A judge halted legal proceedings in one of the civil suits against Compass Academy founder Jay Brooks, and the case is heading to arbitration, according to court documents.
Circuit Court Judge Doyet "Jack" Early on Monday signed an order granting Matson Money's motion to stay and to compel arbitration. The motion, which was filed in August, is a request made to a court in pending litigation to force a party to submit the dispute to arbitration, which is a dispute-resolution procedure that avoids taking a matter to court.
Matson Money Inc. is an Ohio-based investment company that is also listed as a defendant, along with Brooks, in a lawsuit filed January 2014 by Aiken residents Scott and Elizabeth Schrader. The Schraders in January 2011 executed an agreement with Brooks and Matson Money, the latter of which agreed to provide "discretionary investment management services" to the Schraders, managing an account of theirs valued at $80,000.
The suit states that the Schraders received a letter in August 2012 confirming that $80,000 had been transferred from their account into the account of a contractor who was building Compass Academy. The complaint states Brooks, "or someone on his behalf," forged the Schraders' signatures on the wire transfer letter of authorization.
The order filed this week states that "any controversy arising from or relating to this" agreement "will be submitted to and settled by arbitration in accordance with the rules then in effect of the American Arbitration Association."
Attorneys for Matson Money said in June that they intended to move for dismissal because of the mandatory arbitration clause in the agreement.
"Plaintiffs' counsel admitted that Plaintiffs did not file an affidavit to oppose Matson Money's position because they had read the arbitration clause before signing the Agreement," the order states. "It appears to the Court that there is a valid, enforceable contract that contains a mandatory arbitration provision whereby Plaintiffs agreed to arbitrate any dispute between the parties. Plaintiffs - despite admitting they read the arbitration clause in the Agreement - never proposed any changes to the Investment Management Agreement, never objected to any of its terms and dealt with Matson Money under the Investment Agreement from approximately January 2011 until November 2012, when Matson Money was removed as advisor from Plaintiffs' accounts.
"Therefore, Plaintiffs are bound by the terms of the Investment Management Agreement, including the mandatory arbitration provision."
Teddy Kulmala covers the crime and courts beat for the Aiken Standard and has been with the newspaper since August 2012. He is a native of Williston and majored in communication studies at Clemson University.