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ADR-106
ATTORNEY OR PARTY WITHOUT ATTORNEY (Name, State Bar number, and address) FOR COURT USE ONLY
—~ DARRYL J. HOROWITT #100898
PAUL M. PARVANIAN #247284
COLEMAN & HOROWITT, LLP
499 W. Shaw Ave., Ste.116, Fresno, CA 93704
E-FILED
TELEPHONE NO: (559) 248-4820 FAXNO (Optional: (559) 248-4830 3/15/2019 11:15 AM
E-MAIL ADDRESS (Optionay: dhorowitt@ch-law.com RESNO COUNTY SUPERIOR COURT
ATTORNEY FOR (Name): Petitioner, GEMINI TRUST COMPANY, LLC By: M. Sanchez, Deputy
SUPERIOR COURT OF CALIFORNIA, COUNTY OF FRESNO
STREET ADDRESS: 1130 "O" Street
MAILING ADDRESS:
CITY AND ZIP CODE: Fresno, CA 93721
BRANCH NAME: B.F. SISK COURTHOUSE
PETITIONER: GEMINI TRUST COMPANY, LLC
RESPONDENT: MATTHEW PETER CASTIGLIONE
AMEN!
PETITION TO [QQ CONFIRM (2) CORRECT vacate
CONTRACTUAL ARBITRATION AWARD
Jurisdiction (check ail that apply)
() Action is a limited civil case
Amount demanded [_] does not exceed $10,000
CASE NUMBER:
CD exceeds $10,000, but does not exceed $25,000
19CECG00675
[EZ] Action is an unlimited civil case (exceeds $25,000)
NOTICE: You may use this form to request that the court confirm, correct, or vacate an award in an arbitration conducted
pursuant to an agreement between the parties that is subject to Code of Civil Procedure section 1285 et seq. and that does
not involve an attorney-client fee dispute. If you are requesting court action after an attorney-client fee arbitration award,
please read Alternative Dispute Resolution form ADR-105, information Regarding Rights After Attorney-Client Fee
Arbitration.
Petitioner and respondent. Petitioner (name each)
GEMINI TRUST COMPANY, LLC
alleges and requests relief against respondent (name each)
MATTHEW PETER CASTIGLIONE,
Contractual arbitration. This petition requests the court to confirm, correct, or vacate an award in an arbitration conducted
according to an agreement between the parties that is subject to Code of Civil Procedure section 1285 et seq.
Pending or new action.
a {} A court case is already pending, and this is a petition filed in that action. (Ifso, proceed to item 4.)
b. (J This petition commences a new action. (ifso, complete items 3b(1) through 3b(4).)
(4) Petitioner's capacity. Each petitioner named in item 1 is an individual,
(CED except petitioner (state name and complete one or more of the following) GEMINI TRUST COMPANY, LLC
(a) (2) is a corporation qualified to do business in California
{b) (21 is an unincorporated entity (specify)
(c) (CL) is a representative (specify)
(a) (ED is (specify other capacity) New York Limited Liability Company ‘
(2) Respondent's capacity. Each respondent named in item 1 is an individual,
(} except respondent (state name and complete one or more of the folowing)
{a) [-} is a business organization, form unknown.
(b) (2) is a corporation
(c) (L) is an unincorporated entity (specify)
(a) C) is a representative (specify)
(e) (21 is (specify other capacity)
Page { of 3
foved for Optional Use PETITION TO CONFIRM, CORRECT, OR VACATE Code of Civil Provedure, § 1285 et 529,
rStulct Gouna ot Cali Cy Essential
ADR-108 [Now January 1, 20 ceb.com &Forms” CONTRACTUAL ARBITRATION AWARD
(Alternative Dispute Resolution) Gemini Trust Company, LLC
PETITIONER: GEMINI TRUST COMPANY, LLC CASE NUMBER:
19CECG00675
RESPONDENT: MATTHEW PETER CASTIGLIONE
3.b. (3) Amount or property in dispute. This petition involves a dispute over (check and complete all that apply):
(a) CE] the following amount of money (specify amount): $ 200,000.00
(b) (2) property (if the dispute involves property, complete both of the following):
a consisting of (identify property in dispute):
(ii) having a value of (specify value of property in dispute); $
@) (E] Venue. This court is the proper court because (complete (a) or (b)):
(a) (2) this is the court in the county in which the arbitration was held.
(b) EX} the arbitration was not held exclusively in any county of California, or was held outside of California,
and (check one or more of the following}:
a) (CJ this is the court in the county where the agreement was made.
(ii) (C)} this is the court in the county where the agreement is to be performed.
(ii) [QJ the agreement does not specify a county where it is to be performed and was not made in any
county in California, and the following party resides or has a place of business in this county
(name
of party): Matthew Peter Castiglione
2608 Norwich Avenue, Clovis, CA 93611
(iv) (2) the agreement does not specify a county where it is to be performed and was not made in any
county in California, and no party to this action resides or has a place of business in California.
Agreement to arbitrate.
a. Date. Petitioner and respondent entered into a written agreement on or about(date): November 16, 2017
b. [XZ] Attachment. A copy of the agreement is submitted as Attachment 4(b) and incorporated herein by this reference.
c. Arbitration provision. Paragraph of the agreement provides for arbitration of disputes arising out of the
agreement as follows (either copy the arbitration provision in full or summarize the provision):
Dispute subject to arbitration. A dispute arose between petitioner and respondent concerning the following matter covered by the
agreement to arbitrate (summarize the dispute) :
Respondent failed to repay Petitioner after receiving an erroneous wire transfer of
$200,000.00, due to a glitch in Petitioner's system, all as provided in more detail in
the attached Final Arbitration Award.
Arbitrator. The following person was duly selected or appointed as arbitrator (name of each arbitrator):
Frank Maas
Arbitration hearing. The arbitration hearing was conducted as follows (complete both of the following) :
a. Date (each date of arbitration) : October 29, 2018
b. Location (city and state where arbitration was conducted): New York City, New York
Arbitration award.
a Date of award. The arbitration award was made on (date) : November 21, 2018
b. Terms of award. The arbitration award (check one or more of the following):
(1) [) requires CD petitioner (] respondent to pay the other party this amount: $ 200,000.00
(2) () requires neither party to pay the other anything.
(3) (L} is different as to different petitioners and respondents.
(4) (2) provides (specify other terms or check item 8(c) and attach a copy of the award):
In addition, Respondent is also required to pay expenses and costs of $6,786.80, and
interest on the $200,000.00 at the rate of 9%, beginning February 5, 2018.
©. [X) Attachment of Award. A copy of the award is submitted as Attachment 8(c).
Service of award.
a. The signed award or an accompanying document indicates that the award was served on petitioner on (date) » 11/21/18
b. (2) Petitioner alleges that a signed copy of the award was actually served on (date) :
ADR-106 [New January 4, 2004] PETITION TO CONFIRM, CORRECT, OR VACATE Page
2 of 3
Cee
ceb.com | Essential
#iForms-
CONTRACTUAL ARBITRATION AWARD
(Alternative Dispute Resolution) Gemini Trust Company, LLC
PETITIONER: GEMINI TRUST COMPANY, LLC CASE NUMBER:
19CECG00675
RESPONDENT: MATTHEW PETER CASTIGLIONE
10. Petitioner requests that the court (check aif that apply) :
a [2] Confirm the award, and enter judgment according to it.
b. (L) Correct the award and enter judgment according to the corrected award, as follows:
(1) The award should be corrected because (check aif that apply) :
(a) oO the amount of the award was not calculated correctly, or a person, thing, or property was not described
correctly.
(b) (C) the arbitrator exceeded his or her authority.
(c) (CD the award is imperfect as a matter of form.
(2) The facts supporting the grounds for correcting the award alleged in item 10b(1) are as follows (if additional space
is required, check here (Land submit facts on an attachment labeled 10b(2)):
(3) The award should be corrected as follows (if additional space is required, check here [_] and describe
requested correction on an attachinent labeled 10b(3)):
c. () Vacate (cancel) the award.
1) The award should be vacated because (check ail that apply) :
(a) (C) the award was obtained by corruption, fraud, or other unfair means.
{b) C) an arbitrator was corrupt.
{c) CY the misconduct of a neutral arbitrator substantially prejudiced petitioner's rights.
(d) (CC) the arbitrator exceeded his or her authority, and the award cannot be fairly corrected.
(e) (2) the arbitrator unfairly refused to postpone the hearing or to hear evidence useful to settle the dispute.
() (2) an arbitrator failed to disclose within the time for disclosure a ground for disqualification of which the
arbitrator was then aware.
(9) (CC) an arbitrator should have disqualified himself or herself after petitioner made a demand to do so.
(2) The facts supporting the grounds for vacating the award alleged in item 10c(1) are as follows (if additional space is
required, check here (_] and submit facts on an attachment labeled 10c(2)):
(3) Petitioner C2] does (} does not request a new arbitration hearing.
[&] Award petitioner interest from (date) : November 21, 2018
(i) () atthe statutory rate.
@) EK] atrateof _% 9 per year.
(E] Award petitioner costs of suit:
(1) (2) in the amount of: $ 6,786.60
@) [K] according to proof.
C) Award petitioner attorney fees incurred in this action (check only if attormey fees are recoverable in this action
according to statute or the parties’ agreement):
(1) CL] in the amount of: $
(2) () according to proof.
[) Award petitioner the following other relief (describe relief requested; if additional space is required, check here oO
and describe relief on an attachment labeled 10g):
aK
11. Pages and attachments. Number of pages attached:
Date: March (L, 2019
Darryl. Horowitt
(TYPE OR PRINT NAME} > T(SIENATURE OF PETITIONER OR ATTORNEY)
ADR-106 [New January 1, 2004) PETITION TO CONFIRM, CORRECT, OR VACATE Page
3 of 3
CEB | Essential CONTRACTUAL ARBITRATION AWARD
cabcom | Forms” (Alternative Dispute Resolution) Gemini Trust Company, LLC
ATTACHMENT 4(b)
CHANGE OF CONTROL
in the event that we are acquired by or merged with a third-party entity, we reserve the right, in any of these clrcurnstances, to transfer or
assign the information we have collected from you as part of such merger, acquisition, sale, or othor change of control.
SURVIVAL
Ail provisions of this User Agreemant which by their natura extend beyond the expiration or termination of this User Agreement, Including,
without {imitation, sections pertaining to suspension or termination, debts owed, general use of Gemini, disputes with us, and general
provisions, shall survive the termination of expiration of this User Agreement.
HEADINGS
Section headings in this Usar Agraarment are for conveniance only, and do not govern the meaning ot interpretation of any provision of this
User Agreement.
ENGLISH LANGUAGE CONTROLS
Notwithstanding any ather provision of this User Agreament, any translation of this User Agreement Is provided for your convenience. The
meanings of terms, conditions, and representations herein are subject to thelr definitions and interpretations in the English language.
WRITTEN NOTICE
If we send an emali to the emall address on record for your User Account, you acknowledge and agree that this constliutes ‘wrltten notice’
from us to you. If you email sipportdgemtnt.com, this constitutes ‘written notice’ from you to us. For ail notlces made by emall, the date of
recaipt is cansidered to be the date of transmission,
NGN-WAIVER OF RIGHTS
This Usey Agreement shai! not be construed to waive rights that cannot be walved under Applicable Laws and Regulations, Including
applicable stata money transmission laws in the state where you are located. In addition, our failure to insist upon your strict compliance
with any term or provision of this User Agreement shail not be construed as a walvar for you to not comply with such term or provision.
GOVERNING LAW
This User Agreement, your use of Gemint, your rights and obligations, and all actions contemplated by, arising out of ar related to this User
Agreement shali be governad by the laws of the State of New York, as if this User Agreement Is a contract wholly entered into and wholly
performed within the State of New York, YOU AGREE THAT ALL ORDERS, TRADES, DEPOSITS, WITHDRAWALS, OR SALES ON GEMINI
AND CONTEMPLATED ACCORDING TO THE TERMS OF THIS USER AGREEMENT SHALL BE DEEMED TO HAVE OCCURRED IN THE STATE
OF NEW YORK AND BE SUBJECT TO THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TG ITS CONFLICTS OF
LAWS PROVISIONS.
DISPUTE RESOLUTION
You acknowledge and agree that any controversy, clain, or dispute arising out of or relating to this User Agreement or the breach thereof
shall be settied sotely and exclusively by binding arbttration held in New York, New York, administered by JAMS and conducted In English,
rather than in court. You expressly agree that any dispute about the scape of this User Agreement to arbitrate and/or the arbitrabillty of
any particular dispute shall be resolved In arbitration In accordance with this section. Jn the avent that you threaten to iitigate a dispute In
court, we may Institute erbltration to enjoin you from filing a complaint or petition In court; provided, however, that you or we may, without
inconsistency with this arbitration provision, apply to any court for » praliminary remedy (1.e., equitable or injunctive relief) or to seek
enforcement of the arbitral award, You expressly agree that an arbltrator may issue all appropriate declaratory and Injunctive relief
lecessary to ensure the arbitration of disputes, Any such arbitration shall be conducted in accordance with the then prevailing JAMS
Streamlined Arbitration Rules & Procedures, with the following exceptions to such rulas if in conflict:
One arbitrator shall be chosen by JAMS;
Any arbitration must be commenced within one (1) year after the claim or cause of action arises;
Each party to the arbitration will pay an equal shara of the expenses and fees of the arbitrator, together with other expenses of the
arbitration incurred or approved by the arbitrator; and
Arbitration may proceed In the absence of any party if written notice (pursuant to the JAMS’ rules and regulations) of the proceedings
has been given to such party. You agree to bear your own attorney's fees, costs, and expenses. You agree to abiele by all decisions and
awards rendered In such proceedings. Such declslons and awards rendared by the arbitrator shali be finat and conclusive, All such
controversies, claims, or disputes shall be settled in this manner In lieu of any action at law or equity; provided, that, nothing in this
subsection shail be construed as precluding us from bringing an action for injunctive or equitable relief. IF FOR ANY REASON THIS
22
ARBITRATION CLAUSE BECOMES NOT APPLICABLE OR IF YOU OR WE SEEK INJUNCTIVE OR EQUITABLE RELIEF THEN YOU AND
WE:
© TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS AND REGULATIONS, HEREBY IRREVOCABLY WAIVE ALL RIGHT TO
TRIAL 8Y JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS USER AGREEMENT OR ANY OTHER MATTER INVOLVING US HERETO, AND
» SUBMITTO THE EXCLUSIVE JURISDICTION AND VENUE OF THE FEDERAL OR STATE COURTS LOCATED IN NEW YORK COUNTY,
NEW YORK AND YOU AGREE NOT TO INSTITUTE ANY SUCH ACTION OR PROCEEDING IN ANY OTHER COURT IN ANY OTHER
JURISDICTION.
You irevocably and unconditionally agree to walve any objection that you may now or hereafter have to the laying of venue of any action
or proceeding arising out of or relating to this User Agreement in the federal or state courts focated in the State of New York.
You agree to arbitrate solely on an individual basis, and acknowledge and agree that this User Agreement doss not parmit class arbitration
or any claims brought as a plaintiff or class member in any class or representative arbitration proceeding. The arbitral triounal may not
consoliate more than one User's clalms and may not otherwise preside over any form of a representative or class proceeding. In tha event
the prohibition on class arbitration Is deemed invalid or unenforceable, then you acknowledge and agree that the remaining portions of
these arbitration provisions in this User Agreement will remain in full force and effect.
You agree that this section of this User Agreement has been included to rapidly and inexpensively resalve any disputes with respect to the
matters described herein, and that this section shall be grounds for dismissal of any court action commenced by you with respect toa
dispute arising out of such matters,
A printed version of this User Agreement shai} be admissible in judicial or administrative proceedings.
QUESTIONS, FEEDBACK, AND COMPLAINTS
Ifyou have any questions, would like to provide feedback, or would like more information about Gernini, please feel free to contact us at
SuppOF er com.
Hf you would like to lodge a complaint, please contact our Customer Support Team using one of the foliawing methods:
« Emall support@-ceraini.com using the email address on record for your User Account;
+ Write to Customer Support at
Gemini Trust Company, LLC, 600 Third Avenue, 2nd Floor, New York, NY 10016; or
+ Call Customer Support at #4 (866) 240-51.13 (toll-free in the USA),
NEW YORK USER COMPLAINTS
If you are jocated in the State of New York and have a complaint, please first contact Gemini Support at one of the three (8) methods
indicated above. You may also direct your complaint to the attention of; New York State Department of Financial Services, One State
Street, New York, NY 10004-1511; +2 (600) 342-3736, Ploase visit www.dis.ny.gev for additional information.
OREGON USER SERVICES AND USER COMPLAINTS
Any regulated serVices provided to users located in the State of Oregon shall be characterized as money transmission and not as trust
services performed on behalf of our users In the State of Oregon. Wa maintain a money transmission license in the State of Oregon and,
therefore, are subject to the requirements of the Oregon money transmission statutes. If you are a user located in the State of Oregon, we
are not praviding any trust services ta you or to any other user in the State of Oregon In the course of you visiting, accessing, or using
Gernini hereunder, Any reference in the User Agreement to fiduciary services provided by us on your behalf shall refer, in the case of users:
In the State of Oreson, to our fiduclary obligations as a licansed money transmitter in Oregon,
If you are lacated in the State of Oregon and have a complaint, please first contact Gemin! Support at one of tha three (3) methods
indicatad above, If you still have an unresolved compiaint regarding our money transmission activity, you may aiso direct your complaint to
the attention of: Oregon Division of Financial Regulation, 2.0, Box 14480, Salem, OR 97309-0405; +1 (866) 814-9710 (toll-free In the USA),
Please vistt http://dfr.oragon.gov/ for additional information.
TEXAS USER COMPLAINTS
tf you are located in the State of Texas and have a complaint, please first contact Gemini Support at one of the three (3) methods indicated
above. IF you still have an unrescived complaint regarding our money transmission activity, you may also direct your complaint to the
attention oft Texas Department of Banking, 2601 North Lamar Boulevard, Austin, Texas 78705; +4 (877) 276-5554 (toll-free In the USA),
Biease visit www.dob.texas.gov for additional information, 23
ATTACHMENT 8(c)
JAMS NO, 1425026244
GEMIN] TRUST COMPANY LLC,
Claimant,
-against- FINAL ARBITRATION AWARD
MATTHEW PETER CASTIGLIONE,
Respondent.
The Undersigned Arbitrator, having conducted an evidentiary hearing on October
29, 2018, in this dispute between Claimant Gemini Trust Company LLC (“Gemini”) and
Respondent Matthew Peter Castiglione Castiglione”), hereby issues the following Final
Arbitration Award.
I Introduction and Procedural Histor
Gemini is a digital asset exchange and custodian — i.e., a place to trade and store
Bitcoin, Ethereum, and other cryptocurrencies. On or about November 16, 2017, Castiglione
opened an account with Gemini. He then engaged in various transactions until January 2018, at
which time his trading rights were suspended. In this proceeding, Gemini seeks (0 recover from
Castiglione $200,000 that it says was mistakenly transferred into his account. Gemini also seeks
to recover from Castiglione his half
of the cost of this arbitration,
Gemini commenced the arbitration by filing its Demand and Statement of Claim
on or about April 5, 2018, Thereatter, JAMS designated me to serve as the sole arbitrator,
Castiglione has sever served an answer, He has instead steadfastly maintained
that Gemini terminated his account without prior notice, thereby precluding Gemini from relying
on the arbitratian agreement set forth in Gemini’s online User Agreement. As an alternative,
Castiglione offered to participate in a conference call which he would organize, ostensibly so
that he could explain why this arbitration could not proceed, In vatious cormmunications,
Castiglione also suggested that JAMS was violating the Fair Debt Collection Practices Act by
attempting to proceed with the arbitration, Other letters suggested that conducting the arbitration
would constitute a violation of criminal law,
On July 30, 2018, the Arbitrator issued “Scheduling Order No. 1," which
explained that the online User Agreeinent (a) called for “any dispute concerning the scope of
[the]... Agreement to arbitrate and/or the arbitrability of any particular dispute” to be “resolved
in arbitration;" (b) provided that the arbitration would be “conducted in accordance with the then
‘prevailing JAMS Streamlined Arbitration Rules & Procedures,” except that the sole arbitrator
would be “chosen by JAMS,” and (c) required each party to pay “an equal shave of the expenses
and fees of the atbitrator.”!
Scheduling Order No.1 further directed the parties to exchange by August 31,
2038, all non-privileged documents and information (including electronically stored information)
upon which they intended to rely and the names of all persons knowledgeable about the dispute,
By letter dated August 31, 2018, Gemini’s counsel confirmed that Gemini had produced its
documents and that Joshua Rawlins. Managing Director of Gemini, was a person knowledgeable
about the dispute. There is no indication that Castiglione sent any documents or information to
Gemini tn response to Scheduling Order No. 1.
Scheduling Order No. 2, dated September 5, 2018, set October 29, 2018, as the
hearing date. The Order further indicated that the hearing wouid proceed on that date absent a
court-issued stay, Finally, the Order directed that any pre-hearing memoranda be submitted by
October 22, 2018,
Subsequently, on Friday, October 26, 2018, Castiglione sent me two emails. In
the first email, Castiglione suggested that three issues needed to be considered:
“Under what circumstances could a unilaterally cancelled contract be
reinstated and enforced later without consent of the corresponding party?”
“Under what circumstances could a controversy be settled by Arbitration
when only one party is present and what could make an Award in that
circumstance valid?”
“Does operating an Arbitration by force or coercion or intimidation or the
taking advantage ofa lay person by professionals with no valid contract
in evidence with the claimant nor Arbitrator indicate a Badge of
Slavery?”
In his second email, Castiglione indicated that to protect his rights “and to have
verified first hand knowledge of [the] meeting and its operation,” he wanted “Charles C. Miller
ae
1 Despite due demand therefor, Castiglione has never paid his halfof the fees and expenses aysociated with
this arbitration, Instead, Gemini has paid all of those fees and expenses,
22
... authorized fo monitor {the] meeting via phone connection,” Castiglione also provided an
email address and telephone number for Miller. As Castiglione explained, he was inserting
Miller into the process for two reasons: “First, so no interpretation af waiver into your process
of contractual obligation could ever be inferred.” Second, to “gather[] evidence of either proper
actions or Jess than ptoper actions,” After the second email arrived at 5:01 p.m, the Arbitrator
solicited via email the views of Gemini’s counsel, who responded over the weekend that Gemini
objected fo the participation of a monitor, but would reconsider if Castiglione could “articulate
the basis for his request and it is reasonable.” Although Castiglione was copied on both the
Atbitrator’s email and counsel's response, he did not communicate further with this Tribunal.
Ratle 9(a) of the JAMS Streamlined Arbitration Rules and Procedures provides
that any party may be represented “by counsel or any other person” of the party’s choice, and
that each party shall give prompt written notice to JAMS and the other parties of its
representative's contact information, Accordingly, although it was far from clear that Miller was
being designated as a “representative” of Castiglione, the Arbitrator attempted to telephone him
several times at the outset of the arbitration hearing on October 29, Each time, Miller failed to
answer and his voice mail indicated that his mailbox was full. The Arbitrator also sent Miller an
email message providing a. telephone number so that he could dial directly into the hearing room,
Miller neither telephoned nor emailed the Arbitrator during the course of the hearing.
Following the hearing, at 5:33 p.m. ET. on the evening of October 29, Mr, Miller
sent the Arbitrator an email in which he said he could not participate on the morning ofthe My
hearing “due to personal circumstance,” He also indicated that when he finally telephoned at
PM pacific tine,” the number he had been provided was a “non working number.” ‘This is
scarcely surprising since the hearing had concluded by then,
In his email, Mr. Miller repeated many of Castiglione’s prior contentions. For
example, he complained that JAMS and the Arbitrator were unlawfully “acting as debt collectors
across state lines.” Mr. Miller also said that he would be “forwarding [a] formal request for
certified records of [the] proceedings.” No such request was ever received.
Because Castiglione chose not to participate in the arbitral hearing Managing
Director Rawlins was the sole witness to testify.
u, Facts
Having reviewed Rawlins’ testimony and Gemini’s exhibits, the Arbitrator makes
the factual findings set forth below. To the extent there is any discrepancy between these
findings and any exhibits, testimony, or contention of a party, that is the result of determinations
regarding credibility, relevance, burden of proof, and the weighing of the evidence.
a2
A court reporter was present during the hearing, Mr, Miller and Castiglione could presumably obtain a
copy of the hearing transcript by purchasing it from the court reporter,
Castiglione opened his Gemini account on or about November 16, 2017. At the
time that he did so, Castiglione necessarily completed a screen which required him to
acknowledge thal he agreed to the Gemini User Agreement (which was hyperlinked for his
convenience). The User Agreement, in tur, provides that Castiglione’s rights and obligations
shall be governed by the laws of the State of New York, as if this User Agreement is a contract
wholly entered into and wholly performed within the State of New York.” Additionally, the
User Agreement provides that “all orders, trades, deposits, withdrawals, or sales on Gemini and
contemplated according to the lerms of this User Agreement shall be deemed to have occurred in
the State of New York .... (Block capitalization omitted.)
The User Agreement further provides that "any controversy, claim, or dispute
arising out of or relating to this User Agreement or the breach thereof shall be settled solely and
exclusively by binding arbitration held in New York, New York,” before a single arbitrator
chosen by JAMS. Pursuant to the User Agreement, Castiglione further agreed to pay one half of
the expenses and fees associated with that arbitration.
After opening his account, Castiglione engaged or attempted to engage in several
transactions that give rise to this proceeding. Specifically, on or about December 1! and [2,
2017, Castiglione twice altempted to wire transfer $200,000 into his Gemini accuunt, On both
occasions, the wire transfer into his account was rejected because the transferor account was not
the account associated with his Gemini account. Although Castiglione modified his account
information after the first failed transfer, this did not occur until after the second $200,000 had
been returned to Castiglione’s transferor account.
The procedure at Gemini for incoming wire transfers was that they would be
reccived in an omnibus Gemini account and then transferred into a customer account if the
source of the funds was recognized, “Due to a “glitch” in the Gemini system, Gemini credited
Castiglione’s trading account with the second $200,000 transfer even though thase funds had
already been returned to his transferor account, Gemini did not notice its error until January
2018, when it was reconciling ifs financial records for the prior calendar year. In the meantime,
however, Castiglione had already withdrawn the $200.000 from his account through Bitcoln
transactions,
After discovering ifs error, Gemini emailed Castiglione numerous times to request
the return of the funds improperly credited to — and removed from — his Gemini account,
Tellingly, on the one avcasion when Castiglione responded to a Gemini email, he did not deny
that he had received funds in error, Instead, on February 5, 2018, he responded: “Thank you for
reaching out to me about this error that Gemini made on my account, J do not have the funds
that you are requesting and need more time.” Since then, despite the commencement of this
arbitration, Castiglione has never returned the $200,000 that Gemini mistakenly credited to his
account,
Finally, at or about the time that it learned of the misappropriation of its
$200,000, Gemini suspended Castiglione’s account, The Gemini User Agreement also affords
Gemini the right to terminate a user’s account at any time and for any reason, There is, however,
no evidence that Gemini exercised this option. Indeed, Mr. Rawlins testified that Gemini still
maintains an account for Castiglione.
it. Discussio!
A. Axbitrabili
As set forth above. by opening a Gemini account, Castiglione agreed to the terms
of the Gemini User Agreement, He therefore agreed to arbitrate this dispute,
In an effort to avoid this conclusion, Castiglione argues that his agreement to
arbitrate was vitiated by Gemini’s termination of his account. His legal theory is dubious. See,
e.g, Inre Tarpon Cove, Lid, 482 N.Y.S.2d 1, 2 (Ist Dep’t 1984) (“Absent a mutual agreement
to nullify an agreement completely, an arbitration clause is enforceable, notwithstanding a
subsequent termination of the agreement or a general release of claims.”); Application of
Leonard, 231 N.Y.S.2d 198, 200 (Sup. Ct, N.Y. County 1962) (“The efficacy of the arbitration
provision in the contract is not exhausted because the contract has terminated."), In any event,
even if Castiglione could have avoided arbitration based on the termination of his User
Agreement, the evidence here plainly shows that no such termination occurred, At most.
Castiglione’s account was suspended, This does not entitle him to repudiate his clear agreement
to arbitrate’ any dispates “arising out of or relating (o [Jhis User Agreement or the breach
thereof,”
B Liabilit
In its demand, Gemini seeks to recover the $200,000 mistakenly transferred into
Castiglione’s account on four theories: (A) money had and reccived; (B) unjust enrichment; (C)
conversion; and (D) breach of contract, One need not be a legal scholar, however, to understand
the correct result here, Castiglione twice wired $200,000 to Gemini, which twice returned that
sum. Accordingly, the additional $200,000 in Castiglione’s account was Gemini's property, and
did not belong to him.
Under New York law, a [“c]onversion occurs when a defendant exercises
unauthorized dominion over persona] property in interference with a plaintiff's Jegal title or
:
superior right of possession.” LoPresti vy. Terwilliger, 126 F.3d 34, 41 (2d Cir, 1997).
Moreover, even if a person originally received the property lawfully, an unlawful conversion
takes place when “the owner makes a demand for the return of the property and the person in
possession of the property refuses to return it.” In re Estate of King, 759 N.Y.8.2d 895, 896 (2d
Dep't 2003).
Here, due to an administrative error, Gemini’s funds were transferred into
CastigHone’s account, Thereafter, when Castiglione refused to return those funds, he converted
Gemini’s property, Gemini is therefore entitled to an award in the amount of $200,000 for the
unlawful conversion of its property.’
In addition, pursuant to the User Agreement, Castiglione is liable for one-half the
cost of this arbitration. Gemini either has advanced or will advance all those funds because
Castiglione refused to honor this obligation, | am advised that the JAMS fees total $13,573.60.
Gemini is therefore entitled to an award for JAMS fees and expenses in the amount of $6,786.80
($13,573.60 + 2).
Finally, in its demand, Gemini seeks to recover its legal fees. The User
Agreement provides that Castiglione must “bear [his] own attoracy’s foes, costs, and expenses,”
which suggests that each side should bear its own legal fees and expenses other than the cos(s
associated with arbitrating at JAMS. In any event, at the hearing. Gemini failed to offer any
proof regarding the legal fees it incurred, For that reason, Gemini’s request to recover its legal
fees must be denied,
Under New York law, the successful claimant in a conversion action ts entitled to
prejudgment interest at the statutory rate of nine percent per annum, See Eighteen Holding Corp.
vy. Drizen, 70] N.Y.S,2d 427, 428 (1st Dep't 2000) (awarding prejudgment interest at that rate in
an action asserting “causes for money had and received, unjust enrichment and conversion.”) By
February 5, 2018, Castiglione clearly communicated that he was not returning Gemini's
$200,000, Gemini is therefore entitled to prejudgment interest from that date,
3 In an email to the Arbitrator dated September 28, 2018, Castiglione asked that the Tribunal address a
number of tssues, including “the law and facts requiring [him] lo refuso a gift" Suffice it to say, there is nota
scintilla of evidence thal Genini gave Castiglione a $200,000 gift, Even if that were a possible interpretation of the
avents here, to establish that Gemini gave him a gift, Castiglione would have to establish: (n) Gornint’s intent to
give hima gift, (b) "the delivery of the property pursuant to this intent,” and (c) his “acceptance of the property.”
Midland Ins. Co. v, Friedgood, 577 PF, Supp. (407, [412 (S.D.N.Y, 1984), Here, al hest, Castiglione has satisfied
the third required element, There consequently is no basis for hts claim that he is entitled to keep Gemini's
$200.000 “gift.”
IV, Conclusion
For the foregoing reasons, Gemini is awarded the principal sum of $200,000, plus
fees and expenses in the amount of $6,786.80, and prejudgment interest on the sum of $200,000
at the rate of nine percent per annum from February 5, 2018, The request for attomey’s fees is
denied.
SO ORDERED.
Lille Frank Maas
November 21, 2018
Arbitrator
STATE OF NEW YORK. )
83.1
COUNTY OF NEW YORK )
1, Frank Maas, do hereby affirm upon my oath as Arbitrator that | am the
individual described in and who executed this instrument, which is my Fina} A/bitration Award
— Lal. Frank Maas
November21, 2018
Arbitrator
SERVICE LIST
Gemini Trust Company LLC vs, Castiglione, Matthew Peter Hear Type: Arbitration
Case Name:
Case Type: Business/Comnmercial
Reference #: 1425026244
Panelist: Maas, Frank ,
David A. Berger
Allegaert, Berger & Vogel
David A. Berger Claimant
411 Broadway Phone: 212-571-0550
20th Fax: 212-571-0555
New York, NY 10006
dberger@abv.com
Party Represented:
Gemini Trust Company, LLC
Matthe eter Castigfi e
Matthew Peter Castiglione Respondent
2608 Norwich Ave. Fax:
Clovis, CA 93611
mattcastigiione@hotmail.com
Party Represented:
Matthew Peter Castiglione
Davi. Ss iman
Allegaert, Berger & Vogel
David A, Shaiman Claimant
411 Broadway Phone: 212-571-0550
20th Fax: 212-571-0655
New York, NY 10008
dshaiman@abv.com
Party Represented:
Gemini Trust Company, LLC
2A Page | oft
PROOF OF SERVICE BY EMAIL & U.S. MAIL
_ Ret Gernini Trust Company LLC vs. Castiglione, Matthew Peter
Reference No, 1425026244
I, Patrick Mullarkey, not a party to the within action, hereby declare that on November 21, 2018, I
served the attached Final Arbitration Award on the parties in the within action by Email and by depositing true
copies thereof enclosed in sealed envelopes with postage thereon fully prepaid, in the United States Mail, at
New York, NEW YORK, addressed as follows:
David A. Berger Esq. Mr. Matthew Peter Castiglione
David A. Shaiman Esq. 2608 Norwich Ave.
Allegaert, Berger & Vogel Clovis, CA 93611
111 Broadway mattcastiglione@hotmail.com
20th Parties Represented:
New York, NY 10006 Matthew Peter Castiglione
Phone: 212-571-0550
dberger@aby.com
dshaiman@abv.com
Parties Represented:
Gemini Trust Company, LLC
I declare under penalty of perjury the foregoing to be true and correct, Executed at New York, NEW
YORK ont Rojeny er 21, 2018.
ae
“4
Ratrick Shatter ey
PMullarkey@jarrisadr.com.