## Facts

- Lachin Hatemi opened a bank account with M&T Bank and signed an account agreement that included a broad arbitration clause governed by the Federal Arbitration Act (FAA).
- The arbitration clause required arbitration of any dispute or controversy arising out of or related to: (i) Hatemi’s account, (ii) any service M&T provided in connection with the account, (iii) either party’s obligations under the account agreement, or (iv) either party’s obligations under any other agreement relating to the account.
- Hatemi sued M&T in federal district court, alleging M&T improperly subscribed him to an overdraft-protection plan and charged overdraft-protection fees even though he claimed he never requested the service.
- M&T moved to compel arbitration and dismiss the complaint based on the account agreement’s arbitration clause.
- The district court denied M&T’s motion to compel arbitration and dismiss.
- On appeal, Hatemi contended there were factual disputes about whether a separate overdraft-protection agreement existed and, if it did, whether it was incorporated into the account agreement that contained the arbitration clause.

## Issues

1. Did Hatemi’s claims about alleged unauthorized overdraft-protection enrollment and related fees fall within the scope of the account agreement’s arbitration clause, even if a separate overdraft-protection agreement was disputed or absent?

## Decision

- The Second Circuit vacated the district court’s order denying M&T’s motion to compel arbitration and remanded.
- Because Hatemi did not dispute signing the account agreement containing the arbitration clause, the threshold showing of an arbitration agreement was satisfied.
- The court held the overdraft-protection dispute and the related fees were indisputably related to Hatemi’s account and to a service provided in connection with that account, and therefore were covered by the arbitration clause.
- The court ruled that arbitration was required regardless of whether the disputed overdraft-protection agreement was incorporated into the account agreement or even existed; any factual disputes about the existence or terms of overdraft protection and fee obligations could be raised and resolved in arbitration.

## Legal Principles

- Under the FAA, courts must enforce a valid arbitration agreement and send a dispute to arbitration when the dispute falls within the clause’s scope.
- A broad arbitration clause covering disputes “arising out of or related to” an account, account services, and obligations in the account agreement or other account-related agreements reaches claims tied to overdraft protection and associated fees.
- When the customer does not contest signing an account agreement that contains an arbitration clause, disputes about whether a separate, collateral agreement exists or is incorporated generally do not block arbitration if the claims are independently tied to the account or an account-connected service.
- Appellate review of a denial of a motion to compel arbitration is de novo, while underlying factual findings are reviewed for clear error.

## Conclusion

The Second Circuit held that Hatemi’s overdraft-protection fee claims were subject to arbitration under the broad arbitration clause in his signed account agreement because the dispute related to the account and account-connected services, and any disagreement about a separate overdraft-protection agreement did not prevent compelling arbitration; the court therefore vacated the denial of arbitration and remanded.


Hatemi v. M&T Bank, 633 F. App’x 47 (2016)