COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 69093 JAMES F. SEXTON : : Plaintiff-appellee : : JOURNAL ENTRY vs. : and : OPINION KIDDER PEABODY & CO., INC., et al : : Defendant-appellants : : : DATE OF ANNOUNCEMENT OF DECISION : MARCH 7, 1996 CHARACTER OF PROCEEDING : Civil appeal from : Court of Common Pleas : Case No. 283,154 JUDGMENT : REVERSED AND REMANDED. DATE OF JOURNALIZATION : _______________________ APPEARANCES: For plaintiff-appellee: FRANK C. WHALEN Attorney at Law 1150 Leader Building Cleveland, Ohio 44114 JAMES F. SEXTON, pro se 2487 Noble Road Cleveland Heights, Ohio 44121 For defendant-appellants: ROBERT N. RAPP Attorney at Law 1400 McDonald Investment Center 800 Superior Avenue Cleveland, Ohio 44114 TIMOTHY E. McMONAGLE, J.: Defendants-appellants Kidder Peabody & Co. Incorporated and Craig Ross appeal the trial court's denial of their Motion for Stay of Proceeding and to Compel Arbitration. The within matter arises from a lawsuit in common pleas court brought by plaintiff Sexton to recover damages from the defen- dants, Kidder Peabody & Co. Incorporated, Craig Ross and two other individual Kidder Peabody employees. Plaintiff Sexton alleged that the defendants either failed or refused to execute plaintiff's orders regarding a securities transaction which the plaintiff claimed that the defendants were obligated to do. Defendants-appellants Kidder Peabody and Ross moved the trial court for an order staying all further proceedings and compelling arbitration based upon written agreements between Sexton and both Kidder Peabody and its predecessor, Clark, Dodge & Co. Sexton opposed the motion to compel arbitration on the grounds that the written agreements did not control with regard to the specific transaction which is the subject of the complaint. In a decision in which the court did not set forth its reasoning, the trial court, on May 16, 1995, denied the defendants' motion to compel arbitration and stay proceedings. The defendants, Kidder, Peabody & Co. and Ross, timely appealed. For the reasons stated below, we - 3 - reverse the decision of the trial court and remand the case to the lower court for further proceedings. The facts giving rise to this appeal are as follows. Plain- tiff-appellee Sexton established an account for the purchase and sale of securities and executed a Customers Agreement with Clark, Dodge & Co. in December, 1973. Clark, Dodge & Co. subsequently combined with Kidder Peabody in June, 1974. Kidder Peabody became the successor to Clark, Dodge & Co. and continued to carry Sexton's account. The 1973 agreement remained operative according to its terms, and no new or different agreement was executed. In January, 1986, appellee Sexton and defendant-appellant Kidder Peabody entered into a further written agreement, "The Options Application and Agreement." In 1989, Kidder Peabody provided Sexton with a form of its own Customer's Agreement, which remained unexecuted. Each of these three written agreements contains an arbitration clause which mandates arbitration of matters which are in dispute between the parties. Appellee Sexton conducted transactions throughout the entire course of his relationship with Kidder Peabody up to and including the transaction which gave rise to the underlying complaint, in which appellee Sexton alleged that the appellants' failure to act on an order in January of 1991 caused him financial damage. Appellants' sole assignment of error is as follows: THE TRIAL COURT ERRED IN DENYING THE APPEL- LANT'S MOTION FOR STAY OF PROCEEDINGS AND TO COMPEL ARBITRATION OF ALL CLAIMS AND CONTRO- VERSIES PRESENTED IN THE COMPLAINT IN - 4 - ACCORDANCE WITH THE TERMS OF WRITTEN AGREE- MENTS FOR ARBITRATION. Initially, we note for the record that pursuant to Ohio Revised Code 2711.02, an order denying a motion to compel arbitra- tion is a final appealable order and therefore is subject to our review. Stewart v. Shearson Lehman Brothers, Inc. (1992), 71 Ohio App.3d 305. It is the position of the appellants that each of the two written and executed agreements, both of which contain arbitration clauses, fully encompasses the claim asserted by appellee in the trial court. It is further the position of the appellants that each agreement is fully enforceable in accordance with its terms. Additionally, appellants contend that the unexecuted contract is enforceable between the parties because both parties have been performing consistently with the contract terms. Appellants con- tend, therefore, that it was error for the trial court to fail to enforce the arbitration clauses according to their terms and to deny the motion to compel arbitration. The appellee contends that no contract exists between him and Kidder Peabody and, therefore, no arbitration clause exists to be enforced between him and Kidder Peabody. The appellee does not contend, however, that the making of either the 1973 agreement or the 1986 agreement is at issue. Appellee asserts that the 1973 agreement was vitiated by the passage of time and the 1986 agree- ment does not apply to the type of transaction at issue. Appellee does argue that the unexecuted 1989 written document does not - 5 - represent a valid contract, thereby placing the "making of" that contract in issue. It is the position of the appellee that where no contract exists, there can be no arbitration clause to enforce against him. Appellee contends that in the absence of a valid contract with an arbitration clause, the court cannot compel arbitration. This contention is correct as far as it goes. As our court stated in Stocker v. Castle Inspections Inc. (1995), 99 Ohio App.3d 735 at 737, "Arbitration is a matter of contract and, despite the strong policy in its favor, a party cannot be compelled to arbitrate any dispute which that party has not agreed to submit. Teramar Corp v. Rodier Corp. (1987) 40 Ohio App.3d 39, 40, 531 N.E.2d 721, 722; Divine Constr. Co. v. Ohio- American Water Co. (1991), 75 Ohio App.3d 311, 599 N.E. 2d 388; Schroeder v. Shearson, Lehman & Hutton, Inc. (Apr. 25, 1991), Cuyahoga App. No. 60236, unreported, 1991 WL 64318." However, in the matter sub judice, the record reflects that appellants have placed before the court two written and executed agreements and one written but unexecuted agreement which form the basis of their claim for a stay and for the court to compel arbi- tration of the dispute. Copies of each of the two executed agree- ments and the unsigned agreement were attached as exhibits to the appellants' Motion to Compel Arbitration in the court below. Although the appellee contends that these contracts do not exist as binding contracts enforceable between appellee and appellants, - 6 - there is no evidence in the record before this court indicating that the executed agreements which form the basis of this appeal were void, null, inoperative, non-existent, procured by fraud or mistake, terminated, or non-applicable to these parties. Appellee does not deny that he executed the 1973 and the 1986 agreements. There is no evidence in the record that appellee made any allega- tion that either of the two executed agreements was procured by fraud or mistake. The appellants properly attached each of the contracts upon which they relied to their motion filed in the lower court. The lower court had before it copies of the written agreements when it denied the appellants' motion to compel arbitration. Appellants now appeal the lower court's denial of their motion. The matter before us is governed by R.C. 2711.01, et seq. In response to appellee's contention that no contract existed to be enforced, we look to R.C. 2711.03. The provision of R.C. 2711.03 states in pertinent part: The party aggrieved by the failure of another to perform under a written agreement for arbitration may petition any court of common pleas having jurisdiction of the party so failing to perform or an order directing that such arbitration proceed in the manner pro- vided for in such agreement; *** The court shall hear the parties, and upon being satis- fied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the agreement. If the making of the arbitration agreement or the failure to perform it is in issue, the trial - 7 - court shall proceed summarily to the trial thereof. *** (Emphasis added.) As our court stated in Bayer v. Mapes (Nov. 17, 1994), Cuya- hoga App. No. 66541, unreported, dismissed, motion to certify overruled 71 Ohio St 3d 1500: In accordance with the foregoing, it is clear that a trial is contemplated when the making of the arbitration agreement or the failure to perform it is in issue. Divine Constr. Co. v. Ohio-American Water Co. (1991), 75 Ohio App.3d 311; Schroeder v. Shearson, Lehman & Hutton, Inc., April 25, 1991, Cuyahoga App. No. 60236, unreported. Where these issues are not presented, the trial court need only be satisfied that dispute is referable to arbitration before ordering a stay in its proceedings. Brumm v. McDonald & Co. Securities, Inc. (1992), 78 Ohio App.3d 96. (Emphasis added.) The court in Divine Construction, supra, citing Colegrove v. Handler (1986), 34 Ohio App.3d 142, stated that: Interpreting the analogous federal arbitration provision which contains exactly the same language as R.C. 2711.03, the Sixth Circuit Court of Appeals in Cincinnati Gas and Elec. Co. v. Benjamin F. Shaw Co. (C.A.6, 1983), 706 F.2d 155, stated at 159: *** Only if the making of the agreement to arbitrate or the failure to perform such an agreement is in issue must the court conduct a trial. The court then proceeded to determine if there was any question of the making of the agreement to arbitrate, and found, absent an allegation of mistake, a hearing was not required. Id. at 316. Here, there is no question that appellee executed both the 1973 and 1986 agreements. The record before us reveals no allega- - 8 - tion of mistake or fraud in the making of either of these agree- ments. Had the question of the making of the 1973 and 1986 agree- ments been in issue before the lower court, the court would have had to hold a trial pursuant to the statutory mandate of R.C. 2711.03. Accordingly, as here, where there were no factual issues regarding the making of either agreement or the failure to comply, the trial court was not required to conduct a trial pursuant to R.C. 2711.03. The question before the trial court, then, was whether any one of the arbitration clauses in the agreements presented to the court encompasses the matter complained of in appellee's underlying complaint and should be enforced according to its terms. If so, the trial court was required by R.C. 2711.02 to stay the trial of the action until the arbitration of the issue has been had. R.C 2711.02 provides in pertinent part: If any action is brought upon any issue re- ferable to arbitration, the court in which the action is pending, upon being satisfied that the issue involved in the action is referable to arbitration under an agreement in writing for arbitration, shall on application of one of the parties stay the trial of the action until the arbitration of the issue has been had *** The issue of "whether a controversy is arbitrable under the provisions of a contract, is a question for the court to decide upon examination of the contract." Divine Constr. Co. v. Ohio- American Water Co., supra. "The scope of the arbitration clause, that is, whether a controversy is arbitrable under the provisions of the contract is a question for the court to decide upon exami- - 9 - nation of the contract." Gibbons-Grable Co. v. Gilbane Building Co. (1986), 34 Ohio App.3d 170. "An arbitration agreement will be judicially enforced unless a court is firmly convinced that the clause is inapplicable to the dispute or issue in question." Ervin v. American Funding Corp. (1993), 89 Ohio App.3d 521. Enforcement of arbitration agreements is mandated in Ohio law. R.C. 2711.01 provides in pertinent part: A provision in any written contract, except as provided in division (B) of this section, to settle by arbitration any controversy that subsequently arises out of the contract, or out of the refusal to perform the whole or any part of the contract, or any agreement in writing between two or more persons to submit to arbitration any controversy existing between them at the time of the agreement to submit, or arising after the agreement to submit from a relationship then existing between them or that they simultaneously create, shall be valid, irrevocable, and enforceable, except upon grounds that exist at law or in equity for the revocation of any contract. A review of the executed 1973 Customer Agreement and the 1986 Option Agreement that are at issue here is necessary to determine whether the arbitration clause in either agreement is fully en- forceable and encompasses the claim asserted by appellee in the court below. A. The 1973 Clark, Dodge & Co. Customer Agreement - 10 - The December, 1973, Clark, Dodge & Co. Customer Agreement provides in its preamble that "(i)n consideration of your accept- ing one or more accounts of the undersigned, whether designated by name or number or otherwise, and your agreeing to act as brokers for the undersigned in the purchase and sale of property (as hereinafter defined), the undersigned agrees as follows: ***" This agreement was signed by the appellee, James F. Sexton. Further, the contract defines "property" in clause 1 as follows: The word "property", as used herein, shall include all monies, securities and commodities of every kind and nature, all contracts with respect thereto, including contracts for the future delivery thereof, all other property usually and customarily dealt in on Ex- changes, Boards or Markets, or by brokerage firms, and any other property belonging to the undersigned which may, now or at any future time be in your possession or control. There is no dispute that the agreement was signed by the appellee and that appellee fully entered into the contractual relationship. By its terms, the Clark, Dodge agreement bound Kidder Peabody in its successor relationship with appellee. The account relationship was established and carried on by Sexton and Kidder Peabody pursuant to the Clark, Dodge agreement. Appellee contends, however, that he closed his account in about 1979, thereby vitiating the Clark, Dodge agreement. Appellee argues that because the 1973 contract was indefinite as to time, it is both unenforceable and terminable at will. The agreement, by its terms, is, in fact, terminable at will. The agreement spells out the requirements for termination in paragraph 16 of the contract, which states: This agreement shall continue until terminated by the undersigned or you in writing and until - 11 - all open accounts of the undersigned and contracts for the account of the undersigned have been closed. It shall cover individually and collectively all accounts which the undersigned may open or re-open with you, and shall inure to the benefit of your present Corporation and any successor firm or corporation, whether resulting merely from changes in your existing personnel or from dissolution of your corporate form as permitted under the Rules and Regulations of the New York Stock Exchange, or otherwise and of the assigns of your present Corporation or any successor firm or corporation, and shall be binding upon the undersigned and the estate, executors, administrators and assigns of the undersigned. The fatal flaw in appellee's argument that he terminated this agreement is that he makes no claim, nor presents any evidence to prove, that he did, in fact, terminate the agreement in writing as required by the specific terms of the contract. There is no evi- dence in the record that the appellee terminated the agreement in any way. There is no evidence in the record that the appellee "closed" his account. It is the contention of the appellee that the contract terminated because he failed to use his account; however, the words of the contract are explicit at paragraph 16 that "[t]his agreement shall continue until terminated *** in writing." Pursuant to the contract language, inactivity in the account will not extinguish the agreement. The contract language, itself, anticipates that accounts may lie dormant. By its terms, the agreement covers all the accounts which the undersigned, the appellee, "may open or re-open." In accordance with the plain language in paragraph sixteen (16) of the agreement, without notice of termination of the agreement in writing by one of the parties, - 12 - the agreement "shall continue." The 1973 Clark, Dodge & Co. Customer Agreement exists as enforceable between the parties. A review of the arbitration clause in this agreement is necessary to determine whether the arbitration clause shall be enforced as to the matter at hand. The issue of whether a controversy is arbitrable under the provisions of a contract is a question for a court to decide upon examination of the contract. Gibbons, supra, at syllabus 2. The 1973 Agreement contemplates that the appellant shall act as broker for the appellee in the purchase and sale of stock. The first sentence of the agreement states in pertinent part: In consideration of your accepting one or more accounts of the undersigned, whether designated by name or number or otherwise, and your agreeing to act as brokers for the undersigned in the purchase and sale of property (as hereinafter defined), the undersigned agrees as follows *** The arbitration clause of the 1973 agreement is contained in paragraph 15, which mandates arbitration of "any controversy *** arising out of or relating to this agreement or the performance or breach thereof." The principles to be applied upon our review of the arbitration provision of the contract were enunciated by the court in Gibbons, supra, at 173, where the court stated: In construing a contract providing for dispute resolution by arbitration, we are mindful of the policy of the law to favor and encourage arbitration. Brennan v. Brennan (1955), 164 Ohio St. 29, 57 O.O. 71, 128 N.E.2d 89; Automatic Die & Products Co. (1954), 162 Ohio St. 321, 55 O.O. 195, 123 N.E. 2d 401 *** "Arbitrability should not be denied unless it - 13 - may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage." Siam Feather, supra at 241. (citations omitted; emphasis added). The dispute complained of by the plaintiff-appellee in the underlying complaint related to the failure of the defendant- appellant/brokerage firm to properly transact a purchase or sale of "property" as defined in the agreement. We therefore find, that the plain language of the arbitration provision within the 1973 agreement, "that any controversy arising out of or relating to this agreement or the performance or breach shall be settled by arbitration," clearly encompasses the dispute complained of by appellee in his underlying complaint. It is error for the trial court to deny enforcement of the arbitration provision and to deny the appellants' motion for stay of proceedings. B. The 1986 "Options Application and Agreement" Appellee does not contest that the 1986 "Options Application and Agreement" exists as a valid enforceable agreement between the parties in this matter. Appellee does not contend any fraud or mistake in the making of the 1986 agreement. A trial is not necessary pursuant to the statutory mandate of R.C. 2711.03 to - 14 - prove the contract. Appellee argues solely that because this 1986 contract was executed in contemplation of his "options" purchases only, it ought not apply to the "margin purchase" which is the basis of the underlying complaint. The argument of the appellee flies in the face of the case law interpreting such contracts and is flatly contradicted by the plain language of the agreement. The arbitration provision of the 1986 agreement, on its face, applies to "any controversy between us arising out of or relating to accounts of or transactions with or for me or to this agreement *** [which] shall be settled by arbitration." (Emphasis added.) The plain language of the clause in the option agreement clearly contemplates its application to any disputes arising between the parties. The plain meaning of the words indicates that the arbi- tration provision is all-encompassing as to any controversy be- tween the parties and relating to any transaction. "Any contro- versy language to be read broadly to cover the entire account relationship." See, Sacco v. Prudential Bache (E.D.Pa. 1988), 703 F.Supp. 362. Our courts have stated that even "when the language is ambiguous and unclear, any doubts concerning the scope of arbi- trability should be resolved in favor of arbitration." State, ex rel. Williams v. Belpre City School Dist. Bd. of Ed. (1987), 41 Ohio App.3d 1, paragraph four of the syllabus. Here, the language is both clear and unambiguous. Following the directive of the court in Gibbons-Grable Co. supra, at 173, we agree that "arbitrability should not be denied - 15 - unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of cover- age." Where the court is mandated to resolve doubts in favor of arbitration, the undisputed 1986 contract containing the broad language that the arbitration clause applies to "any controversy between us arising out of or relating to accounts of or transac- tions with or for me" can only be read as requiring arbitration in this matter. It is therefore error for the trial court to deny the appel- lants' motion for stay of proceedings and to fail to compel the parties to arbitrate pursuant to the terms of the agreement. C. The 1989 Unexecuted Customer Agreement The appellee having placed the question of the "making" of the 1989 contract squarely in issue before the court, pursuant to the statutory mandate of R.C. 2711.03, a trial is necessary to determine whether such contract exists as enforceable. Since we have found that each of the two executed agreements before the - 16 - court has an arbitration clause that should be enforced to compel arbitration in this matter, the trial court need not conduct a trial on the issue of the unexecuted 1989 agreement. The issue of whether an enforceable contract exists pursuant to this written but unexecuted 1989 contract is moot. D. Conclusion Upon examination of the two executed contracts in question, we determine that the dispute in the court below is arbitrable under the provisions of each of these contracts. Therefore, we find that where, as here, there is no claim of fraud or mistake in the making of the 1973 and 1986 contracts, the failure of the trial court to compel arbitration of a dispute encompassed within the clear and unambiguous language of the each of the arbitration clauses is error. As our court stated in Lockhart v. American Res. Ins. Co. (1981), 2 Ohio App.3d 99, 101, "(w)hen it appears in 'any suit or proceeding' that the issue is arbitrable under an agreement in writing the court 'in which the suit is pending' is required to stay the proceeding upon the application of a party until the arbitration is had." The trial court is mandated to stay the matter before it pursuant to R.C. 2711.02. Having determined that the arbitration clauses in each of the two executed agreements before the court should be enforced by the court as mandated by both controlling law and policy, we reverse - 17 - the decision of the trial court and remand this case to the trial court for the appropriate order granting the appellants' motion to compel arbitration and imposing a stay pending the arbitration of all claims asserted in the complaint. - 18 - This cause is reversed and remanded to the lower court for further proceedings consistent with this opinion. It is, therefore, considered that said appellants recover of said appellee their costs herein. It is ordered that a special mandate be sent to said court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. JAMES M. PORTER, P.J. and ANN DYKE, J. CONCUR JUDGE TIMOTHY E. McMONAGLE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announce- ment of decision (see Rule 26). Ten (10) days from the date hereof, this document will be stamped to indicate journalization, .