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Click here for the full text of this decision FACTS:Norma and Juan Alaniz won a $2 million personal injury judgment in a case in 1994. The couple was contacted by Henry Medina and the Merrill Lynch Trust Company to create an irrevocable trust. The trust identified the couple as the settlors and the MLTC as the trustee, owner of any life insurance policies and the beneficiary of each policy. The agreement also authorized the sale and purchase of MLTC’s affiliates’ or subsidiaries’ products and the payment of fees and commissions to these affiliates or subsidiaries. The Alanizes transferred $200,000 to the MLTC, which used the funds to purchase life insurance from its affiliate, Merrill Lynch Life Insurance Co., through its agent Medina. The Alanizes filed suit against MLTC, MLLIC and the insurance affiliate, charging self dealing in violation of the property, insurance and business and commerce codes, as well as the DTPA, and for breach of fiduciary duty, fraudulent conversion, theft, negligent misrepresentation, unjust enrichment and negligence. The defendants sound to compel arbitration. The arbitration clause they referred to was in two cash management account applications and agreements signed by the Alanizes and Merrill Lynch, Pierce, Fenner & Smith, a financial advisor hired by the Alanizes after the personal injury suit. MLPF&S generated a financial report for the Alanizes that mentioned the use of life insurance. Medina referred the Alanizes to an insurance specialist who also suggested the possibility. The Alanizes decided to form a trust to purchase the policy and authorized the transfer of money from a MLPF&S account (the $200,000) to purchase the policy from MLLIC. Further transfers from the MLPF&S account were made to pay the annual premiums on the policy. The defendants argued that the Alanizes claims really start with the MLPF&S accounts and CMA agreements, so the arbitration clauses in those agreements should apply. The trial court denied the defendant’s motion to compel arbitration and stayed the trial proceeding. HOLDING:Accelerated appeal denied; writ denied. The court first confirms that the case should proceed as a writ for mandamus, as it is governed by the Federal Arbitration Act, instead of as an accelerated appeal under the Texas Arbitration Act. The court frames the issue on appeal as being whether the defendants have carried their burden to establish that they are entitled to enforce the arbitration agreements under general equitable or contract law. The court first considers whether, under agency principles, the defendants, who are not signatories to the CMA agreements can nonetheless compel arbitration under them. The court takes note of a similar case that applied agency principles where the nonsignatory employees were integral to and responsible for the alleged wrongful acts of the signatory principal, but the court distinguishes this case. Unlike the plaintiff in Pritzker v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 7 F.3d 1110 (3d Cir. 1993), however, the Alanizes raised no claims against MLPF&S. The petition does not allege any misconduct by MLPF&S, nor does it contain allegations of misconduct by Medina in his capacity as financial advisor for MLPF&S. The Alanizes’ petition explicitly states that their claims against Medina are based solely on his role as insurance agent for MLLIC in the sale of the insurance policy. Although Medina received the money from MLPF&S to pay for the life insurance policies, the funds for Medina’s actual compensation were provided by MLLIC. “The misconduct alleged in the Alanizes’ petition is that the Merrill Lynch Trust Company, as trustee, engaged in improper self-dealing by purchasing for the trust a life insurance policy from its affiliate and that [the defendants] later attempted to conceal the wrongdoing. Neither the petition nor the record shows that MLPF&S had any role in that transaction or that the Alanizes’ complaints in actuality are based on services rendered by MLPF&S through Medina.” Having concluded that agency principles do not apply, the court then considers the application of equitable estoppel principles. Equitable estoppel applies when the signatory to a written agreement containing an arbitration clause must rely on the terms of the written agreement in asserting its claims against the nonsignatory. Application of equitable estoppel is warranted when the signatory to the contract containing an arbitration clause raises allegations of substantially interdependent and concerted misconduct by both the nonsignatory and one or more of the signatories to the contract. The Alanizes does rely on or refer to the CMA agreements in their claims against the defendants. Although the Alanizes’ relationship with MLTC may have been initiated as a result of their relationship with MLPF&S, the relationship with MLTC was not dependent on the establishment of or transfers of money from the CMAs. Thus, the Alanizes’ claims do not presume the existence of the CMA agreement, and equitable estoppel principles do not apply. OPINION:Valdez, C.J.; Valdez, C.J., Hinojosa and Castillo, JJ. Castillo, J., concurs.

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