|
Larry Hagman, better known as JR Ewing, or my favorite: Major Nelson, appears to have won an $11 million award against Citigroup.
Not only did the Panel award Mr. Hagman compensatory damages in the amount of $1.098,386.00, but also award Mr. Hagman attorney's fees of $439,354.40.
In addition, the Panel also ordered that Citigroup pay $10,000,000 directly to the IRS Tax-Exempt 501 c(3) charitable organization(s) of Mr. Hagman's choice. Notwithstanding the outrageous circumstances warranting the imposition of punitive damages, Citigroup requested that the broker's records be expunged. Not only did the Panel deny this request, it appears to bullet-proof the award from appeal, the Panel provided ample legal support for its award. The Award appears below.
.
Award
FINRA Dispute Resolution
In the Matter of the Arbitration Between:
Claimants Case Number: 09-03251
Larry Hagman, Individually
Larry Hagman & Maj I. Hagman Rev Trust, Larry Hagman & Maj I. Hagman, TTEE
Larry Hagman IRA CGM IRA Custodian
Larry Hagman Rollover IRA CGM
The Hagman Insurance Trust UAD 03/21/06
Respondent Hearing Site: Los Angeles, California
Citigroup Global Markets, Inc.
Nature of the Dispute: Customers vs. Member
REPRESENTATION OF PARTIES
Claimants, Larry Hagman, Larry Hagman & Maj I. Hagman Rev Trust, Larry Hagman &
Maj I. Hagman, TTEE, Larry Hagman IRA CGM IRA Custodian, Larry Hagman Rollover
IRA CGM, and The Hagman Insurance Trust UAD 03/21/06, hereinafter referred to as
"Claimants": Philip M. Aidikoff, Esq. and Katrina M. Boice, Esq., Aidikoff, Uhl &
Bakhtlari, Beveriy Hills, California.
Respondent, Citigroup Global Markets, Inc., hereinafter referred to as "Respondent":
William A. Hohauser, Esq., Citigroup Global Markets, Inc., New York, New York.
CASE INFORMATION
Statement of Claim filed on or about: May 29, 2009.
Claimants signed the Submission Agreement: May 27,2009.
Statement of Answer filed by Respondent on or about: September 14, 2009.
Respondent signed the Submission Agreement: September 11, 2009.
CASE SUMMARY
Claimants asserted the following causes of action: 1) breach of fiduciary duty; 2)
breach of written contract; 3) fraud by misrepresentation and omission; 4) failure to
supervise and control; 5) violation of federal and state securities laws, statutory and
common law, and NASD rules of fair practice and NYSE rules. The causes of action
relate to unspecified securities in Claimants' accounts held with Respondent and the
purchase of a life Insurance policy.
FINRA Dispute Resolution
Arbitration No. 09-03251
Award Pace 2 of 5
Unless specifically admitted in its Answer, Respondent denied the allegations made in the
Statement of Claim and asserted various affimnative defenses.
RELIEF REQUESTED
In the Statement of Claim, Claimants requested:
1. Compensatory damages in an amount according to proof but not less than
$1,533,596.00;
2. Rescission;
3. Lost opportunity costs;
4. Attorney's fees and costs;
j5. Pre and post judgment interest at the legal rate;
6. Punitive damages in an amount according to proof; and
7. Such other and further relief as this Panel may deem just and proper.
At the close of the hearing, Claimants requested $1,345,015.00 in compensatory
damages.
Respondent requested that the Statement of Claim be dismissed in its entirety and that
Respondent be awarded its costs.
At the close of the hearing on August 20, 2010, Respondent requested the
expungement of all references to the above captioned arbitration from non-party Lisa
De Tanna's registration records maintained by the Central Registration Depository
("CRD").
OTHER ISSUES CONSIDERED AND DECIDED
The Arbitrators acknowledge that they have each read the pleadings and other
materials filed by the parties.
Respondent requested to waive the discovery deadline and the 20-day exchange rule
by introducing documents into evidence on the fifth day of hearing. The Panel ruled to
accept Respondent's documents into evidence.
The parties have agreed that the Award In this matter may be executed in counterpart
copies or that a handwritten, signed Award may be entered.
AWARD
After considering the pleadings, the testimony, and the evidence presented at the
hearing, the Panel has decided in full and final resolution of the issues submitted for
determination as follows:
1. Respondent is liable to and shall pay to Claimants compensatory damages in the
amount of $1.098,386.00.
2. Respondent is liable to and shall pay punitive damages directly to the IRS Tax-
Exempt 501 c(3) charitable organization(s) of Claimants' choice in the amount of
$10,000,000.00 pursuant to the following authority:
a. Mastrobuono V. Shearson Lehman Hutton. Inc.. 514 U.S. 52 (1995);
b. Hobbs V. Bateman. Eichler. Hill Richards. 164 Cal. App. 3d (Cal. App. 2d Dist.
1985);
c. California Welfare & Institutions Code § 15600, et seq.; and
d. FINRA Arbitrator's Manual, pg. 31 ("[a] party also might have requested
punitive damages. Punitive damages are not intended to right a wrong but
are intended to punish the wrongdoer and to deter future wrongdoing.
Generally, you may award punitive damages if the claimant requests it, and
the respondent has engaged in serious misconduct that meets the standards
for such an award, as well as any arbitration forum rules on the subject").
3. Respondent is liable to and shall pay Claimants' attorneys' fees in the amount of
$439,354.40 pursuant to the following authority:
a. FINRA Arbitrator's Manual, pg. 31 ("[ajttorneys' fees are frequently requested
in arbitration. Arbitrators have the authority to consider awarding attorneys'
fees, but the procedure varies from state to state. It Is appropriate for the
arbitrators to request the parties to brief this issue.");
b. California Welfare & Institutions Code § 15600 et seq. ("...where it is proven
by a preponderance of the evidence that a defendant is liable for financial
abuse, as defined in Section 15610.30, in addition to compensatory damages
and all other remedies othen/vise provided by law, the court shall award to the
plaintiff reasonable attorney's fees and costs."); and
c. Advanced Micro Devices v. Intel Core. Cal. 4th 362 (Cal. 1994) ("the
Supreme Court of California recognized that arbitrators are not bound to
award only on principles of law, but may base their decisions upon broad
principles of equity and justice as follows: The choice of remedy, then, may at
all times call on any decision maker's flexibility, creativity and sense of
fairness. In private arbitration, the parties have bargained for the relatively
free exercise of those faculties. Arbitrators, unless specifically restricted by
the agreement to following legal rules, "'may base their decisions upon broad
principles of justice and equity... [Citations.] As early as 1852, the court
recognized that. The arbitrators are not bound to award on principles of dry
law, but may decide on principles of equity and good conscience, and make
their award ex aequo et bono [according to what is just and good]'").
4. Respondent is liable to and shall pay to Claimants all Claimants' costs in the
amount of $20,387.00, including fees of witnesses.
5. Respondent's request for the expungement of all references to the above
captioned arbitration from non-party Lisa De Tanna's registration records
maintained by the Central Registration Depository ("CRD") Is denied.
6. Any and all relief not specifically addressed herein is denied.
FINRA Dispute Resolution
Arbitration No. 09-03251
Award Page 4 of 5
FEES
Pursuant to the Code, the following fees are assessed:
Filing Fees
FINRA Dispute Resolution assessed a filing fee* for each claim:
Initial claim filing fee = $ 1,800.00
*The filing fee is made up of a non-refundable and a refundable portion.
Member Fees
Member fees are assessed to each member fimri that is a party in these proceedings or
to the member firm that employed the associated person at the time of the events giving
rise to the dispute. Accordingly, as a party, Citigroup Global Markets, Inc. is assessed
the following: •'
Member surcharge = $ 2,800.00
Pre-hearing process fee = $ 750.00
Hearing process fee = $ 5,000.00
Hearing Session Fees and Assessments
The Panel has assessed hearing session fees for each session conducted. A session is
any meeting between the parties and the arbitrators, including a pre-hearing conference
with the arbitrator(s) that lasts four (4) hours or less. Fees associated with these
proceedings are:
Two (2) Pre-hearing sessions with Panel @ $1.200.00/session = $ 2,400.00
Pre-hearing conferences: November 16, 2009 1 session
August 6, 2010 1 session
Fifteen (15) hearing sessions @ $1.200.00/session = $18,000.00
Hearing Dates: August 16,2010 2 sessions
August 17, 2010 2 sessions
August 18, 2010 2 sessions
August 19, 2010 3 sessions
August 20, 2010 3 sessions
September 17, 2010 3 sessions
Total Hearing Session Fees = $20,400.00
1. The Panel has assessed $10,200.00 of the hearing session fees jointly and
severally to Claimants.
2. The Panel has assessed $10,200.00 of the hearing session fees to Respondent.
All balances are payable to FINRA Dispute Resolution and are due upon receipt.
|
