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Pfeffer v. Wells Fargo Advisors, LLC

United States District Court, S.D. New York

May 23, 2017

ALBA T. PFEFFER, Plaintiff,



         Plaintiff Alba T. Pfeffer, proceeding pro se, brings this action against defendants Wells Fargo Advisors, LLC, and Andre Mirkine, to vacate an arbitration award issued by a Financial Industry Regulatory Authority (“FINRA”) arbitration panel.

         Before the Court is plaintiff's complaint, which the Court construes as a motion to vacate the arbitration award (Doc. #1), and defendants' motion to dismiss the complaint and confirm the arbitration award. (Doc. #11).

         For the following reasons, plaintiff's motion is DENIED and defendants' motion is GRANTED.

         The Court has subject matter jurisdiction under 28 U.S.C. § 1332.[1]


         The following factual background is drawn from the complaint and the parties' submissions in support of and in opposition to the pending motions.

         Plaintiff is the widow of Murray Pfeffer, who died in 2012.

         According to plaintiff's statement of claim submitted to FINRA, Mr. Pfeffer executed a “power of attorney” in 2003 under which plaintiff “was authorized to act as Murray Pfeffer's authorized agent and attorney-in-fact to buy, sell and trade in any stocks and bonds, options, other securities, commodities and contracts relating to them, on margin or otherwise.” (Betz Aff. Ex. B ¶ 4). The power of attorney authorized plaintiff “to act for her husband . . . and on his behalf . . . regarding ‘everything mentioned['] in the power of attorney document and everything necessary to conduct his account.” (Id. (quoting the power of attorney, Betz Aff. Ex. F at 14)). The following year, on June 29, 2004, Mr. Pfeffer created two revocable trusts-“Trust A” and “Trust B”-with A.G. Edwards, a company that in 2008 was acquired by Wachovia Corporation and then by Wells Fargo.[2] (Id. ¶ 5). Plaintiff was the beneficiary of Trust A (“plaintiff's trust”); and Murray Pfeffer's children from his first marriage were the beneficiaries of Trust B (“the children's trust”).

         Defendant Andre Mirkine was at all relevant times a financial advisor and Mr. and Mrs. Pfeffer's contact at A.G. Edwards and later Wells Fargo. (Betz Aff. Ex. B. ¶ 2; Transcript of proceedings before the FINRA arbitration panel (Grannum Jan. 10, 2017, Aff. Exs. A-E and Grannum May 11, 2017, Aff. Exs. A-B, hereinafter “Tr., ” at 461)).

         Beginning in October 2009, plaintiff and Murray Pfeffer allegedly became “concerned with the way in which Mirkine was handling the accounts.” (Betz Aff. Ex. B ¶¶ 7-8). As a result, Mr. Pfeffer told Mirkine to transfer all of the assets in the children's trust into plaintiff's trust. (Id. ¶ 8). Mirkine refused to do so because he believed Mr. Pfeffer was not competent. (Id.). Mirkine then “advised Murray Pfeffer to write him a letter requesting the transfer.” (Id. ¶ 9). On January 11, 2010, Mr. Pfeffer sent a letter to Mirkine making the request. (Id. ¶ 10).

         On January 13, 2010, plaintiff spoke with Mirkine on the phone. Mirkine told her that Murray Pfeffer's children from his first marriage “brought him two letters from physicians declaring Murray Pfeffer mentally incapacitated.” (Betz Aff. Ex. B. ¶ 11). Mirkine also told plaintiff that “the money within [the children's trust] was now frozen.” (Id.).

         Sometime in early 2010, Murray Pfeffer's children commenced a guardianship proceeding for their father in New York State Supreme Court, Westchester County. In August 2010, the court appointed plaintiff to be the guardian of Mr. Pfeffer's “person, ” and appointed an independent guardian of Mr. Pfeffer's property. (Tr. at 387-88; Betz Aff. Ex. F at 18).

         Mr. Pfeffer died on October 6, 2012. Thereafter, the guardian of the property distributed the property to plaintiff and the children. (See Tr. at 387).

         In February 2015, plaintiff, who was then represented by counsel, commenced the arbitration by filing a statement of claim with FINRA. (See Betz Aff. Exs. B, C). Plaintiff asserted causes of action for breach of fiduciary duty based on fraud, breach of contract, negligent misrepresentation, and conversion. The essence of her claims was that Wells Fargo and Mirkine had wrongfully refused to follow Mr. Pfeffer's instructions to transfer assets from the children's trust into plaintiff's trust.

         A three-person FINRA arbitration panel held a hearing over the course of seven sessions in January, May, and September 2016, during which plaintiff, who at that point was proceeding pro se, gave an opening statement, testified, was cross-examined, called witnesses to testify, presented documentary evidence to the panel, and gave a closing argument. ...

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