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Bogar v. Ameriprise Financial Services, Inc.

United States District Court, S.D. New York

May 4, 2017

Lawrence Keith Bogar, Petitioner,
v.
Ameriprise Financial Services, Inc., Respondent.

          MEMORANDUM OPINION AND ORDER

          GREGORY H. WOODS United States District Judge.

         Petitioner Larry Bogar worked as a registered representative at Respondent Ameriprise Financial Services, Inc., a broker-dealer. When Mr. Bogar's employment ended in 2015, Ameriprise demanded payment of the outstanding balance on a loan it had made to him approximately two years earlier. Mr. Bogar did not repay the outstanding debt as demanded, and the matter proceeded to arbitration before the Financial Industry Regulatory Authority, which rendered an award in favor of Ameriprise. Mr. Bogar now moves to vacate the award under the Federal Arbitration Act on the basis that the arbitrator exceeded his powers. Ameriprise opposes Mr. Bogar's petition and moves to confirm the award. For the reasons stated below, Mr. Bogar's petition to vacate the award is DENIED and Ameriprise's motion to confirm the award is GRANTED.

         I. INTRODUCTION

         Petitioner Larry Bogar signed a promissory note in favor of his employer, Ameriprise Financial Services, Inc. (“Respondent” or “Ameriprise”), on August 1, 2013. See Verified Petition to Vacate Arbitration Award (Dkt. No. 1), Ex. A (the “Promissory Note”). The principal amount of the Promissory Note was $143, 199, which Mr. Bogar agreed to repay at interest of 1.47% per annum, in monthly installments for nine years. Id. ¶ 1. The Promissory Note provided that, if Mr. Bogar's employment with Ameriprise ended for any reason, the “unpaid principal balance of the principal sum, plus accrued interest, shall be due and payable as of the date of the termination.” Id. ¶ 2. It is undisputed that Mr. Bogar's employment with Ameriprise ended on December 7, 2015, and that the outstanding balance due and owing under the Promissory Note at that time was $107, 819.56.

         Ameriprise demanded payment of the outstanding balance due and owing under the Promissory Note several times-on December 14, 21 and 30, 2015. See Declaration of Michael S. Taaffe (Dkt. No. 12-1), Ex. B. Mr. Bogar did not pay the amount demanded by Ameriprise and, following an exchange of correspondence with Mr. Bogar and his counsel, on February 23, 2016, Ameriprise commenced an arbitration before the Financial Industry Regulatory Authority (“FINRA”). See Id. Ameriprise's FINRA Statement of Claim asserted four “counts”: (1) “Breach of Promissory Note Dated August 1, 2013, ” (2) “Unjust Enrichment, ” (3) “Conversion of Loan Funds, ” and (4) “Attorneys' Fees and Costs.” Petition, Ex. A. As pleaded, all of the asserted “counts” sought recovery for Mr. Bogar's alleged failure to repay the amount due on the Promissory Note. Id. at 4-6. The Statement of Claim's request for relief sought an award of the “principal owed as of December 7, 2015” in the amount of $107, 819.56, together with fees and costs associated with the action. Id. at 6. The Statement of Claim did not request different or additional relief for each of its three substantive “counts.”

         Mr. Bogar did not appear in the FINRA arbitration. On September 28, 2016, FINRA arbitrator Neal D. Baker issued an award in favor of Ameriprise comprising $107, 819.56 in compensatory damages, plus interest at the rate of 1.47% per annum from December 7, 2015 until the award is paid in full, and attorneys' fees and costs of $2, 429.83. See Taaffe Decl, Ex. A (the “Award”).

         Mr. Bogar filed a petition to vacate the Award on September 16, 2016. Dkt. No. 1 (the “Petition”). Ameriprise opposed the Petition on October 27, 2016, Dkt. No. 12, and Mr. Bogar replied on November 29, 2016, Dkt. No. 15. Ameriprise also filed a petition to confirm the Award on November 29, 2016, Dkt. No. 16, which Mr. Bogar opposed on December 9, 2016, Dkt. No. 17. In brief, the Petition argues that the arbitrator exceeded his powers in rendering the Award, and that the Award must therefore be vacated pursuant to 9 U.S.C. § 10(a)(4). The Court concludes that Mr. Bogar's asserted basis for vacatur do not support the relief requested, and the Petition must be denied. Moreover, inasmuch as denying a petition to vacate an arbitration award is tantamount to confirming it, Ameriprise's petition to confirm is granted.

         II. LEGAL STANDARD

         “[T]o avoid undermining the twin goals of arbitration, namely, settling disputes efficiently and avoiding long and expensive litigation, arbitral awards are subject to very limited review.” Zurich Am. Ins. Co. v. Team Tankers A.S., 811 F.3d 584, 588 (2d Cir. 2016) (quoting Folkway Music Publishers., Inc. v. Weiss, 989 F.2d 108, 111 (2d Cir. 1993) (internal quotation marks omitted)). Section 10(a) of the Federal Arbitration Act (“FAA”) “sets forth specific grounds for vacating” an arbitration award. Jock v. Sterling Jewelers Inc., 646 F.3d 113, 121 (2d Cir. 2011). Under that provision, an award may be vacated only under one of the following four circumstances:

(1) where the award was procured by corruption, fraud, or undue means;
(2) where there was evident partiality or corruption in the arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or
(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

         9 U.S.C. § 10(a). “Because the FAA supports a ‘strong presumption in favor of enforcing arbitration awards . . . the policy of the FAA requires that the award be enforced unless one of those grounds is affirmatively shown to exist.'” Jock, 646 F.3d at 121 (quoting Wall Street Assocs., L.P. v. Becker Paribas Inc., 27 F.3d 845, 848 (2d Cir. 1994)). In addition to the grounds for vacatur specified in § 10(a), there is an additional, “judicially-created ground, namely that an arbitral ...


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