Judge: Malcolm Mackey, Case: 22STCP04091, Date: 2023-04-19 Tentative Ruling

Case Number: 22STCP04091    Hearing Date: April 19, 2023    Dept: 55

SMANSA CHU v. TIAN HUA LU,                                                              22STCP04091

Hearing Date:  4/19/23,  Dept. 55.

#3:   PETITION TO CONFIRM ARBITRATION AWARD AND FOR ENTRY OF JUDGMENT.

Notice:  Okay

No Opposition

MP:  Petitioner

RP:  

Summary

On 11/14/22, Petitioner SMANSA CHU filed a Petition to Confirm Arbitration Award, alleging:  Petitioner filed a FINRA Arbitration Submission Agreement on October 9, 2021, and Respondent Cetera Investment Services LLC filed a FINRA Arbitration Submission Agreement on October 21, 2019. After the underlying claims settled in principle, Lu’s counsel filed a notice to FINRA dismissing all of his claims against Petitioner and Respondent Cetera Investment Services LLC, with prejudice. Pursuant to the Submission Agreements the parties signed and applicable FINRA Rules, FINRA administered a hearing on the Motion for Expungement pursuant to FINRA Dispute Resolution Arb. No. 19-02084. 

MP Positions

Petitioner requests an order confirming an arbitration award and entering judgment, on grounds including the following:

·         On March 29, 2022, FINRA issued and served a written decision in full and final resolution of Petitioner’s Motion for Expungement  (Petition, Exhibit H.)

·         The Arbitration Award granted Petitioner’s request for expungement of Lu’s customer complaint and FINRA arbitration from her Central Registration Depository records.

·         Pursuant to FINRA Rule 12904, the award is final and not subject to review or appeal and may be entered in any court having competent jurisdiction.

Tentative Ruling

The unopposed petition is granted, as prayed.

 “[N]othing in the FINRA Code of Arbitration Rules required the arbitrators to decide issues in accordance with California law.”  Bak v. MCL Financial Group, Inc. (2009) 170 Cal.App.4th 1118, 1127.

FINRA Rule 2080(a) “recognizes the right of members and associated persons to seek expungement of information from the CRD system by obtaining an order from a court of competent jurisdiction directing such expungement”…. “and provides no substantive criteria for delivering the remedy of expungement, …”  Lickiss v. Fin. Ind. Reg. Auth.  (2012) 208 Cal.App.4th 1125, 1135.

“Courts interpret the FINRA arbitration rules the same way they interpret contracts, giving effect to the parties' intent as expressed by the plain and ordinary meaning of the language they used.”  Ronay Family Limited Partnership v. Tweed (2013) 216 Cal.App.4th 830, 841-42.

“Rule 12200 of FINRA's Code of Arbitration Procedure for Customer Disputes … requires arbitration of disputes ‘between a customer and a member or associated person,’ if the ‘dispute arises in connection with the business activities of the member or the associated person’ and arbitration is required by a written agreement or requested by the customer.”  Ronay Family Limited Partnership v. Tweed (2013) 216 Cal.App.4th 830, 843. (Italics added in opinion.)

“The mandate to arbitrate disputes arising out of ‘business activities of ... an associated person,’ reasonably read, must require arbitration of disputes only if they arise out of the business activities of an individual as an associated person of a FINRA member. With this interpretation, FINRA and the registered representatives under its jurisdiction are assured that arbitration will pertain to matters with some nexus to the activity actually regulated by FINRA.”  Valentine Capital Asset Management, Inc. v. Agahi (2009) 174 Cal.App.4th 606, 616.