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White Pacific Sec., Inc. v. Gulak

United States District Court, S.D. New York

September 15, 2014

WHITE PACIFIC SECURITIES, INC., et al., Petitioners,
v.
DANIEL GULAK, Respondent

For Petitioners: Christopher Mader, Patrick Baldwin, BALDWIN LAW GROUP.

For Respondent: Val D. Hornstein, HORNSTEIN LAW OFFICES, PROF. CORP.

MEMORANDUM OPINION

Lewis A. Kaplan, United States District Judge.

This is an action to confirm an alleged arbitration award. Now pending before the Court are petitioners' motion to confirm the alleged award [DI 20], respondent's motions to dismiss the action and for Rule 11 sanctions [DI 9 and 12], and petitioners' motion for a temporary restraining order halting the continuation of the arbitration [DI 22]. The last of the foregoing motions is the subject of a report and recommendation by Magistrate Judge Kevin Nathaniel Fox to which petitioners have objected.[1]

Facts

The Arbitration

Respondent Gulak made investments in three tenant-in-common real estate interests for which he paid on August 17, 2005. Six years and twelve days later, he commenced the subject arbitration against petitioners (" White" ) under the auspices of

Page 499

the Financial Industry Regulatory Authority (" FINRA" ). White moved before the arbitrators to dismiss the claim on the ground that it was barred by FINRA Rule 12206(a), which provides in relevant part that no claim may be submitted for arbitration before FINRA " where six years have elapsed since the occurrence or event giving rise to the claim." On January 15, 2013, the arbitrators entered a document headed Pre-hearing Conference Order (the " Order" ) which began by listing several motions pending before it, took up the motion to dismiss under Rule 12206(a), and concluded with respect to that motion as follows:[2]

Accordingly, and while the Panel understands that twelve days is not a huge amount of time, given the pleadings and argument, the Panel considers the twelve days enough that jurisdiction is absent. The Panel therefore grants the Respondents' motion based on eligibility (12206), with costs split evenly between the parties.
The Claimant therefore is free to proceed with his case in any court of competent jurisdiction.
As the Panel lacks jurisdiction, it does not decide the other motions before it, and removes the hearing dates from the calendar.

No document entitled " Award" or anything like it, however, was issued.

Shortly after the entry of the Order, Gulak requested reconsideration. On March 4, 2013, the panel concluded that it had jurisdiction to entertain the request. Further papers were submitted. And on April 8, 2013, the panel reversed itself, holding that Gulak's claim was eligible for arbitration.[3] In due ...


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