IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2024-CA-00156-COA
THE ESTATE OF ALTON BOLEWARE, A. APPELLANT REGNAL BLACKLEDGE, ADMINISTRATOR
v.
BRENDA McPHAIL AND PRIORITYONE BANK APPELLEES
DATE OF JUDGMENT: 12/14/2023 TRIAL JUDGE: HON. MATTHEW GORDON SULLIVAN COURT FROM WHICH APPEALED: COVINGTON COUNTY CIRCUIT COURT ATTORNEYS FOR APPELLANT: ORVIS A. SHIYOU JR. COREY DANIEL GIBSON TISDALE CHRISTIAN SHIYOU ATTORNEYS FOR APPELLEES: NOAH LEE SANFORD C. PHILLIP BUFFINGTON CLAIRE DULANEY WILLIAMS NATURE OF THE CASE: CIVIL - WILLS, TRUSTS, AND ESTATES DISPOSITION: AFFIRMED AS MODIFIED - 04/08/2025 MOTION FOR REHEARING FILED:
BEFORE CARLTON, P.J., WESTBROOKS AND EMFINGER, JJ.
CARLTON, P.J., FOR THE COURT:
¶1. The Estate of Alton Boleware (the Estate) filed a complaint against PriorityOne Bank
and Brenda McPhail (collectively, Appellees) claiming that McPhail misappropriated funds
that belonged to Alton Boleware, the deceased. PriorityOne Bank filed a motion to stay
litigation and compel arbitration, arguing that Boleware entered into a Deposit Account
Agreement with the bank that contained a provision requiring mediation and arbitration of
certain disputes (Arbitration Addendum).
¶2. After a hearing on the matter, the Covington County Circuit Court found that the Arbitration Addendum was valid and that the Estate’s claims against the Appellees were
within the scope of the arbitration agreement. The circuit court also determined that the
Estate failed to meet its burden of proving the existence of any contract defenses that would
invalidate the Arbitration Addendum. The circuit court accordingly granted the motion to
stay litigation and compel arbitration.
¶3. The Estate now appeals, arguing that the circuit court erred in submitting the matter
to arbitration because Boleware lacked the mental capacity to enter into the Deposit Account
Agreement and because McPhail and an employee of PriorityOne Bank had unduly
influenced Boleware into creating a joint account with McPhail. The Estate further asserts
that because McPhail is a third party to the Deposit Account Agreement, the circuit court
erred in compelling arbitration as to the Estate’s claims against McPhail.
¶4. After our review, we find that the circuit court did not err in staying litigation and
compelling arbitration. However, we clarify that pursuant to the arbitration agreement in this
case, an arbitrator, not a court, must decide the threshold question of whether the Estate’s
claims against the Appellees are within the scope of the arbitration agreement. We therefore
affirm the circuit court’s judgment as modified.
FACTS
¶5. In July 2022, the Estate filed a complaint against the Appellees alleging conversion,
embezzlement, detrimental reliance, unjust enrichment, breach of fiduciary duty, and fraud
stemming from McPhail’s allegedly improper disbursement of funds from Boleware’s bank
account at PriorityOne Bank.
2 ¶6. In the complaint, the Estate alleged that Boleware’s sister, Linda, had deposited
approximately $350,000 into an account with PriorityOne Bank. The account was listed in
Linda’s name and payable on death to Boleware. On December 30, 2019, Linda died.
According to the complaint, the next day, McPhail, who was Linda’s close friend, called
Boleware and informed him that someone from PriorityOne Bank had contacted her and
asked her to bring him to the bank to sign some documents. McPhail picked up Boleware
from his home and drove him to PriorityOne Bank. Boleware stayed inside McPhail’s
vehicle, and a bank employee brought a Deposit Account Agreement to McPhail’s vehicle
for Boleware to sign. The Deposit Account Agreement contained an arbitration-mediation
provision. Boleware signed the documents, which authorized PriorityOne Bank to place the
$350,000 from Linda’s account into a joint account for McPhail and Boleware. McPhail then
changed the address listed on the account from Boleware’s address to her address.
¶7. The Estate claimed that Boleware was unaware of the balance of the account and
repeatedly asked McPhail about it. McPhail told Boleware that Linda left him $10,000 and
that she left the remaining amount to charity upon her death. The Estate alleged, however,
that McPhail actually withdrew the remaining funds from the account and used them for her
own benefit and the benefit of others, to the exclusion of Boleware. After Boleware died in
2020, the Estate discovered that the funds were missing. The Estate claimed that Boleware
was vulnerable and lacking full mental capacity and that he detrimentally relied upon the
misrepresentations by McPhail and an employee at PriorityOne Bank.
¶8. On October 3, 2022, PriorityOne Bank filed a motion to compel mediation or
3 arbitration and stay the proceedings, arguing that the Estate’s claims were subject to
mediation or arbitration because Boleware executed a valid, binding Deposit Account
Agreement that contained an arbitration provision. PriorityOne attached the Deposit Account
Agreement and Arbitration Addendum to its motion. The Arbitration Addendum provides,
in pertinent part, as follows:
The parties hereto agree that any and all disputes, claims and controversies between them, whether individual, joint, or class in nature arising out of or in any way related to this agreement, services, transactions or otherwise, including with limitation contract and tort disputes . . . shall be resolved by mediation or binding arbitration in the State of Mississippi.
The Arbitration Addendum also reflects that the parties “agree first to try in good faith to
settle the dispute by mediation . . . .” However, “[i]f mediation does not result in settlement
within thirty (30) days, either party may provide written notice to the other of the parties’
intention to arbitrate the dispute and upon written demand for arbitration, the dispute shall
be submitted to arbitration . . . .” The Arbitration Addendum further provides that
[t]his arbitration provision is made pursuant to a transaction involving interstate commerce and the Federal Arbitration Act (FAA) shall apply to the construction, interpretation and enforceability of this arbitration provision . . . . Any dispute as to whether a particular claim or dispute is subject to arbitration under this section shall be decided by the arbitrator.
¶9. The Estate filed an opposing motion arguing that the Deposit Account Agreement and
its arbitration provision was invalid because Boleware entered into the agreement as a result
of fraud and undue influence. The Estate claimed that Boleware “lacked the capacity to
understand and agree to the [Deposit Account Agreement and its Arbitration Addendum]”
because Boleware had a “known general weakness of intellect” and was “undergoing cancer
4 treatments[.]” The Estate also argued that its claims for relief fell outside of the scope of the
Arbitration Addendum.
¶10. PriorityOne Bank filed a response and asserted that the Estate failed to provide any
evidence in support of its claim that Boleware lacked mental capacity to enter into the
Deposit Account Agreement. PriorityOne Bank argued that “an abundance of evidence”
shows that Boleware possessed the requisite legal capacity to enter into the Deposit Account
Agreement. In support of its argument, PriorityOne Bank attached the following exhibits to
its motion: (1) a decree from the chancery court adjudicating Boleware to be “of sound and
[disposing] mind, memory[,] and understanding and vested with the legal right to execute”
his Last Will and Testament on October 13, 2020; (2) the affidavits of the two subscribing
witnesses who witnessed Boleware execute his Last Will and Testament and testified under
oath that Boleware was “of sound and disposing mind and memory”; (3) Boleware’s General
Power of Attorney and Durable Power of Attorney for Health Care executed on January 23,
2020; (4) a warranty deed conveying real property executed by Boleware on March 20, 2020;
(5) the affidavit of Tommy Rogers, the attorney who prepared Boleware’s Last Will and
Testament, powers of attorney, and the warranty deed, stating that based upon his interactions
with Boleware, he found Boleware “to be fully competent, of sound and disposing mind and
memory, fully appreciative and understanding of the terms of the aforesaid instruments, and
under no duress or threat”; and (6) the affidavit of Kimberly Chain, the PriorityOne Bank
employee who spoke with Boleware and witnessed his execution of the Deposit Account
Agreement, which contained the Arbitration Addendum, stating that Boleware appeared to
5 be “physically alert and attentive” during the conversation about the account and “appeared
to be of sound mind and capable of making the decision to sign the [Deposit] Account
Agreement.” Chain also stated that she did not observe “any signs, symptoms or indications
that made [her] believe [Boleware] was mentally incapable of making decisions about his
finances or the account,” nor did she observe “any threats, coercion, or pressure on
[Boleware] to sign the [Deposit] Account Agreement.”
¶11. After a hearing on the matter, the circuit court entered its judgment granting the
Appellees’ motion to compel arbitration and stay the proceedings pending a resolution of
arbitration. The circuit court explained that the Arbitration Addendum required “all disputes,
claims, and controversies between [the Parties] . . . arising out of or in any way related to this
[Deposit Account] Agreement, services, transactions or otherwise, including without
limitation contract and tort disputes . . . shall be resolved by mediation or binding arbitration
in the State of Mississippi.” The Arbitration Addendum also provided that any dispute as to
whether a particular claim is subject to arbitration “shall be decided by the arbitrator.” The
circuit court found that based on the evidence presented, Boleware possessed the legal
capacity to enter into the Deposit Account Agreement on December 31, 2019, and therefore
the Deposit Account Agreement is valid. The circuit court also found the Estate’s claims
against PriorityOne Bank and McPhail fell within the scope of the Deposit Account
Agreement’s Arbitration Addendum. Finally, the circuit court determined that the Estate
failed to set forth sufficient facts or a legal basis to support a finding that contract defenses
such as fraud, duress, or unconscionability would preclude the enforcement of the Arbitration
6 Addendum.
¶12. The Estate now appeals.
STANDARD OF REVIEW
¶13. We review de novo the grant of a motion to compel arbitration. Bank of Holly Springs
v. Puryear ex rel. Est. of Brown, 309 So. 3d 598, 602 (¶12) (Miss. Ct. App. 2020). “We
follow the federal policy favoring arbitration. Therefore, any doubts concerning the scope
of arbitrable issues should be resolved in favor of arbitration.” Id. (citation and internal
quotation marks omitted).
DISCUSSION
I. Whether the circuit court erred in granting the Appellees’ motion to compel arbitration.
¶14. On appeal, the Estate argues that the circuit court erred in granting PriorityOne Bank’s
motion to stay the proceedings and compel arbitration. The Estate maintains that the
arbitration provision of the Deposit Account Agreement is invalid because Boleware lacked
the mental capacity to enter into the agreement and that Boleware entered into the Deposit
Account Agreement as a result of undue influence and fraud by McPhail and an employee
of PriorityOne Bank.
¶15. When determining whether a party is bound to arbitration, we apply a two-prong
inquiry. Belhaven Senior Care LLC v. Smith, 359 So. 3d 612, 616 (¶10) (Miss. 2023). First,
we determine if a valid arbitration agreement exists; if so, we then consider whether “the
parties’ dispute is within the scope of the arbitration agreement.” Id. If both questions in the
first prong are answered in the affirmative, we move to the second prong and ask “whether
7 legal constraints external to the parties’ agreement foreclosed arbitration of those claims.”
Gregory Meridian Acquisition LLC v. McFarland, 386 So. 3d 381, 386 (¶9) (Miss. Ct. App.
2023).
A. Whether the parties agreed to arbitrate the dispute.
¶16. In determining whether the parties are bound to arbitration, we must first determine
if a valid arbitration agreement exists. Belhaven Senior Care, 359 So. 3d at 616 (¶10). If we
find that a valid agreement exists, we then determine whether the parties’ dispute is within
the scope of the arbitration agreement. Id.
¶17. “To determine if the arbitration agreement is valid, we apply contract law to analyze
whether a valid contract exists between the parties.” Caplin Enters. Inc. v. Arrington, 145
So. 3d 608, 613 (¶9) (Miss. 2014). “The elements of a contract are (1) two or more
contracting parties, (2) consideration, (3) an agreement that is sufficiently definite, (4) parties
with legal capacity to make a contract, (5) mutual assent, and (6) no legal prohibition
precluding contract formation.” Id. (internal quotation marks omitted). At issue before us
is whether Boleware possessed the legal capacity to make a contract.
¶18. The Estate argues that Boleware lacked the mental capacity to enter into the Deposit
Account Agreement, and therefore the agreement, including the Arbitration Addendum, is
invalid. This Court has explained that “[t]he law presumes a person sane and mentally
capable to enter into a contract. The burden is upon the party seeking to avoid an instrument
on the ground of insanity or mental incapacity to establish it by a preponderance of proof.”
Magee Cmty. Care Ctr. LLC v. Perkins, 333 So. 3d 34, 41 (¶20) (Miss. Ct. App. 2021).
8 “Thus, [the Estate] was required to rebut the presumption of requisite mental capacity and
show by a preponderance of the evidence that [Boleware] was mentally incapable of entering
into [the Deposit Account Agreement].” Id.
¶19. In support of its argument that Boleware lacked the mental capacity to enter into the
Deposit Account Agreement, the Estate claims that Boleware had a “known general
weakness of intellect” and that he was “undergoing cancer treatments.” Our review of the
record reflects that the Estate failed to provide any evidence in support of its claims.
¶20. To the contrary, PriorityOne Bank provided numerous exhibits in the circuit court
proceedings that showed Boleware possessed the legal mental capacity to enter into the
Deposit Account Agreement. The exhibits reflect that Boleware executed the General Power
of Attorney and the Durable Power of Attorney for Health Care in January 2020, just one
month after he entered into the Deposit Account Agreement. Boleware also executed a
warranty deed in March 2020. The attorney who drafted these instruments signed an
affidavit confirming that based on his interactions with Boleware, he found Boleware to be
fully competent and understanding of the terms of the instruments and under no duress or
threat at the time of execution. In October 2020, shortly before his death and less than a year
after entering into the Deposit Account Agreement, Boleware executed his Last Will and
Testament. The chancellor’s decree admitting Boleware’s Last Will and Testament for
probate found that Boleware “was of sound and [disposing] mind, memory[,] and
understanding” at the time he executed the will. The subscribing witnesses to Boleware’s
will signed affidavits confirming that at the time he executed his will, Boleware was of sound
9 and disposing mind. After reviewing these exhibits, as well as Chain’s affidavit describing
Boleware’s demeanor and mental capacity at the time he entered into the Deposit Account
Agreement, the circuit court held that “the evidence supports that [Boleware] had the legal
capacity to enter into the [Deposit Account Agreement,] . . . and therefore, the Agreement
is valid.”
¶21. After reviewing the record, we find that the Estate failed to meet its burden of
“rebut[ting] the presumption of requisite mental capacity and show[ing] by a preponderance
of the evidence that [Boleware] was mentally incapable of entering into [the Deposit Account
Agreement].” Id. We therefore find that a valid arbitration agreement exists.
¶22. Because we find that a valid arbitration agreement exists, our next consideration is
whether the Estate’s claims are within the scope of the arbitration agreement. Belhaven
Senior Care, 359 So. 3d at 616 (¶10). The Estate and the Appellees disagree over whether
the Estate’s claims fall within the scope of the Arbitration Addendum. However, “before we
determine whether [the Estate’s] claims are within the scope of the arbitration agreement, we
must first determine who—a court or an arbitrator—should decide that issue.” Bank of Holly
Springs, 309 So. 3d at 603 (¶14) (citing Greater Canton Ford Mercury Inc. v. Ables, 948 So.
2d 417, 421 (¶11) (Miss. 2007)). The Arbitration Addendum in the case before us is
governed by the FAA; therefore, “we are bound by the decisions of the United States
Supreme Court” on this issue. Id. This Court has recognized that “[t]he question whether
a particular dispute is subject to arbitration is generally considered an issue for the courts, not
the arbitrator, unless the parties clearly and unmistakably provide otherwise.” Id. (internal
10 quotation marks omitted). “In other words, when the parties have explicitly agreed that the
question of arbitrability is to be decided by an arbitrator rather than the court, that agreement
must be interpreted by an arbitrator.” Id.
¶23. In granting the Appellees’ motion to compel arbitration, the circuit court found that
the Estate’s claims, including its tort claims, fall within the scope of the Arbitration
Addendum. The circuit court explained that the Arbitration Addendum states that its
provisions “apply to all disputes arising from the [Deposit Account] Agreement, services,
transactions, or otherwise, including tort disputes.”
¶24. However, the Arbitration Addendum clearly provides that “[a]ny dispute as to whether
a particular dispute or claim is subject to arbitration under this section shall be decided by
the arbitrator.” We therefore find that “the parties clearly and unmistakably agreed that an
arbitrator, not a court, would decide any dispute concerning the scope of the arbitration
agreement and the arbitrability of any claim.” Id. at 604 (¶18); see also Ables, 948 So. 2d at
422-23 (¶¶14-16); Swindle v. Harvey, 23 So. 3d 562, 570-71 (¶¶22-24) (Miss. Ct. App.
2009). Although the circuit court correctly granted the Appellees’ motion to stay litigation
and compel arbitration, an arbitrator must determine whether the Estate’s claims against the
Appellees are within the scope of the Arbitration Addendum.
B. Whether any external legal constraints bar enforcement of the arbitration agreement.
¶25. The second prong in determining whether parties are bound to arbitration requires us
to ask “whether legal constraints external to the parties’ agreement foreclosed arbitration of
those claims.” Gregory Meridian Acquisition, 386 So. 3d at 386 (¶9). “Under the second
11 prong, applicable contract defenses available under state contract law such as fraud, duress,
and unconscionability may be asserted to invalidate the arbitration agreement without
offending the [FAA].” E. Ford Inc. v. Taylor, 826 So. 2d 709, 713 (¶10) (Miss. 2002). As
the party resisting arbitration, the Estate “carries the burden of proving that a contract defense
is applicable.” St. Dominic Ambulatory Surgery Ctr. LLC v. Shaffer, 329 So. 3d 509, 514
(¶13) (Miss. Ct. App. 2021).
¶26. The Estate argues that McPhail and an employee of PriorityOne Bank engaged in
fraudulent acts and unduly influenced Boleware to execute the agreement and create a joint
account with McPhail. The Estate submits that enforcing the Arbitration Addendum is
unconscionable because Boleware lacked the mental capacity to enter into the Deposit
Account Agreement.
¶27. The Mississippi Supreme Court has held that “[t]he doctrine of unconscionability
applies only to the most egregious of contractual situations.” LAGB LLC v. Total Merch.
Servs. Inc., 284 So. 3d 720, 727 (¶17) (Miss. 2019). “An unconscionable contract is one
such as no man in his senses and not under a delusion would make on the one hand, and as
no honest and fair man would accept on the other.” Id. (internal quotation marks omitted).
“Procedural unconscionability is established by showing a lack of knowledge, lack of
voluntariness, inconspicuous print, the use of complex legalistic language, disparity in
sophistication or bargaining power of the parties and/or a lack of opportunity to study the
contract and inquire about the contract terms.” Id. (internal quotation marks omitted).
¶28. On appeal, the Estate does not argue that the terms of the Arbitration Addendum or
12 Deposit Account Agreement are unconscionable; rather, the Estate argues that it would be
unconscionable for this Court to compel arbitration because Boleware was fraudulently and
unduly influenced into entering the Deposit Account Agreement. The Estate bases its
argument on its claim that Boleware lacked the mental capacity to enter into the Deposit
Account Agreement. As discussed above, the Estate failed to provide any evidence in
support of its claim that Boleware lacked the mental capacity to enter into the Deposit
Account Agreement. Moreover, the evidence in the record supports the circuit court’s
finding that Boleware possessed the requisite mental capacity to enter into the Agreement.
¶29. Additionally, the supreme court has held:
A claim that a party was fraudulently induced to enter into a contract is not a sufficient basis for a trial judge to usurp the authority of the arbitrator to decide the issue, because federal law has clearly established that allegations of fraud in the inducement of a contract as a whole must be submitted to arbitration.
Va. Coll. LLC v. Blackmon, 109 So. 3d 1050, 1054 (¶13) (Miss. 2013). Therefore, “[w]e will
not invalidate an arbitration provision on the basis of fraudulent inducement, unless the
complaint specifically and clearly alleges the party was fraudulently induced to enter into the
agreement to arbitrate[.]” Id. This claim “must be independent of any fraud inducing the
contract as a whole—and the claim must be pleaded with particularity.” Id.
¶30. Here, the Estate claims the Deposit Account Agreement as a whole—and not just the
Arbitration Addendum—was the result of fraud. Therefore, based on the particular facts of
this case, we decline to invalidate the Arbitration Addendum on the basis of the Estate’s
unsupported claim that McPhail and an employee of PriorityOne Bank fraudulently induced
Boleware to enter into the Deposit Account Agreement.
13 ¶31. After our review, we find that the Estate failed to meet its burden of proving the
existence of any contract defenses that would invalidate the Arbitration Addendum. We
therefore find no legal constraints external to the Deposit Account Agreement and its
Arbitration Addendum that would preclude arbitration.
II. Whether the circuit court erred in ordering the Estate’s claims against McPhail to be arbitrated.
¶32. Finally, the Estate argues that the circuit court erred in ordering the Estate’s claims
against McPhail to be arbitrated. The Estate maintains that McPhail is a third-party
beneficiary to the Deposit Account Agreement, and therefore she lacked standing to compel
arbitration of the Estate’s claims against her.
¶33. However, the Deposit Account Agreement reflects that Boleware and McPhail created
a joint account with the right of survivorship at PriorityOne Bank. Both Boleware and
McPhail signed the Deposit Account Agreement as account owners. Therefore, McPhail is
not a third-party beneficiary but, rather, a signatory and a party to the Deposit Account
Agreement.
¶34. As stated, the Arbitration Addendum reflects that “the parties” to the Deposit Account
Agreement—here, Boleware, McPhail, and PriorityOne Bank—“agree that any and all
disputes, claims and controversies between them, whether individual, joint, or class in nature,
arising out of or in any way related to this agreement, services, transactions or otherwise,
including without limitation contract and tort disputes[,] . . . shall be resolved by mediation
or binding arbitration . . . .” Because McPhail is a party to the Deposit Account Agreement,
we find that the circuit court did not err in ordering the Estate’s claims against McPhail into
14 arbitration.
CONCLUSION
¶35. After our review, we find that the circuit court did not err in granting the Appellees’
motion to stay and compel arbitration. However, we clarify that the judgment is modified
to reflect that an arbitrator must decide the threshold question of whether the Estate’s claims
against the Appellees are within the scope of the arbitration agreement. We therefore affirm
the circuit court’s judgment as modified.
¶36. AFFIRMED AS MODIFIED.
BARNES, C.J., WILSON, P.J., WESTBROOKS, LAWRENCE, McCARTY, EMFINGER, WEDDLE AND ST. PÉ, JJ., CONCUR. McDONALD, J., CONCURS IN RESULT ONLY WITHOUT SEPARATE WRITTEN OPINION.