 1 nlay n seh at mote Or leas Thal I'•.m ;ww! I(v Owl wiverdovi mS Ihvdn1111C mill IIIIIro d flWaple And am law quimilxal • tioreaboldloW I wbisend that Yet may We Mid combulo .-.I .... xlinxl::IxIL'14nlrlg IlweMnNpllw, IlnepM,fr W xl WxWIIy:N!:IIpdF ImMxl1•f' In•JIYNY 111'! m41IMY IIpLFCIIOkl1t Wql 111 mlMdealxinvolsiatedstatenent,and. forcertampWwts,q +tn II:MhYYglldPeewill pxIMWINNnTdxdli'AIIxWIWNelrptmWltvnlmlXxkwpWl,lilterlxptpMSC,nlltxtleFtp: Ipu1pS will anY AlxnlpYt nxytled faF bl: m wytll del IuNINUI I+': F'hN,M,Fwrl agP y1 It Wpl Wa111,11)aw, n sialenW111 LImnIMI Only acruints Owl Vol) Own And loan pelx:lpalr. 111 IM,i.Makl plcnq, plllate call your dsllednetl Express filwxt.a :?!:'.:. ' • 1 edrrtewdedpe I bava reeaNedtlra Alsarless Enpnss Rnatscisl Allison loc. tdiaat aSrenseunh and spec la able OytbeG tam a eerteMly its eMnw n nay M antseded batst Wax a Wun.TMtaaasuntk 11 by • pradis4ds srWMdiorl elaoss which is rotund un pall 1 k IisNeey d1M a'ITsnd aprelweeet.l edtsowl owTedN receipt of *8 prodispwM NNW"" deep. seder for"Wes of per*y, l t edltldot 1. The eaadlM shows en Wia kno Is say ""so texpayer identification Ile nber. and 21 m not asbjecteo badnp vOhill ald4lbswauna (al l m elcalapt tree baektp wMlboWlap, hl l tare rlxbenn entilid M ill lateruno Reeawe SWWGG IMS)Sm I ere indrieet to boom w'IW6oNMp O a raaftof feihae to report all inform sr dividoods, or lo) Wn fawoel Rove ow; Sark" bee sofMed ere Wat 1 m ar MnpMaWeet to betdmp Will"IUtp, NW 3.1 m e US parents Rachtdinp a U,S. rswidMM diem. r:N!onntalas net Item 2 above if Wu here bead notaked l•N :•n r": nLlr},91 a1L•GXIMlfly allt111n:I le lW p,g+WlddlfYdXlg h%gill,!x: NNI IpIN!IWIIxi Ill rfxMrt ills lnlerotl old dnxnwhF p( 1111 im1W1111 BV IMIW, prh pMN IWmr! IWIOW. You Slprdfy dial You have Mmf I . ' .opi,we"): N: ap ImUSS:NOi 1'INNIIIIIIIIF 4vm• Please ly1w vlgq 10pM; ixN1:gN:I,11 lix'IMIY IuXnlan in pw scout Mai mlidvat Mnyxmtnep tMS page, alsoinn and date it halo„' 1,•.I Inal Ili IN adlhm, Miow PdOA"om .r-sbRMRr /{ V ( `(' U _)L Accoru?d11o1defTunjutp?rl`D', (? 'l.. f coTIY? The IMerswl Revenee Sersia? daas eat _ Vow consent to an pravidorl of Wie dedYlllenl ether then don cerliReati0le ngairsd to ovoid bneksp wIWAdllinp. Dab: © a• .F0Y 140 ?13 For CAida IINfM(t. -_ W,• ApPm'C dun al:mlullt Ion d+SrY endaOeall.,f,O?,tau` Ln : n, ,::i hnxv^..uY J'pVm s11KJxneleR ea M tf104rldl as er m w••Q, u1t1.N'x?'.I,C .1'. Mrxrmxl ad aaNSle)nbyAplekM EAprest firwx„; iurc •x ,•n sTlhiis.aapplication was '? ?t -1 1t'QIWeIW soatMe o1 ranl:IN:mIaINUGa I111WnIAl A,Iv14N<ka, rlxll alWllk sal Tlx: Gti1v111CM1 afhmld by it oMw than Anwiff M I wesx Inuxef Mepry Merkel AMOK me nM Iwrkod n W NmUa'+t W alp Ibllp, WI M0 it" 101, OWMAWII tlxgMV11OW1t In futo pnknllalle Xe? nun an: udgml In NIWIxlnsiat lltk. Inckxllrlh kiss Of IN,Ix:exll:pxl lnily lrri,: I+I{IX' ::,."d I I IA01 1X 7. Beak AN&WkWIM Beak author&aeoa. Client authorizes regular deductions from his or her bank account into the cash portion of the brokerage account. Note. A systematic investment into a mutual fund within a brokerage account may only begin after the initial purchase minimum for that fund has been met. Status of Month(s) IRA Pmt. for Hank Action Frequency Payrr", Pea Yr Thm W. of Authorization ENecttve Date MWIbly 0u DOW Amoum ,u,., tab Mill Ark Start Modify '5100 00 Minirtwm (Form must be received 15 days before effective date.) Once nice mrtial purchase minimum for a mutual fad has been trial. systematic investing from a diem bank account Into a m"I fund held within a brokerage aceotnt may be initiated by calling Brokerage Services at 1.800 724377 To copy existing barrio information already established on another AEFA product, indicate the product name and account number to the space provided. Bank Account Inforsollon and lype (Mesa" olink nee box #WWCbackky or Savings) Checking Staple Voided Check Here -- Not Deposit Slip --- on . - Savings Savings Account Ownership Savings Account Number Savings Account Routing Transit Number (9 Digits) Name of Bank at Credit Union street city State ZIP Authorisation 111equired Well now requests) By signing this application: • you authorize American Express Financial Advisors Inc, to charge your account at the tinancial institution named above to pay the amount indicated into the account or on the contract: and • you authorize the financial institution named above to honor these charges for payment. as if they were SOW by you. • you certify this agreement will remain in effect until you notify us or your financial institution in writing to cancel it, allowing reasonable time to act at your cancellation. You may stop any payment by notifying the financial institution or us at least three banking days before the charge is to be made. You will receive notice from us of arty payment that differs in amount from the previous payrriam. L Comb" Feat Please refer to Your Guide to IRAs for IRA fee information IRA Americatt F,xpress ??b '??' ? •?- reement Application Forms and Ag AMERICAN EXPRESS BROKERAGE - IRA CLIENT AGREEMENT FOR BROKERAGE ACCOUNTS CASH AGREEnENr General Information. In consideration of your accepting my brokerage account, I agree to me following with respect many of my accounts with you. As used in this agreement, the word "you" shall mean Introducing Broker as defined in the client application and/or American Enterprise Investment Services Inc. CClear'kng Broker"). This agreement shall include the Cash Agreement and as appropriate: • Electronic Services Agreement • Electronic F und'fransfer Disclosure • Contacting American Express Brokerage • Fee Schedule The account offers integrated fmaticial services including a brokerage account, an income earning account or an eligible money market fund as selected by me, electronic funds transfer services and electronic brokerage services which may be offered. As used in this agreement, the singular shat mean the plural where appropriate. For purposes of this agreement, "securities and other property" shat include, but not be limited m, money, socurities, financial instruments and commodities of every kind and torture, and all contracts and options relating thereto, whether for present or future delivery. I appoint you as ray Broker for the purpose of carrying out my directions to you in accordance with the terms and conditions of ray agreement with you for my account and risk with respect to the purchase or sale of securities. To carry out you dotes, you are authorized to open or close brokerage accounts, place and cancel orders and take such other steps as are reasonable to carry out my directions. I understand that my Clearing Broker will execute and clear transactions under this agreement and my account will be carried with them I understand and agree that any telephone conversation with you will be tape recorded and monitored for accuracy and quality assurance and any electronic communication may be similarly maintained or monitored. 2. Applicable Rules and Regulatlons. Ali transactions for ray account shall be subject to doe regulations of all applicable federal, state and self- regulatory agencies including the Board of Governors of the Federal Reserve System and the constitution, rules and customs of the exchange or market (and its clearing house, if any) where executed. The Clearing Broker will receive remuneration for directing orders to a particular broker or dealer through which my trarusaction is executed. Such remuneration is considered compensation to you and the source and amount of arty compensation will be disclosed upon request. 3. Security Interest. Ali securities and other property now or thereafter held, carried or maintained by you in my account, or my trade settlement account or any of my accounts with your affiliates, shat be subject to a general lien for the discharge of my obligations to you, and are to be held by you as security for the payment of any liability or indebtedness of me to you in any of the said accounts. You shall have the right to transfer securities and other property so held by you from or to any other of my above-referenced accounts whenever in yourjudgment you consider such a transfer necessary for your protection or due to an erroneous transfer. You are hereby authorized to sell and/or purchase any and all property in said accounts without notice to satisfy such general lien. Shares of any investment company in which I love an interest and for which Anmerican Express Financial Corporation serves as investment adviser also are subject to a general lien for the discharge of my obligation to the Introducing Broker or Clearing Broker, and the Introducing Broker and Clearing Broker may redeem any such shares to satisfy my obligation without further notice or demand. 4. Settlement. On each sale order, I represent that I own the security, and, if the security is not in you possession at the time of the contract for sale, I agree to deliver the negotiable security to you by settlement date. In the case of nondelivery of the security by settlement date, you are authorized to purchase the security to cover my position and charge any loss to my account It is further agreed that if you fail to receive payment for securities purchased, you may sell securities held by you in any of my accounts sufficient to cover the amount owed, and I will be responsible for any loss resulting. To the extent pemltted by the laws of the State of Minnesota, the reasonable costs and expenses of collection of the debit balance and any unpaid deficiency in env accounts with you, including but not limited to attorneys fees incurred and payable or paid by you, shat be payable to you by me. Trading Conditions. I acknowledge that the Introducing Broker will not. provide me with any legal, tax or accounting advice or advice regarding the suitability or profitability of a security or investment unless I receive advice or securities recommendations from an advisor of the Introducing Broker Dealer.I assume hill responsibility with respect to transactions in or for my account and my investment decisions. I acknowledge that trading securities carries substantial risk, that securities Lading can be volatile and that investment lose may be substantial in a short period of time. The Introducing Broker and its officers, directors, employees, agents and affiliates will have no liability with respect to transactions in or for my account and my investment decisions. I agree that I will not use the American Express Brokerage account for extreme trading activity such as day trading, mutual fluid trading based on market turning, overuse of stop or limit orders, or excessive order splitting of the same stock on the same day. The American Express Brokerage account is not intended for excessive trading activity If I engage in excessive trading activity (rte determined by American Express Brokerage, in its sole discretion), I may be subject to additional charges, determined on a case by case basis, and/or termination of my account I agree that I will not use this account as a securities broker-dealer, investment advisor, futures commission merchant, commodities introducing broker, or commodity trading advisor, member of a securities exchange or association or futures contract market, or an owner, partner or associated person of any of the foregoing. When you hold on my behalf bonds or preferred stocks in street or bearer form which are callable in part, I agree to participate in the impartial lottery allocation system of the called securities in accordance with the provisions of the New York Stock Exchange rules. Further, 1 understand flat no allocation will be made to any account in wfuch you, your officers, or employees have financial interest until all other customers are satisfied on an impartial lottery basis. Good-till-canceled orders remain in force for thirty (30) days. At that time, you will cancel the order, urdeas you have executed the transaction or I have canceled the order. Thu agreement and its terms shall be binding upon my heirs, executors, administrators and assigns. In the event of my death, incompetence or disability, you may cancel, or complete any open orders for the purchase or We of arty property, you may place orders for the sale of property which you may be carrying for me and for which payment has not. been made or buy any property of which my accounts may be short, or any par thereof, under the same terms and conditions as herein above stated, as though I were alive and competent, without prior notice to my heirs, executors, admktisramrs, assigns, committee, or conservators and without prior demand upon any of them. This agreement shall inure to the benefit of my successors and assigns, shall be. binding on me, my heirs, executors, administrators and assigns and shat be governed by the laws of the Stara of Minnesota Custodial Fee. An annual custodial fee may he charged in an account that is part of a qualified plan including an Individual Retirement Account, and other pension or prohbsharing plan. Other incidental service fees may be applied. In addition, certain accounts that invest only in mutual fund securities may be exempt from the annual administration fee. A transaction fee may be charged on redemptions of mutual fund shares bought with no transaction fee and held for less than 90 days. American Express Service Corporation may assess transaction fees for excessive shor t temp trading in funds. This agreement and its terns shall be binding upon my heirs, executors, administrators and assigns. In the event of my death, incompetence or disability, you may cancel, or complete any open orders for the purchase or sale of any property, you may place orders for the sale of property which you may be carrying for me and for which payment has not been made or buy any property of which my accounts may be short, or any part thereof, under the same terms and conditions as herein above stated, as though I were alive and competent, without prior notice to my heirs, executors, administrators, assigns, committee, or conservators and without prior demand upon any of them. This agreement shall inure to tie benefit of my successors and assigns, shall be binding on me, my heirs, executors, admmistiamrs and assigns and shall be governed by the laws of the State of Minnesota 1332.11 (titan 7. Arbitration. (1) Arbitration is find and binding on the parties. (B) The parties are waiving their right to seek remedies in court, Including the right to a jury trial. (W) Pre-arbitration discovery is generally more limited than, and different from, court proceedings. (iv) The arbitrators' award is not required to Include factual findings or legal reasoning and any Party's right to appeal or to seek modification of ratings by the arbitrators is strictly limited. (v) The panel of arbitrators will typically include a minority of arbitrators who were or are atDltated with the securities industry. Any controversy aAal- out of, or relating to, my accounts, to transactions with you or your Brokers and/or employees for me or to this agreement or the breach thereof, shall be settled by arbitration and conducted purau sat to the Federal Arbitration Act, before the American Arbitration Association or the National Association of Securities Dealers Inc., Chicago Stock Exchange Inc., the New York Stock Exchange, the American Stock Exchange to the extent you may be a member of each exchange or the Municipal -Securities Rulemaking Board or the independent nonindustry arbitration forum as I may elect. If I do not make such an election by registered mail addressed to you at your main office within 10 days after demand by you that I make such election, then you may make such election. Judgment upon any award rendered by the arbitrators may be entered in any courthaving jurledletion thereof; No person shall bring a putative or certified olase action to arbitration, nor seek to enforce any predispute arbitration agreement against any person who has initiated in court a putative class actionl or who is a member of a putative class who has not opted out of the class with respect to any clamm encompassed by the putative class action untib (1) the elms certification is denied; or (B) the class is decertified; or (Ill) the customer is excluded from the class by the court. Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this agreement except to the extent stated herein. a 3. Receipt of Communications. A confirmation of orders and statements of my accounts shall be conclusive if not objected to in writing within 30 days after mailing by you to ore. Communications mailed to me at the address, shall be deemed to have been personally delivered to me, and I agree to waive all claims resulting from failure to receive such communications. 3. Amendments. I agree that you shag have the right to amend this agreement by modifying or rescinding any of its existing provisions or by adding any new provision Any such amendment shall be effective as of a date to be established by you. I understand and acknowledge that you may modify or change the terms and conditions by mailing a written notice or a new printed agreement to me or, if I am an online client by posting such modifications or changes online. My use of the posting constitutes my agreement to be bound thereby. This agreement is not subject to any oral modification. This agreement, along with the Application and any other agreements I have signed, constitutes the endre agreement between me and you. 10. Money Settlement Options. Amounts contributed and received will be invested in available money settlement options such as a money market fund. I understand that you may, as part of your compensation for services provided to my account receive remuneration from available cash in my money settlement account An investment in a money market fund is not insured or guaranteed by the U.S. government. A motley market fund cannot assure that a $1.00 share price will be maintained I have received and read copies of prospectuses of funds selected by me. 11. Location of Securities. Securities may be held by another brokerage firm, bank or financial institution as custodian 12. Relationship of Introducing Broker and Clearing Broker. Your Introducing Broker and the Cleating Broker have an agreement in which your introducing Broker introduces customer accounts to the Clearing Broker on a fully disclosed basis. This means that the Clearing Broker provides execution, il..,dkeeping, delivery and receipt of securities and funds; receives and distributes Payments therefore; and safeguards all funds and securities received. The Clearing Broker also receives and distributes dividends and other distributions and processes exchange offers, rights offerings, warrants, tender offers and redemptions. The Introducing Broker is responsible for the opening, approving and monitoring of your account and for the acceptance of securities orders. 13. Credit Information. I authorize you to make inquiries for the purpose of verifying my creditworthiness such inquiries may include verilymg information I have given In my new account application, contacting my employer and obtaining credit reports or reviewing any of the foregoing for any legitimate business purpose deemed by Yom Upon request you will inform me of the name and address of each credit agency from which you obtained a credit report, if any. 14. Taxpayer Identification Number. My Taxpayer Identification Number (TIN) is important As with any financial account f open, I most list my current and correct Thxpayer Identification Number (TIN) -either my Social Security or Employer Identification number. The TIN must be certified under penalties of perjury on my application when I open an account at the Introducing Broker. If I don't provide the TIN, or the TIN I report is Incorrect, I could be subject to backup withholding of 31% of taxable distributions and proceeds from certain sales and exchanges. I could also be subject to further penalties, such sa: • a $50 penalty for each failure to supply my correct TIN • a civil penalty of $500 if I make a false statement that results in no backup withholding • criminal penalties for falsifying Information I also could be subject to backup withholding because I failed to report interest or dividends on my tax return as required by the Internal Revenue Service. 15. Termination of Account. I understand that my account may be terminated by me or you at any time. Temdnation will insult in the cancellation of my securitie?st account and all other features or privileges. 1 understand that I remain 4spomible for all charges, debit terms or other transactions initiated or authorized by me. whether arising before or after term mwlon. 16. Extraordinary Events. You shall not be liable for loss caused directly or indirectly by government restrictions, exchange or market rulings, suspension of trading, war, strikes or other conditions beyond your control, including, but not limited to computer or telephone failure, extreme market volatility or trading volumes. 17. Headings Are Descriptive. The heading of each provision is for descriptive purposes only and shall not be deemed to modify or qualify any of the rights or obligations set forth in each such provision. 18. Separability. If any provision or condition of tibe agreement shall be held to be invalid or unenforceable by any court, or regulatory or self- regulatory agency or body, such invalidity or uncnforceab0ity, shall attach only to such provision or condition. The validity of the remaining provisions and conditions shall not be affected thereby and this agreement shall be carried out as if any such invalid or unenforceable provision or condition was not contained herein. 19. The Introducing Broker is not a bank, and securities offered by it are not backed or guaranteed by any bank nor are they insured by the FDIC. I am aware that my brokerage account is not a bank account. Investments in my brokerage account are subject to investment risk, including loss of principal, and may lose value. The Clearing Broker and Introducing Broker will receive compensation for directing the order equity flow. With respect to OTC transactions, compensation may be in the form of aper share cash payment The Clearing Broker has selected certain market makers to provide execution of OTC securities transactions who have agreed to accept orders transmitted electronically up to a specified size and to execute them at or better than the national best bid or offer (NBBO). On larger orders, or if the designated market makers do not make anrwket in the subject security the Clearing Broker directly contacts market makers to obtain an execution. The designated market makers to whom orders are automatically routed are selected based on the consistently high quality of their execution of their OTC executions in one or more market 8323 Lill/011 segments and their ability to provide oppoft sties for executions at prices superior to the N5I80. Ian order for an exchange-listed security is not immediately executable on the exchange to which it is routed, the Clearing Broker may represent the order in the national marketplace using the various means available for price discovery. I agree to pay for brokerage commissions and other fees, as they exist from time to time and as they apply to my account, transactions and services I receive. I also agree to pay all applicable state and local excise taxes. A fee and commission table is available upon request or on your web site. 20. Other Terms. All securities and other property now or hereafter held carried or maintained by you In your possession or control in any of my accounts may be pledged and repledged by you from time to time, without notice to me, either separately or in common with other such securities and other property, for any amount due in the accounts of mine, or for any greater amount, and you may do m without retuning in your possession or under your control for delivery a like amount of similar securities or other property. Within the limitations imposed by applicable laws, rules and regulations, you are hereby authorized to lend to yourselves, a9 principal or otherwise, or to others, any securities held by you on margin for any accounts of mine or as collateral therefoae, either separately or with other securities. It is recognized that any losses or other detriments, m gains or other benefits, arising from any such lending of securities shall not accrue to my account THIS AGREEMENT AND ITS ENFORCEMENT SHALL BE GOVERNED BY THE STATE OF MINNESOTA WITHOUT GIVING EFFECT TO ITS CHOICE OF LAW OR CONFLICTS OF LAW PRINCIPLES; SHALL COVER INDIVIDUALLY AND COLLECTIVELY ALL BROKERAGE ACCOUNTS WHICH I MAY OPEN OR REOPEN WILIL YOU, OR WHICH MAY BE INTRODUCED TO YOU, INCLUDING YOUR SUBSIDIARIES AND AFFILIATES, THROUGH THE COURTESY OF THE AFOREMENTIONED INTRODUCING BROKER; SHALL INSURE TO THIN BENEFIT OF YOUR AFFILIATES AND YOUR SUCCESSORS, AND THOSE OF THE AFOREMENTIONED INTRODUCING BROKER, WHETHER BY MERGER, CONSOLIDATION OR OTHERWISE, AND ASSIGNS, AND THEIR RESPECTIVE EMPLOYEES AND BROKERS; YOU MAY TRANSFER MY ACCOUNTS TO YOUR SUCCESSORS AND ASSIGNS AND THOSE OF THE AFOREMENTIONED INTRODUCING BROKER; AND THIS AGREEMENT SHALL BE BINDING UPON MY HEIRS, EXECUTORS, ADMINISTRATORS, SUCCESSORS AND ASSIGNS. By reading and accepting the terra of this agreement, I acknowledge (1) that, in accordance with the Arbitration section, I agree in advance to arbitrate any controversies which may arise with the Introducing Broker or Cleating Broker, and (2) that, certain of my securities may be loaned to you or loaned out to others. AMERICAN Ex Rtes INSURED MONEY hL%RM Accomrr TERMS AND CoNDmoNs By opening an American Express Insured Money Market Account through American Express Financial Advisors ("AEFA") I agree to appoint Reserve Management Corporation ("Reserve") as my authorized agent pursuant to the Tens and Conditions set forth below which may be modified by written notice to me. 1. Eligible Depositors. Tb be eligible for an American Express Insured Money Market Account (`AEIMMA"), I must maintain a brokerage account with AEFA. Individual, joint corporate, IRA and certain other types of accounts authorized by AEFA are permitted. New Accounts. When I open a AEAIMA, AEFA will forward my funds to Reserve. As my agent, Reserve will deposit my funds in a FDIC- barred money market account ("MMDA") held in Reserve's name as agent for designated rlients at American Express Centurion Bank ("AECB"), m F XOmsured depository insniugon, and an affiliate of AEFA- Funds Placed in the MMDA will be insured up to a maximum of $100,1100. If I maintain other funds in the same legal ownership category with AECB, balances in those deposit accounts will count toward the 5100,000 Litt I am responsible for monitoring the total amount of such deposits in order for me to determine the extemof insurance coverage available on my deposits. Annual Percetre ("APY"). MyAEIMMA will man a rate of interest that is tiered based on the balance in my AkmtMa The rate can fructuate daily depending on market oonditiore. Please call IASW 07-7378 for the dens and current prevailing raps. The daily balance method will be used to calculate interest on my funds. Interest Is compounded di ib, and credited monthly to my AEIMMA There is no minimum period ttut funds must remain in my account and consequently, there is no penalty for withdrawals of my entire balance or any part thereof at any time without notice. 4. Contribudom. Punds I intend to contribute to my AEBOU must be placed into my brokerage account and cannot be placed directly with Reserve or AECB. Available cash in my AEFA brokerage account will be swept daily to my AEIMMA. 5. Withdrawals and'hansteret. I can make withdrawals at any time in any amount from myAEMMA through my AEFA brokerage aarount Withdrawals must be made from my AEFA brokerage account and cannot be made directly from Reserve or AECB. The sweep feature will automatically debit funds from my AEIMMA to cover withdrawals made from my AEFA brokerage account If I purchase a security, funds will be automatically swept from my AEW4A to my AEFA brokerage account on settlement date. The AEIMMA is not transferable. 6. Statements. The activity in my American Express haired Money Market Account will be included on my AEFA brokerage statement which will be mailed monthly or quarterly, if there is no activity. 7. Other Terms. The MMDA is solely the obligation of AECB and not AEFAs or Reserve's, which acts only as the agent for me. In the event that AECB rejects additional contributions or withdrawals entirely then Reserve as my agent is authorized by me to transfer my balance to The Reserve Fund - Pilnary Fund and notify me of such action. Subject to applicable Law, AECB reserves the right to change the terms of its agreement with Reserve, which may affect the terra of this AEIMMA agreement AEFA or Reserve may, without notice, refuse any contribution and close my account or impose a fee if my actions become burdensome. AEIMMA is not available for Wealth Management Service accounts AEFA and Reserve are not banks. Securities made available by AEFA are not guaranteed by any bank and are not insured by the FDIC. Reserve is Paid a comprehensive fee, not to exceed 1.10%per annum, of the average daily net assets of my account Reserve at its own expense may compensate AEFA for providing services such as administrative, clerical, recordkeeping, bookkeeping and servicing account holders All questions regarding my account should be directed to AEFA at 1 K0 l)7-7378, and not Reserve or AECB. AEFA and Reserve do not guarantee in any way the financial condition of any institution at which I may establish accounts. Upon request, I will be provided with the publicly available summary of financial information that AEFA has relating to participating institutions. Lf I have questions about the FDIC insurance coverage, I may obtain information by contracting the FDIC Office of Consumer Affairs, by letter, 55017th S[, N.W., Washington, DC 20481}, by phone (800) 9343342 or (202) 942-3100, by e-mail (comamer®FDIC.gov) or by visiting the FDIC web site at www.fdic.gov. Emcmmc SERNCES AGREEMENT IMPORTANT. I most read this Electronic Services Agreement before using any of the electronic services offered through my Introducing Broker accounts, which may include orde execution and financial market information access (hereafter referred to collectively as "The Services"). My use of The Services, or signed rrclmowledgement, Indicates my acceptance of all of the following terms. In consideration of you accepting and carrying one or more accounts for me, in addition to the above, if I choose to effect transactions using your electronic services which may include order execution and financial market information access, I hereby consent and agree that, I. Financial Market Information; Limited Warranty: I acknowledge financial market information accessible through The Services (the "Information") has been independently obtained by vendors, various securities markets, such as stock exchanges, and their affiliates, and 83I3LOVD11 others (collectively, "Infomlation Providers') Budh sources believed to be reliable. Tice accuracy, completeness, timeliness or correct sequencing of the information is not guaranteed by the Introducing Broker, the Information Providers, any parties transmitting the information ("Information Transmitters") or the vendors, or other service fscilitators (the "Service Facilitators). I understand there may be delays, omissions or inaccuracies in the Information and I agree that neither the Introducing Broker, the Information Providers, the Information Transmitters nor the Service Facilitators shall have any liability, contingent or otherwise, for the accuracy, completeness, timeliness or correct sequencing of the Information or for any decision made or action taken by you reliant upon the Information or the Service, or for interruption of any data, information or aspect of the Service. r- to be bound by the tc..,,s of this Agmement, and any user license agreements related to any service software. I further acknowledge that I have read, understand and agree to be bound by the terms of all user license agreements, if any, and hereby reaffirm my acceptance of these terms. 7. I further understand and agree, that as a condition of using the Introducing Broker electronic service to place orders or send information I shall immediately notify the Introducing Broker if I become aware of - any loss or theft of my access number(s), password(s) and/or account number(s); or THERE IS NO WARRANTY OF MERCHANTABILITY, NO WARRANTY OF FITNESS FOR A PARTICULAR USE, AND NO OTHER WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, REGARDING THE INFORMATION OR ANY ASPECT OF THE SERVICE (INCLUDING BUT NOT LIMITED TO INFORMATION ACCESS AND ORDER EXECUTION). 2. Limitations of Liability. I AGREE THAT IN NO EVENT WILL, THE INTRODUCING BROKER, THE INFORMATION PROVIDERS, THE INFORMATION TRANSMITTERS OR THE SERVICE FACILITATORS BE LIABLE TO ME OR ANYONE ELSE FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL OR INDIRECT DAMAGES (INCLUDING BUT NOT LIMITED TO LOST PROFIT'S, TRADING LOSSES AND DAMAGES THAT RESULT FROM INCONVENIENCE, DELAY OR LOSS OF THE USE OF THE SERVICE), EVEN IF THE INTRODUCING BROKER, THE., INFORMATION PROVIDERS, THE INFORMATION TRANSMITTERS OR THE SERVICE FACILITATORS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR LASSES. 8. I FURTHER AGREE THAT THE LIABILITY OF THE INTRODUCING BROKER, THE INFORMATION PROVIDERS, THE INFORMATION TRANSMITTERS AND THE SERVICE FACILITATORS ARISING OUT OF ANY KIND OF LEGAL CLAIM (WHETHER IN CONTRACT, TORT OR OTHERWISE) IN ANY WAY CONNECTED WITH THE SERVICE OR THE INFORMATION, WILL NOT EXCEED THE AMOUNT I ORIGINALLY PAID FOR THE SERVICE. I acknowledge and agree neither the Introducing Broker, the Information Providers, the Information Transmitters nor the Service 8 Facilitators shall be liable for any loss resulting from a cause over which such entity does not. have direct control, including but not limited to failure of electronicpr mechanical equipment or communication lines telephone or other interconnect problems, muauthortzed access, theft, operator errors, severe weather, earthquakes, and strikes or other labor problems. SOME STATES DO NOT ALLOW LIMITATIONS ON HOW LONG IMPLIED WARRANTIES LAST, THE EXCLUSION OR LIMITATION OF 10. INCIDENTAL OR CONSEQUENTIAL DAMAGES, OR THE. EXCLUSION OF CERTAIN IMPLIED WARRANTIES, SO THAT THESE DISCLAIMERS AND LIMITATIONS MAY NOT APPLY TO ME. THIS WARRANTY GIVES ME SPECIFIC LEGAL RIGHTS, AND I MAY ALSO HAVE OTHER RIGHTS, WHICH VARY FROM STATE TO STATE. 3. Proprietary Information. The Information Is the property of the Information Providers or others and is protected by copyright or other proprietary rights I agree not to reproduce, retransmit, dissema..am, sell, distribute, publish, broadcast, circulate or commercially exploit the Information in any manner without the express written consent of the Introducing Broker and the relevant Information Provider(s); nor to use the Information for any unlawful purpose. I agree to comply with reasonable requests by the Introducing Broker to protect the Information Providers and the Introducing Brokers respective contactual, statutory and common law rights in the Information and the Service. 4. I will use the Introducing Broker electronic services only in accordance with this Agreement and any additional future services will only be used in accordance with this Agreement - any unauthorized use of any of my access number(s), password(s) and/or account number(s), or of The Services or any information provided by The Services or any Information; or - any failure by me to receive a message that an order initiated by me through The Services has been received and/or executed through The Services; or - any failure by me to receive accurate written confirmation of an order or its execution within five (5) business days after entering the order through The Services; or - any receipt of confirmation of an order which I did not place, or any similar Inaccurate or conflicting report of information any discrepancy in the account balance or securities positions. Ali notifications to the Introducing Broker pertaining to this agreement shall be nailed to you BI fail to notify the Introducing Broker when any of the above conditions occur neither the Introducing Broker, nor the Clearing Broker, will have any responsibility or liability to me or to any other person whose claim may arise through me for any claims with respect to the handling, nuslandling, or lose of any order or other business. Any liability arising out of any action or omission by the Introducing Broker Dealer to provide services to me hereunder shall be limited to an amount equal to the benefit which would have resulted from the transaction during the five (5) business days in which I should have acted. I understand if there is a+ettiction on my account(s) with you, I will not be able to use The Services trading function Further, the Introducing Broker reserves the right in its sole discretion to request a cash or equity deposit prior to the execution of any transaction through The Services. The Introducing Broker will not be responsible for any delay or failure to provide The Services, including the execution of any securities order, in the event there is a restriction on my account or I delay or fail to make such deposit I understand that the Introducing Broker through The Services may be provided in accordance with Information Transmitters or Service Facilitators to whose terns I have agreed and those terms shall apply to this Agreement and are incorporated hereto by reference, including without Ibnitation, availability of The Services, limitations of liability, and restrictions on the use of the information provided. 11. 1 acknowledge that neither Time Services nor arty of the Information is intended to supply tax or legal advice. Although The Services may provide access to numerous recommendations about how to invest and what to buy, none of these recommendations are developed or endorsed by the Introducing Broker. In the Services, the Introducing Broker is not recommending any investment advisory service or product, nor does the Introducing Broker offer any advice regarding the nature, potential value or suitability of any particular security transaction or investment strategy. I acknowledge that all orders are at my sole risk. 12 I agree to be liable for any and all charges in connection with the use of The Services, including, but not limited to, your regular commission schedule In the event I choose to effect transactions other than via your electronic service 5. 1 shall be the only authorized user under this Agreement Further, I shall be retionsible for the confidentiality use of 13. P my access identification name and password information. I understand that 1 shall be solely responsible for all orders entered through the Introducing Broker electronic services using my login 1D, sign-on password and/or trading password. AI orders Shall be deemed to be made at the time received and in the form received. 5. I acknowledge that the Introducing Broker, in providing me with the Introducing Broker electronic service has relied upon my agreement I agree to pay all subscription, service and use fees, if any, which are charged by you for The Services and agree that such fees may be changed without notice. I agree to pay all costs (including attorney's fees), if aztiy, incurred by the Introducing Broker in collecting overdue fees from me. I also agree to pay all federal, state, and local taxes applicable to my use or receipt of The Services. I hereby grant the Introducing Broker a continuing security interest in the asses in my account(s), to secure the timely payment of all fees owed by me for The Services and any other amounts owing under this Agreement. 8323 L 111 N11 1n 14. 1 agree that the Introducing Broker may md--, The Services or change the terms of this Agreement or the Commission Schedule, in whole or in part, upon notice through an electronic service or in writing. 15. All price and security information provided through The Services is believed to be reliable; however, because of the volume of information, and the frequency, with which it changes, the information can only be provided on a best efforts basis for the convenience of the user, and neither the Introducing Broker, nor the Clearing Broker, any of its Information Providers, nor Service Facilitators is liable for any investment decisions made using the information provided 16. A. I agree to indemnity and hold the Introducing Broker, the Clearng Broker, Information Providers and Service Facilitators hamdess from and against any and all claims, losses, liability costs and expenses (including but not Hadeed to attorney's fees) arising from my violation of this Agreement or arty third party?s rights, including but not limited to copyright, proprietary, and privacy rights. These indemnification and hold harmless obligations will survive the termination of this Agreement B. The Introducing Broker reserves the right to terminate my access to The Services or any portion of it in its sole discretion, without notice and without limitations, for any reason whatsoever, including but not limited to the unauthorized use of my access number(s), password(s), and/or account number(s), breach of this Agreement, and discontinuance of the Introducing Broker's access to any Information or data from any Information Provider or Service Facilitator or termination of one or more agreements between the Introducing Broker, the Information Providers, Information Transmitters or Service Facilitators. In the event of a termination by the Introducing Broker, the Information Providers, the Information Transmitters, Service Facilitators, the Introducing Broker and the Clearing Broker shall have ne, liability to me. Eram omc FUND TRANSFER Dact.osnme Throughout this Disclosure, "you"and "your" refer to the Introducing Broker, Clearing Broker and/or American Express Company. 'We',. US, . "I," and "our" refer to the brokerage account holder(s) who are obligated on the brokerage account 1. Applicability of these disclosures. These disclosures, and the rights and obligations contained thereby, apply only to customers who are natural persons whose account was established primarily for personal, family or household purposes. They are applicable only to accounts and transactions governed by the Federal Electronic Dmd'Iransfer Act and Federal Reserve Board Regulation E and (for Massachusetts residents) Chapter 167B of the Massachusetts General Laws and any regulations promulgated thereunder. 2. Types of Electronic Fund Transfers. If I sign the appropriate documentation as required by you, I may make the following types of electronic funds transfers to or from my account; preaudiorized payments from my account to third parties; automatic funds transfer ("AFP') transactions made through the Amended Clearing House system between my account and accounts at financial institutions; direct deposit of funds to my account; and telephone transfers. 3. Limits on Electronic Fund Transfers. 1 cannot make any transfer; out of my account that exceed the combined asset value of my account as described in my agreement For any single AFf Transaction, the minimum amount is $100, and the maximum amount is 5100,000. All electronic fund transfers are limited by the amount of available funds in any account from which the transfer is requested. For security reasons, there may be other limits on electronic fund transfers that I can make. 4. Fees. Them is no charge for AFT Transactions. You may add or change fees for electronic fund transfers by giving notice to me. 5. Error Resolution Notice. In case of errors or questions about my electronic transfers, I shall call or write you at the telephone number or address listed n this Agreement, as soon as I can, if I think my statement or receipt is wrong or if I need more information about a transfer listed on the statement or receipt You must hear from me no later titan 60 days after you sent the FIRST statement on which the problem or error appeared. I must: • Tell you my nlu...: and account number (if any). • Describe the error or the transfer I am unsure about, and explain as clearly as I can why I behe it is an error and why I need more information. • Tell you the dollar amount of the suspected error. If I tell you why orally, you may require that I send you my complaint or question in writing within 10 business days. You will determine whether an error occurred within 10 business days (20 business days if the transfer involved a new account) after you hear from me and will correct any error promptly If you need more time, however, you may take up to 45 days (96 days if the transfer involved a new account, a pointof4ide transaction, or a foreignbdtiated transfer) to investigate my complaint or question. If you decide to do this, you will credit my account within 10 business days (20 business days if the transfer involved a new account) for the amount I thin[ is in error, so that I will have use of the money during the time it takes you to complete your investigation. If you ask me to put my complaint or question in writing and you do not receive it within 10 business days, you may not credit my account. An account is considered a new account for 30 days after the fast deposit is made. You will tell me the results within three business days after completing your investigation If you decide that there was no error, you will send me a written explanation. I may ask for copies of the documents that you used in your investigation by phone or in writing. 6. Busirness Days. Your business days are Monday through Friday, except days when the New York Stock Exchange, Inc. is closed. 7. Record of Transacctfons. My monthly statement will list all electronic fund transfers made in connection with my account S. My Liability for Unauthorized Transactions. If my statement shows withdrawals or transfers that I did not make or other inaccuracies, I shall tell you at once. If I do NOT tell you within 60 days after the statement was mailed to me, I may not get back any money I lost after the 60 days if you can prove that you could have stopped someone from taking the money if I had told you in time. H I believe that someone has transferred or may transfer money from my account without my permission, I shag call you between 0:00 am. and 6:00 p.m. Easters nine or write to you at the Introducing Broker location identified on the client application. Your Liability. You will be liable to me for any actual losses I suffer if you fail to complete a properly requested electronic fund transfer, or to stop payment of a transfer, in accordance with the terns of this Disclosure or any other written agreement you may have with me. However, you will not be liable to me if an electronic food transfer cannot be completed or I receive less cash than you requested if, through no fault of yours, my account or bank account does not have enough money to complete the transaction, the transfer will exceed any credit available to me in my account, the funds in my account are subject to legal process or other encumbrance restricting the transfer There may be other exceptions in your agreements with me. 10. Preauthodzed Payments. If I have told you in advance to make regular payments out of my account, I can stop any of these payments. Here's how: I shall call or write to you at the Introducing Broker location identified on the client application in dine for you to receive my request three business days or more before the payment is scheduled to be. made. If I call, you may also require me to pin my request in writing and send it to you within 14 days after I call. If these regular payments vary in amount, the person I am gong to pay vqV tell me, 10 days before each payment, when it will be made and how much it will be. If I order you to stop one of these payments drtY. busnesa days or more before the transfer is scheduled, and you do not do so, you will be liable for my losses or damages. 11. To Find Out if a Preauthorized Transfer Has Been Made. If I have authorized an electronic fund transfer to or from my account, I can call you to find out if the transfer has been made. 12. Changing This Disclosure and These Rights and Responsibilities. You may change this Disclosure at any tine upon notice to me, or without notice to me, whenever the account description or Fund Prospectus is modified You or any participating bank, financial a373 t (11/011 institution or ATM network may add or removes hall ATMs or extend limit or eliminate the services provided at any or all ATMs without notifying me beforehand. From time to time, the rights and responsibilities with respect to electronic fund transfers may change. I shall be notified of my changes as required by applicable law. However, if the change is necessary for security reasons, I do not have to be notified Nora toa Mnssr cuuserrs RsvDe The following disclosures apply to Massachusetts residents only 1. General Disclosure Statement. Any documentation provided to me that mdicates that an electronic fund transfer was made shall be admissible as evidence of such transfer and shag constitute prima facie proof that such transfer was made. The initiation by me of certain electronic fund transfers from my account will, except as otherwise provided in this Disclosure, effectively eliminate my ability to stop payment of the transfer. Unless otherwise provided in this Disclosure, l may not stop payment of electronic fund transfers; therefore, I should not employ electronic access for purchases or services unless I am satisfied that I shall not need to stop payment. No interest is paid on the cash balance in my account Dividends, at a rate that varies daily, are paid on my mutual fund balances in my account 1 may terminate this Agreement by notifying you in writing. , If a problem or error with respect to my account concerns a transfer to or from a third party (for example a Social Security payment), your investigation may be limited to a review of your own records If you decide that there was no error, I may want to contact such third party to pursue the matte further. If I comply with the conditions set forth above, in cases in which I think that a transfer from my account was Initiated by a third party that was not authorized to midate any transfers from my account, you will request a copy of the third party's authorization. If you do not request it within 30 calendar days, you will recredit my account for the transfer I think is unauthorized, so I will have the sae of my money will we determine whether I had authorized the transfer. 2. Disclosure of Account Information to Third Parties. Ifl give you written authorization to dsclo& information about, me, my account or the transactions that I make to any person, that authorization shall automatically expire 45 days after you receive it If an unauthorized disclosure has been made, you must inform me of the particulars of the disclosure within three days after you have discovered that an unauthorized disclosure has occurred. 3. Protected Consumer Use of Electronic Fund Transfer Services. Chapter 1678 of the Massachusetts General Laws was enacted to provide a means for financial institutions businesses and consumers to conduct their business relations more conveniently. Transferring funds electronically will supplement the use of cheeks, credit and cash and will not replace these methods of doing business. As a consumer, I should be aware of my rights if i choose to utilize this system. • Prohibition of Compulsory Use. No person may require me to use a preauthorized electronic fund transfer as a condition for the extension of credit unless the credit is being extended in connection with an overdraft checking plan or is being extended to maintain a specified balance in my account; or require me either to accept a transfer service or to establish an account that is accessed electronically as condition of employment or receipt of governmental benefit; or require me to pay electronically for the purchase of goods or services. If my account is to be credited by a preauthorized transfer, I may choose the financial institution to which the transfer nay be made if the institution is technically capable of receiving such preauthorized transfer. • Waiver of Rights. No writing or agreement signed by me can waive the rights conferred to me by Chapter 167B of the Massachusetts General laws orders I decide to waive these rights in settlement of a dispute or action. • Discounts. No store or retail business may offer a discount tome for making payment on any purchase or goods or services by electronic payment, rather than by cash, check or charge. • Refunds. If it is the policy of a store or retail business to give cash refunds in return for an item purchase with cash, then this policy most also cover refunds for items purchased by electronic fund transfer unless It is dearly disclosed at the time the transaction is consummated that no cash or credit refunds are. given for payments made by electronic hand transfers. • Suspension of Obligations. If a person agrees to accept payment by means of an electronic fund trandiar and the system malfunctions preventing such a transfer, then the consumer's obligation is suspended until the transfer can be completed, unless that person, in writing, demands payment by other means. • Prohibited Means of Identification. My Social Security number cannot be used as the primary identification number although it can be used as a secondary aid to identity me.. • Criminal IJabllity. Procuring m using a card, code or other means of electronic access to an accmmt with the Intent to defraud is basis for criminal liability I may contact you using the following addresses and phone numbers. I may also write you at the Introducing Broker location identified on the client application American Express Brokerage 70400 ARP Financial Center Minneapo0s, MN 55474 1S00LAXPSERV (297-7378) saes t lr urotl 17 Fg s FOR Retmitsic , EDWAM IRA AND KEOGH AC(nuN1E Brokerage Service Fees Whe Transfer Out $15 Express Mail Cost of Carrier Returned Check or ACA $15 Limited Partnership Transfer $45 per issue Legal Transfers $20 Private Placement $75 annual per account Transfer Out $50 Voluntary Physical/Reorganization $36 Certificate Delivery $15 Non-standard Custody/Safekeeping $25 Statement Reprint $5 Trade Related Fees Late Trade Settlement $15 ($30 maximum client charge per settlement date) SEC Transfer $0.01 per $300, or fraction thereof, on all equity and options sale transaction' Quotes 5011 real-time quotes free with account opening 100 free quotes for each executed bade. Additional quotes are $0.01 each. 'SEC 11anafer fee applies to all non-debt securities subject to prompt last sale reporting 1 agree that you may charge multiple transaction fees and/or commissions if a single order Orttansectlon is executed an muhWle days. MoNgr Sernmoorr opnoss' Retirement Accounts American Express Insured Money Market Account Daily sweep of uninvested cash balances Reserve Fund Money Market portfolios Daily sweep of uninvested cash balances at the opening of the first business day of the week Taxable: Primary U.S. Government U.S. Treasury SPS Advantage Accounts American Express Insured Money Market Account Daily sweep of uninvested cash balances Reserve Fund Money Market portfolios weekly sweep of uninvested cash balances at the opening of the first business day of the week Tmabl Primary 'If rm portfolio is indicated, the American Express Wuted MoneY Makat Account will be Selected. Ali portfoam exmept the American EVp Irwumd Money Market Account are money market munul fwid portfolios of the Reserve Fund. American Express lmured Money MarketAccamt N m interest beating account All deposit products and services are offered by American Express Centurion Bank, a federally insured financial institution. All trauactions securities are cleared by American Enterprise Investment Services, inc., a wholly owned subsidiary of American Express Financial Corporation. Amerlgn Enterprise Investment Services b a member of the National Association of Securities Dealers (NASD), Securities Investor Protection Corporation (SIP(. , the Chicago Stock Exchange, and the Patiac Stock Exchange. All fees and acewnt features subject to change. Other fees may apply. 832311111011 13 FOX • ROTHSCHILD,. ATTORNEYS AT LAW 2000 MARKET STREET • TENTH FLOOR • PHILADELPHIA, PA 19103-3291 215.299.2000 • FAX 215.299.2150 • www.foxrothschild.com Joshua Hom Direct Dial: (215) 299-2184 Internet Address: jhom@foxrothachild.com U October 1, 2004 it Henry F. Coyne, Esquire Coyne & Coyne, P.C. 3901 Market Street Camp Hill, PA 17011 Re: Scheuren v. American Express Financial Advisors, Inc., et al. Cumberland County CCP No. 03-3622 Dear Mr. Coyne: I write with respect to your outstanding settlement proposal. As you may recall, I advised you that there was an agreement to arbitrate that would cover this disposition of these proceedings. In that regard, enclosed is an account application that Mr. Scheuren signed. Please note the language in bold above his signature requires the submission of this matter to arbitration. If you have any questions, please do not hesitate to contact me. Thank you. Very truly ?yours, Josh Horn jh Enclosure cc: A. Wesley Bridges, Esquire PENNSYLVANIA • NEW JERSEY • DELAWARE CERTIFICATE OF SERVICE I, Joshua Horn, Esquire, hereby certify that a true and correct copy of the preliminary objections of defendants Ameriprise Financial Services, Inc., IDS Life Insurance Company, Donald Weaver and Doris E. Brytz, to Plaintiffs Complaint was served by first-class U.S. mail, postage prepaid, on plaintiff's counsel of record, addresses as follows: Henry F. Coyne, Esquire 3901 Market Street Camp Hill, Pennsylvania 17011-4227 Counsel for Plaintiff Itl_ Horn, Esquire Dated: August 10, 2006 m ? A 6 {'?1 ?.- tip N PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in duplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: Please list the within matter for the next Argument Court. CAPTION OF CASE (entire caption must be stated in full) JAMES N. SCHEUREN and BARBARA SCHEUREN, Vs. AMERICAN EXPRESS FINANCIAL ADVISORS, INC. (n/k/a AMER FINANCIAL SERVICES, INC.), (Plaintiff) [PRISE ID fendant) COURT OF COMMON PLEAS OF CUMBERLAND COUNTY CIVIL ACTION NO. 03-3622 No. 03-3622 1. State matter to be argued (i.e., plaintiffs motion for new trial, defendant's demurrer to complaint, etc.): Term to compel arbitration preliminary objections to the complaint 2. Identify counsel who will argue cases: (a) forplaintiff: Henry F. Coyne, Esquire (Name and Address 3901 Market''Street'Camp Hil , PA 17011-4227 (b) for defendant: Joshua Horn, Esquire 2000 Market Street Philadelphia, PA 19103 3. I will notify all parties in writing within two days that this can has been listed for argument. 4. Argument Court Date: October 25, 2006 9iLn e3uaMx'- Hun Net year tome Date: $?IO? Attomcy fm c7 N m? c --i-t rm- m v7,:: rv v T ?... Sa J ? ?^^^T (([l?? c_ p m w COYNE & COYNE, P.C. Henry F. Coyne, Esquire Pa. Supreme Ct. No. 06250 3901 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 IN RE: JAMES N. SCHEUREN AND BARBARA D. SCHEUREN, Husband and Wife,: Plaintiffs VS. Attorney for Plaintiffs : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA NO.03-3622 AMERICAN EXPRESS FINANCIAL ADVISORS, INC. IDS LIFE INSURANCE CIVIL ACTION -ACTION COMPANY, DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ, Defendants PRAECIPE FOR LISTING CASE FOR ARGUMENT COURT TO THE PROTHONOTARY OF CUMBERLAND COUNTY: Please list the within matter for the next Argument Court. Matter to be Argued: Defendant Brytz's Preliminary Objections. 1. Identify counsel who will argue case: a. For Plaintiffs: Henry F. Coyne, Esquire Coyne & Coyne, P.C. Address: 3901 Market Street Camp Hill, PA 17011 Telephone: (717) 737-0464 b. For Defendants: Joshua Horn, Esquire Fox Rothchild Address: 2000 Market Street, Tenth Floor Philadelphia, PA 19103-3291 Telephone: (215) 299-2000 2. I will notify all parties in writing within two days that this case has been listed for argument. 3. Argument Court Date: October 25, 2006 Date: ?6'G Attorney for Plaintiffs 1 CERTIFICATE OF SERVICE I, Henry F. Coyne, Esquire, of Coyne & Coyne, P.C., hereby certify that true copy of the foregoing Plaintiffs' Praecipe was served this date upon the below-referenced individual at the below listed address by way of first class mail, postage pre-paid: Joshua Horn, Esquire Fox Rothschild, LLP 2000 Market Street, Tenth Floor Philadelphia, Pa 19103-3291 Dated: Z enry F. Coyne, squire Attorney for Plai tiffs 2 C? N ? Pi C. cr rtl , 27, N ?._ 4A JAMES N. SCHEUREN AND BARBARA D. SCHEUREN, Husband and Wife, Plaintiffs VS. AMERICAN EXPRESS FINANCIAL ADVISORS, INC., (a/k/a AMERIPRISE FINANCIAL SERVICES, INC.) IDS LIFE INSURANCE COMPANY, DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ, Defendants : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA NO.03-3622 CIVIL ACTION -ACTION REPLY TO PRELINUNARY OBJECTIONS OF DEFENDANTS AND MOTION TO COMPEL ARBITRATION AND NOW comes the Plaintiffs, James N. Scheuren and Barbara D. Scheuren, husband and wife and aver the following in support of this reply: 1. Admitted. 2. Admitted. 3. Denied. It is denied that Plaintiffs sought financial planning advice from Defendant Brytz. Rather, it was Defendant Brytz who sought-out, approached and pursued Plaintiffs and solicited and encouraged Plaintiffs to liquidate Mr. Scheuren's PPL Dividend Reinvestment Plan Account held by PPL and advised Plaintiffs there would be no adverse tax consequence should the liquidation of that PPL Account occur and the proceeds were then rolled-over to an IRA Account. Furthermore, the contents of Defendants' Exhibit "B" are denied. An Affidavit is an improper attachment to Preliminary Objections and, furthermore, the Plaintiffs have never met with or spoke with the Affiant or had any interaction with the Affiant. 4. Admitted in part and Denied in part. It is admitted that at the suggestion of Cyndy Potts Morris, the Field Compliance Director of Defendant American Express Financial Advisors, Plaintiffs filed a Complaint which speaks for itself. It is denied that Exhibit 1 of Exhibit "B" is a true and correct and complete copy of the Complaint filed at the suggestion of Defendants. I 5. Admitted in part and Denied in part. It is admitted that Defendant American Express Financial Advisors denied Plaintiffs' Complaint. It is denied that Defendants' denial of the Complaint was proper or that the denial of the Complaint was factually or legally accurate. 6. Denied as stated. The Complaint with the PSC speaks for itself. 7. Admitted in fact and Denied in fact. It is admitted that the Complaint was dismissed by the PSC as the PSC was unable to determine if a violation of the 1972 Act had occurred. It is denied; however, that the civil remedies sought by Plaintiffs are precluded by the PSC's action. 8. Admitted in part and Denied in part. It is admitted that Mr. Scheuren executed an IRA Application with Defendant American Express on June 3, 2003. It is denied the Client Agreement attached to Defendants' Preliminary Objections was provided to Mr. Scheuren on June 3, 2003. Further, it is denied that Exhibit 5 of Exhibit `B"is a true and correct copy of the "Agreement." 9. Admitted in part and Denied in part. It is admitted that the language quoted appears on the Application. It is denied the Client Agreement was attached to the Application. Further, it is denied the predispute arbitration clause is on page 1, it appears on page 8 of the "document." 10. Admitted in part and Denied in part. It is admitted that Plaintiffs filed a Complaint and admitted that he signed an Agreement for the IRA account on June 3, 2003. It is denied as stated in paragraph 9, supra. 11. Admitted in part and Denied in part. It is admitted the Agreement provides language as stated. It is denied that Section 7 is applicable to the transaction at issue which triggers relief and damages due to the Plaintiffs. 12. Denied. It is denied the arbitration provision is applicable to the Plaintiffs concerning the transaction at issue which triggers damages due and claimed by the Plaintiffs in this civil action. 13. Admitted. By way of further answer, the Record speaks for itself. 14. Paragraphs 1 through 13 are incorporated and made a part hereof. 2 15. Denied. It is denied Plaintiffs breached the "Agreement" because the "Agreement" which was signed was approximately three years after the event that triggered damages to Plaintiffs and is not applicable to that transaction and events at issue. 16. Denied. This is a legal argument and prayer for relief to which no response is required and same is therefore denied. 17. Admitted. 18. Admitted. 19. Denied. This is legal argument to which no response is required and same is therefore denied. 20. Denied. This is legal argument to which no response is required and same is therefore denied. 21. Denied. This paragraph is denied as stated. The referenced Statute speaks for itself. 22. Denied. This is legal argument to which no response is required and same is therefore denied. 23. Denied. This is a legal conclusion to which no response is required. Furthermore, see paragraphs 8 and 9, supra. 24. Denied. This is legal argument and prayer for relief to which no response is required and same is denied. WHEREFORE, Plaintiffs' respectfully request this Honorable Court to dismiss Defendants' Motion to Compel Arbitration and direct Defendants to Answer the Complaint. 25. Paragraphs 1 through 24 are incorporated and made a part hereof. 26. Admitted. Furthermore, the Rule speaks for itself. 27. Denied. This is legal argument to which no response is required and same is denied 28. Denied. This is legal argument to which no response is required and same is denied. 29. Denied. The Complaint speaks for itself. 3 30. Denied as stated. It is denied the Complaint is based upon the breach of an "Agreement" signed in 2003 when the events which give rise to Plaintiffs' Complaint, pertain to events and conduct of Defendants in 2000. 31. Denied. This is legal argument and conclusion to which no response is required and same is denied. WHEREFORE, Plaintiffs respectfully request that this Honorable Court dismiss Defendants' Preliminary Objections and direct Defendants to Answer the Complaint. 32. Paragraphs 1 through 31 are incorporated and made a part hereof. 33. Denied. It is denied that Plaintiffs failed to state acts or omissions of the Defendants which give rise to violation of the UTPCPL when the entire Complaint is read in its entirety. 34. Denied. See paragraph 33, supra. WHEREFORE, Plaintiffs respectfully request that this Honorable Court dismiss Defendants' Preliminary Objections and direct Defendants to Answer the Complaint. 35. Paragraphs 1 through 34 are incorporated and made a part hereof. 36. Admitted. Furthermore, the Rule speaks for itself. 37. Admitted. Furthermore, the Rule speaks for itself. 38. Denied. This is a legal conclusion to which no response is required. 39. Denied. This is a legal argument to which no response is required. 40. Denied. This is a legal conclusion to which no response is required. WHEREFORE, Plaintiffs respectfully request this Honorable Court to dismiss Defendant's Preliminary Objections in the nature of a Motion to Dismiss and direct Defendants to Answer the Complaint. 41. Paragraphs 1 through 40 are incorporated and made a part hereof. 42. Admitted. Furthermore, the Rule speaks for itself. 43. Denied. This is a legal argument to which no response is required. 4 44. Denied. This is a legal argument to which no response is required. 45. Denied. It is denied that Weaver was named a Defendant in the Praecipe for Writ of Summons. 46. Denied in part and admitted in part. This is a legal conclusion to which no response is required. It is admitted; however, that the caption of the Complaint should be amended to accurately reflect the parties as identified in the caption of the Praecipe for the Writ of Summons. (See Exhibit "A", attached). WHEREFORE, Plaintiff respectfully requests that the Caption of the Complaint reflect the parties identified in the Praecipe for Writ of Summons to include the fact that American Express Financial Advisors, Inc. is now known as Ameriprise Financial Services, Inc. Dated: Respectfully submitted: COYNE & COYNE, P.C. By: Henry F. Coyne, Esquire Pa. S. Ct. No. 06250 3901 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 Attorney for Plaintiffs 5 JAMES N. SCHEUREN and : IN THE COURT OF COMMON PLEAS OF BARBARA D. SCHEUREN, his wife : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiffs VS. :NO. 03 ` 3 6 ? ? mim TERM AMERICAN EXPRESS FINANCIAL n a O ADVISORS, INC.; IDS LIFE INSURANCE g -? COMPANY AND DORIS E. BRYTZ, -? L G Defendants : CIVIL ACTION - LAW Z5 a PRAECIPE FOR ISSUANCE OF A WRIT OF SUMMONS c? -c To the Prothonotary!- - Kindly issue a writ of summons in the above-captioned action. Please forward the writ of summons to the Sheriff of Cumberland County for personal service on the Defendants as follows: American Express Financial Advisors, Inc. and IDS. Life Insurance Company Donald Weaver, Vice President 3500 Market Street, Suite 200 Camp Hill, PA 17011 Doris E. Brytz American Express Advisors, Inc. 5500 Carlisle Pike Mechanicsburg, PA 17050 Date: C0)3a E "DYNE, P.CC) / HENRY F. COYNE, f SQUIRE 3901 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 Pa. S. Ct. No. 06250 Attorneys for Plaintiffs VERIFICATION The facts set forth in the foregoing are true and correct to the best of the undersigned's knowledge, information and belief and are verified subject to the penalties for unsworn falsification to authorities under 18 Pa. C.S.A. § 4904. Dated: /C / // /O , JAMES N. SCHEUREN Date: /° ) /< 16?. -(JBARBARA D. SCHEUREN CERTIFICATE OF SERVICE I, Henry F. Coyne, Esquire, of Coyne & Coyne, P.C., hereby certify that true copy of the foregoing Reply to Preliminary Objections of Defendants and Motion to Compel Arbitration was served this date upon the below-referenced individual at the below listed address by way of first class mail, postage pre-paid: Joshua Horn, Esquire A. Wesley Bridges, Esquire Fox Rothschild, LLP 2000 Market Street, Tenth Floor Philadelphia, PA 19103-3291 Attorneys for Defendants Dated: t t ® cJ7 ep L Henry F. Coyne, E ui Pa. S. Ct. No. 0625 3901 Market Street Camp Hill, PA 170114227 (717) 737-0464 6 r'-? ? ,... ... r`~ -r, -, _,?, r- „ice ? r ?? -i `'?? { 7 4 ?`_ ? , JAMES N. SCHEUREN AND IN THE COURT OF COMMON PLEAS OF BARBARA D. SCHEUREN, HNV, CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFFS NO. 03-3622 CIVIL V. AMERICAN EXPRESS FINANCIAL ADVISORS, et. al., DEFENDANTS CIVIL ACTION - LAW IN RE: PRELIMINARY OBJECTIONS OF DEFENDANTS IN THE NATURE OF A MOTION TO COMPEL ARBITRATION BEFORE HESS AND EBERT, J.J. ORDER OF COURT AND NOW, this 17th day of November, 2006, after consideration of the briefs filed by the parties and after argument, IT IS HEREBY ORDERED AND DIRECTED that the Defendants' Motion to Compel Arbitration is GRANTED. By the Court, ?% A- M. L. Ebert, Jr., J. Henry F. Coyne, Esquire Attorney for Plaintiff 1 ?- a2o - D ? Joshua Horn, Esquire Attorney for Defendants bas t Ci 'pi's Hi7 oz A€.. 1A ?JJv COYNE & COYNE, P.C. Henry F. Coyne, Esquire 3901 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 Attorneys for Plaintiffs JAMES N. SCHEUREN AND : IN THE COURT OF COMMON PLEAS OF BARBARA D. SCHEUREN, : CUMBERLAND COUNTY, PENNSYLVANIA Husband and Wife, Plaintiffs VS. : NO. 03-3622 CIVIL TERM AMERICAN EXPRESS FINANCIAL : ADVISORS, INC. (n/k/a AMERIPRISE FINANCIAL, INC.), : CIVIL ACTION - ACTION IDS LIFE INSURANCE COMPANY, DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ,: JURY TRIAL DEMANDED Defendants APPLICATION TO AMEND ORDER TO INCLUDE DETERMINATION OF FINALITY PURSUANT TO Pa. R.A.P. 341(c) TO THE HONORABLE, JUDGE M. L. EBERT, JR.: AND NOW COMES the Plaintiffs, JAMES N. SCHEUREN and BARBARA D. SCHEUREN, husband and wife, by and through their counsel, Coyne & Coyne, P.C., Applies for Determination of Finality Pursuant to Pa.R.A.P. 341(c) as follows: 1. By Order of this Court, dated November 17, 2006 and entered of record on November 20, 2006, this Court granted in part the Defendants' Preliminary Objection in the nature of a Motion to Compel Arbitration. (Copy of the Order is attached hereto as Exhibit "A"). 2. The Order of this Court entered November 20, 2006 did not state that it was a final Order of Court. 3. The Order of Court changes the venue of this litigation to Arbitration rather than jury trial as requested by Plaintiffs. 4. An immediate appeal of this Court's November 17, 2006 Order granting Motion to Compel Arbitration and, thereby changing venue will facilitate resolution of the entire case. Wherefore, Plaintiffs, Mr. and Mrs. James N. Scheuren respectfully request that this Honorable Court amend its Order dated November 17, 2006 granting Defendants' Motion to Compel Arbitration and, thereby, resulting in a change of venue to include an express determination that an immediate appeal will facilitate resolution of the entire case, pursuant to Pa. R.A.P. 341(c). Respectfully Submitted: COYNE & COYNE, P.C. Dated. 1'z--) -06 By: ?.?? H F. Coyne, Es ire 3101 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 Pa. S. Ct. No. 06250 Attorney for Plaintiffs JAMES N. SCHEUREN AND BARBARA D. SCHEUREN, HNV, PLAINTIFFS V. AMERICAN EXPRESS FINANCIAL ADVISORS, et. al., DEFENDANTS IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLV. NO. 03-3622 CIVIL CIVIL ACTION - LAW BEFORE HESS AND EBERT, J.J. ORDER OF COURT AND NOW, this 17"' day of November, 2006, after consideration of the briefs filed by the parties and after argument, IT IS HEREBY ORDERED AND DIRECTED that the Defendants' Motion to Compel Arbitration is GRANTED. By the Court, Henry F. Coyne, Esquire Attorney for Plaintiff Joshua Hom, Esquire Attorney for Defendants t bas 1?k A- -`111" \/ M. L. Ebert, Jr., J. TRUE COPS' FROM RECORD ' timony whereof, I here ante set my hano A the seal of said Court at Carlisle, Pa. n 12 -day 69 Prothonotsrv EXHIBIT "A" CERTIFICATE OF SERVICE I, Henry F. Coyne, Esquire, of Coyne & Coyne, P.C., hereby certify that true copy of the foregoing Plaintiffs' Application To Amend Order To Include Determination Of Finality Pursuant To Pa. R.A.P. 341(C) was served this date upon the below-referenced individual at the below listed address by way of first class mail, postage pre-paid: Joshua Horn, Esquire A. Wesley Bridges, Esquire Fox Rothschild, LLP 2000 Market Street, Tenth Floor Philadelphia, PA 19103-3291 Attorneys for Defendants Dated: j Z - 1-0 6 3901 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 c F. C e, squire a. S. Ct. #?*06250 ? ? ? ?p ?^ ,,?. _` ? <., -gym ? x'? _? ? -- ?; Y ??" .? rz .?: FOX ROTHSCHILD LLP BY: JOSHUA HORN, JILL A. GULDIN, ESQUIRES IDENTIFICATION NO(S). 71799, 93657 2000 MARKET STREET, TENTH FLOOR PHILADELPHIA, PA 19103-3291 TELEPHONE: (215) 299-2000 FACSIMILE: (215) 299-2150 JAMES N. SCHEUREN and BARBARA SCHEUREN, Plaintiffs, V. ATTORNEYS FOR DEFENDANTS COURT OF COMMON PLEAS OF CUMBERLAND COUNTY CIVIL ACTION NO. 03-3622 AMERICAN EXPRESS FINANCIAL ADVISORS, INC. (n/k/a AMERIPRISE FINANCIAL SERVICES, INC.), IDS LIFE INSURANCE COMPANY, DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ, Defendants. DEFENDANTS' RESPONSE IN OPPOSITION TO PLAINTIFFS' APPLICATION TO AMEND ORDER TO INCLUDE DETERMINATION OF FINALITY PURSUANT TO Pa.R.A.P. 341(c) Defendants, American Express Financial Advisors, Inc. (n/k/a Ameriprise Financial Services, Inc.), IDS Life Insurance Company, and Doris E. Brytz (collectively, the "Defendants") hereby respond to the Application to Amend Order to Include Determination of Finality Pursuant to Pa.R.A.P. 341(c) (the "Application") filed by plaintiffs, James N. Scheuren - and Barbara Scheuren ("Plaintiffs"), as follows: 1. Denied. Paragraph I of the Application refers to a writing, which should be reviewed for its content. To the extent that Plaintiffs mischaracterize the content of that writing, Defendants deny those mischaracterizations. _, e ti a 2. Denied. Paragraph 2 of the Application refers to a writing, which should be reviewed for its content. To the extent that Plaintiffs mischaracterize the content of that writing, Defendants deny those mischaracterizations. 3. Denied. Paragraph 3 of the Application refers to a writing, which should be reviewed for its content. To the extent that Plaintiffs mischaracterize the content of that writing, Defendants deny those mischaracterizations. 4. Denied. An immediate appeal of this Court's November 17, 2006 Order granting Motion to Compel Arbitration will not facilitate resolution of the entire case; rather, an immediate appeal would effectively prevent the arbitration that was compelled by this Court from proceeding and only serve to cause further delay. WHEREFORE, Defendants, American Express Financial Advisors, Inc. (n/k/a Ameriprise Financial Services, Inc.), IDS Life Insurance Company, and Doris E. Brytz, respectfully request that Plaintiffs' Application to Amend Order to Include Determination of Finality Pursuant to Pa.R.A.P. 341(c) be denied. Respectfully submitted, LLP By: JosVTi Hork, 9squire Jill Guldi , Esquire Identification No(s). 71799, 93657 2000 Market Street, Tenth Floor Philadelphia, PA 19103-3291 Telephone: (215) 299-2000 Facsimile: (215) 299-2150 Attorneys for Defendants Dated: December 5, 2006 CERTIFICATE OF SERVICE I, Jill A. Guldin, Esquire, do hereby certify that, on this 5th day of December, 2006, a true and . correct copy of the Response to the Application to Amend Order to Include Determination of Finality Pursuant to Pa.R.A.P. 341(c) was served by first-class U.S. mail, postage prepaid, on Plaintiffs' counsel of record, addressed as follows: Henry F. Coyne, Esquire COYNE & COYNE, P.C. 3901 Market Street Camp Hill, PA 17011-4227 JILL GUL , ESQUIRE on rn 4 i r ?- JAMES N. SCHEUREN AND IN THE COURT OF COMMON PLEAS OF BARBARA D. SCHEUREN, H/W, CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFFS NO. 03-3622 CIVIL V. AMERICAN EXPRESS FINANCIAL ADVISORS, et. al., DEFENDANTS CIVIL ACTION - LAW IN RE: PRELIMINARY OBJECTIONS OF DEFENDANTS IN THE NATURE OF A MOTION TO COMPEL ARBITRATION BEFORE HESS AND EBERT, J.J. AMENDED ORDER OF COURT AND NOW, this 6th day of December, 2006,the previous Order of Court in the above-captioned matter dated November 17, 2006 is amended as follows: IT IS HEREBY ORDERED AND DIRECTED that the Defendants' Motion to Compel Arbitration is GRANTED and all action in the above-captioned civil case is STAYED pending cornpletion of the Arbitration. By the Court, Henry F. Coyne, Esquire Attorney for Plaintiff Joshua Horn, Esquire / Attorney for Defendants ? bas ?t ar4 WV 9- 310 HE is r . 31 1 ?O COYNE & COYNE, P.C. Henry F. Coyne, Esquire 3901 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 Attorneys for Plaintiffs JAMES N. SCHEUREN AND BARBARA D. SCHEUREN, Husband and Wife, Plaintiffs VS. : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA NO. 03-3622 CIVIL TERM AMERICAN EXPRESS FINANCIAL : ADVISORS, INC. (n/k/a AMERIPRISE FINANCIAL, INC.), : CIVIL ACTION - ACTION IDS LIFE INSURANCE COMPANY, : DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ,: JURY TRIAL DEMANDED Defendants NOTICE OF APPEAL Notice is hereby given that James N. Scheuren and Barbara D. Scheurn, husband and wife, Plaintiffs above named, hereby appeals to the Superior Court of Pennsylvania from the Amended Order of Judge M. L. Ebert, Jr. entered in this matter, dated December 6, 2006 which amends a prior Order of Court, dated November 17, 2006. This Order has been entered in the docket as evidenced by the attached copy of the docket entry. Respectfully Submitted, Dated: 1 Z. - .1 !j -ob COYNE AND COYNE, P. By: Henry F. Coyne squire Ta. Supreme Ct. No. 06250 3901 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 Attorney For Plaintiffs JAMES N. SCHEUREN AND BARBARA D. SCHEUREN, HAN, PLAINTIFFS V. AMERICAN EXPRESS FINANCIAL ADVISORS, et. al., DEFENDANTS' IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 03-3622 CIVIL CIVIL ACTION - LAW IN RE: PRELIMINARY OBJECTIONS OF DEFENDANTS IN THE NATURE OF A MOTION TO COMPEL ARBITRATION BEFORE HESS AND EBERT. J.J. AMENDED ORDER OF COURT AND NOW, this 6th day of December, 2006,the previous Order of Court in the above-captioned matter dated November 17, 2006 is amended as follows: IT IS HEREBY ORDERED AND DIRECTED that the Defendants' Motion to Compel Arbitration is GRANTED and all action in the above-captioned civil case is STAYED pending cornpletion of the Arbitration. By the Court, ?x -? M. L. Ebert, Jr., J. Henry F. Coyne, Esquire Attorney for Plaintiff Id? W'O? Joshua Horn, Esquire / Attorney for Defendants ? bas Y244'2812142006 Cumberland County Prothonotary's Office Page 1 PYS510 Civil Case Print 2003-03622 SCHEUREN JAMES N ET AL (vs) AMERICAN EXPRESS FINANCIAL ETA Reference No. Filed......... 7/30/2003 Case Type...... WRIT OF SUMMONS Time.......... 9:53 Judgment...... .00 Execution Date 0/00/0000 Judge Assigned: EBERT M L JR Jury Trial.... Disposed Desc.: Disposed Date. 0/00/0000 ------------ Case Comments ------------- Higher Crt 1.: Higher Crt 2.: ******************************************************************************** General Index Attorney Info SCHEUREN JAMES N PLAINTIFF COYNE HENRY F NO ADDRESS PROVIDED SCHEUREN BARBARA D PLAINTIFF COYNE HENRY F NO ADDRESS PROVIDED AMERICAN EXPRESS FINANCIAL DEFENDANT GARNES DAVID T ADVISORS INC DOANLD WEAVER VICE PRESIDENT 3500 MARKET STREET SUITE 200 CAMP HILL PA 17011 IDS LIFE INSURANCE COMPANY DEFENDANT GARNES DAVID T DOANLD WEAVER VICE PRESIDENT 3500 MARKET STREET SUITE 200 CAMP HILL PA 17011 BRYTZ DORIS E DEFENDANT GARNES DAVID T AMERICAN EXPRESS ADVISORS INC 5500 CARLSILE PIKE MECHANICSBURG PA 17050 WEAVER DONALD DEFENDANT GARNES DAVID T 3500 MARKET STREET SUITE 200 CAMP HILL PA 17011 ******************************************************************************** * Date Entries ******************************************************************************** - - - - - - - - - - - - - FIRST ENTRY - - - - - - - - - - - - - - 7/30/2003 PRAECIPE FOR WRIT OF SUMMONS IN CIVIL ACTION-WRIT OF SUMMONS ISSUED ------------------------------------------------------------------- 8/08/2003 SHERIFF'S FILE RETURNED FILED. Litigaynt.: AMERICAN EXPRESS FINANCIAL yypp?ADVISORS rINC Address..: 3500 MARKET STREET STE 200 Ctyy/St/Z • CAMP HILL, PA 17011 Hna To: ?RAIG STILES (VP ASSISTANT) Shf/D ty.: RONALD E. HOOVER Date/ Time: 08/04/2003 0015:50 Costs....: $37.66 Pd By: HENRY COYNE 08/08/2003 ------------------------------------------------------------------- 8/08/2003 SHERIFF'S FILE RETURNED FILED. Case Type: WRIT OF SUMMONS Ret Type.: Regular Litigant.: IDS LIFE INSURANCE COMPANY Address..: 3500 MARKET STREET STE 200 Cty/St/Z • CAMP HILL, PA 17011 Hnd To: ?RAIG STILES (VP ASSISTANT) Shf/D ty.: RONALD E. HOOVER Date/ Time: 08/04/2003 0015:50 Costs....: $16.00 Pd By: HENRY COYNE 08/07/2003 ------------------------------------------------------------------- 8/08/2003 SHERIFF'S FILE RETURNED FILED. Case Type: WRIT OF SUMMONS Ret Type.: Regular Litigant.: WEAVER DONALD Address..: 3500 MARKET STREET STE 200 Cty/St/Z • CAMP HILL, PA 17011 Hnd To: CRAIG STILES (VP ASSISTANT) Shf/D ty.: RONALD E. HOOVER Date/ Time: 08/04/2003 0015:50 Costs....: $16.00 Pd By: HENRY COYNE 08/08/2003 1244-2812142006 Cumberland County Prothonotary's Office Page PYS510 Civil Case Print 2003-03622 SCHEUREN JAMES N ET AL (vs) AMERICAN EXPRESS FINANCIAL ETA Reference No... Filed......... 7/30/2003 Case Type...... WRIT OF SUMMONS Time.......... 9:53 Judgment...... .00 Execution Date 0/00/0000 Judge Assigned: EBERT M L JR Jury Trial.... Disposed Desc.: Disposed Date. 0/00/0000 ------------ Case Comments ------------- Higher Crt 1.: Higher Crt 2.: ------------------------------------------------------------------- 8/15/2003 SHERIFF'S FILE RETURNED FILED. Regular Case Type WRIT OF : AMERICAN SUMMONS Ret PRESS Type.: Litigahant. FIINANCIAL ADVIORSINC Address..: 3500 MARKET STREET STE 200 Cty/St/Z • CAMP HILL, PA 17011 Hnd To: ?RAIG STILES, GENERAL VICE PRESIDENT, ADULT IN CHARGE Shf/D ty.: RONALD HOOVER Date/Time: 08/04/2003 1550:00 Costs....: $37.66 Pd By: HENRY COYNE 08/15/2003 ------------------------------------------------------------------- 8/15/2003 SHERIFF'S FILE RETURNED FILED. Case Type: WRIT OF SUMMONS Ret Type.: Regular Litigant.: IDS LIFE INSURANCE COMPANY Address..: 3500 MARKET STREET STE 200 Cty/St/Z • CAMP HILL, PA 17011 Hnd To:RAIG STILES, GENERAL VICE PRESIDENT, ADULT IN CHARGE Shf/D ty.: RONALD HOOVER Date/Time: 08/04/2003 1550:00 Costs....: $16.00 Pd By: HENRY COYNE 08/15/2003 ------------------------------------------------------------------- 8/15/2003 SHERIFF'S FILE RETURNED FILED. Case Type: WRIT OF SUMMONS Ret Type.: Regular Litigaht.: WEAVER DONALD Address..: 3500 MARKET STREET STE 200 Cty/St/Z • CAMP HILL, PA 17011 Hnd To: ?RAIG STILES, ADULT IN CHARGE Shf/D ty.: RONALD HOOVER Date/Time: 08/04/2003 1550:00 Costs....: $16.00 Pd By: HENRY COYNE 08/15/2003 ------------------------------------------------------------------- 8/15/2003 SHERIFF'S FILE RETURNED FILED. Case Type: WRIT OF SUMMONS Ret Type.: Regular Litigant.: BRYTZ DORIS E Address..: 5521 CARLISLE PIKE Cty/St/Z • MECHANICSBURG, PA 17055 Hnd To: DORIS E BRYTZ Shf/D ty.: BRYAN WARD Date/ Time: 08/13/2003 1610:00 Costs....: $22.90 Pd By: HENRY COYNE 08/15/2003 ------------------------------------------------------------------- 8/18/2003 ENTRY OF APPEARANCE OF JOSHUA HORN ESQ AND DAVID T GARNES ESQ ON BEHALF OF DEFENDANTS AMERICAN EXPRESS FINANCIAL ADVISORS INC AND IDS LIFE INSURANCE COMPANY IN THE ABOVE-CAPTIONED MATTER BY DAIVD T GARNES ESQ ------------------------------------------------------------------- 8/18/2003 ENTRY OF APPEARANCE FOR DEFTS DONALD WEAVER AND DORIS E BRYTZ - BY DAVID T GARNES ESQ ------------------------------------------------------------------- 5/06/2005 PRAECIPE FOR LISTING CASE FOR ARGUMENT - DEFT BRYTZ'S OBJECTIONS TO PLFFS' FIRST SET INTERROGATORIES AND PLFFS' FIRST REQUEST FOR PRODUCTION OF DOCUMENTS - BY HENRY F COYNE ESQ ------------------------------------------------------------------- 5/27/2005 PRAECIPE TO REMOVE FROM THE ARGUMENT LIST SCHEDULED FOR 6/1/05 AND SPECIALLY SET FOR A CONFERENCE WITH THE HONORABLE KEVIN A HESS - BY AUSTIN F GROGAN ESQ FOR PETITIONER ------------------------------------------------------------------- 6/03/2005 ORDER OF COURT - DATED 6/2/05 - THE ABOVE THE CASE IS STRICKEN FROM THE 61/05 ARGUMENT LIST AS BEING IN VIOLATION OF CUMBERLAND COUNTY LOCAL RULE OF COURT 210-04 REGARDING DISCOVERY MOTIONS - BY THE COURT GEORGE E HOFFER PJ COPIES MAILED ------------------------------------------------------------------- 8/30/2005 DEFENDANTS' MOTION TO COMPEL ARBITRATION PURSUANT TO 42 PA CSA 7304 - BY JOSHUA HORN ESQ FOR DEFTS ------------------------------------------------------------------- 9/21/2005 ORDER - DATED 9121/05 - IN RE DEFT'S MOTION TO COMPEL ARBITRATION - ON RELATION OF THE PROTHONOTARY THAT COUNSEL FOR THE DEFT IS 2 :2442812142006 Cumberland County Prothonotary's Office Page PYS51'0 Civil Case Print 2003-03622 SCHEUREN JAMES N ET AL (vs) AMERICAN EXPRESS FINANCIAL ETA Reference No. Filed......... 7/30/2003 Case Type...... WRIT OF SUMMONS Time.......... 9:53 Judgment...... .00 Execution Date 0/00/0000 Judge Assigned: EBERT M L JR Jury Trial.... Disposed Desc.: Disposed Date. 0/00/0000 ------------ Case Comments ------------- Higher Crt 1.: Higher Crt 2.: SEEKING TO WITHDRAW HIS APPEARANCE AND IT FURTHER APPEARING THAT NO COMPLAINT HAS BEEN FILED IN THE CASE ACTION ON THE DEFTS' MOTION TO COMPEL ARBITRATION IS DEFERRED PENDING DISPOSITION OF COUNSEL'S MMOTION TO WITHDRAW APPEARANCE - BY THE COURT KEVIN A HESS J COPIES MAILED ------------------------------------------------------------------- 7/26/2006 COMPLAINT - BY HENRY F COYNE ATTY FOR PLFFS ------------------------------------------------------------------- 8/11/2006 PRELIMINARY OBJECTIONS OF DEFTS AMERIPROSE FINANCIAL SVCS INC - DORIS E BRYTZ & DONALD WEAVER IN THE NATURE OF A MOTION TO COMPEL ARBITRATION PURSUANT TO PA RULE OF CIVIL PROCEDURE 1028-A-6 & 42 PA CSA 7304 & PRELIMINARY OBJECTIONS TO THE COMPLAINT - BY JOSHUA HORN ATTY FOR DEFTS ------------------------------------------------------------------- 8/21/2006 PRAECIPE FOR LISTING CASE FOR ARGUMENT - PRELIMINARY OBJECTIONS OF DEFTS IN THE NATURE OF A MOTION TO COPEL ARBITRATION PRELIMINARY OBJECTIONS TO THE COMPLAINT - BY JOSHUA HORN ATTY FOR DEFT ------------------------------------------------------------------- 9/22/2006 PRAECIPE FOR LISTING CASE FOR ARGUMENT - DEFT BRYTZ'S PRELIMINARY OBJECTIONS - BY HENRY F COYNE ATTY FOR PLFFS ------------------------------------------------------------------- 10/11/2006 REPLY TO PRELIMINARY OBJECTIONS OF DEFTS AND MOTION TO COMPEL ARBITRATION - BY HENRY F COYNE ATTY FOR PLFFS ------------------------------------------------------------------- 11/20/2006 ORDER OF COURT - 11-17-06 - IN RE: ORDERED THAT THE DEFTS' MOTION TO COMPEL ARBITRATION IS GRANTED - BY ML EBERT JR J - COPIES MAILED 11-20-06 ------------------------------------------------------------------- 12/01/2006 APPLICATION TO AMEND ORDER TO INCLUDE DETERMINATION OF FINALITY PURSUANT TO PA R A P 341(C) BY HENRY F COYNE ESQ ------- -------------------------------------------------------- 12/06/2006 DEFTS' RESPONSE IN OPPOSITION TO PLFFS' APPLICATION-TO-AMEND-ORDER- TO INCLUDE DETERMINATION OF FINALITY PURSUANT TO PA RAP 341 C - BY JILL A GULDIN ATTY FOR DEFTS ------------------------------------------------------------------- 12/06/2006 AMENDED ORDER OF COURT - 12-06-06 - IN RE: DEFTS' MOTION TO COMPEL ARBITRATION IS GRANTED AND ALL ACTION IN CASE IS STAYED PENDING COMPLETION OF THE ARBITRATION - BY ML EBERT JR J - COPIES MAILED 12-06-06 - - - - - - - - - - - - - - LAST ENTRY - - - - - - - - - - - - - - ******************************************************************************** * Escrow Information * Fees & Debits Bw*Bal***Pymts/Ad? End Bal *********************************** ****** ******************************* WRIT OF SUMMONS 35.00 35.00 .00 TAX ON WRIT .50 .50 .00 SETTLEMENT 5.00 5.00 .00 AUTOMATION FEE 5.00 5.00 .00 JCP FEE 10.00 10.00 .00 ------------------------ ------------ 55.50 55.50 .00 ******************************************************************************** * End of Case Information `RUE GOPY FROM RECORO ', Y11Vhere,1?qcP3. 1 •f"'°? aPIto$et my tam the 3 PROOF OF SERVICE I, Henry F. Coyne, Esquire, of Coyne & Coyne, P.C., hereby certify that true copy of the Notice of Appeal and Proof of Service was served upon the persons in the manner indicated below, which service satisfies the requirements of Pa. R.A.P. 906: By First Class Mail: Hon. M.L. Ebert, Jr. Judge, Court of Common Pleas Cumberland County Courthouse One Courthouse Square Carlisle, PA 17013 Joshua Horn, Esquire Fox Rothschild, LLP 2000 Market Street, Tenth Floor Philadelphia, PA 19103-3291 Court Administrator Cumberland County Courthouse One Courthouse Square Carlisle, PA 17013 Dated: / 2 - O G Henry F. Coyne *Esquire Pa. Supreme Ct. o. 06250 3901 Market Street Camp Hill, PA 17011 (717) 737-0464 Attorney for Plaintiffs C-1 n? C, r?5 .p JAMES N. SCHEUREN AND BARBARA D. SCHEUREN, H/W, PLAINTIFFS V. AMERICAN EXPRESS FINANCIAL ADVISORS, et. al., DEFENDANTS IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 03-3622 CIVIL CIVIL ACTION -LAW ORDER OF COURT AND NOW, this 18th day of December, 2006, the Court being in receipt of a Notice of Appeal in the above captioned matter, the Appellant is ordered to file with this Court a concise statement of matters complained of on appeal no later than January 8, 2007. By the Court, M. L. Ebert, Jr., J. Henry F. Coyne, Esquire Attorney for Plaintiffs Joshua Horn, Esquire Attorney for Defendants Court Administrator 1 bas J 4 0, ; 9:17 A.M. Appeal Docket Sheet Docket Number: 2174 MDA 2006 Page 1 of 3 December 19, 2006 .2 t l superior Court of Pennsylvania 4ft James N. and Barbara D. Scheurn, Appellant V. American Express Financial Advisors, Inc. (nka Ameriprise Financial, Inc.) IDS Life Insurance Company, Donald Weaver Vice President and Doris Brytz Initiating Document: Notice of Appeal Case Status: Active Case Processing Status: December 18, 2006 Awaiting Original Record Journal Number: Case Category: Civil CaseType: Arbitration Consolidated Docket Nos.: Related Docket Nos.: SCHEDULED EVENT Next Event Type: Receive Docketing Statement Next Event Due Date: January 2, 2007 Next Event Type: Original Record Received Next Event Due Date: January 29, 2007 12/19/2006 3023 9:37 A.M. } Appeal Docket Sheet Docket Number: 2174 MDA 2006 Superior Court of Pennsylvania Paqe 2 of 3 MRNM December 19, 2006 COUNSEL INFORMATION Appellant Scheurn, James N. and Barbara D. Pro Se: Appoint Counsel Status: IFP Status: No Appellant Attorney Information: Attorney: Coyne, Henry F. Bar No.: 6250 Law Firm: Coyne & Coyne, P.C. Address: 3901 Market Street Camp Hill, PA 17011-4227 Phone No.: (717)737-0464 Fax No.: Receive Mail: Yes E-Mail Address: Receive E-Mail: No Appellee American Express Financial Advisors, Inc., etal Pro Se: Appoint Counsel Status: IFP Status: Appellee Attorney Information: Attorney: Horn, Joshua Bar No.: 71799 Law Firm: Fox Rothschild, L.L.P. Address: 2000 Market St 10th Fl Philadelphia, PA 19103 Phone No.: (215)299-2184 Fax No.: (215)299-2150 Receive Mail: Yes E-Mail Address: Receive E-Mail: No FEE INFORMATION Paid Fee Date Fee Name Fee Amt Amount Receipt Number 12118/06 Notice of Appeal 60.00 60.00 2006SPRMD001133 TRIAL COURT/AGENCY INFORMATION Court Below: Cumberland County Court of Common Pleas County: Cumberland Division: Civil Date of Order Appealed From: December 6, 2006 Judicial District: 9 Date Documents Received: December 18, 2006 Date Notice of Appeal Filed: December 14, 2006 Order Type: Order Entered OTN: Judge: Ebert, Jr., Merle L. Lower Court Docket No.: 03-3622 Judge ORIGINAL RECORD CONTENTS 12/19/2006 3023 9:37 A.M. Appeal Docket Sheet Superior Court of Pennsylvania Docket Number: 2174 MDA 2006 Paqe 3 of 3 Z%*6 December 19, 2006 Original Record Item Date of Remand of Record: Filed Date Content/Description BRIEFS DOCKET ENTRIES Filed Date Docket Entry/Document Name Party Type Filed By December 18, 2006 Notice of Appeal Filed Appellant Scheurn, James N. and Barbara D. December 19, 2006 Docketing Statement Exited (Civil) Middle District Filing Office 12/19/2006 3023 COYNE & COYNE, P.C. Henry F. Coyne, Esquire Pa. S. Ct. No. 06250 3901 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 Attorneys for Plaintiffs JAMES N. SCHEUREN AND : IN THE COURT OF COMMON PLEAS OF BARBARA D. SCHEUREN, : CUMBERLAND COUNTY, PENNSYLVANIA Husband and Wife, Plaintiffs VS. : NO. 03-3622 CIVIL TERM AMERICAN EXPRESS FINANCIAL ADVISORS, INC. (n/k/a AMERIPRISE FINANCIAL, INC.), : CIVIL ACTION - ACTION IDS LIFE INSURANCE COMPANY, : DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ,: JURY TRIAL DEMANDED Defendants APPLICATION TO AMEND ORDER TO INCLUDE STATEMENT SPECIFIED IN 42 Pa. C.S. 702 (b) TO THE HONORABLE M. L. Ebert, Jr., Judge: AND NOW COMES the Plaintiffs, Mr. and Mrs. James N. Scheuren, by and through their attorney, Henry F. Coyne, Esquire, and files the following Application: 1. On December 6, 2006, this Honorable Court issued an Amended Order amending a prior order, dated November 17, 2006. A copy of the Amended Order is attached hereto as Exhibit "A". 2. This Court's Order involves controlling questions of law as to which there is a substantial ground for difference of opinion in that: the Order erroneously (a) assumes the validity of a contract of adhesion, and (b) enforces the arbitration clause contained in that contract of adhesion retroactively to cover transactions that occurred before the contract was even signed. The American Express Brokerage IRA Application, dated December 3, 2006 is a contract of adhesion as alleged in Plaintiff's complaint. It was executed approximately three (3) years after the date of the transaction that forms the basis of Plaintiff's cause of action. No Pennsylvania appellate cases support this Court's Order on these important questions. 3. An immediate appeal from this Court's Order will advance ultimate termination of this case by securing appellate guidance as to the validity of the arbitration clause applied to the circumstances presented here, thereby enhancing the prospects of settlement. Although Plaintiffs believe that the Order is appealable as of right as a collateral order, United Services Automobile Association v. Shears, 692 A2d 161 (Pa. Super 1997), Plaintiffs are also seeking interlocutory review by permission as a precaution. 4. Pursuant to Pa. R.C.P. 1311, Plaintiffs petition for permission to appeal from this Court's Amended Order, dated December 6, 2006 and, pursuant to said rule, requests that this Honorable Court amend Order of December 6, 2006 to include the statement specified in 42 Pa. C.S. 702(b), namely adding that the Order "involves controlling questions of law as to which there is a substantial ground for difference of opinion and an immediate appeal from the Order may materially advance the termination of the matter." WHEREFORE, the Plaintiffs respectfully request that this Honorable Court to amend its Order of December 6, 2006, to include the statement specified by 42 Pa. C.S. 702 (b). Respectfully Submitted: Dated: COYNE & COYNE, P.C. By: 11-% 1 4f VI Hen ry F. CoyT?ej Esquire Pa. Supreme C No. 06250 3901 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 Attorney for Plaintiffs r JAMES N. SCHEUREN AND IN THE COURT OF COMMON PLEAS OF BARBARA D. SCHEUREN, H/W, CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFFS NO. 03-3622 CIVIL V. AMERICAN EXPRESS FINANCIAL ADVISORS, et. al., DEFENDANTS CIVIL ACTION - LAW IN RE: PRELIMINARY OBJECTIONS OF DEFENDANTS IN THE NATURE OF A MOTIt3N TO COMPEL ARBITRATION BEFORE HESS AND EBERT, J.J. AMENDED ORDER OF COURT AND NOW, this 6th day of December, 2006,the previous Order of Court in the above-captioned matter dated November 17, 2006 is amended as follows: IT IS HEREBY ORDERED AND DIRECTED that the Defendants' Motion to Compel Arbitration is GRANTED and all action in the above-captioned civil case is_ STAYED pending completion of the Arbitration, Henry F. Coyne, Esquire Attorney for Plaintiff Joshua Hom, Esquire Attorney for Defendants bas By the Court, M. L. Ebert, Jr., T" WPY FROM RECORD of sz, I'rothc><a N GxAI l-? CERTIFICATE OF SERVICE I, Henry F. Coyne, Esquire, of Coyne & Coyne, P.C., hereby certify that true copy of the foregoing Application to Amend Order to Include Statement Specified in 42 Pa. C.S. 702(b) was served this date upon the below-referenced individual at the below listed address by way of first class mail, postage pre-paid: Hon. M.L. Ebert Cumberland County Courthouse One Courthouse Square Carlisle, PA 17013 Joshua Horn, Esquire Fox Rothschild, LLP 2000 Market Street, Tenth Floor Philadelphia, PA 19103-3291 Dated: Henry F. Coyne, E uire Pa. S. Ct. No. 0625 3901 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 7 6 t Ca F3 COYNE & COYNE, P.C. Henry F. Coyne, Esquire Pa. Supreme Ct. No. 06250 3901 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 Attorneys for Plaintiffs JAMES N. SCHEUREN AND BARBARA D. SCHEUREN, Husband and Wife, Plaintiffs VS. : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA NO. 03-3622 CIVIL TERM AMERICAN EXPRESS FINANCIAL ADVISORS, INC. (n/k/a AMERIPRISE FINANCIAL, INC.), : CIVIL ACTION - ACTION IDS LIFE INSURANCE COMPANY, DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ,: JURY TRIAL DEMANDED Defendants STATEMENT OF MATTER COMPLAINED OF PURSUANT TO ORDER OF COURT AND NOW COMES the Plaintiffs, Mr. and Mrs. James N. Scheurn, by and through their counsel, Henry F. Coyne, Esquire and pursuant to this Honorable Court's Order of December 18, 2006, files the following concise statement of matters complained of an appeal to the Pennsylvania Superior Court: This Court in its Order, dated December 6, 2006 granted Defendants' Motion to Compel Arbitration and stayed all actions pending completion of the arbitration. The Order is in error because: 1. This Court's Order compelling arbitration: (i) erroneously assumes the validity of a contract of adhesion, and (ii) erroneously enforces the arbitration clause contained in that contract of adhesion retroactively to cover transactions that occurred before the contract was even signed. The American Express Brokerage IRA Application, dated June 3, 2003, is a contract of adhesion, as alleged in Plaintiff's complaint. It was executed approximately three (3) years after 1 the .date of the transaction that forms the basis for Plaintiffs' cause of action. No Pennsylvania appellate cases support this Court's Order; and 2. The action of this Court compelling arbitration denies Plaintiffs their opportunity for a jury trial. By compelling binding arbitration before a panel outside the jurisdiction of this Court, essentially removes the Plaintiffs' cause of action from judicial review of this Court and places it solely before arbitrators who are or were affiliated with the securities industry of which the American Express Brokerage is a member. Respectfully Submitted: Dated: COYNE & COYNE, P.C. 4fev . J WAA By: Henry F. Coyn , Esquire Pa. S. Ct. No. 6250 3901 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 Attorney for Plaintiffs 2 CERTIFICATE OF SERVICE I, Henry F. Coyne, Esquire, of Coyne & Coyne, P.C., hereby certify that true copy of the foregoing Appeal to Superior Court - Statement of Matters Complained was served this date upon the below-referenced individual at the below listed address by way of first class mail, postage pre-paid: Hon. M. L. Ebert, Jr. Cumberland County Courthouse One Courthouse Square Carlisle, PA 17013 Joshua Horn, Esquire Fox Rothschild, LLP 2000 Market Street, Tenth Floor Philadelphia, PA 19103-3291 Dated: 7 Henry F. Coyne, Esq ire Pa. S. Ct. No. 06250 3901 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 3 C= L?r A ? ?- t- 'tJ t F ?.J FOX ROTHSCHILD LLP BY: JOSHUA HORN, JILL A. GULDIN, ESQUIRES IDENTIFICATION NO(S). 71799, 93657 2000 MARKET STREET, TENTH FLOOR PHILADELPHIA, PA 19103-3291 TELEPHONE: (215) 299-2000 FACSIMILE: (215) 299-2150 JAMES N. SCHEUREN and BARBARA SCHEUREN, ATTORNEYS FOR DEFENDANTS COURT OF COMMON PLEAS OF CUMBERLAND COUNTY Plaintiffs, V. CIVIL ACTION NO. 03-3622 AMERICAN EXPRESS FINANCIAL ADVISORS, INC. (n/k/a AMERIPRISE FINANCIAL SERVICES, INC.), IDS LIFE INSURANCE COMPANY, DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ, Defendants. DEFENDANTS' REPLY IN OPPOSITION TO PLAINTIFFS' APPLICATION TO AMEND ORDER TO INCLUDE STATEMENT SPECIFIED IN 42 Pa C S 702(b) Defendants, American Express Financial Advisors, Inc. (n/k/a Ameriprise Financial Services, Inc.), IDS Life Insurance Company, and Doris E. Brytz (collectively, the "Defendants") hereby reply to the Application to Amend Order to Include Statement Specified in 42 Pa.C.S. § 702(b) (the "Application") filed by plaintiffs, James N. Scheuren and Barbara Scheuren ("Plaintiffs"), as follows: Admitted. By way of further answer, the December 6, 2006 Order (the "Order") is an interlocutory order pursuant to which plaintiffs' appeal is improper. Asa result, on December 28, 2006, defendants filed a motion to quash the interlocutory appeal with the Superior Court. In the Application, plaintiffs failed to advise the Court of the pending motion to quash the appeal. A true and correct copy of the motion to quash is attached hereto and made a part hereof as Exhibit "A". In the motion to quash, defendants, among other things, noted that (not only was the appeal an improper interlocutory appeal) plaintiffs never sought permission from this Court to pursue an interlocutory appeal in accordance with Pa.R.A.P. 1311. Only now having received the motion to quash and being educated on the fact of the impropriety of their interlocutory appeal and their failure to seek permission to file an interlocutory appeal, plaintiffs seek to have this Court amend the Order once again. In light of the fact that defendants filed the motion to quash before plaintiffs sought relief from this Court to amend the Order in accordance 42 Pa.C.S. § 702(b), the Application should be denied as waived because of the pendency of the motion to quash. More important, the timing of the Application is improper, warranting its denial. Specifically, Pa.R.A.P 1311(b) requires that an allegedly aggrieved party seek an amendment of the purportedly offending order in accordance with 42 Pa.C.S. § 702(b) within thirty (30) days of the order in question. Only after the trial court issues an order with the language required by 42 Pa.C.S. § 702(b) can the allegedly aggrieved party then file a petition with the appellate court to ask for permission to appeal. See Hoover v. Welsh, 615 A.2d 45 (Pa. Super. 1992), allo. denied, 634 A.2d 222 (Pa. 1993)(certification of an appealable issue by the trial court pursuant to 42 Pa.C.S. § 702(b) and then filing a petition for permission to appeal with appellate court are jurisdictional prerequisites to appeal an interlocutory order not appealable as of right; appeal quashed because appellant failed to follow procedures detailed in Pa.R.A.P. 1311). Here, plaintiffs have done the complete opposite of what the appellate rules require; namely, they 2 appealed before they ever requested an amendment in accordance with 42 Pa.C.S. § 702(b). Plaintiffs filed a notice of appeal of this Court's November 17, 2006 order on December 14, 2006. On December 1, 2006, plaintiffs requested that this Court amend the November 17, 2006 order to designate it as "final", which this Court denied. It was not until January 5, 2007 that plaintiffs filed the Application. In view of plaintiffs failure to comply with Pa.R.A.P 1311(b), the Application should be denied on this basis as well. See Hoover, supra. 2. Denied. It is specifically denied that the Order involves controlling questions of law as to which there is a substantial ground for a difference of opinion. First, agreements to arbitrate are not contracts of adhesion and have been uniformly enforced, including in disputes between investors and their financial advisors. Indeed, the United States Supreme Court has long recognized the enforceability of industry-wide agreements to arbitrate between investors and their financial advisors. See Shearson/American Express v. McMahon, 482 U.S. 220 (1987) (upholding industry-wide agreement for arbitration enforceable against investors), Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985) (if there is a valid agreement to arbitrate, the court has no discretion, but rather shall direct the parties to arbitration); and Moses H. Cone Memorial Hospital v. Mercury Construction Corp., supra, (pursuant to the Federal Arbitration Act, any doubts concerning an agreement to arbitrate should be resolved in favor of arbitration). The Pennsylvania courts have similarly held that, where a contract provides for arbitration of all claims or disputes arising out of or relating to the contract, those claims are to be submitted to arbitration as the parties agreed regardless if the claim is in contract or tort. See Elkins & Co. v. Suplee, 538 A.2d 883 (Pa. Super. 1988) (citing Waddell v. Shriber, 348 A.2d 96, 100 (Pa. 1975) (Pennsylvania Supreme Court favors the settlement of disputes by arbitration); Midomo Co. v. Presbyterian Housing Development Co., 739 A.2d 180, 188 (Pa. Super. 1999) (claims for 3 fraudulent and negligent misrepresentation covered by arbitration clause in contract); Williams v. Gruntal & Co., 447 Pa. Super. 357, 669 A.2d 387, 388 (1995), appeal denied, 545 Pa. 665, 681 A.2d 179 (1996) (claim for conversion covered by arbitration provision in contract); and Gouger v. Bear, Stearns & Co., Inc., 823 F.Supp. 282, 284 (1993) (claim of fraud in the inducement is covered by the arbitration agreement). Any doubts concerning an agreement to arbitrate should be resolved in favor of arbitration. See Kaplan v. First Options of Chicago, Inc., 460 U.S. 1, 24 (1983). Second, courts have routinely enforced arbitration agreements regardless if the agreement was executed before or after the alleged improper conduct. See Hamilton v. Dean Witter Reynolds, Inc., 1989 WL 89434 (W.D. Pa. July 19, 1989) (enforcing arbitration agreement to cover investor dispute involving incidents that occurred before and after agreement signed); Prestera v. Shearson Lehman Bros., Inc., 1986 WL 10095 (D. Mass. 1986) (arbitration clause covered transactions occurring both before and after the plaintiff/investor signed the agreement); A.G. Edwards & Sons, Inc. v. Syyrud, 597 So. 2d 197 (Ala. 1992) (appropriate to enforce agreement to arbitrate even if claims in investor dispute arose before execution of agreement to arbitrate); Clark v. Kidder, Peabody & Co., 636 F. Supp. 195 (S.D.N.Y. 1986) (motion to compel arbitration granted even though investor claims arose before execution of agreement to arbitrate); and Shotto v. Laub, 632 F.Supp. 516 (D. MD 1986) (same). Accordingly, this Court should deny the Application. 3. Denied. It is specifically denied that an immediate appeal will advance the ultimate termination of these proceedings let alone the prospects of any resolution. The "potential" for resolution is irrelevant and improper to raise with respect to the propriety of the Application. Further, plaintiffs are not out of court and can properly pursue their purported 4 claims in arbitration. By way of further reply, defendants incorporate by reference as if set forth at length herein their reply to paragraph 3 above. Moreover, the Order is not a collateral order appealable as a matter of right. See Maleski v. Mutual Fire, Marine and Inland Ins. Co., 633 A.2d 1143 (Pa. 1993) (Court lacked jurisdiction over an order compelling arbitration because such an order is interlocutory, and further reasoning that a stay pending arbitration was required by statute in any court order compelling arbitration; such an order is interlocutory in nature); Schantz v. Dodgeland, 830 A.2d 1265,1266 (Pa. Super. 2003) (holding that the order directing that the matter proceed to arbitration was an interlocutory order rather than a final order because "[t]he parties have been forced into, not put out of court. Thus the order is interlocutory and this appeal is not properly before us.") (citing Canter's Pharmacy v. Elizabeth Associates, 578 A.2d 1326 (Pa. Super. 1990); and Maleski, supra); and 42 Pa. C.S.A. § 7304(d) ("If the application for an order to proceed with arbitration is made in such action or proceeding and is granted, the court order to proceed with arbitration shall include a stay of the action or proceeding."). The Order is interlocutory and not appealable as a matter of law. See Motion to Quash. 4. Denied. Paragraph 4 of the Application does not contain averments of fact to which a reply is required. To the extent that a reply is required, this Court should not amend the Order any further as plaintiffs have not and cannot establish the basis for an interlocutory order pursuant to 42 Pa.C.S. § 702(b) and have failed to comply with Pa.R.A.P. 1311. WHEREFORE, Defendants, American Express Financial Advisors, Inc. (n/k/a Ameriprise Financial Services, Inc.), IDS Life Insurance Company, and Doris E. Brytz, respectfully request that Plaintiffs' Application to Amend Order to Include Statement specified in 42 Pa.C.S. § 702(b) be denied. Dated: January 10, 2007 By Respectfully submitted, F04, OTHSCHILD LLP Jos Horn, Esquire Jill Guldin, Esquire Iden ification No(s). 71799, 93657 2000 Market Street, Tenth Floor Philadelphia, PA 19103-3291 Telephone: (215) 299-2000 Facsimile: (215) 299-2150 Attorneys for Defendants 6 IN THE SUPERIOR COURT OF PENNSYLVANIA MIDDLE DISTRICT JAMES N. SCHEUREN and BARBARA SCHEUREN, Appellants, : V. Docket No. 2174 MDA 2006 AMERICAN EXPRESS FINANCIAL : ADVISORS, INC. (n/k/a AMERIPRISE FINANCIAL SERVICES, INC.), IDS LIFE INSURANCE COMPANY, DONALD : WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ, Appellees. AND NOW, this ORDER day of 2007, upon consideration of the motion of Appellees to quash appeal, and any response thereto, it is hereby ORDERED and DECREED that the motion to quash is GRANTED. The appeal of Appellants, James N. Scheuren and Barbara Scheuren, is hereby QUASHED. BY THE COURT: J. Received in Superior Court DEC 2 S 2006 MIDDLE M IN THE SUPERIOR COURT OF PENNSYLVANIA MIDDLE DISTRICT JAMES N. SCHEUREN and BARBARA SCHEUREN, Appellants, v. Docket No. 2174 MDA 2006 AMERICAN EXPRESS FINANCIAL ADVISORS, INC. (n/k/a AMERIPRISE FINANCIAL SERVICES, INC.), IDS LIFE INSURANCE COMPANY, DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ, ; Appellees. APPELLEES' MOTION TO QUASH THE APPEAL OF APPELLANTS Appellees, American Express Financial Advisors, Inc. (nikla Ameriprise Financial Services, Inc.), IDS Life Insurance Company, and Doris E. Brytz (collectively, the "Appellees") hereby move to quash the appeal of appellants, James N. Scheuren and Barbara Scheuren (the "Appellants"), pursuant to Pennsylvania Rule of Appellate Procedure 1972. In support thereof, Appellees aver as follows: On November 17, 2006, the Court of Common Pleas of Cumberland County, Pennsylvania, issued an Order that granted Appellees' Motion to Compel Arbitration. 2. On December 1, 2006, Appellants filed with the Court of Common Pleas of Cumberland County an Application to Amend the November 17, 2006 Order to Include Determination of Finality pursuant to Pa. R.A.P. 341(c). 3. Appellees opposed Appellants' Application to Amend, and on December 6, 2006 the trial court entered an Amended Order, providing as follows: IT IS HEREBY ORDERED AND DIRECTED that the Defendants' Motion to Compel Arbitration is GRANTED and all action in the above-captioned civil case is STAYED pending the completion of the Arbitration. See December 6, 2006 Order, a true and correct copy of which is attached hereto as Exhibit "A". 4. Appellants filed a notice of appeal with respect to the trial court's December 6, 2006 Order on December 18, 2006. See Notice of Appeal, a true and correct copy of which is attached hereto as Exhibit "B". This interlocutory appeal is improper because the underlying action has been stayed pending arbitration and Appellants did not obtain permission to file an interlocutory appeal. Therefore, the appeal should be quashed. 6. The Appellants' notice of appeal is improper insofar as it is an appeal from a non- appealable interlocutory order. See Pa.R.App.P. 301, 311, 341 (2006); see also Rosy v. National Grange Mutual Ins. Co., 771 A.2d 60 (Pa. Super. 2001) (holding that an order directing arbitration is an interlocutory order and not immediately appealable) (citation omitted). The December 6, 2006 Order stayed the court action pending completion of the arbitration, thereby making the order interlocutory and not final. See Maleski v. Mutual Fire, Marine and Inland Ins Co., 633 A.2d 1143 (Pa. 1993) (Court lacked jurisdiction over an order compelling arbitration because such an order is interlocutory, and further reasoning that a stay pending arbitration was required by statute in any court order compelling arbitration; such an order is interlocutory in nature); Schantz v. Dod eland, 830 A.2d 1265,1266 (Pa. Super. 2003) (holding that the order directing that the matter proceed to arbitration was an interlocutory order rather than a final order because "[t]he parties have been forced into, not put out of court. Thus the order is interlocutory and this appeal is not properly before us.") (citing Canter's Pharmacy v. Elizabeth Associates, 578 A.2d 1326 (Pa. Super. 1990); and Maleski, si ra); and 42 Pa. C.S.A. § 7304(d) ("If the 2 application for an order to proceed with arbitration is made in such action or proceeding and is granted, the court order to proceed with arbitration shall include a stay of the action or proceeding.") The Appellants also failed to follow the procedure outlined in Pennsylvania Rule of Appellate Procedure 1311 to seek an interlocutory appeal by permission. In light of the fact that the December 6, 2006 Order is interlocutory and Appellants failed to follow the procedure outlined in Pennsylvania Rule of Appellate Procedure 1311, the Appellants' appeal should be quashed pursuant to Pennsylvania Rule of Appellate Procedure 1972(7). See Pa.R.App.P. 1972(7) (2006). WHEREFORE, Appellees, American Express Financial Advisors, Inc. (n/k/a Ameriprise Financial Services, Inc.), IDS Life Insurance Company, Donald Weaver and Doris E. Brytz, respectfully request that this Court quash the appeal of appellants, James N. Scheuren and Barbara Scheuren, pursuant to Pennsylvania Rule of Appellate Procedure 1972. ,Wgk-- JOS A H , ESQUIRE JILL A. UL , ESQUIRE FOX ROTHSCHILD LLP 2000 Market Street, 10th Floor Philadelphia, PA 19103-3291 (215) 299-2000 Attorneys for Appellees Date: December 27, 2006 JAMES N. SCHEUREN AND IN THE COURT OF COMMON PLEAS OF BARBARA D. SCHEUREN, HNV, CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFFS : NO. 03-3622 CIVIL V. : AMERICAN EXPRESS FINANCIAL ADVISORS, et. al., DEFENDANTS CIVIL ACTION -LAW IN RE: PRELIMINARY OBJECTIONS OF DEFENDANTS IN THE NATURE OF A MOTION TO COMPEL ARBITRATION BEFORE HESS AND EBERT, J.J. AMENDED ORDER OF COURT AND NOW, this 6th day of December, 2006,the previous Order of Court in the above-captioned matter dated November 17, 2006 is amended' as follows: IT IS HEREBY ORDERED AND DIRECTED that the Defendants' Motion to Compel Arbitration is GRANTED and all action in the above-captioned civil case is STAYED pending completion of the Arbitration, By the Court, Henry F. Coyne, Esquire Attorney for Plaintiff Joshua Horn, Esquire Attorney for Defendants bas ?)A \ M. L. Ebert, Jr., J. "ato set Row Of 9 t'?othn?t rv Ir i . COYNE & COYNE, P.C. Henry F. Coyne, Esquire 3901 Market Street Camp Hill, PA 17011-4227 (717) 737-0464 JAMES N. SCHEUREN AND BARBARA D. SCHEUREN, Husband and Wife, Plaintiffs VS. Attorneys for Plaintiffs : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA NO. 03-3622 CIVIL TERM AMERICAN EXPRESS FINANCIAL : ADVISORS, INC. (n/k/a AM ER.IPRISE FINANCIAL, INC.), : CIVIL ACTION - ACTION IDS LIFE INSURANCE COMPANY, : DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ,: JURY TRIAL DEMANDED Defendants NOTICE OF APPEAL c :- -T 71 r r} - Cy) { Notice is hereby given that James N. Scheuren and Barbara D. Scheurn, husband and wife, Plaintiffs above named, hereby appeals to the Superior Court of Pennsylvania from the Amended Order of Judge M. L. Ebert, Jr. entered in this matter, dated December 6, 2006 which amends a prior Order of Court, dated November 17, 2006. This Order has been entered in the docket as evidenced by the attached copy of the docket entry. Respectfully Submitted, COYNE AND COYNE, P.C. Dated: ('L i t (if 0 By: e Henry F. Coyne, Y106250 Pa. Supreme Ct. ty .. s•.oov.. ?L.v?`ak. 3901 Market Street ?• unto im wq (7C 177):1371046417011-4227 00 O( at C f• Attorney For Plaintiffs JAMES N. SCHEUREN AND IN THE COURT OF COMMON PLEAS OF BARBARA D. SCHEUREN, HAN, CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFFS NO. 03-3622 CIVIL V. AMERICAN EXPRESS FINANCIAL ADVISORS, et. al., DEFENDANTS CIVIL ACTION -LAW IN RE: PRELIMINARY OBJECTIONS OF DEFENDANTS IN THE NATURE OF A MOTION TO COMPEL ARBITRATION BEFORE HESS AND EBERT,?J.J. AMENDED ORDER OF COURT AND NOW, this 6th day of December, 2006,the previous Order of Court in the above-captioned matter dated November 17, 2006 is amended as follows: IT IS HEREBY ORDERED AND DIRECTED that the Defendants' Motion to Compel Arbitration is GRANTED and all action in the above-captioned civil case is STAYED pending completion of the Arbitration. Henry F. Coyne, Esquire Attorney for Plaintiff Joshua Horn, Esquire Attorney for Defendants bas By the Court, M. L. Ebert, Jr., J. Cumberland County Prothonotary's Office Paae 1 PX.S:510 Civ il Case Print 2003-03622 SCHEUREN JAMES N ET AL (vs) AMERICAN EXPRESS FINANCIAL ETA Reference No... Filed......... 7/30/2003 Case Type...... WRIT OF SUMMONS Time.......... 9:53 Judgment...... .00 Execution Date 0/00/0000 Judge Assigned: EBERT M L JR Jury Trial.... Disposed Desc.: Disposed Date. 0/00/0000 ------------ Case Comments ---- --------- Higher Crt 1.: Higher Crt 2.: k * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * is * * * k General Index Attorney Info SCHEUREN JAMES N PLAINTIFF COYNE HENRY F JO ADDRESS PROVIDED SCHEUREN BARBARA D PLAINTIFF COYNE HENRY F 40 ADDRESS PROVIDED AMERICAN EXPRESS FINANCIAL DEFENDANT GARNES DAVID T ADVISORS INC )OANLD WEAVER VICE PRESIDENT 3500 MARKET STREET SUITE 200 DAMP HILL PA 17011 EDS LIFE INSURANCE COMPANY DEFENDANT GARNES DAVID T )OANLD WEAVER VICE PRESIDENT 3500 MARKET STREET SUITE 200 AMP HILL PA 17011 3RYTZ DORIS E DEFENDANT GARNES DAVID T AMERICAN EXPRESS ADVISORS INC 5500 CARLSILE PIKE 4ECHANICSBURG PA 17050 aEAVER DONALD DEFENDANT GARNES DAVID T 3500 MARKET STREET SUITE 200 AMP HILL PA 17011 kyY* * * * * * * * * * * * * * * * * * * * * * * * * * 7tic* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * i ********** k Date Entries 7/30/2003 - FIRST ENTRY PRAECIPE FOR WRIT OF SUMMONS IN CIVIL ACTION-WRIT OF SUMMONS ISSUED 8/08/2003 ---------- SHERIFF'S --------------------------------------------------------- FILE RETURNED FILED. Regular Case TyiDe WRIT OF t.: AMERICAN SUMMONS EXPRESS FIR NANCI yyppAL ADVISORS INC Litigahan Address..: 3500 MARKET STREET STE 200 Ctyy/St/Z • CAMP HILL, PA 17011 Hnd To: ?RAIG STILES (VP ASSISTANT) Shf/D ty.: RONALD E. HOOVER Date/ Time: 08/04/2003 0015:50 Costs....: $37.66 Pd By: HENRY COYNE 08/08/2003 8/08/2003 ---------- SHERIFF'S --------------------------------------------------------- FILE RETURNED FILED. Case Type: WRIT OF SUMMONS Ret Type.: Regular Litigant.: IDS LIFE INSURANCE COMPANY Address..: 3500 MARKET STREET STE 200 Ctyy/StjZ]? CAMP HILL, PA 17011 Hnd To: I,RAIG STILES (VP ASSISTANT) Shf/D ty.: RONALD E. HOOVER Date/Time: 08/04/2003 0015:50 Costs....: $16.00 Pd By: HENRY COYNE 08/07/2003 3/08/2003 ---------- SHERIFF'S --------------------------------------------------------- FILE RETURNED FILED. Case Ty e: Litigan .: WRIT OF SUMMONS Ret Type.: Regular WEAVER DONALD Address..: 3500 MARKET STREET STE 200 CtYY/St/Z • CAMP HILL, PA 17011 Hnd To: ?RAIG STILES (VP ASSISTANT) Shf/D ty.: RONALD E. HOOVER Date/ Time: 08/04/2003 0015:50 Costs....: $16.00 Pd By: HENRY COYNE 08/08/2003 242812142006 Cumberland County Prothonotary's Office PY 57.(D : Civil Case Print Page 2 2003-03622 SCHEUREN JAMES N ET AL (vs) AMERICAN EXPRESS FINANCIAL ETA Reference No..: Filed........: 7/30/2003 Case Type...... WRIT OF SUMMONS Time.......... 9:53 Judgment...... .00 Execution Date 0/00/0000 Judge Assigned: EBERT M L JR Jury Trial.... Disposed Desc.: Disposed Date. 0/00/0000 ------------ Case Comments --------- Higher Crt 1.: Higher-Crt 2.: --------------- _--------- 8/15/2003 -------------------------- SHERIFF'S FILE RETURNED FILED. --------- Case Type: WRIT OF SUMMONS Ret Type.: Regular Litigant.: AMERICAN EXPRESS FINANCIAL ADVISORS INC Address..: 3500 MARKET STREET STE 200 Ctyy/St/Z • CAMP HILL, PA 17011 Hnd To: CRAIG STILES GENERAL VICE PRESIDENT, ADULT IN CHARGE Shf/D ty.: RONALD HOOVER Date/ Time: 08/04/2003 1550:00 Costs....: $37.66 Pd By: HENRY COYNE 08/15/2003 ------------------- _____________ 8/15/2003 SHERIFF'S FILE RETURNED FILED. --------- Case Type: WRIT OF SUMMONS Ret Type.: Regular Litigant.: IDS LIFE INSURANCE COMPANY Address..: 3500 MARKET STREET STE 200 Ctyy/St/Z • CAMP HILL, PA 17011 Hna To: RAIG STILES, GENERAL VICE PRESIDENT, ADULT IN CHARGE Shf/D ty.: RONALD HOOVER Date/ Time: 08/04/2003 1550:00 Costs....--$16.00 Pd By: HENRY COYNE 08/15/2003 --------- ----------- -------------------------------------- 8 15/2003 SHERIFF'S FILE RETURNED FILED. ------ Case Type: WRIT OF SUMMONS Ret Type.: Regular Litigant.: WEAVER DONALD Address..: 3500 MARKET STREET STE 200 Cty/St/Z • CAMP HILL, PA 17011 Hnd To: RAIG STILES, ADULT IN CHARGE Shf/D ty.: RONALD HOOVER Date/Time: 08/04/2003 1550:00 Costs....: $16.00 Pd By: HENRY COYNE 08/15/2003 ------------------------------------------------- 8/15/2003 SHERIFF'S FILE RETURNED FILED. ---------- Case Type: WRIT OF SUMMONS Ret Type.: Regular Litigant.: BRYTZ DORIS E Address..: 5521 CARLISLE PIKE Cty/St/Z . MECHANICSBURG, PA 17055 Hnd To: DORIS E BRYTZ Shf/D ty.: BRYAN WARD Date/ Time: 08/13/2003 1610:00 Costs....: $22.90 Pd By: HENRY COYNE 08/15/2003 --------------------------------------------------------- 8/18/2003 ENTRY OF APPEARANCE OF JOSHUA HORN ESQ AND DAVID T GARNES ESQ ON BEHALF OF DEFENDANTS AMERICAN EXPRESS FINANCIAL ADVISORS INC AND IDS LIFE INSURANCE COMPANY IN THE ABOVE-CAPTIONED MATTER -BY DAIVD T GARNES ESQ 8/18/2003 ENTRY OF APPEARANCE FOR DEFTS DONALD WEAVER AND DORIS E BRYTZ - BY ----------------------------------------------------- DAVID T GARNES ESQ ------------------------------------ ___ ------------------ 5 06/2005 PRAECIPE FOR LISTING CASE FOR ARGUMENT - DEFT BRYTZ'S OBJECTIONS TO PLFFS' FIRST SET INTERROGATORIES AND PLFFS' FIRST REQUEST FOR PRODUCTION OF DOCUMENTS - BY HENRY F COYNE ESQ ------------------------------------------------------------------- 5/27/2005 PRAECIPE TO REMOVE FROM THE ARGUMENT LIST SCHEDULED FOR 6/1/05 AND SPECIALLY SET FOR A CONFERENCE WITH THE HONORABLE KEVIN A HESS - BY AUSTIN F GROGAN ESQ FOR PETITIONER ------------------------ _ _ _ _ 6/03/2005 ORDER OF COURT - DATED 6/2/05 - THE ABOVE THE CASE IS STRICKEN FROM THE 6/1/05 ARGUMENT LIST AS BEING IN VIOLATION OF CUMBERLAND COUNTY LOCAL RULE OF COURT 210-04 REGARDING DISCOVERY MOTIONS - BY THE COURT GEORGE E HOFFER PJ COPIES MAILED ------------------------------------------------ ___ 8/30/2005 DEFENDANTS' MOTION TO COMPEL ARBITRATION PURSUANT TO 42 PA CSA 7304 - BY JOSHUA HORN ESQ FOR DEFTS ------------------------------------------------------------------- 9/21/2005 ORDER - DATED 9/21/05 - IN RE DEFT'S MOTION TO COMPEL ARBITRATION - ON RELATION OF THE PROTHONOTARY THAT COUNSEL FOR THE DEFT IS i?YtGt3lGlfGUU6 Cumberland County Prothonotary's Office Page - PY95JO '. Civil Case Print 2003-03622 SCHEUREN JAMES N ET AL (vs) AMERICAN EXPRESS FINANCIAL ETA Reference No... Filed......... 7/30/2003 Case Type...... WRIT OF SUMMONS Time.......... 9:53 Judgment...... .00 Execution Date 0/00/0000 Judge Assigned: EBERT M L JR Jury Trial.... Disposed Desc.: Disposed Date. 0/00/0000 ------------ Case Comments ------------- Higher Crt 1.: Higher Crt 2.: SEEKING TO WITHDRAW HIS APPEARANCE AND IT FURTHER APPEARING THAT NO COMPLAINT HAS BEEN FILED IN THE CASE ACTION ON THE DEFTS' MOTION TO COMPEL ARBITRATION IS DEFERRED PENDING DISPOSITION OF COUNSEL'S MMOTION TO WITHDRAW APPEARANCE - BY THE COURT KEVIN A HESS J COPIES MAILED ------------------------------------------------------------------- 7/26/2006 COMPLAINT - BY HENRY F COYNE ATTY FOR PLFFS 8/11/2006 PRELIMINARY OBJECTIONS OF DEFTS AMERIPROSE FINANCIAL SVCS INC - DORIS E BRYTZ & DONALD WEAVER IN THE NATURE OF A MOTION TO COMPEL ARBITRATION PURSUANT TO PA RULE OF CIVIL PROCEDURE 1028-A-6 & 42 PA CSA 7304 & PRELIMINARY OBJECTIONS TO THE COMPLAINT - BY JOSHUA HORN ATTY FOR DEFTS ------------------------------------------------------------------- 8/21/2006 PRAECIPE FOR LISTING CASE FOR ARGUMENT - PRELIMINARY OBJECTIONS OF DEFTS IN THE NATURE OF A MOTION TO COPEL ARBITRATION PRELIMINARY OBJECTIONS TO THE COMPLAINT - BY JOSHUA HORN ATTY FOR DEFT ------------------------------------------------------------------- 9/22/2006 PRAECIPE FOR LISTING CASE FOR ARGUMENT - DEFT BRYTZ'S PRELIMINARY OBJECTIONS - BY HENRY F COYNE ATTY FOR PLFFS ------------------------------------------------------------------- LO/11/2006 REPLY TO PRELIMINARY OBJECTIONS OF DEFTS AND MOTION TO COMPEL ARBITRATION - BY HENRY F COYNE ATTY FOR PLFFS ------------------------------------------------------------------- L1/20/2006 ORDER OF COURT - 11-17-06 - IN RE: ORDERED THAT THE DEFTS' MOTION TO COMPEL ARBITRATION IS GRANTED - BY ML EBERT JR J - COPIES MAILED 11-20-06 ------------------------------------------------------------------- L2/01/2006 APPLICATION TO AMEND ORDER TO INCLUDE DETERMINATION OF FINALITY PURSUANT TO PA R A P 341(C) BY HENRY F COYNE ESQ ------------------------------------------------------------------- L2/06/2006 DEFTS' RESPONSE IN OPPOSITION TO PLFFS' APPLICATION TO AMEND ORDER TO INCLUDE DETERMINATION OF FINALITY PURSUANT TO PA RAP 341 C - BY JILL A GULDIN ATTY FOR DEFTS ------------------------------------------------------------------- l2/06/2006 AMENDED ORDER OF COURT - 12-06-06 - IN RE: DEFTS' MOTION TO COMPEL ARBITRATION IS GRANTED AND ALL ACTION IN CASE IS STAYED PENDING COMPLETION OF THE ARBITRATION - BY ML EBERT JR J - COPIES MAILED 12-06-06 - - - - - - - - - - - - - - LAST ENTRY - - - - - - - - - - - - - - Escrow Information Fees & Debits Beq Bal P*ymts/Adj End Bal ******************************* ******** ****** ******************************* WRIT OF SUMMONS 35.00 35.00 .00 TAX ON WRIT .50 .50 .00 SETTLEMENT 5.00 5.00 .00 AUTOMATION FEE 5.00 5.00 .00 JCP FEE 10.00 10.00 .00 ------------------------ ------------ 55.50 55.50 .00 ******************************************************************************* End of Case Information TRUE LfOPY FROM RECORD g r a y w ?? 3 ?nrt?onto setmy t o e :: ''t-Carlisle, pa, y U P r? PROOF OF SERVICE I, Henry F. Coyne, Esquire, of Coyne & Coyne, P.C., hereby certify that true copy of the Notice of Appeal and Proof of Service was served upon the persons in the manner indicated below, which service satisfies the requirements of Pa. R.A.P. 906: By First Class Mail: Hon. M.L. Ebert, Jr. Judge, Court of Common Pleas Cumberland County Courthouse One Courthouse Square Carlisle, PA 17013 Joshua Horn, Esquire Fox Rothschihl,._LLP 000 Market Street, Tenth Floor Philadelphia, PA 19103-3291 Court Administrator Cumberland County Courthouse One Courthouse. Square Carlisle, PA 17013 Dated: / Z-/14 -p .6 Henry F. Coyne, Oquire Pa. Supreme Ct. 0 3901 Market Street Camp Hill, PA 17011 (717) 737-0464 Attorney for Plaintiffs CERTIFICATE OF SERVICE I, Jill A. Guldin, Esquire, do hereby certify that service of a true and correct copy of the foregoing Motion of Appellees To Quash the Appeal of Appellants James N. Scheuren and Barbara Scheuren was made this 27`h day of December 2006, via U.S. first- class mail, postage pre-paid, upon the following: Henry F. Coyne, Esquire COYNE & COYNE, P.C. 3901 Market Street Camp Hill, PA 17011-4227 CERTIFICATE OF SERVICE I, Joshua Horn, Esquire, do hereby certify that, on this 10th day of January 2007, a true and correct copy of the Response to the Application to Amend Order to Include Statement Specified in 42 Pa.C.S. § 702(b) was served by first-class U.S. mail, postage prepaid, on Plaintiffs' counsel of record, addressed as follows: Henry F. Coyne, Esquire COYNE & COYNE, P.C. 3901 Market Street Camp Hill, PA 17011-4227 1 HORN, ESQUIRE Nj Q.1 JAMES N. SCHEUREN AND IN THE COURT OF COMMON PLEAS OF BARBARA D. SCHEUREN, HIM CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFFS : NO. 03-3622 CIVIL V. AMERICAN EXPRESS FINANCIAL ADVISORS, et. al., DEFENDANTS CIVIL ACTION - LAW ORDER OF COURT AND NOW, this 24th day of January, 2007, upon consideration of the Application of Plaintiffs, James N. Scheuren and Barbara Scheuren, to Amend Order to Include Statement Specified in 42 Pa.C.S. 702(b), filed January 5, 2007, and the Defendants' Reply in Opposition to Plaintiffs' Application filed January 12, 2007, IT IS HEREBY ORDERED AND DIRECTED that the Plaintiffs' Application is DENIED. By the Court, M. L. Ebert, Jr., J. Henry F. Coyne, Esquire Attorney for Plaintiffs Joshua Horn, Esquire n Attorney. for Defendants `?. bas SO -? IIJ 12 UP LODZ JAMES N. SCHEUREN AND : IN THE COURT OF COMMON PLEAS BARBARA D. SCHEUREN, : CUMBERLAND COUNTY, PENNSYLVANIA Husband and Wife, Plaintiffs/Appellants vs. AMERICAN EXPESS FINANCIAL ADVISORS, INC. (n/k/a AMERIPRISE FINANCIAL, INC.), IDS LIFE INSURANCE COMPANY, DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ, Defendants/Appellees NO. 03-3622 CIVIL TERM CIVIL ACTION - ACTION IN RE: OPINION PURSUANT TO PA. R.A.P. 1925 Appellants James and Barbara Scheuren have filed an appeal to the Superior Court of Pennsylvania following an order compelling arbitration of a contractual dispute between the two parties.I Appellants' bases of appeal are as follows: (1) The order erroneously assumes the validity of an adhesion contract and erroneously enforces the arbitration clause contained in that contract retroactively to cover transactions that occurred before the contract was even signed, and (2) The order compelling arbitration denies Appellants' an opportunity for a jury trial.2 This opinion in support of the order compelling arbitration is written pursuant to Pa. R.A.P. 1925(a). STATEMENT OF FACTS The facts of this case are not in dispute. Appel lants/Plaintiffs James and Barbara Scheuren (Hereinafter "Appellants" or "Scheurens"), on or about August 2000, sought financial planning advice from one Doris E. Brytz, a financial advisor associated with Appellees/Defendants American Express Financial Advisors ("AEF") and IDS Life Insurance ' See Order of Court, December 6, 2006, granting Defendants' Motion to Compel Arbitration and staying all actions pending the completion of arbitration. 2 Appellant's Statement of Matter Complained of Pursuant to Order of Court, filed Jan. 5, 2007, ¶ 1-2. Co. ("IDS"), (Hereinafter collectively "AEF" or "Appellees").3 Following the advisor's suggestion, Appellants liquidated Mr. Scheuren's Dividend Reinvestment Plan ("DRIP") as well as his PPL Employee Stock Ownership Plan ("ESOP").4 Appellants maintain they agreed to proceed with the liquidations only after being assured by AEF that they would not owe additional taxes as a result of the transaction.5 The transaction subsequently occurred on August 29, 2000.6 On March 21, 2001, Appellants were notified by the IRS that they owed taxes as a result of the transaction in the amount of $7,708.00 to the IRS and $1,224.00 to the Commonwealth of Pennsylvania.7 On that same day, Appellants contacted AEF regarding the taxes, to which AEF replied that the Scheurens did indeed owe the additional taxes.`' Scheurens submitted a written complaint to AEF. They alleged that AEF provided inadequate services to them in regards to the August 29, 2000, transaction. 9 On June 20, 2001, AEF rejected the complaint as unjustified.10 Unsatisfied with AEF's response, Plaintiff filed a similar complaint with the Pennsylvania Securities Commission on October 20, 2002.11 The Commission dismissed the second complaint on August 20, 2002.12 Despite having already declared their dissatisfaction with AEF's services, on June 3, 2003, the Scheurens signed an American Express Brokerage IRA Application with Appellees. 13 The IRA application contained an arbitration clause which in pertinent part stated: "Any controversy arising out of, or relating to, my accounts, to transactions with you or your Brokers and/or employees for me or to this agreement or the breach thereof, shall be settled by arbitration ..."14 3 Compl. ¶ 5. 4 Compl. ¶ 15 5 Compl. ¶¶ 15-16 6 Compl. ¶ 17 Compl. ¶ 20 8 Compl. J? 19 9 See Atwood Affidavit at ¶ 4 and Exhibit 1 attached thereto. 10 See Atwood Affidavit at ¶ 5 and Exhibit 2 attached thereto. 11 See Atwood Affidavit at ¶ 6 and Exhibit 3attached thereto. 12 See Atwood Affidavit at ¶ 7 and Exhibit 4 attached thereto. 13 See Atwood Affidavit at ¶ 8 and Exhibit 5 attached thereto. 2 On July 30, 2003, the Plaintiffs/Appellants began this action by filing a Praecipe for Writ of Summons in a Civil Action and serving it upon AEF. On July 26, 2006, the Complaint was filed by the Plaintiffs against the Defendants alleging various claims as a result of erroneous tax advice provided by American Express Advisor Doris Brytz to the Plaintiffs on August 29, 2000. AEF filed a Motion to Compel Arbitration at which time this Court faced the issue of whether the arbitration clause is valid, and if so, should the parties be compelled to undergo arbitration. DISCUSSION L The Agreement Between the Parties Constitutes an Enforceable Contract Appellants contend that this Court, in issuing its Order to Compel Arbitration, "erroneously assumes the validity of an adhesion contract." See Plaintiffs'/Appellants' Statement of Matter Complained of Pursuant to Order of Court, filed Jan. 5, 2007. An adhesion contract is defined as a, "[s]tandard-form contract prepared by one party, to be signed by the party in a weaker position, [usually] a consumer, who has little choice about the terms." Black's Law Dictionary (7th ed.1999). The mere fact that a contract is a contract of adhesion does not automatically render it unconscionable and unenforceable. Whether a contract is unconscionable is a question of law. In order for a court to deem a contractual provision unconscionable, "it must determine both that the contractual terms are unreasonably favorable to the drafter and that there is no meaningful choice on the part of the other party regarding acceptance of the provisions." Huegel v. Mifflin Const. Co., Inc., 796 A.2d 350, 357 (Pa.Super. 2002), citing Todd Heller, Inc., v. United Parcel Service, Inc., 754 A. 2d 689, 701 (Pa.Super.2000). The fact that the weaker party does not participate in the drafting of the agreement, verbally assent, or sign anything does not render his consent invalid. The behavior of the parties is telling as to whether la See Memorandum of Law in Support of the Preliminary Objections of Defendant in the Nature of a Motion to Compel Arbitration Pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(6) and 42 Pa. C.S.A. §7304, filed Oct. 10, 2006, (Hereinafter "Defendant's Motion to Compel") at 5 (referring to arbitration agreement section v). 3 the required contractual elements of offer, acceptance, and consideration are present. See Wetzel v. Baldwin Hardware Corp, 199 U.S. Dist. LEXIS 1227, *8-10 (Pa. Dist. Ct. 1999) (Plaintiff's continued employment at the company indicated his acceptance of the employer's offer of continued employment conditioned upon acceptance of the terms in the company handbook. The continued employment amounted to sufficient consideration between the parties.) Appellants allege that the agreement between the parties is unenforceable due to its adhesionary nature. Such a contention is without merit. Although Appellants did not participate in the drafting of the terms, they were not naive customers being forced to enter into the second agreement with AEF. It is important to note that the financial advisor and customer have relatively equal bargaining power. If the customer does not agree with the terms of the contract, he may seek services elsewhere, request different terms, or simply choose not follow the advice offered. Indeed, courts have upheld adhesion contracts resulting from relationships of a much more unequal nature. For example, in the above mentioned Wetzel case, the court enforced the agreement between an employer and employee despite its adhesionary nature and in spite of the unequal bargaining power of the parties. Id. at *11. The Wetzel court basically stated that a contract whereby the employer essentially dictated that employees having disputes with the employer must accept arbitration or loose their employment was enforceable. At the very least, it is clear that the Scheurens do not constitute the "weak consumers" the legal system seeks to protect against unconscionable, adhesion contracts. Appellants, being sophisticated customers of AEF, and after already experiencing problems with AEF, accepted the terms of the new contract and received due consideration through the services provided. The agreement is thus enforceable and valid. 4 II. The Arbitration Clause in the Contractual Agreement Is Enforceable "it is hornbook law that Pennsylvania favors the enforceability of agreements to arbitrate." Dodds v. Pulte Home Corp., 909 A.2d 348, 351 (Pa. Super. 2006). The legal system supports arbitration because it provides a quicker, less expensive, and more private alternative to traditional litigation. It is also inherently less formal with simplified procedures and often involves a technically experienced decision-maker. Thibodeau v. Comcast Corp., 2006 WL 3457582, ¶ 16 (Pa. Super. 2006). Justifiably, Pennsylvania courts, in concordance with the Federal Arbitration Act, are instructed that if there be any doubts as to whether or not arbitration should be compelled, the doubts must favor arbitration. McNulty v. HER Block, Inc., 843 A.2d 1267, 1271 (Pa. Super. 2004) ("The FAA represents a declaration of a liberal federal policy favoring arbitration, and so any doubts regarding the scope of arbitral issues should be resolved in favor of arbitration"), citing Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S. Ct. 927, 74 L.Ed.2d 765 (1983). Pennsylvania law concerning the enforceability of arbitration agreements allows an arbitration provision to be set aside only for generally recognized contracted defenses such as duress, illegality, fraud, and unconscion ability. 2006 WL 3457582 at ¶ 16. Before a party to a lawsuit can be compelled to arbitrate there must be an express, unequivocal agreement to that effect. 9 U.S.C. § 2, (1970) (an agreement to arbitrate is unenforceable if not in writing). In the event that one party to an agreement seeks to prevent another from proceeding to arbitration, judicial examination is limited to the determination of (1) whether a valid agreement to arbitrate exists between parties, and, if so, (2) whether the dispute involved is within the scope of the arbitration provision. See Midomo Co., Inc. v. Presbyterian Housing Development Co., 739 A.2d 180 (Pa. Super. 1999). We have already discussed the issue of contractual validity. The issue now is whether the dispute comes within the scope of 5 that agreement. More specifically stated, the issue is whether the clause contained in the contract signed in 2003 can act retroactively on the previous agreement signed in 2000. In Hamilton v. Dean Witter Reynolds, Inc. the court stated that, contrary to plaintiffs argument, the broad sweeping terms of the agreement to arbitrate are not limited to activities undertaken in the account after the signing of the arbitration agreement. Hamilton v. Dean Witter Reynolds, Inc., 1989 WL 89434 (W.D. Pa. July 19, 1989). Other jurisdictions have concurred with the Western District of Pennsylvania. The Supreme Court of Alabama in Syvrud stated that the language of the Federal Arbitration Act does not forbid the retroactive application of an arbitration agreement. A.G. Edwards & Sons, Inc. v. Syvrud, 591 So.2d 197 (1992). The United States District Court of Maryland has declared, "Whether plaintiffs signed the agreements before or after opening their accounts or even before or after the claims arose, does not change the fact that they signed written agreements to arbitrate claims arising out of their account." Shotto v. Laub, 632 F.Supp. 516, 522 (1986). In the above mentioned Hamilton opinion, the Pennsylvania Court gave credence to the Massachusetts case of Prestera v. Shearson Lehman Bros., Inc.; in this case the court compelled arbitration based on the language of an arbitration clause which stated: "Any controversy arising out of or relating to my accounts, to transactions with you for me or to this agreement or the breach thereof, shall be settled by arbitration in accordance with the rules, then in effect..." Prestera v. Shearson Lehman Bros., Inc., 1986 WL 10095, *5 (D. Mass 1986). The court noted that, although Prestera had signed the arbitration clause after the original contract, only one account existed with Shearson, and the clear language of the contract indicated that Prestera agreed to arbitrate all claims that arose out of that account. The arbitration clause was subsequently enforced. Id. The instant case is very similar to Prestera. Section (v) of the agreement states, "Any controversy arising out of, or relating to, my accounts, to transactions with you or your Brokers 6 and/or employees for me or to this agreement or the breach thereof, shall be settled by arbitration and conducted pursuant to the Federal Arbitration Act..." See Defendants' Motion to Compel supra. The plain language reading of this provision is nearly identical to that of the Prestera agreement and supports the retroactive applicability of the arbitration clause to previous transactions associated with the Appellants' account with the AEF. The phrase "Any controversy arising out of, or relating to, my accounts, to transactions with you," suggests that the current transaction and any subsequent transactions are not the only dealings subject to this provision, but rather that "any" issue related to accounts or transactions with this company. Considering that there was only one other account existing with AEF, it is fair to state that the arbitration clause was meant to be applicable to both. Again, it cannot be overstated that the Scheurens were sophisticated in their dealings with AEF. They made two separate written complaints regarding the August 29, 2000 transaction. Appellants had the assistance of counsel in their direct complaint to AEF and their complaint to the Pennsylvania Securities Commission. This same law firm eventually commenced the lawsuit filed on July 30, 2003. One would assume that given the date they commenced this action on July 30, 2003 with the same law firm who helped them with their previous complaints, that they must have been considering litigation on June 3, 2003, when they signed the new agreement. Considering their discontent, logic dictates that the Appellants would be cautious and would carefully consider the terms of their second agreement with AEF. If they did not want to arbitrate, they would have deleted the clause from the contract or walked away from the transaction entirely. Appellants have argued that according to the decision of the Pennsylvania Eastern District Court in Wetzel V. Baldwin Hardware Corp., the arbitration clause should not be held to apply retroactively. Wetzel involved an issue of employment age discrimination. According to 7 the Age Discrimination in Employment Act, 15 no civil action may be commenced by an individual until 60 days after a charge alleging unlawful discrimination has been filed with the Equal Employment Opportunity Commission. Between the time of the Equal Employment Opportunity Commission filing and the filing of suit, employer Baldwin issued a Corporate Dispute Resolution Policy. All employees, including Wetzel, who wanted to continue working for Baldwin had to accept the terms of the Corporate Dispute Resolution Policy, which included binding arbitration of disputes with the company. The court found that Wetzel's action did not fall within the terms of the valid arbitration clause because he had commenced his lawsuit before entering into the contract containing the arbitration provision. On this basis, the motion to compel arbitration was therefore denied. See Wetzel v. Baldwin Hardware Corp, 199 U.S. Dist. LEXIS 1227 (Pa. Dist. Ct. 1999). The case at bar is factually distinguishable from Wetzel. The Plaintiff in Wetzel had clearly commenced his suit against his employer before the issuance of the Corporate Dispute Resolution Policy containing the arbitration clause. To hold him to new contractual terms after the commencing of his suit would go against the basic principles of judicial pleading and contract law. In Wetzel, the Court held that because the Age Discrimination in Employment Act required that no civil action may be commenced until 60 days after the charge had been filed with the Equal Employment Opportunity Commission, Wetzel's suit actually began when he filed his complaint with the Equal Employment Opportunity Commission. In this case, there is no statutory requirement to file a complaint to AEF or the Pennsylvania Securities Commission prior to commencing a lawsuit. Thus, Appellants complaints to AEF and the Pennsylvania Securities Commission did not commence the lawsuit. " See 29 USCS § 626(d) 8 Appellants did not commence their lawsuit against AEF until several weeks after entering into yet another agreement with the company which included binding arbitration. In signing the new agreement before commencing the legal action they bound themselves to the new terms. Had the Scheurens brought suit before signing the second agreement containing the arbitration cause, then perhaps Wetzel would hold some precedential weight. However, this is simply not the case. CONCLUSION This Court finds that the contract between the parties constitutes a valid and enforceable agreement. This Court also finds that, considering the strong policy of both State and Federal Courts favoring arbitration, the plain language of the arbitration clause, and Appellants' level of sophistication and previous interaction with Appellees, the 2000 transaction falls within the scope of the 2003 arbitration agreement. Appellees' Motion to Compel Arbitration pursuant to 42 Pa. C.S.A. § 7304 is thereby granted. BY THE COURT, -A?? M.L. Ebert, Jr., X' ry F. Coyne, Esquire Coyne & Coyne, P.C. 3901 Market Street Camp Hill, PA 17011-4227 Attorney for the Plaintiffs/Appellants oshua Horn, Esquire Fox Rothschild LLP 2000 Market Street, Tenth Floor Philadelphia, PA 19103 Attorney for the Defendants/Appellees erc 9 0 s CERTIFICATE AND TRANSMITTAL OF RECORDS UNDER PENNSYLVANIA RULE OF APPELLATE PROCEDURE 1931 (C) To the Prothonotary of the Apellate Court to which the within matter has been appealed: SUPERIOR COURT OF PENNSYLVANIA The undersigned, Prothonotary of the Court of Common Pleas of Cumberland County, the said court being a court of record, do hereby certify that annexed hereto is a true and correct copy of the whole and entire record, including an opinion of the court as required by PA R.A.P. 1925, the original papers and exhibits, if any on file, the transcript of the proceedings, if any, and the docket entries in the following matter: James N. Scheuren and Barbara D. Scheuren VS. American Express Financial Advisors, Inc.(n/k/a Ameriprise financial, Inc.) IDS Life Insurance Company, Donald Weaver, Vice President and Doris E. Brvtz 03-3622 Civil Term 2174 NDA 2006 The documents comprising the record have been numbered from No.1 tog and attached hereto as Exhibit A is a list of the documents correspondingly numbered and identified with reasonable definiteness, including with respect to each document, the number of pages comprising the document. The date on which the record has been transmitted to the Appellate Court is CRY 30, 2007. Curtis R. Lo 0 o Regina K. Lebo, Deputyno An additional copy of this certificate is enclosed. Please sign and date copy, thereby acknowledtin2 receipt of this record. Date Signature & Title Commonwealth of Pennsylvania County of Cumberland ss: In TESTIMONY WHEREOF, I have hereunto this THTRTTRM 1, CURTIS R. LONG , Prothonotary of the Court of Common Pleas in and for said County, do hereby certify that the foregoing is a full, true and correct copy of the whole record of the case therein stated, wherein JAMES N. SCHEUREN AND BARBARD D. SCHECTRIIV Plaintiff, and AMERICAN EXPRESS FINANCIA] INC., IDS LIFE INSURANCE COMPANY, DO] BRE?TZ. AND DONALD WEAVER Defendant , as the same remains of record before the said Court at No. 03-3622 of rTVTL Term, A.D. 19 . set my hand and affixed the seal of said Court day of . D., 19-ZQ07 k=h /othonotary I, EDGAR B. BAYLEY President Judge of the NINTH Judicial District, composed of the County of Cumberland, do certify that CURTIS R. KONG , by whom the annexed record, certificate and attestation were made and given, and who, in his own proper handwriting, thereunto subscribed his name and affixed the seal of the Court of Common Pleas of said County, was, at the time of so doing, and now is Prothonotary in and for said County of in the Commonwealth of Pennsylvania, duly commissioned and t ied to 11 of ose acts as such full faith and credit are and ought to be given as well in Courts of ju ure as els er t the said record, certificate and attestation are in due form of law and ma th per of t r. 1 _ _ ?0., ? Gtr Yet _ Commonwealth of Pennsylvania County of Cumberland ss: President nudge 1, CURTIS R. LONG , Prothonotary bf the Court of Common Pleas in and for the said County, do certify that the Honorable EDGAR B. BAYLEY by whom the foregoing attestation was made, and who has thereunto subscribed his name, was, at the time of making thereof, and still is President Judge of the Court of Common Pleas, Orphan' Court and Court of Quarter Sessions of the Peace in and for said County, duly Commissioned and qualified; to all whose acts as such full faith and credit are and ought to be given, as well in Courts of judicature as elsewhere. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed the seal of said Court this 30TH d f JANUARY A.D. 19 2007 Prothonotary ADVISORS S E. 0 S O w Y 0 "Ti ^ ('? 0 O Or Ch y.. ?. to c. , a d .D I 1 k I b 0 n 0 C C n U G c y a Z o o O W 1 W N H C r (9 'S I Among the Records and Proceedings enrolled in the court of Common Pleas in and for the county of CUMBERLAND to No. 03-3622 in the Commonwealth of Pennsylvania Term, 19 is contained the following: COPY OF COMPLETE APPEARANCE DOCKET ENTRY JAMES N. SCHEUREN BARBARA D. SCHEUREN NO ADDRESS PROVIDED VS. AMERICAN EXPRESS FINANCIAL ADVISORS, INC. DONALD WEAVER, VICE PRESIDENT 3500 MARKET STREET SUITE 200 CAMP HILL, PA 17011 IDS LIFE INSURANCE COMPANY DONALD WEAVER VICE PRESIDENT 3500 MARKET STREET SUITE 200 CAMP HILL, PA 17011 DORIS E. BRYTZ AMERICAN EXPRESS ADVISORS, INC. 5500 CARLISLE PIKE MECHANICSBURG, PA 17050 DONALD WEAVER 3500 MARKET STREET, SUITE 200 CAMP HILL, PA 17011 SEE ENCLOSED CERTIFIED DOCKET James N. Scheuren, et al. IN THE SUPERIOR COURT OF PENNSYLVANIA V. (C.P. Cumberland County No. 03-3622) American Express Financial No. 2174 MDA 2006 Advisors, Inc., et al. Filed: February 1? , 2007 ORDER The Motion to Quash this appeal is hereby GRANTED. Per Curiam TRUE COPY FROM RECORI3 Attest: FEB 1 6 2001 ?c Deputy Prothonotary Superior Court of PA. - Middle District No.: 2174 MDA 2006 Carbon Copy Recipient List Addressed To: Joshua Horn, Esq. Fox Rothschild, L.L.P. 2000 Market St 10th Fl Philadelphia, PA 19103 Carbon Copied: Henry F. Coyne, Esq. Coyne & Coyne, P.C. 3901 Market Street Camp Hill, PA 17011-4227 Mr. Curtis R. Long Prothonotary Cumberland County Courthouse 1 Courthouse Square Carlisle, PA 17013 The Honorable Merle L. Ebert, Jr. Court of Common Pleas of Cumberland County Cumberland County Courthouse, One Courthouse Sq Carlisle, PA 17013 1013 -10/99 10/1/99 ?. ? ? n`?? ? s.?' ? ? N raj ?':, - N ?? e ? ? ?? ? 03-309-- James N. Scheuren, et al. V. . American Express Financial Advisors, Inc., et al. . ORDER IN THE SUPERIOR COURT OF PENNSYLVANIA (C.P. Cumberland County No. 03-3622) No. 9 MDM 2007 Filed: March 164-h , 2007 The Petition for Review is hereby DENIED. TRUE CMPA? Ff ?? MPM Attest: ,oP-. -m c e"4&%k Per Curiam Dq tfy Prothonotary Superior Cou. t of PA - Middle Dishict No.: 9 MDM 2007 Carbon Copy Recipient List Addressed To: Henry F. Coyne, Esq. 3901 Market Street Camp Hill, PA 17011-4227 Carbon Copied: Joshua Horn, Esq. Fox Rothschild, L.L.P. 2000 Market St 10th Fl Philadelphia, PA 19103 Mr. Curtis R. Long Prothonotary Cumberland County Courthouse 1 Courthouse Square Carlisle, PA 17013 The Honorable Merle L. Ebert, Jr. Court of Common Pleas of Cumberland County Cumberland County Courthouse, One Courthouse Sq Carlisle, PA 17013 1013 -10/99 10/1/99 C ° MIMI C1 Cr, 'L7 r? r2 CC) .? y Superior Court of Pennsylvania Karen Reid Bramblett, Esq. Middle District 100 Pine Street. Suite 400 Prothonotary Harrisburg, PA 17101 James D. McCullough, Esq. October 11, 2007 717-772-1294 Deputy Prothonotary www.superior.court.state.pa.us Certificate of Remittal/Remand of Record TO: Mr. Charles W. Johns Prothonotary RE: Scheuren, J. et ux v. American Express No.2174 MDA 2006 Trial Court/Agency Dkt. Number: 03-3622 Trial Court/Agency Name: Cumberland County Court of Common Pleas Annexed hereto pursuant to Pennsylvania Rules of Appellate Procedure 2571 and 2572 is the entire record for the above matter. Contents of Original Record: Original Record Item Filed Date Description Part January 30, 2007 1 Date of Remand of Record: OCT 11 2007 Enclosed is an additional copy of the certificate. Please acknowledge receipt by signing, dating, and returning the enclosed c 1t1ie Prothonotary Office or the Chief Clerk's office. 77c James D. McCullough, Esq. Deputy Prothonotary Signature Date Printed Name ea a Q James N. Scheuren, et al. IN THE SUPERIOR COURT OF PENNSYLVANIA V. (C.P. Cumberland County No. 03-3622) American Express Financial No. 2174 MDA 2006 Advisors, Inc., et al. Filed: February 2007 ORDER The Motion to Quash this appeal is hereby GRANTED. Per Curiam TRUE COPY FROM RECORD Attest: OCT 11 1007 • ?c Deputy Pt othonotary Superior Court of PA - Middle District C ?.' 1. CO 10/11/2007 11 24 FAY MD PRpTHY Supreme Court of Pennsylvania Middle District Irene M. Bizzoso, &q. Deputy Prmhonomy Noriru K. Bl}mn, Esq. Chief Clerk ORIGINAL RECORD REQUEST TO: Karen Reid Bramblett, Esq. Prothonotary RECORD REQUESTED; October 11, 2007 FROM; Office of the Prothonotary >UPERIDR MD di ()01/()01 P.O. Box 624 Eturubum, PA 17106 717.787.6181 n'1VW.;0PC.0r9 RE: James N. and Barbara D. Scheurn, Petitioner V. American Express Financial Advisors, Inc. (nka Ameriprise Financial, Inc.) IDS Life Insurance Company, Donald Weaver Vice President and Doris Brytz, Respondents No.: 239 MAL 2007 No.: 2174 MDA 2006 Trial Court Docket Number: 03-3622 Please forward the 069(nal Record to the Supreme Court at the address shown above as soon as possible. EEZ r ? .e 3 ti C.?. CERTIFICATE AND TRANSMITTAL OF RECORDS UNDER PENNSYLVANIA RULE OF APPELLATE PROCEDURE 1931 (C) To the Prothonotary of the Apellate Court to which the within matter has been appealed: SUPREME COURT The undersigned, Prothonotary of the Court of Common Pleas of Cumberland County, the said court being a court of record, do hereby certify that annexed hereto is a true and correct copy of the whole and entire record, including an opinion of the court as required by PA R.A.P. 1925, the original papers and exhibits, if any on file, the transcript of the proceedings, if any, and the docket entries in the following matter: James N. Scheuren and Barbara Scheuren VS. American Express Financial Advisors, Inc., (n/k/a Ameriprise Financial Services, Inc.) IDS Life Insurance Company, Donald Weaver, Vice President and Doris E. Brytz 03-3622 Civil Term The documents comprising the record have been numbered from No.1 to 221, and attached hereto as Exhibit A is a list of the documents correspondingly numbered and identified with reasonable definiteness, including with respect to each document, the number of pages comprising the document. The date on which the record has been transmitted to the Appellate Court is 10-16-2007. Curtis R ong, Prothonotary Regina K. Lebo, Deputy An additional copy of this certificate is enclosed. Please sign and date copy, thereby acknowledging receipt of this record. Date Signature & Title Commonwealth of Pennsylvania County of Cumberland ss: 1, Curtis' R. Long , Prothonotary of the Court of Common Pleas in and for said County, do hereby certify that the foregoing is a full, true and correct copy of the whole record of the case therein stated, wherein James N. Scheuren et. al. Plaintiff, and AMerican Express Finanr_i; Advisors Inc, et. al. In TESTIMONY WHEREOF, I have hereunto this 16th 1, - Judicial Friaar R- Raul.-Ir District, composed Defendant S_, as the same remains of record before the said Court at No. 03-3622 of Civil Term, A.D. 19 set my hand and affixed the seal of said Court day of Or- abeer . A. D., >i>lx2QQ? Rttc Prothonotary President Judge of the of the County of Cumberland, do certify that _ -C-Xt lz R. L 4=g , by whom the annexed record, certificate and attestation were made and given, and who, in his own proper handwriting, thereunto subscribed his name and affixed the seal of the Court of Common Pleas of said County, was, at the time of so doing, and now is Prothonotary in and for said County of £l and in the Commonwealth of Pennsylvania, duly commissioned and qualified t of whose acts as such full faith and credit are and ought to be given as well in Courts of judicat s elsew ere that the said record, certificate and attestation are in due form of law and made jhe prope fic . Commonwealth of Pennsylvania County of Cumberland ss: 1, Qirtia R. Long , Prothonotary bf the Court of Common Pleas in and for the said County, do certify that the Honorable Mgar R_ Bayley bVwhom the foregoing attestation was made, and who has thereunto subscribed his name, was, at the time of making thereof, and still is President Judge of the Court of Common Pleas, Orphan' Court and Court of Quarter Sessions of the Peace in and for said County, duly Commissioned and qualified; to all whose acts as such full faith and credit are and ought to be given, as well in Courts of judicature as elsewhere. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed the seal of said Court this 16th day of ct ber A. 007 Ninth Prothonotary Among the Records and Proceedings enrolled in the court of Common Pleas in and for the county of in the Commonwealth of Pennsylvania to No. 03-3622 Term, 19 is contained the following: COPY OF APPEARANCE DOCKET ENTRY James N. Scbeuren and Barbara Scheuren Vs. American Express Financial Advisors, Inc., (n/k/a Ameriprise Financial Services, Inc.) IDS Life insurance Company, Donald Weaver, Vice President and Doris E. Brytz **See Certified Docket Entries** -a 0 0 fl 0 0 ? ? b a vat c n 0 0 0 vj* to t1 tD rt' o c? o w N A Z N G N G N ,o a, ' PYS511 Cumberland County Prothonotary's Office Page 1 Civil Case Print 2003-03622 SCI .REN JAMES N ET AL (vs) AMERI( .d EXPRESS FINANCIAL ETA i. ;t Reference No... Filed......... 7/30/2003 Case Type...... WRIT OF SUMMONS Time. ... .9.53 Judgment..... : .00 Execution Date 0/00/0000 Judge Assigned: EBERT M L JR Jury Trial.... Disposed Desc.: Dis osed Date. 0/00/0000 ------------ Case Comments ------------ Hig er Crt 1.: 2174 MDA2006 Higher Crt 2.: ******************************************************************************** General Index Attorney Info SCHEUREN JAMES N PLAINTIFF COYNE HENRY F NO ADDRESS PROVIDED SCHEUREN BARBARA D PLAINTIFF COYNE HENRY F NO ADDRESS PROVIDED AMERICAN EXPRESS FINANCIAL DEFENDANT GARNES DAVID T ADVISORS INC DOANLD WEAVER VICE PRESIDENT 3500 MARKET STREET SUITE 200 CAMP HILL PA 17011 IDS LIFE INSURANCE COMPANY DEFENDANT GARNES DAVID T DOANLD WEAVER VICE PRESIDENT 3500 MARKET STREET SUITE 200 CAMP HILL PA 17011 BRYTZ DORIS E DEFENDANT GARNES DAVID T AMERICAN EXPRESS ADVISORS INC 5500 CARLSILE PIKE MECHANICSBURG PA 17050 WEAVER DONALD DEFENDANT GARNES DAVID T 3500 MARKET STREET SUITE 200 CAMP HILL PA 17011 * Date Entries 7/30/2003 FIRST ENTRY PRAECIPE FOR WRIT OF SUMMONS IN CIVIL ACTION-WRIT OF SUMMONS ISSUED 8/08/2003 ---------- SHERIFF'S --------------------------------------------------------- FILE RETURNED FILED. Case Type: WRIT OF SUMMONS Ret Type.: Regular Litigant.: AMERICAN EXPRESS FINANCIAL ADVISORS INC Address..: 3500 MARKET STREET STE 200 Ctyy/St/Z • CAMP HILL, PA 17011 Hnd To: RAIG STILES (VP ASSISTANT) Shf/D ty.. FR92003 E. HOOVER Date/Time: 0015:50 Costs....: 66 Pd By: HENRY COYNE 08/08/2003 8/08/2003 ---------- SHERIFF'S --------------------------------------------------------- FILE RETURNED FILED. Case Type: WRIT OF SUMMONS Ret Type.: Regular Litigant.: IDS LIFE INSURANCE COMPANY Address..: 3500 MARKET STREET STE 200 Ctyy/St/Z • CAMP HILL, PA 17011 Hnd To: ?RAIG STILES (VP ASSISTANT) Shf/D ty.: RONALD E. HOOVER Date/ Time: 0804/2003 0015:50 Costs....: $16.00 Pd By: HENRY COYNE 08/07/2003 ----- - = 8/08/2003 - - -- SHERIFF'S ------ -------------------------------------------------- FILE RETURNED FILED. Case Type: WRIT OF SUMMONS Ret Type.: Regular Litigant.: WEAVER DONALD Address..: 3500 MARKET STREET STE 200 Ctyy/St/Z • CAMP HILL, PA 17011 Hnd To: CRAIG STILES (VP ASSISTANT) Shf/D/Tty.: RONALD E. HOOVER Dateime: 0804/2003 0015:50 Costs....: $16.00 Pd By: HENRY COYNE 08/08/2003 ------------------------------------------------------------------- 3 dy 1.5 to 7 9 l? /y •`b PYS511 Cumberland County Prothonotary's Ottice Page 2 Civil Case Printrr 2003-03622 SCI ZEN JAMES N ET AL (vs) AMERICA EXPRESS FINANCIAL ETA Reference No... Filed......... 7/30/2003 Case Type...... WRIT OF SUMMONS Time. ... .: 9.53 Judgment......: .00 Execution Date 0/00/0000 Judge Assigned: EBERT M L JR Jury Trial.... Disposed Desc.: Disposed Date. (3/00/0000 ------------ Case Comments ------------- Higher Crt 1.: 2174 M A2006 8/15/2003 SHERIFF'S FILE RETURNED FILED. Higher Crt 2.: Case Type: WRIT OF SUMMONS Ret Type.: Regular Litigant.: AMERICAN EXPRESS FINANCIAL ADVISORS INC Add ess..: 3500 MARKET STREET STE 200 Ctyy/St/Z • CAMP HILL, PA 17011 Hna To: ?RAIG STILES GENERAL VICE PRESIDENT, ADULT IN-CHARGE Shf/D ty.: RO ALD H06VER Date/Time: 08 04/2003 1550:00 Costs....: $3 .66 Pd By: HENRY COYNE 08/15/2003 -----------------------------------------------------------7------- 8/15/2003 SHERIFF'S FILE RETURNED FILED. Case Type: WRIT OF SUMMONS Ret Type.: Regular .Litigant.: IDS LIFE INSURANCE COMPANY Add es : 3500 MARKET STREET STE 200 CtyyJ;V%Z : CAMP HILL, PA 17011 Hnd To: ?RAIG STILES GENERAL VICE PRESIDENT, ADULT IN CHARGE Shf/Dpty.: RONALD H06VER Date/Time: 08/04/2003 1550:00 Costs....: $16.00 Pd By: HENRY COYNE 08/15/2003 ------------------------------------------------------------------- 8/15/2003 SHERIFF'S FILE RETURNED FILED. Case Type: WRIT OF SUMMONS Ret Type.: Regular Litigant.: WEAVER DONALD Add ess..: 3500 MARKET STREET STE 200 Cty//St/Z • CAMP HILL, PA 17011 Hnd To: ERAIG STILES ADULT IN CHARGE Shf/D ty.: R07ALD H06VER Date/Time: 08/04/2003 1550:00 Costs....: $16.00 Pd By: HENRY COYNE 08/15/2003 ------------------------------------------------------------------- 8/15/2003 SHERIFF'S FILE RETURNED FILED. Case Type: WRIT OF SUMMONS Ret Type.: Regular Litigant.: BRYTZ DORIS E Address..: 5521 CARLISLE PIKE Cty/St/Zp • MECHANICSBURG, PA 17055 Hnd To: DORIS E BRYTZ Shf/D ty.: BR AN WARD Date/Time: 08 13/2003 1610:00 Costs....: $2 .90 Pd By: HENRY COYNE 08/15/2003 ------------------------------------------------------------------- 8/18/2003 ENTRY OF APPEARANCE OF JOSHUA HORN ESQ AND DAVID T GARNES ESQ ON BEHALF OF DEFENDANTS AMERICAN EXPRESS FINANCIAL ADVISORS INC AND IDS LIFE INSURANCE COMPANY IN THE ABOVE-CAPTIONED MATTER BY DAIVD T GARNES ESQ ------------------------------------------------------------------- 8/18/2003 ENTRY OF APPEARANCE FOR DEFTS DONALD WEAVER AND DORIS E BRYTZ - BY DAVID T GARNES ESQ ------------------------------------------------------------------- 5/06/2005 PRAECIPE FOR LISTING CASE FOR ARGUMENT - DEFT BRYTZ'S OBJECTIONS TO PLFFS' FIRST SET INTERROGATORIES AND PLFFS' FIRST REQUEST FOR PRODUCTION OF DOCUMENTS - BY HENRY F COYNE ESQ ------------------------------------------------------------------- 5/27/2005 PRAECIPE TO REMOVE FROM THE ARGUMENT LIST SCHEDULED FOR 6/1/05 AND SPECIALLY SET FOR A CONFERENCE WITH THE HONORABLE KEVIN A HESS - BY AUSTIN F GROGAN ESQ FOR PETITIONER ------------------------------------------------------------------- 6/03/2005 ORDER OF COT - DATED 6/2/05 - THE ABOVE THE CASE IS STRICKEN FROM THE 6/105 ARGUMENT LIST AS BEING IN VIOLATION OF CUMBERLAND COUNTY LOCAL RULE OF COURT 210-04 REGARDING DISCOVERY MOTIONS - BY THE COURT GEORGE E HOFFER PJ COPIES MAILED ------------------------------------------------------------------- 8/30/2005 DEFENDANTS' MOTION TO COMPEL ARBITRATION PURSUANT TO 42 PA CSA 7304 - BY JOSHUA HORN ESQ FOR DEFTS ------------------------------------------------------------------- 9/21/2005 ORDER - DATED 9/21/05 - IN RE DEFT'S MOTION TO COMPEL ARBITRATION - ON RELATION OFF THE PROTHONOTARY THAT COUNSEL FOR THE DEFT IS SEEKING TO WITHDRAW HIS APPEARANCE AND IT FURTHER APPEARING THAT NO COMPLAINT HAS BEEN FILED IN THE CASE ACTION ON THE DEFTS' PYS511 Cumberland County Prothonotary's Office Civil Case Print 2003-03622 SCHEUREN JAMES N ET AL (vs) AMERICAN EXPRESS FINANCIAL ETA Reference No..: Case Type.....: WRIT OF SUMMONS Judge eAsssigned: EBERT M L JR Disposed Desc.: ------------ Case Comments ------------- MOTION TO COMPEL ARBITRATION IS DEFERRED COUNSEL'S MMOTION TO WITHDRAW APPEARANCE HESS J COPIES MAILED Page 3 Filed......... 7/30/2003 Time...... 9.53 Execution Date 0/00/0000 Jury Trial.... Disposed Date. 0/00/0000 Higher Crt 1.: 2174 M A2006 Higher Crt 2.: PENDING DISPOSITION OF - BY THE COURT KEVIN A ---------------------=---------------------------------------- ----- &1 - 7,3 7/26/2006 COMPLAINT - BY HENRY F COYNE ATTY FOR PLFFS . ------------------------------------------------------------------- 71/•-1W 8/11/2006 PRELIMINARY OBJECTIONS OF DEFTS AMERIPROSE FINANCIAL SVCS INC - DORIS E BRYTZ & DONALD WEAVER IN THE NATURE OF A MOTION TO COMPEL ARBITRATION PURSUANT TO PA RULE OF CIVIL PROCEDURE 1028-A-6 & 42 PA CSA 7304 & PRELIMINARY OBJECTIONS TO THE COMPLAINT - BY JOSHUA HORN ATTY FOR DEFTS - - - - - - - - - - - - - - - T --------------------------------------------------- 1113 8/21/2006 PRAECIPE FOR LISTING CASE FOR ARGUMENT - PRELIMINARY OBJECTIONS OF DEFTS IN THE NATURE OF A MOTION TO COPEL ARBITRATION PRELIMINARY OBJECTIONS TO THE COMPLAINT - BY JOSHUA HORN ATTY FOR DEFT ------------------------------------------------------------------- /?f..ltj 9/22/2006 OPRAECIPE BJECTIONSO- BYSHENRYTING FOR ATTYMFOR PLFFST BRYTZ'S PRELIMINARY ------------------------------------------------------------------- 1 ,,-/S-710/11/2006 RREEPPLY TOIONRELIMMINAARRYY OBJECTIO SAOF DFORSPAFDSMO'PION TO COMPEL - BY HENRY F TTY ------------------------------------------------------------------- DEFTS 11/20/2006 TOORDCOMPELER OF BYDMLEEBERTTJRHJ - COPIESOTION MAILED 11-20-06 ------------------------------------------------------------------- ?s6--//04 12/01/2006 APPLICATION TO AMEND ORDER TO INCLUDE DETERMINATION OF FINALITY PURSUANT TO PA R A P 341(C) BY HENRY F COYNE ESQ ------------------------------------------------------------------- TO I PA RAP AMEND CORDER TOO - BY l?,/ f?,y 12/06/2006 DEFTS' RESPONSE DETERMINATION OPPOSITION OF O FINALITY F PURSUANT APPLICATION JILL A GULDIN ATTY FOR DEFTS ------------------------------------------------------------------- /SS 12/06/2006 AARRBITRATOIONEISOGRANTED AND2ALL ACTIONNINECASEFIS'STAYEDNPENDINGPEL COMPLETION OF THE ARBITRATION - BY ML EBERT JR J - COPIES MAILED 12-06-06 --------------------------------------------------------- la-/7a 1211412006 NpOOTICE - OF - APPEAL - TO SUPERIOR COURT - BY HENRY F COYNE - ATTY - FOR --- - - -------------------------------------------------- - - - APPELLANT ORDERED TO OF FILE ON CCOURT 12-18-06 - IN RE: 12/18/2006 WITHRTHIS COURT APPEAL NO LATER THAN 01-08-07 - BY ML EBERT JR J - COPIES MAILED 12-18-06 -------- ----- ------------ ---------- ---------- ---------- ------- /7;•-RV12/20/2006 SUPERIOR-COURT-OF'PA NOTICE OF APPEAL DOCKETING TO # 2174-MDA-2006- ------------------------------------------------------------------- / 7 ,/V 1/05/2007 APPLICATION TO AMEND ORDER TO INCLUDE STATEMENT SPECIFIED IN 42 PA CS 702-B - BY HENRY F COYNE ATTY FOR PLFFS ----------------------------------------------------------------- /W-/f/ 1/05/2007 HENRYMFN - -COYNEMATTYRFORMPLFFSTED OF PURSUANT TO ORDER OF COURT - BY ---------------------------------------------------- TO - /fv?' D -1/12/2007 ORDER DEFENDANT'S - REPLY'IN - - BY AMEND - JOSHUA HORN ATTY FOR DEFTS ------------------------------------------------------------------- 1/24/2007 ORDER OF COURT - 01-24-07 - IN RE: ORDERED THAT PLFFS' APPLICATION IS DENIED - ML EBERT JR J - COPIES MAILED 01-24-07 ------------------------------------------------------------------- 1/29/2007 OPINION PURSUANT TO PA RAP 1925 - APPEAL TO SUPERIOR COURT OF PA - BY ML EBERT JR J - COPIES MAILED 01-29-07 ------------------------------------------------------------------- 1/30/2007 CASE TRANSFERRED TO SUPERIOR COURT ------------------------------------------------------------------- c? 2/22/2007 SUPERIOR COURT OF PA - ORDER - THE MOTION TO QUASH THIS APPEAL IS HEREBY GRANTED JAMES D. MCCULLOUGH DEPUTY PROTHONOTARY PYS511 Cumberland County Prothonotary's Office Page 4 Civil Case Print 2003-03622 SCHEUREN JAMES N ET AL (vs) AMERICAN EXPRESS FINANCIAL ETA Reference No. Filed......... 7/30/2003 Case Type...... WRIT OF SUMMONS Time. ... . 9.53 Judgment..... .00 Execution Date 0/00/0000 Judge Assigned: EBERT M L JR Jury Trial.... Disposed Desc.: Disposed Date 0/00/0000 ------------ Case Comments ------------- Higher Crt 1.: : 2174 MDA2006 Higher Crt 2.: ----------------------------------------- --------- ?J"] 3/21/2007 ORDER IN THE SUPERIOR COURT OF PA - DATED 03-16-07 - THE PETITION FOR REVIEW IS HEREBY DENIED - J. MCCULLOUGH DPTY PROTHY SUPERIOR COURT PF PA - MIDDLE DISTRICT -------------------------.------------------------------------------ a 10/16/2007 CERTIFICATE OF REMITTAL/REMAND OF RECORD BY JAMES D MCCULLOUGH ESQ ------------------------------------------------------------------- ja U 10/16/2007 ORDER - THE MOTION TO QUASH THIS APPEAL IS HEREBY GRANTED PER CURIAM -------------------------------------------------------------------EQUEST- HE ORI j 10/16/2007 SORIGINAL UPREME COURTTRATRTHHE FORABOVEWARD SOONIASLPOSSOIBLLETEEZHE ------------------------------------------------------------------- 10/16/2007 NOTICE OF DOCKET ENTRIES MAILED TO HENRY COYNE ESQ AND JOSHUA HORN ESQ - - - - - - - - - - - - - - LAST ENTRY - - - - - - - - - - - - - - ******************************************************************************** * Escrow Information * Fees & Debits Beq Bal Pmts/Adj End Bal ******************************** ******** ****** ******************************* WRIT OF SUMMONS 35.00 35.00 .00 TAX ON WRIT .50 .50 .00 SETTLEMENT 5.00 5.00 .00 AUTOMATION FEE 5.00 5.00 .00 JCP FEE 10.00 10.00 .00 APPEAL HIGH CT 30.00 30.00 .00 ------------------------ ------------ 85.50 85.50 .00 * End of Case Information ******************************************************************************** TRUE COPY FROM RECORD In Testimony whereof, I here unto set my band and the seal of said Court at Carlisle, Pa. This ..... l1O........ day of...Oc,? ......... .7. 4-1- 4'k. e 44. PProthonofarl( Irene M. Bizzoso, Esq. Deputy Prothonotary Norina K. Blynn Chief Clerk 04 y Supreme Court of Pennsylvania Middle District December 21, 2007 Mr. Curtis R. Long Prothonotary Cumberland County Courthouse 1 Courthouse Square Carlisle, PA 17013 P.O. Box 624 Harrisburz. PA 17108 717-787-6181 www.aopc.org RE: James N. and Barbara D. Scheurn, Petitioners V. American Express Financial Advisors, Inc. (nka Ameriprise Financial, Inc.) IDS Life Insurance Company, Donald Weaver, Vice President and Doris Brytz, Respondents Superior Docket Number - 2174 MDA 2006 Trial Court/Agency Dkt. Number: 03-3622 No. 239 MAL 2007 Appeal Docket No.: Date Petition for Allowance of Appeal Filed: March 16, 2007 Disposition: Order Denying Petition for Allowance of Appeal Date: December 21, 2007 Reargument/Reconsideration Disposition: Reargument/Reconsideration Disposition Date: /esh IN THE SUPREME COURT OF PENNSYLVANIA MIDDLE DISTRICT JAMES N. AND BARBARA D. SCHEURN, : No. 239 MAL 2007 Petitioners Petition for Allowance of Appeal from the Order of the Superior Court V. AMERICAN EXPRESS FINANCIAL : ADVISORS, INC. (N/K/A AMERIPRISE FINANCIAL, INC.), IDS LIFE INSURANCE COMPANY, DONALD WEAVER, VICE PRESIDENT AND DORIS E. BRYTZ, Respondents PER CURIAM ORDER AND NOW, this 21St day of December, 2007, the Petition for Allowance of Appeal is hereby DENIED. TRUE & CORRECT COPY ATTEST: ecember 21, 2007 Norin K. Blynn, Chie Clerk Z -z7 C ?a. ,?v y Supreme Court of Pennsylvania Irene M. Bizzoso, Esq. Middle District Deputy Prothonotary Norina K. Blynn January 15, 2008 Chief Clerk Certificate of Remittal/Remand of Record TO: Mr. Curtis R. Long Prothonotary RE: Scheuren, J. et ux v. American Express No.239 MAL 2007 Trial Court/Agency Dkt. Number: 03-3622 Trial Court/Agency Name: Cumberland County Court of Common Pleas Intermediate Appellate Court Number: 2174 MDA 2006 P.O. Box 624 Harrisburg, PA 17108 717-787-6181 www.aopc.org Annexed hereto pursuant to Pennsylvania Rules of Appellate Procedure 2571 and 2572 is the entire record and Notice of Disposition for the above matter. Contents of Original Record: Original Record Item Filed Date Description Part(s) October 17, 2007 1 Exhibits October 17, 2007 1 env. Date of Remand of Record: 1/15/2008 ORIGINAL RECIPIENT ONLY - Please acknowledge receipt by signing, dating, and returning the enclosed copy of this certificate to our office. Copy recipients (noted below) need not acknowledge receipt. Signature Printed Name /esh cc: Karen Reid Bramblett, Esq. Prothonotary Date ?* c 71- d .W Curtis R. Long, Prothonotary Cumberland County Courthouse 1 Courthouse Square Carlisle, PA 17013 ?Supreme C?nur# of ?ertxt??I?ttztitt ?t?tI?CE ?TSfYtCf IRENE M. BIZZOSO, ESQUIRE 434 MAIN CAPITOL BUILDING DEPUTY PROTHONOTARY P.O. BOX 624 HARRISBURG, PENNSYLVANIA 17108 NORINA K. BLYNN CHIEF CLERK (717) 787-6181 http://www.courts.state.pa.us TO: Cumberland County Prothonotary RE: JAMES & BARBARA SCHEUM V. AMERICAN EXPRESS FINANCIAL No. 239 MAL 2007 Cumberland County # 03-3622 DATE: April 16, 2008 Please find enclosed a receipt and return form for the above-captioned matter. On 1/15/2008 we returned the Original Record to you and have not received an acknowledgment. /eh Enclosure r ? t-? ?? E? `?`? cy. ? ?°' ?_ -r? _? ? ..... ?; `{ . _ . R... -, .. _f ? . ` 1, _? k C..'. CERTIFICATE AND TRANSMITTAL OF RECORDS UNDER PENNSYLVANIA RULE OF APPELLATE PROCEDURE 1931 (C) To the Prothonotary of the Apellate Court to which the within matter has been appealed: SUPERIOR COURT OF PENNSYLVANIA The undersigned, Prothonotary of the Court of Common Pleas of Cumberland County, the said court being a court of record, do hereby certify that annexed hereto is a true and correct copy of the whole and entire record, including an opinion of the court as required by PA R.A.P. 1925, the original papers and exhibits, if any on file, the transcript of the proceedings, if any, and the docket entries in the following matter: James N. Scheuren and Barbara D. Scheuren vs. American Express Financial Advisors, Inc.(n/k/a Ameriprise financial, Inc.) IDS Life Insurance Company, Donald Weaver, Vice President and Doris E. Brytz 03-3622 Civil Term • 2174 NIDA 2006 The documents comprising the record have been numbered from No.l to~;~and attached hereto as Exhibit A is a list of the documents correspondingly numbered and identified with reasonable definiteness, including with respect to each document, the number of pages comprising the document. The date on which the record has been transmitted to the Appellate Court is Ry 30, 2007. ;~ Curtis .Long, notary Regina K. Lebo, Deputy An additional copy of this certificate is enclosed. Please sign and date copy, thereby acknowledging receipt of this record. Date Signature & Titll~~~t~~d i~1 ~c~6}j~i ~~u. JAN 3 ~~~~~~