Judge: Michael P. Linfield, Case: 22STCP02248, Date: 2022-08-02 Tentative Ruling

Case Number: 22STCP02248    Hearing Date: August 2, 2022    Dept: 34

SUBJECT:                 Petition to Confirm Arbitration Award

Moving Party:          Petitioner Morgan Stanley Smith Barney, LLC (“MSSB”)

Resp. Party:             None

Petitioner Morgan Stanley Smith Barney, LLC’s Motion to Confirm Arbitration Award is GRANTED.

I.           BACKGROUND

On June 14, 2022, Petitioner Morgan Stanley Smith Barney, LLC filed a petition to confirm an arbitration award.

On June 28, 2022, MSSB moved the Court “pursuant to California Code of Civil Procedure section 1285, et seq., for an order entering judgment confirming the Financial Industry Regulatory Authority Dispute Resolution (“FINRA”) Arbitration Award (“Award”) rendered in the matter entitled Mary Susie McAllister Morton, Individually and on behalf of the Susie McAllister Morton Living Trust DTD 05/06/02 vs. Morgan Stanley Smith Barney LLC (FINRA DR Case No. 19-03229) (the “Expungement Arbitration”).” (Motion, p. 1:27—2:4.)

MSSB wishes to confirm the following award:

AWARD

“After considering the pleadings, the testimony and evidence presented at the hearing, and any post-hearing submissions, the Panel has decided in full and final resolution of the issues submitted for determination as follows:

1.           Claimants’ claims are denied in their entirety.

2.           The Panel recommends the expungement of all references to the above-captioned arbitration (Occurrence Number 2035502) from registration records maintained by the CRD for Unnamed Party Francis James Aurino (CRD Number 1754375) with the understanding that, pursuant to Notice to Members 04-16, Unnamed Party Francis James Aurino must obtain confirmation from a court of competent jurisdiction before the CRD will execute the expungement directive.

Unless specifically waived in writing by FINRA, parties seeking judicial confirmation of an arbitration award containing expungement relief must name FINRA as an additional party and serve FINRA with all appropriate documents.

Pursuant to Rule 12805 of the Code of Arbitration Procedure (“Code”), the Panel has made the following Rule 2080 affirmative finding of fact:

The claim, allegation, or information is false.

The Panel has made the above Rule 2080 finding based on the following reasons:

Claimants’ allegations are false. Over a span of 20 years, Francis James Aurino made over $2 million of profit for Claimants in a non-discretionary account despite Mary Susie McAllister Morton’s refusal to consider investing in stocks and despite her level of spending which far outpaced the income being earned and thereby consumed the capital in her account. When the transactions now complained of settled and Mary Susie McAllister Morton received return of her principal in full and interest well above the prevailing market rates, she frequently called Francis James Aurino to inquire how soon he could purchase another similar security for her. Considering Mary Susie McAllister Morton's frequent conversations with Francis James Aurino, her close supervision and nearly daily review of her account, she had ample opportunity to inquire or complain about any of the 49 transactions over multiple years that first became at issue in this action.

3.           Any and all claims for relief not specifically addressed herein, including any requests for punitive damages and attorneys’ fees, are denied.” (Motion, p. 2:5—3:7.)

II.        ANALYSIS

A.          Legal Standard

Any party to an arbitration in which an award has been made may petition the court to confirm, correct, or vacate the award. (CCP § 1285.) When a petition to confirm an award is filed, the superior court has four courses of conduct available: to confirm the award, to correct and confirm it, to vacate it, or to dismiss the petition. (Cooper v. Lavely & Singer Professional Corp. (2014) 230 Cal.App.4th 1, 10.) Arbitration awards are subject to very limited judicial review, and the merits of the controversy are not reviewable on a petition to confirm, vacate, or correct. (Cinel v. Christopher (2012) 203 Cal.App.4th 759, fn 5.) Thus, an arbitration award may only be vacated if (1) the award was procured by corruption, fraud or other undue means, (2) there was corruption in any of the arbitrators, (3) the rights of the party were substantially prejudiced by misconduct of a neutral arbitrator, (4) the arbitrators exceeded their powers, (5) the rights of the party were substantially prejudiced by the refusal of the arbitrators to postpone the hearing, or (6) the arbitrator making the award failed to disclose a ground for disqualification or failed to disqualify himself or herself as required upon receipt of timely demand. (CCP § 1286.2.) 

The procedural requirements of a petition to confirm an arbitration award require the petition to:

a.           Set forth the substance of or have attached a copy of the agreement to arbitrate unless the petitioner denies the existence of such an agreement.

b.           Set forth the names of the arbitrators.

c.           Set forth or have attached a copy of the award and the written opinion of the arbitrators, if any. (CCP § 1285.4.) 

B.          Discussion

On October 22, 2019 and January 31, 2020 Respondents and Petitioner respectively signed FINRA Uniform Submission Agreements consenting to arbitration of their claims before FINRA. (Lindh Decl., ¶¶  3, 5; Exs. A, C.) Following a joint selection process, arbitrators were appointed by FIRNA DR and accepted by the parties. (Lindh Decl., ¶ 6.) FINRA served Petitioner and Respondent with the Arbitration Award on March 3, 2022. (Lindh Decl., ¶ 8, Ex. D.) On March 24, 2022 MSSR submitted a letter to FINRA “requesting that FINRA waive its requirement that it be named in court proceedings; FINRA approved this request on April 21, 2022. (Lindh Decl., ¶¶ 9, 10.)

The Court finds that the required procedural requirements for a petition to confirm an arbitration award have been met. (Lindh Decl., ¶¶ 3, 5, 6, 11, Exs. A., C, D.) The Court has no evidence to suggest that the arbitration was procured by corruption, fraud, or other undue means, or that any party’s rights were substantially prejudiced.

No opposition has been filed to this petition.

III.     CONCLUSION

Petitioner Morgan Stanley Smith Barney, LLC’s Motion to Confirm Arbitration Award is GRANTED.