The Arbitrator determined that Respondent Michael James Dinapoli was served with the Statement of Claim by regular mail and an Overdue Notice and Notification of Arbitrator by certified mail and is therefore bound by the Arbitrator's ruling and determination.
11. However, following his move to Florida, UBSFS' s Human Resources Department ("UBS HR") required DiNapoli to provide it with a New York address since he would be working in New York and because he did not have a Series 66 License which is required in Florida, but not in New York. UBS HR also indicated to DiNapoli that because he would be working out of the New York office, he was not permitted to have a Florida address on file.12. While in New York City, DiNapoli would stay at the New York Athletic Club (the "NYAC"), located at 180 Central Park South, New York, New York 10019. The NYAC is a private club that, among other things, provides mail drop boxes for its members, Accordingly, DiNapoli set up a mail drop box at the NYAC (the "NYAC Box") so that he would have a New York address for UBS HR.13. During his employment, DiNapoli asked UBS HR if he could change his address on file to reflect his Florida home address, but UBS rejected his request. Further, because the NYAC is considered a commercial establishment, mail cannot be forwarded from the NYAC to any other location. Accordingly, DiNapoli checked his mail regularly while working at UBSFS and staying at the NYAC.14. When DiNapoli was terminated by UBSFS, he requested an address change for all mail that he believed was being sent to the NYAC Box, including mail from UBS HR.15. Critically, at all relevant times, UBS has known that DiNapoli lives in Florida.16. DiNapoli never provided FINRA with the NYAC Box address, which, upon information and belief, was provided to FINRA by UBS.17. Further, FINRA had actual knowledge that the NYAC Box address was not DiNapoli's correct or current address at the time it served the Statement of Claim. UBS's Statement of Claim states that DiNapoli maintains residences in both New York and Florida. A copy of the Statement of Claim is annexed as Exhibit C. In Exhibit C to the Statement of Claim, UBS includes a letter addressed to DiNapoli in Warwick, New York (a previous home address for DiNapoli) and also a letter addressed to DiNapoli's Florida home address. Nowhere in the Statement of Claim or the exhibits attached to it did UBS include any reference to the NYAC Box address.18. Thus, FINRA had actual knowledge that the NYAC Box address was not the proper address for DiNapoli based on the very pleading it was tasked with serving.19. DiNapoli terminated his membership at the NYAC on or about October of 2015 and no longer used the NYAC Box after that.
26. Upon information and belief, FINRA mailed the Statement of Claim to the NYAC Box only, despite the fact that -- as indicated above -- the document annexed as Exhibit C to the Statement of Claim established that the NYAC Box was not DiNapoli's residential address or usual place of abode.27. In fact, at all relevant times, FINRA has known that DiNapoli has a residence in Florida, based both on the Statement of Claim submitted by UBS and FINRA's own records.28. As DiNapoli no longer belongs to the NYAC and no longer uses the NYAC Box, he was never notified that any mailing from FINRA was sent to him there and has no basis to know whether in fact it ever actually was sent to him there.29. Accordingly, DiNapoli never received the Statement of Claim, nor any documentation pertaining to the arbitration and was never afforded an opportunity to file a Statement of Answer or appear in the arbitration.
THE COURT: That is not what I am suggesting. I am suggesting that UBS, who fully knew that -- and there's nothing to refute it -- that Mr. DiNapoli lived in Florida, went along with this; and whether or not that is fundamental fairness, whether that's some kind of fraud, whether that --MR. LAGALANTE: Well, your Honor --THE COURT: -- undermines the --MR. LAGALANTE: First of all --THE COURT: -- entire proceeding.MR. LAGALANTE: Your Honor, no one except the Court has suggested fraud in this case. Only you have raised the issue of fraud in the case.THE COURT: Not really.MR. LAGALANTE: And there's nothing in the pleadings --THE COURT: Please, please, let me talk.MR. LAGALANTE: Your Honor, there is nothing in the pleadings to suggest that UBS --THE COURT: Do you want to change spots?MR. LAGALANTE: No. I think that it's --THE COURT: Can I say something? Can I have permission to speak?The papers from the petitioner suggest that UBS all along knew -- over and over again it suggests this -- that he lived in Florida and did nothing to make certain that he was apprised of the proceeding.MR. LAGALANTE: UBS is not under any obligation, and, in fact, is precluded from serving the Statement of Claim on Mr. DiNapoli. That is FINRA's obligation pursuant to federal law.THE COURT: Are they precluded from saying anything to FINRA that he lives in Florida? Are they preclude from letting him know, not sending the claim, but letting him know that this is ongoing?MR. LAGALANTE: They are not precluded from doing it.THE COURT: Or from saying something when they realized he'd been only served at the Athletic Club? . . .
In a case such as this, which should be governed by New Jersey law, which specifically requires notice, where UBS on this record was fully aware that Mr. DiNapoli lived in Florida, I think this vacatur is required when he only received notice at an address at which he did not reside, where UBS informed FINRA of an address other than the one where FINRA served notice, and where those addresses were on the registration that Mr. DiNapoli swore to. So for all of these reasons, I am vacating the arbitration award and ordering a new hearing; and the new hearing is to be conducted under New Jersey law. . .
We conclude that the arbitrator correctly found that petitioner was properly served with notice (see Selective Ins. Co. v Coach Leasing, Inc. , 2008 WL 2404183, *7, 2008 NJ Super Unpub LEXIS 1104, *18 [NJ Sup Court, App Div, June 16, 2008] ["actual knowledge of the notice is not required by our statute provided service was made at a location held out by the person as a place of delivery of such a notice (internal quotation marks omitted)]). The record demonstrates that, in accordance with its rules, FINRA served respondents' Statement of Claim on petitioner by sending it to him by regular mail at one of the three residential addresses he had provided to FINRA in a filing six weeks earlier. Under the rules, it was petitioner's obligation to keep his address information current via supplemental amendments. No amendments supplementing petitioner's residential information were submitted between the date of the aforementioned filing and the date of the arbitration award six weeks later. Nor was the Statement of Claim returned to FINRA as undeliverable.
Bill Singer's Comment
Personally, I prefer the NYS Sup Ct Decision to that of the NYS App Div. Unfortunately for DiNapoli, my preferences don't mean jack. Regardless, let this case serve as a warning to all associated persons. Make sure that you keep your address current with FINRA. And if your street has no name, well, gee, that's gonna be a problem.