Wade Harvey, Ex Rel. Alexis Breanna Gladden v. Cumberland Trust And Investment Company
This interlocutory appeal addresses whether a trustee's signature on an investment/brokerage account agreement, containing a predispute arbitration provision, binds the trust beneficiary. The Tennessee Supreme Court held that the Tennessee Uniform Trust Code grants trustees broad authority to enter such agreements, provided the trust instrument does not prohibit it. The Court found the Trust Instrument in this case authorized the Trustee to execute the client agreement, including the arbitration provision. However, it clarified that a nonsignatory third-party beneficiary is only bound to arbitration for claims that seek to enforce the contract. The Court reversed the Court of Appeals' decision and vacated the trial court's order compelling arbitration of all claims, remanding the case for a determination of which claims, if any, asserted by the trust beneficiary seek to enforce the Client Agreement.