Federal Court Cites Quintessential Shotgun Pleading and Myriad of Motions in FINRA Arbitration Appeal

May 22, 2020

A public customer filed a FINRA Arbitration Statement of Claim against Wells Fargo Advisors and asked for no less than $100,000 in damages. The arbitrators found in the customer's favor and awarded about $99,000 in damages and fees. For whatever reasons, the customer appealed the FINRA Award to federal court. The Court looked somewhat askance at a quintessential shotgun pleading and a myriad of motions. Not the dried-out prose of the courtroom. Frankly, a tad poetic. 

2016 FINRA Arbitration Decision

In a FINRA Arbitration Statement of Claim filed in July 2015, public customer Claimant Wilkinson asserted  common law fraud; breaches of fiduciary duty, contract, the implied covenant of good faith and fair dealing, North Carolina General Statutes, and FINRA rules; and negligence. Claimant Wilkinson sought in excess of $100,000 in compensatory damages plus interest, punitive damages, fees, and costs. Andrew E. Wilkinson, Claimant, v. Wells Fargo Advisors LLC, Respondent (FINRA Arbitration Decision 15-01842 / August 2, 2016)

Respondent Wells Fargo generally denied the allegations, asserted various affirmative defenses, and sought the expungement of the matter from the Central Registration Depository records ("CRD") of unnamed party Angela Ostendarp.

The FINRA Arbitration Panel found Respondent Wells Fargo liable and ordered it to pay to Claimant Wilkinson $73,784.34 plus $24,965.66 in attorneys' fees. The Panel denied the requested expungement. 

The FINRA Arbitration Decision discloses "For Claimant Andrew E. Wilkinson: Randall C. Place, Esq., Place & Hanley, LLC, Naples, Florida."

After a public customer wins a FINRA arbitration, that's usually the end of it -- unless, of course, the respondent industry parties are outraged or angered by some perceived misconduct by the arbitrators, in which case those so aggrieved file a Motion to Vacate the Arbitration Award. In some cases, the so-called prevailing public customer may also feel aggrieved by the perceived dollars awarded (or other sensed improprieties), and may file a Motion to Vacate and/or Modify the same Award. Given Claimant Wilkinson's FINRA arbitration damages demand for no less than $100,000.01, you might have expected that his total FINRA Arbitration Award of $98,750 in damages and fees were close enough to his numbers that he might have been satisfied -- apparently not.

2020 WDNC Order

As much as I delight in tellin' a tale, I'm going to step back here and let the United States District Court for the Western District of North Carolina ("WDNC") give you the "Background" as to what happened after Wilkinson received his FINRA Arbitration Decision. Andrew Elliott Wilkinson, Plaintiff, v. Wells Fargo Bank, N.A., Wells Fargo Clearing Services, LLC d/b/a Wells Fargo Advisors and/or First Clearing, Angie Ostendarp, Mike Quimby, FINRA, and Place and Hanley, LLC, Defendants (Order, WDNC, 19-CV-00580)
http://brokeandbroker.com/PDF/WilkinsonOrdWDNC200519.pdf [Ed: footnote omitted]:

This is the second action filed by Plaintiff based on the same set of factual allegations. In January 2005, Plaintiff received an inheritance comprised of investments managed by Defendant Wells Fargo Clearing Services, LLC ("WFCS").Plaintiff met with WFCS representatives, including Defendant Angie Ostendarp, a financial advisor who later worked with Plaintiff on his WFCS accounts and investments. On August 12, 2013, WFCS sent a letter to Plaintiff terminating the customer account relationship. The letter was signed by Defendant Mike Quimby, a former WFCS representative. 

On July 22, 2015, Plaintiff initiated a proceeding before the Financial Industry Regulatory Authority ("FINRA") against WFCS asserting claims for fraud, unfair or deceptive acts or practices, breach of fiduciary duty, breach of contract, RICO violations, and negligence. In the FINRA proceeding, Plaintiff sought to recover damages from WFCS, Ostendarp, and Quimby, alleging that Plaintiff did not understand how his assets were being invested, did not receive copies of certain documents, became obligated on a loan without his consent, and WFCS did not properly manage his assets. After a July 2016 hearing, a FINRA arbitration panel ordered WFCS to pay Plaintiff $73,784.34 in damages plus attorney's fees. 

On November 1, 2016, Plaintiff filed his pro se complaint against Wells Fargo Advisors, Ostendarp, Quimby, and Andy Tullis (the "First Federal Action"). See Wilkinson v. Wells Fargo Advisors et al., Case No. 3:16-cv-00755. Attached to Plaintiff's complaint was the same set of allegations he submitted to FINRA. On February 15, 2017, the Court entered an order dismissing Plaintiff's complaint in the First Federal Action. The Court noted that Plaintiff failed to state a claim under 42 U.S.C. § 1983 because Plaintiff failed to allege any of the defendants were state actors. The Court further concluded that the remainder of Plaintiff's complaint failed to alert the Court to any potential claim for relief. 

On August 1, 2019, Plaintiff filed the instant complaint against Wells Fargo Bank, N.A., WFCS, Ostendarp, Quimby, FINRA, and Place and Hanley, LLC in the Superior Court of Mecklenburg County, North Carolina. Certain Defendants removed the action to the United States District Court for the Western District of North Carolina based on diversity jurisdiction. The complaint is difficult to comprehend and does not identify specific claims. The complaint does state, however, that it is "an amendment AND an addendum to previously filed complaints: Federal Court and FINRA." (Doc. No. 1-1, at 34.) In addition, Plaintiff makes the same allegations that he made in the FINRA proceeding and the First Federal Action, namely: (1) Plaintiff did not understand his investments or conversations with WFCS; (2) Plaintiff did not receive copies of certain documents; (3) Plaintiff became obligated on four loans without his consent; and (4) WFCS mismanaged funds in his investment account.

On December 6, 2019, Wells Fargo Bank, N.A., WFCS, Ostendarp, and Quimby (the "Wells Fargo Defendants") filed their motion to dismiss pursuant to Rules 8, 10(b), and 12(b)(6). (Doc. No. 11.) In the five-month period since the Wells Fargo Defendants filed their motion to dismiss, Plaintiff has filed twelve different motions. 

at Pages 2 - 4 of the WDNC Order

Wilkinson's Former Law Firm

Note that Wilkinson's law firm during his FINRA Arbitration -- Place and Hanley, LLC -- has somehow become a Defendant in Wilkinson's federal case. In keeping with that altered relationship, you should note that Wilkinson represented himself pro se in the federal matters. 

Res Judicata

In Wilkinson, WDNC telegraphs its sensibilities when it observed that the "complaint is difficult to comprehend and does not identify specific claims. . . " Oh my, this just ain't gonna turn out all that great for Wilkinson. As such, in adjudicating the various pending motions to dismiss by the Defendants, WDNC make short shrift of Wilkinson's Complaint. First, the Court dismisses the Complaint on the basis of res judicata by finding in part that:

Here, Plaintiff's complaint is based on the same series of transactions and occurrences as his complaint in the First Federal Action and the FINRA arbitration -- namely, his dealings with WFCS and its representatives regarding Plaintiff's account and investments. As the claims, allegations, and issues raised in Plaintiff's complaint either were adjudicated or could have been adjudicated in the prior FINRA arbitration and the First Federal Action, Plaintiff's complaint is barred by the doctrine of res judicata.

at Pages 4 - 5 of the WDNC Order

Quintessential Shotgun Pleading

After landing a staggering right cross to Wilkinson's head a la res judicata, WDNC closes in with a devastating uppercut to his chin: 

Here, Plaintiff's complaint is the quintessential shotgun pleading. Plaintiff complains of a grand criminal scheme, asserting that his rights and the rights of 3.5 million others "must be defended and preserved over the banking industries [sic] communistic criminal capitalistic enterprises." (Doc. No. 1-1, at 13.) The Complaint consists of a series of handwritten and typewritten pages generally asserting that banks, including Wells Fargo, steal money from people, including Plaintiff. Plaintiff also lists numerous civil and criminal statutes that he believes have been violated. Other than stating that "[t]his is a 42USC@1983 [sic] Civil Rights Complaint," "[t]his is a Criminal Complaint," and "[t]his is a Constitutional Complaint," it is entirely unclear what claims Plaintiff attempts to assert, and the Court is unable to discern any potential claims for relief. Accordingly, dismissal of Plaintiff's complaint is also warranted for failure to comply with Rule 8. 

at Page 7 of the WDNC Order

Myriad of Motions

Having effectively ended Plaintiff Wilkinson's case with the above-noted dismissals, WDNC quickly shreds through some 12 pending motions of his, which the Court characterizes as "a myriad of motions." In addressing Wilkinson's Motion to Amend, the Court explains how Wilkinson's prior law firm wound up as the subject of his ire:

The motion states that Plaintiff "finally found Randall Place" and seeks to include "Defendants previously not served by oversight," including FINRA, Randall Place, and Place and Hanley, LLC. While FINRA and Place and Hanley, LLC were named as original Defendants, Randall Place was not. (Doc. No. 1-1, at 3.) Thus, the Court construes the motion as one to amend the complaint to add Randall Place as a Defendant. Randall Place of Place and Hanley, LLC appears to be the lawyer who represented Plaintiff in the FINRA arbitration. The complaint is devoid of any factual allegations to support a potential claim against Randall Place or Place and Hanley, LLC. Therefore, the Court denies Plaintiff's motion to amend, (Doc. No. 19), as futile.

at Page 9 of the WDNC Order

The Lawyer's Wife

In a somewhat bizarre revelation, WDNC adds this additional commentary:

E. Motion to Serve Sarah Hanley with Complaint (Doc. No. 28) 

It is unclear what relief Plaintiff seeks through this motion. The motion suggests that Sarah Hanley is Randall Place's wife. Hanley is not a Defendant in this case and there does not appear to be any allegations in the complaint regarding Hanley. Accordingly, Plaintiff's motion to serve Sarah Hanley with the complaint, (Doc. No. 28), is denied. 

at Page 10 the WDNC Order

Case Closed

At the end of this judicial carnage, WDNC grants the Wells Fargo Defendants' Motion to Dismiss and denies the "myriad" of motions made by Plaintiff Wilkinson. Finally, WDNC ordered Wilkinson to "file a response showing cause as to why this action should not be dismissed as to FINRA and Place and Hanley, LLC for failure to comply with Rule 8 and failure to state a claim for relief" at page 13 of the WDNC Order.