Royal Alliance Associates, Inc. v. Lorelei Mooney, as trustee

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ROYAL ALLIANCE ASSOCIATES,
INC.,
Plaintiff-Appellant,
v.
LORELEI MOONEY, as trustee and on
behalf of the Herbert and Helen Schweiger
Trust dated November 5, 2002; ROBERT
SCHMIEDEKE, an individual,
Defendants-Appellees.
No. 16-56468
D.C. No. 2:16-cv-02379-PA-AFM
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
Percy Anderson, District Judge, Presiding
Argued and Submitted August 29, 2017
Pasadena, California
Before: W. FLETCHER and IKUTA, Circuit Judges, and FREUDENTHAL,**
Chief District Judge.
FILED
SEP 14 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The Honorable Nancy Freudenthal, Chief United States District Judge
for the District of Wyoming, sitting by designation.

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Royal Alliance Associates, Inc. (“Royal”) appeals the district court’s grant
of Lorelei Mooney and Robert Schmiedeke’s (“Claimants”) Motion to Compel
Arbitration. We have jurisdiction under 28 U.S.C. § 1291. We reverse and remand
to the district court for entry of judgment in Royal’s favor.
The Financial Industry Regulatory Authority (“FINRA”) requires members
to arbitrate disputes with their customers. The sole question on appeal is whether
the Claimants are “customers” of Royal for purposes of FINRA Rule 12200. This
is a question of fact that we review for clear error. Knutson v. Sirius XM Radio
Inc., 771 F.3d 559, 564 (9th Cir. 2014).
Claimants’ allegations arise out of real estate securities that were purchased
by their trusts. Although Claimants first opened their accounts with United
Securities Alliance, Inc. (“United”), they allege that they are entitled to arbitration
because all of United’s customer accounts were transferred to Royal pursuant to a
2007 contract. The purchase agreement is ambiguous as to whether United
transferred Claimants’ accounts to Royal, and Claimants produced no evidence
beyond the words of the contract that their accounts were ever transferred from
United to Royal.
As the parties seeking to compel arbitration, Claimants bore the burden of
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showing that a valid agreement to arbitrate existed. Because Claimants failed to
carry that burden, we reverse and direct entry of judgment for Royal.
REVERSED AND REMANDED.
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