Motion to Confirm Judgment or Award in MORGAN STANLEY SMITH BARNEY LLC VS. ROBERT A. RESNICK ET AL| Trellis.Law

On June 26, 2020 a Judgment was filed involving a dispute between Morgan Stanley Smith Barney Llc, and Resnick, Robert A., Resnick, Wai-Ping Jenny, for PETITION RE: ARBITRATION (PETITION TO CONFIRM ARBITRATION AWARD and enter judgment thereon) in the District Court of San Francisco County.

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1 Jeffrey P. Palmer (SBN 229314)
GREENBERG TRAURIG, LLP
2 1900 University Ave, 5th Floor
East Palo Alto, CA 94303 ELECTRONICALLY
3 Telephone: (415) 655-1300
Facsimile: (415) 707-2010 F I L E D
Superior Court of California,
4 palmerj@gtlaw.com County of San Francisco

5 Attorneys for Petitioner 07/07/2020
Clerk of the Court
Morgan Stanley Smith Barney LLC BY: SANDRA SCHIRO
6 Deputy Clerk

8 THE SUPERIOR COURT OF THE STATE OF CALIFORNIA

9 COUNTY OF SAN FRANCISCO

10 MORGAN STANLEY SMITH BARNEY CASE NO. CPF-20-517140
LLC
11 DECLARATION OF JEFFREY P.
12 Petitioner, PALMER IN SUPPORT OF MORGAN
STANLEY SMITH BARNEY LLC’S
13 vs. PETITION TO CONFIRM ARBITRATION
AWARD AND ENTER JUDGMENT
14 ROBERT A. RESNICK and WAI-PANG THEREON
JENNY RESNICK,
15 [C.C.P. §§ 1285, 1285.4, 1286, 1292.2]
Respondents
16
Date: September 10, 2020
17 Reservation No. N/A
Time: 9:30 a.m.
18 Location: Dept. 302

19
20 I, Jeffrey P. Palmer, declare as follows:
21 1. I am an attorney with the Greenberg Traurig LLP, and admitted to practice before the
22 state courts in California. I have personal knowledge of the facts and information set forth herein, and if
23 called upon to testify, I can competently testify thereto.
24 2. On or about May 16, 2017, before the Financial Industry Regulatory Authority
25 (“FINRA”), Respondents Robert A. Resnick and Wai-Pang Jenny Resnick (“Respondents” or
26 “Claimants”) commenced the “FINRA Arbitration, Case No. 17-01267, by filing a Statement of Claim
27 seeking at least $395,000 from Morgan Stanley Smith Barney (“MSSB”).
28

1
DECLARATION OF JEFFREY P. PALMER ISO PETITION TO CONFIRM
ARBITRATION AWARD AND ENTER JUDGMENT THEREON
1 3. On or about September 11, 2017, Petitioner filed an Answer to the Statement of Claim
2 denying the allegations in the Statement of Claim and denying any and all liability to Respondents.
3 4. In its Answer, MSSB requested that the Panel: deny the Claimants’ Claim, enter an
4 award in favor of MSSB, and such other and further relief as the FINRA Arbitration panel deems just
5 and proper. MSSB also requested that the Panel recommend the matter be expunged from FINRA’s
6 Central Records Depository of non-parties Kevin C. Butler (“Mr. Butler”) and Christopher Butler.
7 5. FINRA had jurisdiction to hear the FINRA Arbitration and determine Petitioner’s motion
8 for expungement. All parties agreed to resolve the expungement issue by means of arbitration before
9 FINRA by executing an arbitration agreement and FINRA Arbitration Submission Agreements by
10 which they all agreed to submit the matter to binding FINRA arbitration, as well as be bound by FINRA
11 rules and procedures and by the arbitrators’ decision. The FINRA Arbitration Submission Agreements
12 provide in pertinent part:
13
The undersigned parties (“parties”) hereby submit the present matter in
14 controversy, as set forth in the attached statement of claim, answers, and
all related cross claims, counterclaims and/or third-party claims which
15 may be asserted, to arbitration in accordance with the FINRA By-Laws,
Rules, and Code of Arbitration Procedure.
16
***
17
The parties agree that in the event a hearing is necessary, such hearing
18 shall be held at a time and place as may be designated by the Director of
Arbitration or the arbitrator(s). The parties further agree and understand
19 that the arbitration will be conducted in accordance with the FINRA Code
of Arbitration Procedure.
20
The parties agree to abide by and perform any award(s) rendered pursuant
21 to this Submission Agreement. The parties further agree that a judgment
and any interest due thereon, may be entered upon such award(s) and, for
22 these purposes, the parties hereby voluntarily consent to submit to the
jurisdiction of any court of competent jurisdiction which may properly
23 enter such judgment.
24 6. Attached hereto as Exhibit A is a true and correct copy of the FINA Arbitration
25 Submission Agreement signed by Melissa M. Muehlfeld in her capacity as an Executive Director of
26 MSSB.
27 7. Attached hereto as Exhibit B is a true and correct copy of the FINA Arbitration
28 Submission Agreement signed by Respondents Robert A. Resnick and Wai-Pang Jenny Resnick.
2
DECLARATION OF JEFFREY P. PALMER ISO PETITION TO CONFIRM
ARBITRATION AWARD AND ENTER JUDGMENT THEREON
1 8. Telephonic prehearing sessions were held with an arbitration panel composed of Mary
2 M. O’Neil, Aurelio A. Garcia, and Loyd A. Wright (the “FINRA Arbitrators” or “Panel”) on October 2,
3 2017 and March 12, 2019. On September 3-6, 2019, September 9, 2019, and January 13-15, 2020 and
4 January 27, 2020 an evidentiary hearing was held by the FINRA Arbitrators to address the merits of
5 Respondents’ Claim and Petitioner’s request for expungement.
6 9. The FINRA Arbitrators rendered an Award dated February 19, 2020, which
7 recommended that the FINRA Arbitration be expunged from Kevin C. Butler’s CRD records (the
8 “Award”). Attached hereto as Exhibit C is a true and correct copy of the Award.
9 10. On or about February 20, 2020, FINRA served the parties with a copy of the Award.
10 11. On or about April 16, 2020, FINRA waived its right to be named as a party in any action
11 to confirm the award issued in the FINRA Arbitration. Attached hereto as Exhibit D is a true and
12 correct copy of the Waiver.
13 12. The FINRA Arbitration was not held exclusively in any one county of the State of
14 California.
15 13. MSSB has a place of business in the City and County of San Francisco..
16 I declare under penalty of perjury under the laws of the State of California that the foregoing is
17 true and correct. Executed this 7th day of July, 2020 at Atherton, California.
18

19 ________________________________
Jeffrey Palmer
20

26
27

3
DECLARATION OF JEFFREY P. PALMER ISO PETITION TO CONFIRM
ARBITRATION AWARD AND ENTER JUDGMENT THEREON
EXHIBIT A
EXHIBIT B
EXHIBIT C
Award
FINRA Office of Dispute Resolution

In the Matter of the Arbitration Between:

Claimants Case Number: 17-01267
Robert A. Resnick, an individual; and
Wai-Pang Jenny Resnick, an individual

vs.

Respondent Hearing Site: Los Angeles, California
Morgan Stanley Smith Barney LLC

______________________________________________________________________
Nature of the Dispute: Customers vs. Member
This case was decided by an all-public panel.

REPRESENTATION OF PARTIES

For Claimants Robert A. Resnick, an individual; and Wai-Pang Jenny Resnick, an
individual, hereinafter collectively referred to as “Claimants”: Marc I. Zussman, Esq.,
Law Offices of Marc I. Zussman, Los Angeles, California.

For Respondent Morgan Stanley Smith Barney LLC (“Respondent”): Nicholas N.
George, Esq., Morgan Stanley Wealth Management, San Francisco, California.

CASE INFORMATION

Statement of Claim filed on or about: May 16, 2017.
Claimants signed the Submission Agreement: May 3, 2017.

Statement of Answer filed by Respondent on or about: September 11, 2017.
Respondent signed the Submission Agreement: September 11, 2017.

CASE SUMMARY

Claimants asserted the following causes of action: fraud; negligent misrepresentation;
breach of fiduciary duty; negligence; and violation of Unfair Competition Laws BPC §§
17200 et. seq. The causes of action relate to Claimants’ investment in junk bonds,
including, but not limited to: Penn Virginia Corp.; NRG Energy Inc.; SLM Corp/Floating
Rate; Citizens Communications Co.; Chrysler Group LLC; Centurytel Inc.; Patriot Coal
Corp.; Chesapeake Energy Corp.; Advanced Micro Devices; Supervalu Inc.;
ArcelorMittal; Safeway Inc. Debentures; Citigroup Inc.; Royal Bank of Scotland; Morgan
Stanley Dean Witter; Societe Generale; Massey Energy Co.; Arch Coal, Inc.; Zions
Bancorporation; Sandridge Energy Inc.; Forest Oil Corp.; Windstream Corp.; Frontier
FINRA Office of Dispute Resolution
Arbitration No. 17-01267
Award Page 2 of 6

Communications; Limited Brands; Cliffs Natural Resources; Swift Energy Co.; Walter
Investment Mgmt.; and Bank of America.

Unless specifically admitted in the Statement of Answer, Respondent denied the
allegations made in the Statement of Claim and asserted various affirmative defenses.

RELIEF REQUESTED

In the Statement of Claim, Claimants requested:
1. Compensatory damages in an amount not less than $395,579.00;
2. Disgorgement and restitution of fees, commissions and other remuneration paid
to Respondent;
3. Economic, consequential, special and general damages;
4. Punitive damages;
5. Attorneys’ fees, expert witness fees and costs of the suit;
6. Pre and post award interest at the legal rate; and
7. Such other and further relief as the Panel deems just and proper.

In the Statement of Answer, Respondent requested:
1. Claimants’ claims be denied;
2. An award in favor of Respondent;
3. Such further relief as the Panel deems just and proper; and
4. Expungement of this matter from the Central Registration Depository (“CRD”)
records of unnamed parties Christopher James Butler (“C Butler”) and Kevin C.
Butler (“K Butler”).

At the close of the hearing, Claimants requested:
1. Compensatory damages in the amount of $344,075.00;
2. Costs incurred in the amount of $6,770.00;
3. Expert witness fees in the amount of $23,800.00;
4. Post-award interest at the rate of 10% per annum from the date of the award until
the award is paid in full; and
5. Forum fees be assessed against Respondent.

OTHER ISSUES CONSIDERED AND DECIDED

The Arbitrators acknowledge that they have each read the pleadings and other
materials filed by the parties.

During the recorded in-person evidentiary hearing, the Panel heard oral argument and
evidence on the expungement requests for C Butler and K Butler.

Claimants opposed C Butler’s request for expungement and took no position on K Butler’s
request for expungement.

The Panel reviewed K Butler’s BrokerCheck® Report.

In recommending expungement, the Panel relied upon the documentary evidence and
witnesses’ testimony during the full evidentiary hearing.
FINRA Office of Dispute Resolution
Arbitration No. 17-01267
Award Page 3 of 6

The parties present at the hearing 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 evidence presented at the hearing,
and the post-hearing submissions, the Panel has decided in full and final resolution of
the issues submitted for determination as follows:

1. Claimants’ claims are denied in their entirety.

2. The Panel recommends the expungement of all references to the above-captioned
arbitration, occurrence number 1936492, from registration records maintained by the
CRD, for unnamed party Kevin C. Butler (CRD# 2986238), with the understanding
that, pursuant to Notice to Members 04-16, unnamed party Kevin C. Butler must
obtain confirmation from a court of competent jurisdiction before the CRD will
execute the expungement directive.

Unless specifically waived in writing by FINRA, parties seeking judicial confirmation
of an arbitration award containing expungement relief must name FINRA as an
additional party and serve FINRA with all appropriate documents.

Pursuant to Rule 12805 of the Code of Arbitration Procedure (“Code”), the Panel has
made the following Rule 2080 affirmative finding of fact:

The registered person was not involved in the alleged investment-related sales
practice violation, forgery, theft, misappropriation, or conversion of funds.

The Panel has made the above Rule 2080 finding based on the following reasons:

Based on all the documentary evidence and witnesses’ testimony during the
nine-day evidentiary hearing, the Panel finds K Butler did not give any advice or
make any recommendations to Claimants, and had never managed Claimants’
investments. K Butler was not involved with the claimed allegations.

3. C Butler’s request for expungement of the above-captioned arbitration,
occurrence number 1936497, from his CRD records is denied.

4. Any and all claims for relief not specifically addressed herein, including Claimants’
request for punitive damages and attorneys’ fees, are denied.

FEES

Pursuant to the Code, the following fees are assessed:

Filing Fees
FINRA Office of Dispute Resolution assessed a filing fee* for each claim:

Initial Claim Filing Fee =$ 1,425.00
FINRA Office of Dispute Resolution
Arbitration No. 17-01267
Award Page 4 of 6

*The filing fee is made up of a non-refundable and a refundable portion.

Member Fees
Member fees are assessed to each member firm that is a party in these proceedings or
to the member firm(s) that employed the associated person(s) at the time of the event(s)
giving rise to the dispute. Accordingly, as a party, Respondent is assessed the
following:

Member Surcharge =$ 1,900.00
Member Process Fee =$ 3,750.00

Postponement Fees
Postponements granted during these proceedings for which fees were waived:

September 10 – 14, 2018, postponement by parties = WAIVED
February 25 – March 1, 2019, postponement by parties = WAIVED

Discovery-Related Motion Fee
Fees apply for each decision rendered on a discovery-related motion.

One (1) decision on a discovery-related motion on the papers
with one (1) arbitrator @ $200.00/decision =$200.00

Respondent submitted one (1) discovery-related motion

Total Discovery-Related Motion Fees =$200.00

The Panel has assessed $100.00 of the discovery-related motion fees jointly and
severally to Claimants.
The Panel has assessed $100.00 of the discovery-related motion fees to Respondent.

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 arbitrator(s), 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 the Panel @ $1,125.00/session =$ 2,250.00
Pre-hearing conferences: October 2, 2017 1 session
March 12, 2019 1 session

Eighteen (18) hearing session @ $1,125.00/session =$20,250.00
Hearing Dates: September 3, 2019 2 sessions
September 4, 2019 2 sessions
September 5, 2019 2 sessions
September 6, 2019 2 sessions
September 9, 2019 2 sessions
January 13, 2020 2 sessions
FINRA Office of Dispute Resolution
Arbitration No. 17-01267
Award Page 5 of 6

January 14, 2020 2 sessions
January 15, 2020 2 sessions
January 27, 2020 2 sessions
______________________________________________________________________
Total Hearing Session Fees =$22,500.00

The Panel has assessed $11,250.00 of the hearing session fees jointly and severally to
Claimants.
The Panel has assessed $11,250.00 of the hearing session fees to Respondent.

All balances are payable to FINRA Office of Dispute Resolution and are due upon
receipt.
FINRA Office of Dispute Resolution
Arbitration No. 17-01267
Award Page 6 of 6

ARBITRATION PANEL

Mary M. O'Neil - Public Arbitrator, Presiding Chairperson
Aurelio A. Garcia - Public Arbitrator
Loyd A Wright - Public Arbitrator

I, the undersigned Arbitrator, do hereby affirm that I am the individual described herein
and who executed this instrument which is my award.

Concurring Arbitrators' Signatures

Mary M. O'Neil 02/19/2020
Mary M. O'Neil Signature Date
Public Arbitrator, Presiding Chairperson

Aurelio A. Garcia 02/19/2020
Aurelio A. Garcia Signature Date
Public Arbitrator

Loyd A Wright 02/19/2020
Loyd A Wright Signature Date
Public Arbitrator

February 20, 2020
Date of Service (For FINRA Office of Dispute Resolution office use only)
EXHIBIT D
April 16, 2020

Nicholas N. George, Esq.
Morgan Stanley
Legal and Compliance Division
1633 Broadway
New York NY 10019

VIA EMAIL

Re: KEVIN BUTLER, CRD# 2986238
FINRA Arbitration Case #: 17-01267
Robert A Resnick and Jenny Resnick vs. Morgan Stanley

Dear Mr. George:

FINRA has reviewed, and determined to grant, your request for a waiver of the obligation under FINRA
Rule 2080 to name FINRA as a party in any action to confirm the award issued in the above-captioned
proceeding. The award directs the expungement of customer dispute information from the Central
Registration Depository (CRD®) system. FINRA notes that the arbitration award reflects compliance with
FINRA's Code of Arbitration Procedure for Customer Disputes § 12805 or Code of Arbitration Procedure
for Industry Disputes § 13805. In addition, it includes an affirmative finding that the expungement directive
is based on one or more standards enumerated in FINRA Rule 2080. Specifically, the expungement
directive is based on one or more of the following affirmative arbitral finding(s):

☐ the claim, allegation, or information is factually impossible or clearly erroneous
☑ the above-named individual was not involved in the alleged investment-related sales practice violation,
forgery, theft, misappropriation, or conversion of funds
☐ the claim, allegation, or information is false

Therefore, you are not required to name FINRA as a party in the judicial proceeding to confirm the
arbitration award. If, however, you do name FINRA as a party, this waiver does not serve as a waiver of
FINRA's appearance in the court proceeding and you must serve FINRA with process and notice of all
court filings.

If you have any questions, please contact me at 240-386-4788.

Sincerely,
Karen Weinstein
Karen Weinstein, Analyst
Credentialing, Registration, Education and Disclosure
Operations Policy Implementation

Investor protection. Market integrity. 9509 Key West Avenue
t 240 386 4000
Rockville, MD www.finra.org
20850-3329

Case Info

Judge

Ethan P. Schulman Track Judge’s New Case

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Document Filed Date

July 07, 2020

Case Filing Date

June 26, 2020

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Judgment: MORGAN STANLEY SMITH BARNEY LLC VS. ROBERT A. RESNICK ET AL

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