Securities when its assets were acquired by Prudential. Indeed, in concluding that "the card does not apply to the time before Dusch became a customer of Prudential," id. at *2, the court focused instead on the language of the purchase agreement between Prudential and Thompson McKinnon. See id. As previously noted, such an analysis is at odds with case law in this Circuit and in New York State.
For the foregoing reasons, this Court must defer to the arbitrators on the parties' disputes about the arbitrability of the claims of the Fakihs and Jones.*fn28
IV. Perry Reich
The facts as to Reich are entirely distinguishable, and the law thus compels a different result. Ryan Beck does not concede that it assumed Reich's Client Agreement with Gruntal; to the contrary, plaintiff argues that Reich never became its customer and that therefore those parties never entered into any arbitration agreement of any scope.
Under these circumstances, the parties' quarrel as to arbitrability may not be deferred to the arbitrators. As the Supreme Court has observed, "a gateway dispute about whether the parties are bound by a given arbitration clause raises a `question of arbitrability' for a court to decide." Howsam, 123 S.Ct. at 592; see ACEquip, 315 F.3d at 155 ("[t]he first type of factual scenario, involving the existence of the arbitration agreement itself, generally presents an issue for the court to decide."); John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964) (court must decide whether an arbitration clause survived a corporate merger and bound the resulting corporation); Calamia v. Riversoft, Inc., No. 02-CV-1094 (FB)(RML), 2002 WL 31779991, at *5 (E.D.N.Y. Dec. 13, 2002) ("Whether . . . a non-signatory[ ] should be deemed a party to the agreement, and hence a party to the arbitration clause, under any of the traditional principles of agency or contract law is an issue for the Court to decide.") This Court must therefore determine whether Ryan Beck is somehow bound to arbitrate Reich's claims against it.*fn29
A. Assumption/Estoppel (Reich's Customer Status)
The logical starting point in this analysis is an examination of the record to ascertain whether Reich's theory that he became a Ryan Beck customer is factually sustainable. in determining arbitrability in connection with a motion to prevent arbitration, "the court applies a standard similar to that applicable for a motion for summary judgment." Bensadoun, 316 F.3d at 175. Thus, in ruling on Ryan Beck's motion, the Court must review the record to determine whether there are any genuine issues of fact as to the making of an arbitration agreement with Reich, so as to require a hearing. See Fed.R.Civ.P. 56(c); Bensadoun, 316 F.3d at 175; cf. 9 U.S.C. § 4. In this regard, "[t]he Supreme Court has held that `the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.'" Opals on Ice Lingerie v. Body Lines Inc., 320 F.3d 362, 368 (2d Cir. 2003) (quoting Anderesoe v. Liberty Lobby, 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (emphasis in original)).
Judged by this standard, and with the evidence analyzed in light of New York contract law, Reich's submissions fail to create any genuine issue of material fact to support his theory that he, like his codefendants, became a customer of Ryan Beck, which thereby assumed the benefits and obligations of his Client Agreement.
"Under New York law, a contract for services that makes no specific provision for duration is presumed to be terminable at will." White Plains Towing Corp. v. Patterson, 991 F.2d 1049, 1062 (2d Cir. 1993). Reich's communications with Gruntal in March 2001,*fn30 and his subsequent transfer of all of the assets in his accounts to another brokerage firm, clearly and unequivocally indicated that he was terminating his relationship with Gruntal and rescinding Gruntal's authority to act on his behalf.*fn31 Such a severance need not be preceded by any particular verbal formulation. New York courts have held that a "broker/principal relationship and accompanying fiduciary duty can be severed by agreement of the parties or by unilateral action of the principal." Dubbs v. Stribling & Assocs., 96 N.Y.2d 337, 340, 728 N.Y.S.2d 413, 415, 752 N.E.2d 850 (2001) (citations omitted); see Aegis Prop. Servs. Corp. v. Hotel Empire Corp., 106 A.D.2d 66, 484 N.Y.S.2d 555, 561 (1st Dep't 1985) ("the right of the principal to terminate [the broker's] authority is absolute and unrestricted.") (citation and internal quotation marks omitted). "Authority created in any manner terminates when either party in any manner manifests to the other dissent to its continuance. . . ." Restatement (Second) of Agency § 119 (1985). Accordingly, "[a] revocation of an agent's authority . . . may be implied by words or conduct of a principal which are inconsistent with the continuation of authority." Whiting v. Marine Midland Bank-Western, 80 Misc.2d 871, 365 N.Y.S.2d 628, 644 (Sup.Ct. 1975); see also Savitsky v. Sukenik, 240 A.D.2d 557, 659 N.Y.S.2d 48, 50 (2d Dep't 1997) ("In general, abandonment of a contract need not be express, but may be inferred from the conduct of the parties and the attendant circumstances.") (citing Rosiny v. Schmidt, 185 A.D.2d 727, 587 N.Y.S.2d 929, 932 (1st Dep't 1992)).
Unquestionably, once Reich cancelled his contract with Gruntal, removed his funds, and opened accounts at another brokerage firm, his relationship with Gruntal came to an end; there was no open Gruntal account or existing contract for Ryan Beck to assume.
Notably, Reich proffers no sworn statement to the effect that he considered himself to be a Ryan Beck customer; indeed, when asked at his deposition to identify all his current and previous brokerage accounts, Ryan Beck was conspicuously absent from the list. See Reich Dep. (#90 [Ex.A]) at 6-7. That omission is entirely understandable, inasmuch as he does not dispute that he closed his Gruntal accounts, and transferred all of his assets to another firm, more than one year prior to the acquisition. See id. at 31-32; 1/21/03 Tr. at 85-89, 92, 110. Reich never maintained any assets at Ryan Beck, never engaged in any transactions through or with Ryan Beck, never received a monthly statement or other communication from Ryan Beck (apart from the "Dear Client Letter"), and had no dealings whatsoever with representatives of Ryan Beck. See Reich Dep. (#90 [Ex.A]) at 31-33; 1/21/03 Tr. at 89, 114-16.
"Under New York contract law, . . . [i]f there is no meeting of the minds on all essential terms, there is no contract. This is because an enforceable contract requires mutual assent to the essential terms and conditions thereof." Opals on Ice, 320 F.3d at 372 (quoting Schurr v. Austin Galleries of Ill., 719 F.2d 571, 576 (2d Cir. 1983)) (internal citations and quotation marks omitted). With respect to Reich and Ryan Beck, "it is clear from the record that there was no meeting of the minds, and no contract was ever formed." Opals on Ice, 320 F.3d at 371-72. Therefore, there was no agreement to arbitrate.
In spite of these facts and legal principles, Reich advances the notion of an "implied contractual relationship between Ryan, Beck and Perry Reich" (1/21/03 Tr. at 93), and asserts that he "must be deemed to have been a `customer' of Ryan, Beck." Reich Mem. (#105) at 1. In support of this argument, he cites his receipt of the "Dear Client Letter," and his ability to access his account information — showing a zero balance — through the Ryan Beck website sometime after April and prior to October 2002. See Reich Mem. (#105) at 1-2; 1/21/03 Tr. at 89.*fn32 However, plaintiff's unchallenged proof as to the applicable records retention policy refutes any inference that Gruntal's transfer of the file to Ryan Beck, Reich's receipt of the "Dear Client Letter," and the inclusion of his account information in the clearing firm's database, resurrected an otherwise dead account. See Gruntal & Co. v. Steinberg, 843 F. Supp. 1, 12 (D.N.J. 1994) (rejecting suggestion that the acquiring entity's "mere possession of documents relating to" the investors' account at the acquired entity `requires a finding" that the acquirer is "bound by" the predecessor's contract with the investors).
It is uncontroverted that Pershing LLC ("Pershing") — the clearing firm that served as the "back office" and handled "operational functions" for Gruntal and for Ryan Beck*fn33 — typically "maintains an account with the `closed' tesignation for approximately 18 months," during which time the customer would not be able to engage in transactions without first arranging to reopen the account. Pl. Supp. Br. (#90) at 6-7 (citing Tobin Dep. at 23-26). As Reich closed his accounts in April 2001, his name was not scheduled to be purged from the clearing firm's list of open and closed accounts until October 2002. See Pl. Supp. Br. (#90) at 7-8; Affidavit of Linda Scorsone in Support of Ryan, Beck's Motion for Summary Judgment ("Scorsone Aff." [#91]) at ¶ 3; DelleCave Aff. (#107) at ¶ 3. The "Dear Client Letter" was sent to all account-holders whose files had not yet been purged. For those whose accounts had been closed in 2002, the notification of the transfer had some significance, as those former Gruntal customers needed to be sent 1099 tax information forms in early 2003. Rather than delay the issuance of the "Dear Client Letters" by first creating a system to sort out those whose accounts had been closed but not yet purged, Pershing sent the letter to all Gruntal customers and former customers whose account information had not been purged. See Scorsone Aff. (#91) at ¶ 3; DellaCave Aff. (#107) at ¶ 3; Berson Aff. (#55) at ¶ 7.
In similar circumstances, also involving the Gruntal acquisition by Ryan Beck, the district court in Ryan Beck & Co. v. Campbell, No. 02 C 7016, 2002 WL 31696792 (N.D.Ill.Dec.2, 2002), reconsideration denied, 2003 WL 193524 (N.D.Ill. Jan.28, 2003), issued a preliminary injunction against further arbitration proceedings. Addressing the likelihood of Ryan Beck's success, the court observed:
We are convinced, at this point, that Ryan Beck never
entered into any agreement to arbitrate with
Campbell. Campbell withdrew all the assets in his
accounts at Gruntal by February 2002, months before
Ryan Beck acquired the customer accounts of Gruntal.
Campbell was never a client of Ryan Beck. No
contracts were executed between Campbell and Ryan
Beck. Based on this evidence, we find that Ryan Beck
is likely to prevail in proving that it did not enter
into an agreement to arbitrate disputes with