Access Funding v. Linton

Access Funding, LLC, et al. v. Chrystal Linton, et al., No. 5, September Term, 2022 ARBITRATION – EXISTENCE OF AGREEMENT TO ARBITRATE – FRAUD – TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS – Court of Appeals reaffirmed that question of whether valid agreement to arbitrate exists is question for trial court, not arbitrator, to determine. It is well settled that where party denies existence of valid agreement to arbitrate, court—not arbitrator—determines if agreement exists. Court held that where respondents alleged trial court’s approval of transfer of their structured settlement payment rights was procured through fraud and deceit, respondents denied existence of valid arbitration agreement and question of whether valid arbitration agreement exists is question for court to determine, not arbitrator. Because respondents alleged fraud as to arbitration clause in agreement in particular, existence of valid arbitration agreement is in dispute and issue of existence of agreement to arbitrate is matter for court to decide.

In addition, because plain language of arbitration clause expressly conditions arbitration on closure of transaction, by challenging validity of court’s approval of transfer, respondents challenge existence of agreement to arbitrate, which is issue for court and not arbitrator to determine. In other words, for variety of reasons, Court concluded that trial court erred in compelling arbitration of question of whether arbitration clause in agreements is valid. Circuit Court for Baltimore City Case No. 24-C-16-003894 Argued: September 9, 2022 IN THE COURT OF APPEALS OF MARYLAND No. 5 September Term, 2022 ______________________________________ ACCESS FUNDING, LLC, ET AL. v. CHRYSTAL LINTON, ET AL. ______________________________________ Watts Hotten Booth Gould Eaves Adkins, Sally D. (Senior Judge, Specially Assigned) McDonald, Robert N.

(Senior Judge, Specially Assigned), JJ. ______________________________________ Opinion by Watts, J. Gould, J., dissents. ______________________________________ Filed: December 1, 2022 Pursuant to the Maryland Uniform Electronic Legal Materials Act (§§ 10-1601 et seq. of the State Government Article) this document is authentic. 2023-06-15 11:49-04:00 Gregory Hilton, Clerk Generally used to resolve tort cases, structured settlements are voluntary agreements under which an injured party receives periodic payments, rather than one lump sum payment, as settlement of a claim. With a structured settlement, the party providing the settlement buys an annuity that provides regular payments to the injured party over time. The theory is that spreading payments over an extended period of time will provide better assurance of future financial stability for an injured party, who may need payment for medical bills or be vulnerable as a result of an injury.1 The use of structured settlements first became popular in the 1980s as a result of a federal tax incentive framework introduced to encourage use of such settlements. See James Gordon, Enforcing and Reforming Structured Settlement Protection Acts: How the Law Should Protect Tort Victims, 120 Colum.

L. Rev. 1549 , 1552 (2020). Because structured settlements are transferrable assets, the buying and selling of structured settlements became a highly profitable venture. See id. A Maryland statute regulates the sale of structured settlement payment rights and requires court authorization of the transfer of such rights, upon the court’s consideration of factors, including whether the party purporting to transfer structured settlement rights has received independent professional advice.

See Md. Code Ann., Cts. & Jud. Proc. (1974, 2020 Repl. Vol.) (“CJ”) § 5-1102.

Companies that are in the business of purchasing payment rights from structured settlement annuitants are called factoring companies. 1 A structured settlement provides a series of tax-free payments to the recipient of such a settlement and is intended to provide long-term financial security to an injured party. See, e.g., Linton v. Consumer Prot. Div., 467 Md. 502, 525 , 225 A.3d 456, 470 (2020) (Booth, J., dissenting). Factoring companies often use contracts called Purchase and Sale Agreements to consummate the purchase of structured settlements.

These agreements generally contain arbitration clauses. The arbitration clause at issue in this case stems from transactions between lead paint tort plaintiffs who received structured settlements and affiliated factoring companies that specialize in purchasing structured settlement rights. Although the case raises interesting questions concerning arbitration and agreements transferring structured settlement benefits for lump sum payments, at the heart of the matter is a straightforward issue: Whether in bringing an action against a factoring company and others, the plaintiffs challenged the existence of an agreement to arbitrate and, if so, whether the trial court erred in granting a motion to compel arbitration upon finding that an arbitrator was to determine “arbitrability.” The Court of Special Appeals was not persuaded by the position that an arbitrator should decide the issue of whether a valid agreement to arbitrate exists, and neither are we. In this case, Crystal Linton2 and Dimeca D. Johnson, Respondents, who had been lead paint tort plaintiffs, obtained structured settlements with periodic payments over time as the resolution of lead paint exposure claims.

Subsequently, Linton and Johnson signed agreements purporting to transfer their rights to the structured settlement payments to Access Funding, LLC and Assoc, LLC in exchange for discounted lump sum cash payments. Later, Linton and Johnson filed a class action complaint in the Circuit Court for 2 With the exception of the caption of this case, Linton’s first name appears in the record as “Crystal,” not “Chrystal.” -2- Baltimore City against Access Funding, LLC, and its affiliates Access Holding, LLC, Reliance Funding, LLC, Assoc, LLC, and En Cor, LLC (collectively, “Access”), Anuj Sud and Sudlaw, LLC (collectively, “Sud”), and Charles E. Smith and CES Law Group, LLC (collectively, “Smith”), Petitioners, alleging negligence; negligent misrepresentation; fraud, misrepresentation, and deceit; constructive fraud; and civil conspiracy in connection with procurement of the agreements. Because the agreements contained arbitration clauses, Petitioners filed motions to compel arbitration and to stay the proceedings. Before the circuit court ruled on the motion to compel arbitration, the parties filed a joint motion for approval of a class action settlement.

While the joint motion was pending, the Consumer Protection Division of the Office of the Maryland Attorney General (“the CPD”), Respondent, moved to intervene in the case, and the circuit court granted the motion. As an intervenor, the CPD opposed the joint motion to approve the settlement.3 Nonetheless, after a hearing, in February 2018, the circuit court approved the settlement. The Court of Special Appeals reversed the circuit court’s approval of the settlement, and this Court affirmed the judgment of the Court of Special Appeals, see Linton v. Consumer Prot. Div., 467 Md. 502, 521 , 225 A.3d 456, 467 (2020) (“Linton I”), resulting in the case being remanded to the circuit court for further 3 Before Linton and Johnson filed the class action complaint, the CPD had filed an enforcement action against Access, alleging that Access had engaged in unfair or deceptive trade practices in violation of the Maryland Consumer Protection Act.

Six months after Linton and Johnson filed the complaint, the Federal Consumer Financial Protection Bureau initiated an action in federal court against the same defendants. -3- proceedings.4 On remand, Petitioners renewed the motions to compel arbitration and stay the proceedings. The circuit court granted the motions, ruling that the question of “arbitrability” must be determined by an arbitrator and not the court. The Court of Special Appeals reversed and remanded the case to the circuit court for further proceedings, holding that the circuit court erred in compelling arbitration because a court, not an arbitrator, must decide the question of whether a valid arbitration agreement exists. See Linton v. Access Funding, LLC, 253 Md. App. 507 , 510, 517, 526, 268 A.3d 937 , 939, 943, 948 (2022).

Petitioners filed the instant petition for a writ of certiorari, which we granted. See Access Funding, LLC v. Linton, 478 Md. 244 , 273 A.3d 890 (2022). Against this backdrop, as to the predominant issue in this case, we hold that where Linton and Johnson alleged that the circuit court’s approval of the transfer of their structured settlement payment rights was procured through fraud and deceit, Linton and Johnson denied the existence of a valid agreement to arbitrate, and the question of whether a valid arbitration agreement exists is a question for the court to determine, not the arbitrator. Because Linton and Johnson alleged fraud as to the arbitration clause of the agreement in particular, the existence of a valid arbitration agreement is in dispute and the issue is a matter for the court to decide.

In addition, because the plain language of the arbitration clause expressly conditions arbitration on closure of the transaction, by 4 In Linton I, 467 Md. at 521, 523-24 , 225 A.3d at 467, 469 , this Court concluded that provisions in the settlement were unenforceable because they purported to preclude the CPD from pursuing remedies such as disgorgement and restitution and, as such, directly contravened the CPD’s statutory authority to sanction Access for its wrongful conduct. -4- challenging the validity of the circuit court’s approval of the transfer, Linton and Johnson challenge the existence of an agreement to arbitrate, which is an issue for the court, and not an arbitrator, to determine. We conclude that the question of whether an agreement to arbitrate exists, i.e., whether the arbitration clause in the agreements is valid, has been raised and is a question for the circuit court, not the arbitrator, to determine. It is well settled that where a party denies the existence of an arbitration agreement, the court—not an arbitrator—determines if the agreement exists. In this case, we conclude that the circuit court erred in compelling arbitration of the question of whether the arbitration clause in the agreements is valid.

Accordingly, we affirm the judgment of the Court of Special Appeals. BACKGROUND This case has a lengthy factual and procedural history which was set forth in Linton I. See Linton I, 467 Md. at 505-15 , 225 A.3d at 458-64 . We need describe only the background relevant to resolution of the issue before us, namely, whether the court or an arbitrator must decide the validity of the arbitration clause in the agreements. Structured Settlements We begin with a brief overview of Maryland law with respect to structured settlement transactions.

In 2000, seeking to protect vulnerable consumers and to ensure fairness in the transactions, the General Assembly enacted the Maryland Structured Settlement Protection Act (“the MSSPA”). See 2000 Md. Laws 2076 (Vol. III, Ch. 366, H.B. 357); CJ §§ 5-1101 to 5-1112. The Fiscal Note of House Bill 357, which became the MSSPA, stated that the purpose of the bill was as follows: -5- This bill provides that a direct or indirect transfer of structured settlement payment rights is effective if the transfer has been authorized in an order of a court based on a finding that: • the transfer is necessary, reasonable, or appropriate; • the transfer is not expected to subject the payee, the payee’s dependents, or both to undue or unreasonable financial hardship in the future; • the payee received independent professional advice regarding the legal, tax, and financial implications of the transfer; and • the transferee disclosed to the payee the discounted present value.

Fiscal Note (Revised), H.B. 357 (2000), available at https://mgaleg.maryland.gov/2000rs/ fnotes/bil_0007/hb0357.PDF [https://perma.cc/YX8P-UYHD]. The MSSPA provides that a “structured settlement” is “an arrangement for periodic payment of damages for personal injury established by a settlement or judgment in resolution of a tort claim[.]” CJ § 5-1101(i)(1). The MSSPA states that “structured settlement payment rights” are “the rights to receive periodic payments, including lump- sum payments under a structured settlement, whether from the settlement obligor or the annuity issuer, if[,]” among other things, “[t]he structured settlement agreement was approved by a court or responsible administrative authority in this State[.]” CJ § 5-1101(l). Pursuant to CJ § 5-1102(a), “[a] direct or indirect transfer of structured settlement payment rights to a transferee is effective as provided in th[e] subtitle.” Under CJ § 5-1102(b), “[a] structured settlement obligor or annuity issuer may not make any payment directly or indirectly to a transferee of structured settlement payment rights unless the transfer is authorized in an order of a court based on” several findings. -6- At the time of the transfers at issue in this case, Md. Code Ann., Cts. & Jud.

Proc. (1974, 1998 Repl. Vol., 2000 Supp.) § 5-1102(b) required that the court not authorize a transfer unless the court made findings that: (1) The transfer is necessary, reasonable, or appropriate; (2) The transfer is not expected to subject the payee, the payee’s dependents, or both, to undue or unreasonable financial hardship in the future; (3) The payee received independent professional advice regarding the legal, tax, and financial implications of the transfer; and (4) The transferee disclosed to the payee the discounted present value. 2000 Md. Laws 2079 (Vol. III, Ch. 366, H.B. 357).

Also, at the time of the transfers in this case, the MSSPA defined “independent professional advice” as follows: “Independent professional advice” means advice of an attorney, certified public accountant, actuary, or other licensed professional adviser: (1) Who is engaged by a payee to render advice concerning the legal, tax, and financial implications of a transfer of structured settlement payment rights; (2) Who is not affiliated with or compensated by the transferee of the transfer; and (3) Whose compensation is not affected by whether a transfer occurs. Md. Code Ann., Cts. & Jud. Proc. (1974, 1998 Repl.

Vol., 2000 Supp.) § 5-1101(c); 2000 Md. Laws 2077 (Vol. III, Ch. 366, H.B. 357). In 2016, after the transfers in this case occurred, the General Assembly amended the MSSPA to increase the protections for transferors of structured settlements. See 2016 Md. Laws 7391 -7404 (Vol.

IX, Ch. 721, H.B. 535); 2016 Md. Laws 7404 -17 (Vol. IX, Ch. 722, -7- S.B. 734). Among other things, the General Assembly added a provision stating “that it is necessary to regulate transfers of structured settlement payment rights to: (1) Ensure that the transfers are effectuated on fair and reasonable terms and are in the best interests of payees; and (2) Protect payees against deceptive practices.” CJ § 5-1101.1 (paragraph breaks omitted). The General Assembly redefined “independent professional advice” from “advice concerning the legal, tax, and financial implications of a transfer of structured settlement payments rights” to “advice concerning whether a proposed transfer of structured settlements payment rights would be in the best interest of the payee, taking into account the welfare and support of the payee’s dependents[.]” 2016 Md. Laws 7393 , 7406; see also CJ § 5-1101(d)(1).

In addition, with the 2016 amendments, the General Assembly expanded the findings that the trial court is required to make under CJ § 5-1102(b) before authorizing a transfer of structured settlement payments rights. As amended, CJ § 5-1102(b) requires more extensive “express findings” by providing: A structured settlement obligor or annuity issuer may not make any payment directly or indirectly to a transferee of structured settlement payment rights unless the transfer is authorized in an order of a court based on express findings that: (1) The transfer is necessary, reasonable, and appropriate and in the best interest of the payee, taking into account the welfare and support of the payee’s dependents; (2) The financial terms of the transfer agreement are fair to all parties, taking into account: (i) The difference between the amount payable to the payee and the discounted present value of the payments to be transferred; and -8- (ii) The discount rate applicable to the transfer; (3) The payee received independent professional advice concerning the proposed transfer; and (4) At least 10 days before the date on which the payee signed the transfer agreement, the transferee provided to the payee a separate disclosure statement, in at least 14 point boldface type, that states: (i) The amounts and due dates of the structured settlement payments to be transferred; (ii) The aggregate amount of the payments to be transferred; (iii) The discounted present value of the payments to be transferred; (iv) The amount payable to the payee in exchange for the payments to be transferred; (v) An itemized listing of all brokers’ commissions, service charges, application fees, processing fees, closing costs, filing fees, administrative fees, notary fees, and other charges payable by the payee or deductible from the gross amount otherwise payable to the payee, except attorney’s fees and related disbursements; (vi) The transferee’s best estimate of the amount of any attorney’s fees and disbursements payable by the payee or deductible from the gross amount otherwise payable to the payee; (vii) The net amount payable to the payee after deduction of all commissions, fees, costs, expenses, and charges described in items (v) and (vi) of this item; (viii) The discount rate applicable to the transfer, which shall be disclosed in the following statement: “Based on the net amount that you will receive from us and the amounts and timing of the structured settlement payments that you are transferring to us, you will, in effect, be paying interest to us at a rate of __ percent per year.”; (ix) The amount of any penalty or liquidated damages payable by the payee in the event of any breach of the transfer agreement by the payee; and -9- (x) A statement that the payee has the right to cancel the transfer agreement, without penalty or further obligation, at any time before the transfer is authorized by a court under this subtitle. In 2016, the General Assembly also amended the MSSPA to require that factoring companies register with, and be approved by, the Office of the Attorney General. See 2016 Md. Laws 7394 , 7398-7403, 7406, 7411-16; CJ §§ 5-1101(g), 5-1107 to 5-1110. “The Attorney General may suspend or revoke the registration of a structured settlement transferee, or deny an application for registration, if the Attorney General finds that the transferee or any of its employees, affiliates, or agents has” engaged in an enumerated list of activities, including making a referral to a payee “for independent professional advice concerning a proposed transfer subject to this subtitle other than a referral to a local or state bar association or not-for-profit lawyer referral service unaffiliated with any structured settlement transferee that makes referrals to attorneys, certified public accountants, or licensed financial consultants[.]” CJ § 5-1110(a)(4).

In addition, the General Assembly enacted CJ § 5-1112, which authorizes the Attorney General to promulgate regulations to enforce the MSSPA. See 2016 Md. Laws 7404 , 7417.5 5 Similarly, in October 2015, the Standing Committee on Rules of Practice and Procedure (“the Rules Committee”) submitted to this Court its One Hundred Eighty-Ninth Report, in which it, among other things, proposed a new Chapter 1300 to Title 15 of the Maryland Rules concerning structured settlements. See Standing Comm. on Rules of Practice and Proc., 189th Report, at 2 (Oct. 15, 2015), available at https:// mdcourts.gov/sites/default/files/rules/reports/189th.pdf [https://perma.cc/7AQJ-B9QG]. In the report, the Rules Committee explained that the “impetus” for the new proposed chapter “was the exposure of” the absence of any Rules governing the judicial procedure by which structured settlements are transferred “and the harmful consequences therefrom, in two recent publications – one in the August 25, 2015 edition of the Washington Post and - 10 - The Transfers and the Purchase and Sale Agreements In this case, as resolution of lead paint exposure claims, Linton and Johnson, residents of Baltimore City, each received a settlement that included compensation in the form of structured settlement annuity payments.

As victims of lead paint exposure, both Linton and Johnson suffer cognitive impairment. According to the complaint, Linton was in special education for approximately fourteen years, reads at a fourth-grade level, and is functionally illiterate. Johnson did not complete the tenth grade of high school, has been diagnosed with attention deficit hyperactivity disorder and other disorders, and has tested with a below average IQ and achievement scores. Linton and Johnson, and others who had obtained structured settlements after resolving lead paint exposure claims, signed “Purchase and Sale Agreements” purporting to transfer their right to the structured settlement annuity payments to Access in exchange for a discounted lump sum cash payment.

Access, a Delaware limited liability company established in 2012, is a factoring company. “[B]etween 2013 and 2015, Access obtained judicial approval to acquire 163 structured settlements from 100 victims and obtained $33.8 million in future payment rights . . . in exchange for $7.7 million in cash.” Linton I, 467 Md. at 506 n.1, 225 A.3d at 458 n.1 (citation omitted). one in the earlier June 2015 edition of the Maryland Bar Journal.” Id. at 4. On December 7, 2015, this Court adopted Chapter 1300 of Title 15, with the new Rules taking effect on January 1, 2016. See Court of Appeals of Maryland, Rules Order, at 1 (Dec. 15, 2015), available at https://www.mdcourts.gov/sites/default/files/rules/order/189ro.pdf [https:// perma.cc/TP4L-MMF7]. Among other things, Maryland Rule 15-1304 requires that an independent professional advisor submit an affidavit that includes, among other things, “an affirmation that affiant’s compensation is not affected by whether the proposed structured settlement transfer occurs[.]” - 11 - In two transactions, through Purchase and Sale Agreements signed on October 28, 2013, and December 10, 2013, Access obtained from Linton the right to a total of $122,677.50 in future monthly settlement payments.

The payments had a discounted present value of $110,491.31. Under the agreements, Access was to provide only $48,543.51 in cash to Linton, or slightly more than 40% of the discounted present value of the transferred payments.6 In a transaction initiated through a Purchase and Sale Agreement signed on January 15, 2014, Access obtained from Johnson the right to $143,666.88 in future monthly settlement payments. The payments had a discounted present value of $116,162.18. Access was to provide Johnson only $40,000 in cash, or slightly more than one-third of the discounted present value of the transferred payments.7 The Purchase and Sale Agreements signed by Linton and Johnson providing for the transfer of their future settlement payments to Access contained the following identical arbitration clause: 8.17 Arbitration Clause.

Once your transaction has closed, any claim or dispute (“Claim”) by either you or us against the other, or against the employees, agents, successors or assigns of the other, arising from or relating in any way to this Agreement or any prior agreement (whether under a statute, in contract, tort, or otherwise and whether for money damages, penalties or declaratory or equitable relief) including Claims regarding the applicability of this arbitration clause or the validity of the entire Agreement or any prior agreement, shall be resolved by mandatory binding arbitration. For matters that could be brought in your local small claims court, you have the option of proceeding in the small claims court rather than proceeding in arbitration. This arbitration provision cannot be used to bypass state and 6 The complaint filed by Linton and Johnson refers to only one of the two transfers signed by Linton, the December 10, 2013 transfer. 7 Johnson allegedly received only $37,000 of the $40,000 owed. - 12 - federal laws requiring court approval of this transaction. The arbitration shall be conducted by JAMS Arbitration (“JAMS”) under the Code of Procedure in effect at the time the Claim is filed.

JAMS rules and forms may be obtained and Claims may be filed at any JAMS office, online at www.jamsadr.org, or by telephone 1-800-352-5267. You will have the right to counsel, the right to be heard in front of a neutral arbitrator, and you will have the opportunity to participate in the selection of the arbitrator. You will retain all the remedies that you are afforded under local, state and federal law. The arbitration shall take place in your hometown or, in the JAMS office closest to where you are located.

The arbitrator shall apply the law of the jurisdiction where we sought court approval of this Agreement. We or you may, upon approval of the other, substitute another nationally recognized, independent arbitration organization that uses a similar code or procedure. This arbitration agreement is made pursuant to a transaction involving interstate commerce, and shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16 (“FAA”). Any arbitration award shall be final, and judgment upon the award may be entered in a court having jurisdiction.

No Claim submitted to arbitration is heard by a jury, and no Claim may be brought as a class action or as a private attorney general. You do not have the right to act as a class representative or participate as a member of a class of claimant with respect to any Claim. On the first page of each Purchase and Sale Agreement, directly above the parties’ signature lines, was a disclosure that the seller (transferor) acknowledged “that the closing and funding of the Transaction described herein and in the Transaction Documents is expressly contingent upon entry of a Court Order, as described in Article 5.5 of this Purchase and Sale Agreement.” Article 1.1 of the agreements reiterated that “[a]t Closing, Seller hereby sells, assigns, transfers, and conveys to the Purchaser and Purchaser purchases and acquires from Seller, all of Seller’s right, title and interest in and to the Assignment Payments, including, without limitation, the Seller’s right to receive the Assigned Payments.” Article 2 of the Purchase and Sale Agreements, titled “Closing,” contains a section that defined closing as follows: - 13 - 2.1 Closing Defined. The closing of the Transaction described in this Agreement (the “Closing”) shall occur on a date designated by the Purchaser, which date shall be as soon as reasonably practicable after entry of the Court Order and verification that the Annuity Issuer will comply therewith, and after the Purchaser, in its sole and absolute discretion, has determined that all of the conditions and contingencies required by this Agreement and the other Transaction Documents have been satisfied, have occurred, and/or have been performed and complied with, as the case may be, and that no event or condition has occurred or exists that would require this Agreement to be terminated.

Seller agrees to cooperate with Purchaser and use Seller’s best efforts to secure the Court Order and close the Transaction in accordance with this Agreement. Article 5 of the agreements is titled “Conditions to Closing.” As a condition to closing, Article 5.5 specifically stated that the transactions must be approved by a court in accordance with any applicable state transfer statute: Seller understands and acknowledges that the Transaction contemplated by this Agreement must be approved by a court of competent jurisdiction in accordance with an applicable state transfer statute of a state of the United States of America and must be structured, consummated, closed and approved in accordance with certain applicable laws of the United States of America. Article 5.5 provided that “a further condition and contingency” to closing was that “the Purchaser and/or the Seller shall have procured and/or received a court order, judgment, or decree (the Court Order, as previously defined) approving the sale, assignment, and transfer of the Assigned Payments to Purchaser.” The Complaint In the complaint, Linton and Johnson alleged that they and other putative class members had been “lured into consumer transactions” with Access “to sell their structured - 14 - settlement annuity contracts for grossly unfair and unconscionably low sums.”8 According to the complaint, Access and Smith “engaged in a scheme of knowingly failing to advise all Plaintiffs and the courts of their friendly and collusive relationship with one another” and Access “engaged in a common scheme to fail to pay the reported present values for the already unfair transactions to the Plaintiffs.”9 In Linton I, 467 Md. at 505-06 , 225 A.3d at 458 , we stated that, although the fraud claim had “several strains[,]” it was mainly based on evidence of a modus operandi in which (1) most of the assignors were young victims of lead paint poisoning whose ability to understand the economic impact of the assignment was severely limited; (2) those individuals were actively solicited by Access; (3) as a condition to implementing an assignment of structured settlement benefits, Maryland law requires approval of the proposed assignment by a Circuit Court but prohibits a court from approving an assignment unless the assignor has received “independent professional advice regarding the legal, tax, and financial implications of the transfer” (Md. Code, § 5-1102 of the Cts. & Jud. Proc.

Article (CJP)); (4) independent professional advice means advice from a licensed professional adviser who is engaged by the assignor and is not affiliated with or compensated by the assignee (CJP § 5-1101(d)); (5) most of the assignments at issue involved an Access agent posing as an independent professional adviser who gave no (or wholly inadequate) independent advice to the assignors; and (6) the amount paid for the assignment of benefits was unconscionably inadequate. (Footnote omitted). 8 In Linton I, 467 Md. at 508 , 225 A.3d at 460 , we indicated that there are approximately 100 putative class members “who, between January 1, 2012 and July 6, 2016, transferred structured settlement payment rights obtained in settlement of a personal injury claim to Access.” 9 The complaint included the following seven counts: (1) negligence against Smith; (2) negligent misrepresentation against Smith; (3) negligent misrepresentation against Access; (4) fraud, misrepresentation, and deceit against Smith; (5) fraud, misrepresentation, and deceit against Access; (6) constructive fraud against Smith; and (7) civil conspiracy against all Petitioners, i.e., Access, Smith, and Sud. - 15 - In the complaint, Linton and Johnson alleged that Smith acted as an attorney who had agreed to provide independent professional advice concerning the sale of their structured settlement annuity contracts and that, although he represented to each plaintiff and to Maryland trial courts that he was independent and not affiliated with Petitioners, “Smith in fact had very close business and personal ties with all of the Defendants[, i.e., Petitioners].” To satisfy the requirement of the MSSPA that any prospective transferor receive independent professional advice prior to the transfer, Smith would submit to the approving court a signed letter stating that he had explained the financial and legal implications of the proposed transfer and that the transferor understood “all aspects” of the transfer. According to the complaint, in seeking judicial authorization for the transfers, Access provided to the Circuit Court for Prince George’s County letters from Smith on CES Law Group, LLC’s letterhead, in which Smith stated that he: spoke with Linton and Johnson; reviewed on Linton’s and Johnson’s behalf the proposed transactions; and explained to them the financial, legal, and tax implications of the transactions. In the letters, Smith stated that Linton and Johnson each “indicated that [they] understood every aspect of the transaction and the implications of said transaction” and that he was “not affiliated with nor compensated by the transferee of th[e] transfer and [his] compensation [was] not affected by whether a transfer occurs.” According to the complaint, neither Linton nor Johnson recalled ever having met with Smith.

Also, according to the complaint, Smith never advised a single transferor not to transfer their structured settlement or to pursue other options and he failed to review the contracts that the transferors signed with - 16 - Access, thereby failing “to ensure that they fully understood the terms of the contract and the proposed transaction.” In paragraph 81 of the complaint, Linton and Johnson specifically alleged: In using Defendant Charles Smith, Defendant Access Funding not only ensured that its customers would not receive true independent professional advice, but it also sought to prevent Plaintiffs from fully understanding and appreciating the Purchase agreement’s provision with respect to binding arbitration and/or limiting class action rights, which were not in the Plaintiffs’ best interests. In the complaint, Linton and Johnson alleged that at the same time that Smith posed as an independent adviser for potential customers, he sent invoices for his services directly to Access. In Linton I, 467 Md. at 506 n.1, 225 A.3d at 458 n.1, this Court noted that Access paid Smith for each transferor he “advised,” and that Access paid Smith more than $50,000 in total. In the complaint, Linton and Johnson also alleged that Smith was connected with Access’s principals on a personal level.

Smith attended the wedding of Access Funding’s Chief Executive Officer, represented that CEO in a traffic matter, had a prior business relationship with Access Funding’s Chief Operating Officer/Chief Marketing and Sales Officer, and was close personal friends with and had a prior business relationship with Access’s counsel. At no point did anyone disclose this relationship to the customers or the court. According to the complaint, Access specifically targeted victims of lead exposure in Baltimore City who had structured settlements in place, devising a plan to target those residents through “various illegal and deceptive ways in order to have them cash in their structured settlement annuity contracts for a single, inadequate, lump sum payment.” In - 17 - the complaint, Linton and Johnson alleged that Access searched court records to identify lead paint exposure victims, sent unsolicited advertisements to the victims to entice them to sell their structured settlement payments, and advertised on billboards in Baltimore City. Access also allegedly sent unsolicited checks to prospective customers with its phone number on them.

In addition, Access allegedly promised advance payments, vacations, and dinners, and engaged in other tactics, to induce the consent of prospective customers, but never disclosed such promises or tactics to the courts in the course of seeking approval for transfers. With Smith’s letters, Access represented to the circuit court that its customers had received independent professional advice within the meaning of the MSSPA. The circuit court relied on the letters in authorizing the transfers. In the complaint, Linton and Johnson alleged that had they been aware of Smith’s affiliation with Access, they would not have entered into the transactions because they would not have felt that they were receiving “a fair deal.” Moreover, they alleged that had the court been aware of the relationship, it would not have approved the transfers.10 10 In its opinion, the Court of Special Appeals noted that Sud, Access’s former attorney, has been disbarred and that “Smith, [] Sud, and Raffi Michael Boghosian (a founder, part owner, and chief operating officer of Access) recently were charged in the Circuit Court for Baltimore City with Theft Scheme Over $10,000 and Conspiracy to Commit Theft Scheme Over $100,000.” Linton, 253 Md. App. at 513 n.7, 268 A.3d at 941 n.7 (citation omitted).

According to entries on Maryland Judiciary Case Search on the Judiciary’s website, on November 9, 2022, in Case No. 121354003, Smith was found guilty of theft scheme over $100,000 and in Case No. 121354002, Sud was found guilty of theft scheme over $100,000 and conspiracy to commit theft scheme over $100,000. Case Search does not reflect the disposition of the charge of conspiracy to commit theft scheme over $100,000 as to Smith or the disposition of the charges described above as to Boghosian in - 18 - Proceedings in the Circuit Court In August 2016, shortly after the complaint was filed, Petitioners filed motions to compel arbitration and to stay the case. The circuit court stayed the case pending a ruling on the motions to compel arbitration. While the case was stayed, the parties negotiated a settlement and, on March 28, 2017, the parties filed a joint motion for preliminary approval of a class action settlement.

As we described in Linton I, 467 Md. at 508 , 225 A.3d at 460 : The settlement class was to consist of all individuals who, between January 1, 2012 and July 6, 2016, transferred structured settlement payment rights obtained in settlement of a personal injury claim to Access. It was estimated that there were 100 such individuals. The total gross payout by Access, taken entirely from indemnity insurance policies, would be $1.1 million, of which $330,000 would be paid to Class Counsel as attorneys’ fees. Of the balance, the Class Administrator would receive “the reasonable costs of class notice and administrative expense and taxes,” for which no estimate was then given, and each of the two named plaintiffs would receive $500 as a service award.

Whatever was left would be distributed to the estimated 100 class members on a pro rata basis set forth in the Stipulation of Settlement. In May 2016, two months before Linton and Johnson filed the complaint in this case, the CPD filed an enforcement action under the Maryland Consumer Protection Act, Md. Code Ann., Comm. Law (1975, 2013 Repl. Vol.) (“CL”) §§ 13-101 to 13-501, against Access in the circuit court based on the same alleged misconduct.

See Linton I, 467 Md. at 507 , 225 A.3d at 459 . In its complaint, the CPD alleged that, “in soliciting and consummating the assignments, Access engaged in unfair or deceptive trade practices in violation of CL § 13-303.” Linton I, 467 Md. at 507 , 225 A.3d at 459 . The CPD sought Case No. 121354004. Pursuant to Maryland Rule 8-202(a), Smith, Sud, and Boghosian each have the right to file a notice of appeal in the Circuit Court for Baltimore City within thirty days after sentencing to appeal any judgment of conviction. - 19 - various forms of relief, including having the court enjoin Access from continuing its alleged misconduct, restoring to the transferors a future stream of structured settlement payments, and compensating the transferors through restitution and the disgorgement of funds from Access.

See id. at 507 , 225 A.3d at 459 .11 On April 13, 2017, the CPD filed a motion to intervene in the case. The circuit court granted the motion to intervene and the CPD opposed the joint motion to approve the class action settlement. After holding a hearing, on February 9, 2018, the circuit court issued an order certifying the class and approving the settlement. See Linton I, 467 Md. at 512 , 225 A.3d at 462 .

Appellate Proceedings The CPD appealed, and in an unreported opinion filed on April 22, 2019, the Court of Special Appeals affirmed in part and reversed in part. See Consumer Prot. Div. v. Linton, No. 2609, Sept. Term, 2017, 2019 WL 1770524 , at ¹³ (Md. Ct. Spec. App. Apr. 22, 2019).

The Court of Special Appeals held that the settlement improperly interfered with the CPD’s (and the Federal Consumer Financial Protection Bureau’s) enforcement authority because it purported to settle the claims of those who were not parties to the agreement (i.e., the agencies) and the agencies’ rights to seek restitution were not something that the plaintiffs could settle or bargain away. See id. at ⁶.12 11 Six months after Linton and Johnson filed the class action complaint, “the Federal Consumer Financial Protection Bureau (CFPB), chartered by Congress to enforce the Consumer Federal Protection Act of 2010[,]” filed a similar action in the United States District Court for the District of Maryland “against the same defendants, for the same misconduct and seeking essentially the same relief[.]” Linton I, 467 Md. at 507 , 225 A.3d at 459 . 12 The Court of Special Appeals affirmed the circuit court’s decision permitting the CPD’s intervention. See Linton, 2019 WL 1770524 , at ⁶. - 20 - The Court of Special Appeals explained: The point of settlements is to settle, and the Class Action Defendants understandably sought in this agreement to achieve total peace. But parties can only settle their own claims—they can’t settle the claims of those who aren’t parties to the agreement or otherwise not theirs to settle.

The [CPD] and the Bureau weren’t parties to the settlement and their rights to seek restitution w[ere] not something the Class could bargain away. And because the settlement effectively preempted a major portion of the pending claims being pursued by the [CPD] and the Bureau when it assigned any benefit from those actions to Access and the Class Defendants—i.e., the targets of the agencies’ enforcement efforts—the judgment approving the settlement must be reversed. Id. As a result of the Court of Special Appeals’s holding, the case was remanded for further proceedings.

See id. at ¹³. “Neither side was entirely happy with the Court of Special Appeals judgment,” and Access and the CPD each filed a petition for a writ of certiorari in this Court. Linton I, 467 Md. at 515 , 225 A.3d at 464 . We granted both petitions. See id. at 515 , 225 A.3d at 464 .

We vacated the Court of Special Appeals’s judgment and remanded the case to the circuit court, also concluding that the settlement was improper. See id. at 521, 523-24 , 225 A.3d at 467, 469 . We explained that provisions in the settlement were unenforceable, stating: The parties can agree, if they wish, not to accept any compensation from recoveries by CPD, provided there is an adequate disclosure of the prospect that there may be such recoveries through remedies not sought in the Linton action. With respect to recoveries through disgorgement/restitution, however, they cannot preclude CPD from pursuing such remedies or direct that any such recoveries be handed over to Access or anyone else (other than the settling plaintiffs), which would directly contravene the statutory authority of CPD to sanction Access for its wrongful conduct.

That alone requires that the Circuit Court’s approval of the Stipulation of Settlement be reversed. - 21 - Id. at 521 , 225 A.3d at 467 (citation omitted). Subsequent Proceedings in the Circuit Court On remand, the parties did not seek to reach a new settlement. Rather, following a status conference, the circuit court ordered, among other things, that Petitioners were to file renewed motions to compel arbitration. Access, Sud, and Smith all filed separate motions to compel arbitration and to stay proceedings, and Linton and Johnson opposed the motions.

On December 15, 2020, the circuit court held a hearing on the motions. On January 15, 2021, the circuit court issued a memorandum opinion and order granting the motions to compel arbitration and staying the proceedings. The circuit court addressed three distinct issues. First, the circuit court ruled “that arbitrability in this case must be decided by an arbitrator and not the court[,]” relying on the language of the arbitration clauses themselves, which calls for an arbitrator to decide the applicability of the arbitration clause itself and the validity of the entire agreement.

In addition, relying on case law indicating that, unless there is an allegation of fraud in the inducement as to the arbitration clause itself, an arbitrator decides such issues, the circuit court determined that, because Linton and Johnson alleged in the complaint fraud and misrepresentation as to the agreements as a whole and not to “the arbitration clauses separately and specifically[,] the arbitrability must be decided by the arbitrator.” Second, the circuit court addressed whether Smith had standing to compel arbitration and ruled that each Petitioner had standing to enforce the arbitration clause of - 22 - the agreements.13 Finally, the circuit court concluded that Petitioners had not waived the right to enforce arbitration.14 Opinion of the Court of Special Appeals Linton and Johnson appealed. On January 26, 2022, the Court of Special Appeals reversed the circuit court’s judgment, holding that the circuit court erred in compelling arbitration. See Linton, 253 Md. App. at 510, 517, 268 A.3d at 939, 943.15 As an initial matter, the Court of Special Appeals noted that, although the arbitration clause in the agreements provided that the Federal Arbitration Act (“the FAA”), 9 U.S.C. § 1 , et seq., 13 The circuit court stated that, even though Smith and his law firm were not parties to the agreements (and thus not parties to the arbitration clauses), Linton and Johnson, as signatories, were equitably estopped from contending “that a non-signatory cannot move to compel arbitration when the signatory’s claims arise out of and relate directly to the written agreement or when the signatory raises allegations of substantially interdependent or concerted misconduct by both the non-signatory and one or more signatories to the contract.” In addition, the circuit court determined that Sud and his law firm were agents/attorneys of Access and had the right to enforce the arbitration clauses in the agreements. 14 The circuit court explained that “[a] litigant may waive [the] right to arbitrate by invoking the litigation machinery[,]” but concluded that Petitioners did not do so because they did not file an answer, any dispositive motion, or a motion in limine and the court never resolved any merit-based issues in the case. The circuit court also determined that Petitioners’ right to arbitration was preserved in the joint settlement agreement. 15 The Court of Special Appeals explained that the only issue before it was the circuit court’s ruling that the arbitration clause required that the issue of arbitrability in the case be determined by an arbitrator and not the court.

See Linton, 253 Md. App. at 517, 268 A.3d at 943. The circuit court’s rulings that all Petitioners had standing to invoke the arbitration clause and that none of Petitioners had waived their right to enforce arbitration were not at issue. See id. at 517, 268 A.3d at 943. In addition, the Court of Special Appeals declined to consider Linton’s and Johnson’s argument “that the arbitration clause should not be enforced because it ‘contravenes’ the public policy behind the Structured Settlement Transfer Act” because the argument was not raised in the circuit court and consequently was not preserved for appellate review.

Id. at 527 n.16, 268 A.3d at 949 n.16. - 23 - governs, this Court has held that when interpreting Section 2 of the FAA,16 state courts are not bound by the procedural provisions of the FAA and instead may apply their own procedures. See Linton, 253 Md. App. at 519, 268 A.3d at 944. The Court of Special Appeals stated that, under Maryland’s arbitration act and case law, when a court is confronted with a petition to compel arbitration, its task is narrowly focused on determining only whether a valid arbitration agreement exists. See id. at 521, 268 A.3d at 946.

The Court of Special Appeals concluded that, in ruling that “arbitrability” must be determined by an arbitrator, the circuit court conflated two issues by using the term “arbitrability”: “first, whether there is an agreement to arbitrate at all and second, whether a particular dispute falls within the scope of an arbitration agreement.” Id. at 521-22, 268 A.3d at 946 (emphasis in original). The Court of Special Appeals explained that the first question “is always for the court, and not the arbitrator, to decide” and that the first question is the only relevant question in this case. Id. at 521-22, 268 A.3d at 946 (cleaned up). The Court of Special Appeals explained that the parties’ arguments in this case as to whether a valid arbitration agreement existed flow from the Supreme Court’s holding in Prima Paint Corp. v. Flood & Conklin Mfg.

Co., 388 U.S. 395 (1967), which was followed 16 Section 2 of the FAA provides: A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract or as otherwise provided in chapter 4. - 24 - by this Court’s holding in Holmes v. Coverall N. Am., Inc., 336 Md. 534 , 649 A.2d 365 (1994). See Linton, 253 Md. App. at 522, 268 A.3d at 946. The Court of Special Appeals explained that, in Prima Paint, the United States Supreme Court held that a challenge to the enforceability of a contract must be heard by an arbitrator in the absence of a claim that the arbitration clause itself is unenforceable. See Linton, 253 Md. App. at 522-23, 268 A.3d at 946-47.

The Court of Special Appeals stated that Petitioners contended that this case is just like Prima Paint and Holmes and argued that, as such, the circuit court did not err in compelling arbitration because Linton and Johnson did not allege that the arbitration clause itself was obtained by fraud but instead contended that the whole agreement was procured by fraud. See Linton, 253 Md. App. at 524, 268 A.3d at 947. The Court of Special Appeals explained that Linton and Johnson pointed out that they have alleged that the arbitration clause itself was obtained by fraud and therefore this case falls within an exception to the holdings set forth in Prima Paint and Holmes. See Linton, 253 Md. App. at 524-25, 268 A.3d at 947-48.

The Court of Special Appeals concluded that the Prima Paint and Holmes line of cases does not apply because the cases are premised on the circumstance that the underlying agreement and the arbitration clause were entered into at arm’s length. See Linton, 253 Md. App. at 525, 268 A.3d at 948. The Court of Special Appeals explained that this was not the case with the instant agreements because they are not effective unless the circuit court approves the transfers. See id. at 525, 268 A.3d at 948.

The Court of Special Appeals pointed out that the court’s authorization was required under the express terms of the arbitration clause and was required by statute for approval of the transfer. See id. at 525, - 25 - 268 A.3d at 948. The Court of Special Appeals concluded that, for these reasons, Prima Paint and Holmes did not control the analysis of whether the arbitration clause came into being. See Linton, 253 Md. App. at 525, 268 A.3d at 948.

Rather than relying on Prima Paint and Holmes, the Court of Special Appeals turned to principles embodied in the Maryland Uniform Arbitration Act, a provision of which states that a written agreement to arbitrate any controversy “is valid and enforceable, and is irrevocable, except upon grounds that exist at law or in equity for the revocation of a contract.” Linton, 253 Md. App. at 525, 268 A.3d at 948 (quoting CJ § 3-206(a)). The Court of Special Appeals concluded that Linton and Johnson had alleged grounds to rescind the agreements, as the agreements “expressly conditioned the obligation to arbitrate on the ‘closing’ of the transaction[.]” Id. at 525, 268 A.3d at 948. The Court of Special Appeals determined that, with these grounds, Linton and Johnson “have denied the existence of a valid arbitration agreement, and that puts to the court, not the arbitrator, the question of whether the arbitration agreement exists.” Id. at 526, 268 A.3d at 948 (cleaned up). The Court of Special Appeals compared this case to Spahr v. Secco, 330 F.3d 1266, 1272 (10th Cir. 2003), a case in which the United States Court of Appeals for the Tenth Circuit held that Prima Paint did not apply and that the trial court correctly denied a motion to arbitrate.

See Linton, 253 Md. App. at 526, 268 A.3d at 949. The Court of Special Appeals explained that, in Spahr, the plaintiff alleged that he lacked the mental capacity to enter into a stock share purchase agreement and asserted that the arbitration clause in the agreement was not enforceable. See Linton, 253 Md. App. at 526, 268 A.3d at 949. The Court of Special Appeals explained that the Tenth Circuit determined that “a mental - 26 - capacity challenge, by definition, can logically be directed only at the entire contract[.]” Linton, 253 Md. App. at 526, 268 A.3d at 949.

The Court of Special Appeals stated that, in this case, Linton and Johnson allege that Petitioners fraudulently interfered with the “court’s statutory obligation to find, as a condition of approving the transfers, that a professional who was not affiliated with [Petitioners] provided advice ‘concerning the legal, tax, and financial implications’ of the transfer, which necessarily include the implications of agreeing to arbitrate.” Id. at 526, 268 A.3d at 949 (citation omitted). As a final matter, the Court of Special Appeals stated that compelling arbitration at this stage would essentially permit Petitioners “to circumvent the court authorization process mandated by the [MSSPA,]” which the arbitration clause itself states should not be permitted. Id. at 527, 268 A.3d at 949. Petition for a Writ of Certiorari On March 2, 2022, Petitioners together petitioned for a writ of certiorari, raising the following two issues: 1.

Did the [Court of Special Appeals] err in ruling that [the] Circuit Court must determine whether an arbitration agreement exists between the Parties when Respondents did not challenge the validity or enforceability of the underlying agreements containing the arbitration clauses in their Complaint, but instead affirmed the agreements when they sued Petitioners for fraud in the inducement and sought damages, not rescission or avoidance of those agreements; and moreover, the agreements are the subject of enrolled judgments, and as such, their validity and enforceability may not be collaterally attacked in any court unless the court that issued the judg[]ment lacked fundamental jurisdiction to enter the judgment, which is not the case here? 2. Did the [Court of Special Appeals] err in ruling that the Circuit Court must decide the existence of an arbitration agreement when well-established Federal and Maryland law mandates that the arbitrator and not the court - 27 - decides the issue of arbitrability when Respondents executed agreements containing arbitration clauses that expressly stated that the arbitrator shall decide the arbitrability of the parties’ dispute, and Respondents have only alleged fraud and misrepresentation as to the agreements as a whole and not with respect to the arbitration clause separately and specifically?[17] On April 25, 2022, we granted the petition. See Access Funding, LLC v. Linton, 478 Md. 244 , 273 A.3d 890 (2022). DISCUSSION The Parties’ Contentions Petitioners contend that the Court of Special Appeals erred in holding that the court, not the arbitrator, must determine the validity of the arbitration clause in the Purchase and Sale Agreements.

Petitioners argue that, where the parties agree that an arbitrator is to decide the arbitrability of a dispute, a court must enforce the agreement as written. Petitioners maintain that this is the case unless a plaintiff has “specifically and separately” alleged in a complaint that the plaintiff’s “agreement to arbitrate was procured by fraud and not merely that the contract as a whole was procured by fraud.” According to Petitioners, an arbitration clause is a severable contract independently enforceable from the main contract. Petitioners contend that Linton and Johnson failed to assert a basis for 17 In an answer to the petition, the CPD opposed the grant of certiorari but stated that, if this Court were to grant the petition, it would be desirable and in the public interest for this Court to address a legal theory newly advanced by Access Funding in its petition. Specifically, this Court should determine whether, under its prior decision in LVNV Funding v. Finch, 463 Md. 586 (2019) (“LVNV”), Ms. Linton and Ms. Johnson are precluded, by the court orders authorizing the transfer of their future settlement payments to Access Funding, from asserting that they did not validly agree to arbitrate. - 28 - avoidance or rescission of the arbitration clauses themselves, as opposed to the agreements as a whole, and that, as such, the arbitration clauses remain valid.

In addition, Petitioners argue that Linton and Johnson ratified or affirmed the agreements by accepting the benefit of payments made to them under the agreements and that, by seeking damages arising out of alleged breach of common law duties, they are not seeking rescission of the agreement. Petitioners assert that Linton and Johnson have not sought to void the arbitration clauses or the agreements as a whole and that to do so would be to engage in an impermissible collateral attack on enrolled judgments approving the transfers of their structured settlement rights. Petitioners assert that an enrolled judgment may be collaterally attacked only where the court that entered the judgment lacked jurisdiction to do so, which Linton and Johnson would not be able to show here as the circuit court had the power to approve the transfer of their structured settlement rights. Petitioners argue that the question of whether Smith provided independent professional advice regarding the transactions was “intrinsic” to the court’s decisions because it was an issue to be decided by the court before approving the transfers and that allegations of intrinsic fraud are not sufficient to collaterally attack an enrolled judgment.

Linton and Johnson respond that they have sufficiently alleged or established grounds to deny the existence of a valid and enforceable arbitration agreement. Linton and Johnson argue that the Court of Special Appeals correctly determined that they challenged the existence of a valid arbitration agreement by alleging that a necessary prerequisite— valid court approval of the transfer resulting in the closing of the transaction—was procured through fraud and deceit of them and the court. Linton and Johnson assert that to - 29 - deny the validity of an agreement to arbitrate, they were not required to challenge the validity of the arbitration clauses separately from the underlying agreements where they have alleged that Petitioners committed fraud and deceit in obtaining the court’s approval of the transfers. In addition, Linton and Johnson point out that they have expressly challenged the validity or enforceability of the arbitration clause in the complaint and that the complaint contains numerous allegations of fraud and deceit as to Smith, who was required to provide independent professional advice as to the implications of the transfers and agreements, including the arbitration clause.

Linton and Johnson assert that the Court of Special Appeals properly determined that the allegations of fraud in the complaint go to both the validity of the agreements as a whole and that of the arbitration clauses in particular.18 Like Linton and Johnson, the CPD contends that it was for the circuit court to decide whether Linton and Johnson validly agreed to arbitrate the claims asserted in this case and asks that this Court affirm the judgment of the Court of Special Appeals. Standard of Review An appellate court’s review of a trial court’s order compelling arbitration “extends only to a determination of the existence of an arbitration agreement.” Holloman v. Circuit City Stores, Inc., 391 Md. 580, 588 , 894 A.2d 547, 551 (2006) (cleaned up). In a case 18 Linton and Johnson contend that Petitioners failed to preserve for appellate review arguments that: (1) they were required to seek rescission of the agreements; (2) they cannot collaterally attack enrolled judgments; and (3) by seeking monetary damages, they affirmed the agreements, including the arbitration clauses. Linton and Johnson argue that, in any event, none of the above contentions negates the conclusion that a court must determine whether a valid agreement to arbitrate exists. - 30 - concerning whether a valid agreement to arbitrate exists, “the interpretation of a written contract is ordinarily a question of law for the court and, therefore, is subject to de novo review by an appellate court.” Walther v. Sovereign Bank, 386 Md. 412, 422 , 872 A.2d 735, 741 (2005) (cleaned up).

Similarly, a “trial court’s decision as to whether a particular dispute is subject to arbitration is a conclusion of law, which we review de novo.” Holloman, 391 Md. at 588 , 894 A.3d at 551 (cleaned up). Analysis Introduction Petitioners have raised two multi-layered questions that essentially ask whether the Court of Special Appeals erred in concluding that the circuit court must determine whether a valid arbitration agreement exists between the parties. We answer “no.” We hold that where Linton and Johnson alleged that the circuit court’s approval of the transfer of their structured settlement payment rights was procured through fraud and deceit, Linton and Johnson denied the existence of a valid agreement to arbitrate, and the question of whether a valid arbitration agreement exists is a question for the court to determine, not the arbitrator. Because Linton and Johnson alleged fraud as to the arbitration clause in the agreements in particular, the existence of a valid arbitration clause is in dispute and the issue is a matter for the court to decide.

In addition, because the plain language of the arbitration clause expressly conditions arbitration on closure of the transaction, by challenging the validity of the circuit court’s approval of the transfer, Linton and Johnson challenge the existence of an applicable agreement to arbitrate. Again, this is an issue for the court and not an arbitrator to determine. Accordingly, we affirm the judgment of the - 31 - Court of Special Appeals. Arbitration in Maryland As we have previously described, arbitration is “the process whereby parties voluntarily agree to substitute a private tribunal for the public tribunal otherwise available to them.” Holloman, 391 Md. at 590 , 894 A.2d at 552 (cleaned up).

Thus, “[t]he issue of whether an agreement to arbitrate exists is governed by contract principles.” Id. at 590 , 894 A.2d at 552 (citations omitted); see also Cheek v. United Healthcare of Mid-Atl., Inc., 378 Md. 139, 147 , 835 A.2d 656, 661 (2003) (“The determination of whether there is an agreement to arbitrate, of course, depends on contract principles since arbitration is a matter of contract.”). As such, the parties “cannot be required to submit any dispute to arbitration that [they have] not agreed to submit.” Gold Coast Mall, Inc. v. Larmar Corp., 298 Md. 96, 103 , 468 A.2d 91, 95 (1983) (citations omitted). In this case, the arbitration clause in the agreements provided: “This arbitration agreement is made pursuant to a transaction involving interstate commerce, and shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16 (‘FAA’).” In Walther v. Sovereign Bank, 386 Md. 412, 423 , 872 A.2d 735, 742 (2005), we recognized that “[t]he FAA applies to nearly all arbitration agreements, and, like all federal law, it preempts inconsistent state law.” (Citation omitted). Section 2 of the FAA, 9 U.S.C. § 2 , provides that a written agreement between the parties to arbitrate a dispute is “valid, irrevocable, and enforceable, save upon any grounds as exist at law or in equity for the revocation of any contract[.]” The “United States Supreme Court has made clear state courts are [] bound to recognize and enforce” Section 2 of the FAA.

Walther, 386 Md. at 423 , 872 A.2d at - 32 - 742 (citation omitted). Nevertheless, in enforcing Section 2 of the FAA, “state courts are not bound by the federal procedural provisions of the FAA, which are found in §§ 3 and 4 of the FAA, but may generally apply their own procedures.” Walther, 386 Md. at 423 , 872 A.2d at 742 (citation omitted). Thus, “in enforcing § 2 of the FAA, we [] look to [] pertinent Maryland law relating to arbitration agreements to decide whether the circuit court properly” compelled arbitration. Id. at 423, 872 A.2d at 742 .

The Maryland Uniform Arbitration Act, CJ §§ 3-201 to 3-234 (“the MUAA”), which was enacted in 1965, “was purposefully meant to mirror the language of the FAA[,]” Walther, 386 Md. at 423-24 , 872 A.2d at 742 , and “embodies a legislative policy favoring enforcement of executory agreements to arbitrate[,]” Gold Coast Mall, 298 Md. at 103 , 468 A.2d at 95 (citations omitted). Like Section 2 of the FAA, the MUAA provides that a written agreement to arbitrate a dispute between the parties “is valid and enforceable, and is irrevocable, except upon grounds that exist at law or in equity for the revocation of a contract.” CJ § 3-206(a). The MUAA “strictly confines the function of the court in suits to compel arbitration to the resolution of a single issue—is there an agreement to arbitrate the subject matter of a particular dispute.” Gold Coast Mall, 298 Md. at 104 , 468 A.2d at 95 (citation omitted). CJ § 3-207 of the MUAA permits a party to petition a court to compel arbitration and requires the court to deny the petition if it determines that a valid arbitration agreement does not exist, stating: (a) If a party to an arbitration agreement described in § 3-202 of this subtitle refuses to arbitrate, the other party may file a petition with a court to order arbitration. - 33 - (b) If the opposing party denies the existence of an arbitration agreement, the court shall proceed expeditiously to determine if the agreement exists.

(c) If the court determines that the agreement exists, it shall order arbitration. Otherwise it shall deny the petition. In other words, CJ § 3-207 gives the court the authority to determine whether a valid arbitration agreement exists. We have expressly recognized that “courts play a leading role in cases involving arbitration [] in deciding arbitrability of a dispute.” Balt.

Cnty. Fraternal Ord. of Police Lodge No. 4 v. Balt. Cnty., 429 Md. 533, 549 , 57 A.3d 425, 434 (2012). This is so “because the existence of an agreement to arbitrate is a threshold issue, and the courts must have authority to assess, independently of the arbitrator’s point of view, whether or not the parties ever reached such an agreement.” Id. at 549 , 57 A.3d at 434 (cleaned up).

In deciding an issue as to whether arbitration is required, the court is “limited to determining only one thing: whether a valid arbitration agreement exists[.]” Id. at 550 , 57 A.3d at 435 (cleaned up). In doing so, the court must take care “not to stray into the merits of any underlying agreements.” Id. at 550 , 57 A.3d at 435 (cleaned up). Stated otherwise, consideration of a motion to compel arbitration may involve two separate, and distinct, issues: (1) whether an agreement to arbitrate exists; and (2) whether a particular dispute falls within the scope of the arbitration agreement. See id. at 549-50 , 57 A.3d at 434-35 ; Cheek, 378 Md. at 159-60 , 835 A.2d at 668 ; Gold Coast Mall, 298 Md. at 103-04 , 468 A.2d at 95 .

As is plain, the first issue—whether an agreement to arbitrate exists—is always a matter to be decided by the court, and not an arbitrator. See Balt. Cnty. Fraternal Ord. of Police Lodge No. 4, 429 Md. at 550 , 57 A.3d at 435 ; see also Cheek, 378 Md. at 159 , 835 - 34 - A.2d at 668.

By contrast, if disputed, the second issue—whether a particular dispute falls within the scope of the arbitration agreement—may be decided by the court or the arbitrator, depending on the relevant circumstances. See Allstate Ins. Co. v. Stinebaugh, 374 Md. 631, 643 , 824 A.2d 87, 94 (2003).19 Alleging Grounds for Revocation In this case, although Linton and Johnson did not specifically seek rescission of the agreements, it is readily apparent that, in the complaint, Linton and Johnson alleged “grounds that exist at law or in equity for the revocation of” the agreements in accord with CJ § 3-206(a), and thereby denied the existence of a valid arbitration agreement. See CJ § 3-207(b) (“If the opposing party denies existence of an arbitration agreement, the court shall proceed expeditiously to determine if the agreement exists.”).

By its express terms, the arbitration clause states that it is effective only “[o]nce [the] transaction has closed[.]” Closure of the transaction necessarily depended on the court’s approval of the transfer 19 In Allstate Ins. Co., 374 Md. at 643 , 824 A.2d at 94 , we distilled from Gold Coast Mall “the rules for determining whether court or arbitrator determines arbitrability where the arbitrability issue is the scope of the arbitration clause and its applicability to the dispute at hand[,]” stating: First, in Gold Coast Mall, we declared that if an arbitration clause is clear, it is initially for the courts to determine whether the subject matter of a dispute falls within the scope of the arbitration clause. Second, we explained that in determining whether a dispute falls within the scope of an arbitration clause, arbitration should be compelled if the arbitration clause is broad and does not expressly and specifically exclude the dispute. Third, we concluded that if an arbitration clause is unclear as to whether the subject matter of the dispute falls within the scope of the arbitration agreement, the question of arbitrability ordinarily should be left to the arbitrator.

(Cleaned up). - 35 - under the MSSPA. In the complaint, Linton and Johnson specifically pled that the circuit court’s finding that they had received independent professional advice from Smith was procured through fraud and deceit. Linton and Johnson alleged that the court would not have approved the transfer—meaning that the transaction would not have closed—had the court been aware of Smith’s relationship with Access. With these allegations, Linton and Johnson disavowed the validity of both the agreements and the arbitration clause within them.

As the Court of Special Appeals explained, the circuit court and Petitioners used the term “arbitrability” to improperly conflate two separate issues that may be presented upon the filing of a motion to compel arbitration—“whether there is an agreement to arbitrate at all and [] whether a particular dispute falls within the scope of an arbitration agreement.” Linton, 253 Md. App. at 521-22, 268 A.3d at 946. As stated above, and as the Court of Special Appeals recognized, whether an agreement to arbitrate exists is always a question for the court, not the arbitrator, to decide. See id. at 522, 268 A.3d at 946. Thus, despite Petitioners’ contention otherwise, there is no “general rule” that an arbitrator decides issues of “arbitrability.” To the contrary, our case law is clear that the circumstance in which a court plays a “leading role” in a case involving arbitration is “in deciding the arbitrability of a dispute[,]” meaning in determining the threshold issue of whether an agreement to arbitrate exists.

Balt. Cnty. Fraternal Ord. of Police Lodge No. 4, 429 Md. at 549 , 57 A.3d at 434 (citation omitted). In this case, under Maryland law, the circuit court was required to determine whether a valid agreement to arbitrate existed rather than finding “that arbitrability in this case must be determined by an arbitrator and not the court” and - 36 - compelling arbitration.

Prima Paint and Holmes Petitioners rely on Prima Paint and Holmes for the proposition that, where a party does not specifically challenge the validity of an arbitration clause or allege fraud in the inducement as to the arbitration clause itself, the underlying dispute is for the arbitrator to decide. If we were to accept Petitioners’ argument that compelling arbitration in this case is required under the holdings of Prima Paint and Holmes because, according to them, Linton and Johnson did not specifically challenge the validity of the arbitration clause, such a determination would be inconsistent with: (1) the fact that, in the complaint, Linton and Johnson alleged that the arbitration clause itself was procured through fraud and deceit which interfered with their ability to understand the clause; (2) the provisions of the MSSPA, which require valid court approval of the transfer of structured settlement rights; and (3) the express language of the arbitration clause, which conditions arbitration on closing of the transaction. In this case, where Linton and Johnson have alleged fraud with respect to both the agreements generally and the arbitration clause specifically, the holdings of Prima Paint and Holmes are not applicable. In Prima Paint, 388 U.S. at 396-97 , the Supreme Court addressed whether a federal court or an arbitrator should resolve a claim of fraud in the inducement under a contract governed by the FAA where there was “no evidence that the contracting parties intended to withhold that issue from arbitration.” In Prima Paint, Flood & Conklin (“F & C”) entered into a consulting agreement with Prima Paint (which was closely followed by a contract whereby Prima Paint purchased F & C’s business), pursuant - 37 - to which F & C was to furnish advice and consultation to Prima Paint in exchange for Prima Paint paying F & C a percentage of its receipts.

See id. at 397 . The consulting agreement included a “broad” arbitration clause, which provided in part that “[a]ny controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration in the City of New York, in accordance with the rules then obtaining of the American Arbitration Association[.]” Id. at 398 . A dispute arose in the performance of the consulting agreement when Prima Paint notified F & C that it believed F & C had breached the agreement by fraudulently representing that it was solvent and able to perform its contractual obligations, when in fact it was insolvent and had filed a petition for bankruptcy one week after the agreement was signed. See id. at 398 .

After F & C sought