Childbirth and Medical Emergency Impact FINRA Arbitration

August 14, 2017

In a recent FINRA arbitration, a former J.P. Morgan Securities associated person sought over $800,000 in damages from the alleged damages to his book of business. It all set up as a fascinating dispute. Unfortunately, it ended in what seems a fizzle. Julius Caesar famously said "I came, I saw, I conquered." In this case, we have the Claimant and his counsel essentially saying "I came, I couldn't come back but I tried but I couldn't make it and asked for an adjournment, and, I lost." 

Case In Point

In a Financial Industry Regulatory Authority ("FINRA") Amended Arbitration Statement of Claim filed in April 2015, former associated person Claimant Sayre asserted breaches of contract and the covenant of good faith and fair dealing; negligence; intentional misrepresentation; negligence per se; defamation; and negligent misrepresentation. The allegations arose from circumstances attendant to Claimant's employment with Respondent J.P. Morgan Securities LLC. As explained in the FINRA Arbitration Decision, Claimant sought at least $830,000 in damages from "the loss of Claimant's book of business and two months of revenue he would have otherwise received." Additionally, Claimant sought future damages to compensate for ongoing losses, punitive damages, interest, costs, and fees. In the Matter of the FINRA Arbitration Between Bradley Aaron Sayre, Claimant, vs. J.P. Morgan Securities LLC, Respondent (FINRA Arbitration 15-00524, August 4, 2017).  

(Amended) Statement of Claim

As stated in the FINRA Arbitration Decision:  

Claimant amended the Statement of Claim prior to service of the claim. Although the claim is entitled Amended Statement of Claim, it is deemed the only Statement of Claim filed in this case. 

I'm not sure I understand that. Let me set out the pertinent facts:
  1. A claim was drafted but never served. 
  2. What got served was an amended version of the previously drafted but unserved claim. 
  3. The arbitrators and parties apparently concurred on calling the only served claim the "Amended Statement of Claim." 
If a tree falls in the woods but nobody hears it, is there sound? If a Statement of Claim is drafted but never served, is that actually a Statement of Claim? Frankly, I don't think that we're dealing with an "Amended" Statement of Claim but a plain-old "Statement of Claim." If I draft ten versions of a Statement of Claim on my computer but only serve the last (so-called "FINAL") draft, isn't that served version the Statement of Claim? According to this FINRA Arbitration Decision, my first of the ten drafts would be deemed the "Statement of Claim" and each of the subsequent nine would be deemed "Amended Statements of Claim." Frankly, it would seem to be a sensible policy to only label the first served version of an Statement of Claim as that, and any future submissions as "Amended." 


Respondent J.P. Morgan Securities LLC generally denied the allegations and asserted various affirmative defenses.  

For the Parties

The FINRA Arbitration Decision asserts the following legal representation:  

For Claimant Bradley Aaron Sayre ("Claimant): Kevin J. Mirch, Esq., Mirch Law Firm LLP, San Diego, California  

For Respondent J.P. Morgan Securities LLC ("Respondent): Jeffrey S. Dunlap, Esq., Ulmer & Berne LLP, Cleveland, Ohio  

The Opening Session

At the first evidentiary hearing, which began at 10 a.m. on July 18, 2017, all the parties showed up and the lawyers made their opening statements. So far, so good. Next, Claimant's case-in-chief kicks off with the presentation to the FINRA Arbitration Panel of a three-ring binder containing Exhibits 1 through 42. which were admitted into evidence and used to examine Claimant's first witness. The first session ended about noon and everyone was supposed to reconvene at 1:30 p.m. 


Alas, that word "supposed" always causes problems. The reconvening time of 1:30 p.m. comes and goes and although the arbitrators and Respondent J.P. Morgan's scounsel made it back to the hearing room, neither Claimant Sayre nor his lawyer Kevin J. Mirch, Esq. were anywhere to be seen.  

Now, let me permit the FINRA Arbitration Decision to pick it up from there:

[M]s. Marie Mirch, an attorney and wife of Mr. Mirch, Claimant's counsel, then informed all the parties that she had to take Mr. Mirch to see a doctor and that Claimant himself had left to be with his wife who was giving birth. Ms. Mirch made an oral motion for an indefinite postponement of the hearing. Respondents counsel objected to the postponement request. The Panel recessed the hearing to deliberate its ruling on the motion. The Panel reconvened the hearing and requested Ms. Mirch return the following day at 9:00 a.m. with information on Mr. Mirch's medical condition and when Mr. Mirch would be available to continue the hearing. Ms. Mirch stated that she did not believe she could represent the Claimant, although she had acted on the case previously. At this time, the Panel did not take any action on Ms. Mirch's oral motion for an indefinite postponement of the hearing. The session concluded at approximately 2:00 p.m. 

Following the closing of the session, in an executive session, the Panel discussed the possible actions available, including: 
1. Granting the motion and any parameters to be set to assure the integrity of the process;  
2. Denying the motion and any parameters to be set to assure the integrity of the process;   
3. Dismissing the case without prejudice;  
4. Dismissing the case with prejudice; and  
5. Any other possible action.  

The Panel wanted to confirm that all parties received proper consideration, the integrity of the hearing process would be assured, and that the final action of the Panel would stand up to scrutiny.  

On July 19, 2017 at 9:00 a.m., the Panel, Respondent's counsel, and Ms. Mirch were available to convene the session. Ms. Mirch was asked for the information previously requested, the medical condition of Mr. Mirch and his availability for resuming the hearing. The Panel also requested information on Claimant's failure to appear and the Claimants future availability as a participant in the hearing. Ms. Mirch responded that she had not brought her husband to the doctor as yet. The Panel informed Ms. Mirch that the information was still required, and that the Panel would conclude this session. Ms. Mirch was instructed to provide the requested information for the afternoon session which would convene at 3:00 p.m. The session was concluded at approximately 9:30 a.m.  

The Panel retired to executive session spending time individually and as a Panel, examining Claimants exhibits, Claimant's Statement of Claim, FINRA Rules, and other appropriate documents in the case file. The Panel continued in this activity with a break only for lunch.  

That same day at 3:00 p.m., the Panel and Respondents counsel were available to convene the session. Ms. Mirch arrived at approximately 3:10 p.m. and the session was convened. Ms. Mirch brought two memos, marked M-1 and M-2. The memo from the Claimant indicated that he was attending to his wife and new child, and would not be available for 12 weeks. The memo regarding Mr. Mirch's health gave no date of actual availability to return, but indicated that he could not return for the remainder of this week, i.e. through July 21, 2017. Ms. Mirch again made an oral motion for an indefinite postponement of the hearing and reiterated that she could not represent the Claimant. Respondent's counsel again objected to Ms. Mirch's motion. The Panel recessed the session to go into executive session to rule on the oral motion.  

During the executive session, the Panel discussed if there was sufficient evidence presented by Claimant's counsel, both witness testimony and the written exhibits, to assure that the Panel could make an honest, impartial, and comprehensive evaluation of Claimant's case. The Panel also considered Claimant's memo concerning his voluntary absence from the hearing. By unanimous vote, the Panel affirmed that the Panel could and would make an honest, impartial, and comprehensive evaluation of Claimant's case. The unanimous vote was to deny the request for an indefinite postponement.  

That same day at approximately 3:25 p.m., the session was reconvened and the Panel announced the decision to deny the oral motion. Ms. Mirch stated her objection to the denial and left the hearing. Respondent's counsel requested a directed verdict, which the Panel denied. Respondent's counsel was offered the same option as Claimant's counsel had -- to submit his exhibit books to the Panel to be accepted as evidence. Respondent did not have a witness testify, and did not cross-examine Claimants witness. Respondent's counsel then submitted exhibit books and the Panel accepted the exhibit books into evidence. Respondent's counsel made his closing statement and the session was adjourned at approximately 3:35 p.m.  

Executive Session

Thereafter, the arbitrators went into executive session, reviewed the parties' exhibit books and apparently took a shot at . . . at what, you might ask. I would likely raise that same question. Armed with whatever they had from whatever the hell had gone on in the form of an evidentiary hearing on July 18 and July 19, 2017, the FINRA Arbitration Panel apparently believed that it could deliberate and render a decision. And render they did!


The FINRA Arbitration Panel denied Claimant Ayre's claims because he had "failed to prove that there were grounds for an award that was substantiated by any credible evidence." You think? (The esteemed Bill Singer, Esq. says in an audible stage whisper).

Bill Singer's Comment

There are so many unanswered questions about why Claimant and his counsel had not requested an adjournment of the first hearing date in consideration of the wife's pregnancy and whatever the medical emergency was that necessitated the lawyer's absence. It is possible that the Claimant's wife went into an unexpectedly early childbirth. It is possible that Claimant's lawyer was stricken with an unexpected medical emergency. It would have been helpful for the FINRA Arbitration Decision to offer just a bit more context in order to explain why the arbitrators did not see fit to grant the adjournment. As best I understand it the arbitrators didn't see the need for further live hearings because they had exhibit books and heard Claimant's first witness. It will be interesting to see if Claimant appeals this outcome.