[O]n September 26, 2019, Claimant's Non-attorney Representative filed an Emergency Application to Adjourn the Hearing in order for Claimant to hire an attorney ("Motion to Adjourn"), since the Non-attorney Representative was planning to withdraw from the case. On September 27, Columbus filed an opposition and a motion for sanctions of dismissal and striking the Statement of Claim. By Order that same day, the Arbitrator granted the Motion to Adjourn and advised that Claimant's new representative must be an attorney licensed to practice in Georgia and must file an appearance within 21 days, otherwise Respondent's motion to dismiss would be granted. Claimant was assessed all related costs. On October 18, Claimant's Non-attorney Representative filed a notice withdrawing as Claimant's representative. On or about October 29, Claimant's new representative, an attorney, filed a notice of appearance ("Claimant's Attorney of Record").
[C]laimant's former Non-attorney Representative (who was supposedly withdrawn and supplanted in this case) appeared and advised that Claimant's attorney was not "feeling well, his son was sick, and Claimant was busy with his business due to the Covid-19 situation" and then requested a four-week postponement on Claimant's behalf. The Arbitrator noted that she was not Claimant's representative of record, and did not explain how she obtained this information, since FINRA, the Arbitrator and Respondent had no knowledge of these facts. Columbus opposed the postponement request. The Arbitrator advised the parties that he would issue a decision on the request, and closed the Special Proceeding.
Mutually scheduled evidentiary hearings have been postponed twice before at Claimant's request. Claimant has not complied with discovery obligations, despite orders to do so and despite sanctions including assessed fees and potential dismissal of Claimant's claims. The pattern in this case evinces a clear disinclination to prosecute Claimant's claims and a material and intentional failure by Claimant to comply with obligations imposed by the Code and orders entered that he do so.Accordingly, Claimant's case is dismissed with prejudice pursuant to [Rule] 12212(c).
SIDE BAR: FINRA Code of Arbitration Procedure for Customer DisputesRule 12212: Sanctions(a) The panel may sanction a party for failure to comply with any provision in the Code, or any order of the panel or single arbitrator authorized to act on behalf of the panel.Unless prohibited by applicable law, sanctions may include, but are not limited to:
- Assessing monetary penalties payable to one or more parties;
- Precluding a party from presenting evidence;
- Making an adverse inference against a party;
- Assessing postponement and/or forum fees; and
- Assessing attorneys' fees, costs and expenses.(b) The panel may initiate a disciplinary referral at the conclusion of an arbitration.(c) The panel may dismiss a claim, defense or arbitration with prejudice as a sanction for material and intentional failure to comply with an order of the panel if prior warnings or sanctions have proven ineffective.
[C]olumbus filed a submission in support of its Counterclaims and requested an award of attorneys' fees of $16,350.00, expert witness fees of $2,500.00, and FINRA forum fees of $3,450.00, and projected that its costs for confirming and collecting the award would be $5,000.00. Claimant did not file a response.
On April 7, 2020, Claimant's Attorney of Record filed a notice withdrawing as Claimant's representative. That same day, another attorney filed a Notice of Limited Appearance ("Limited Attorney") advising that he appeared on Claimant's behalf "for the limited purpose of filing a [m]otion for [r]econsideration and to oppose the counterclaim." He further requested that any award with respect to all prior representation reflect the appropriate representative and exclude him. That same day, Claimant filed a motion to reconsider the order dismissing his claims, and a motion to stay the decision on Columbus' Counterclaims until the motion to reconsider was decided ("Motions to Reconsider and to Stay"). On April 8, Columbus filed an opposition to Claimant's motions. The same day, the Claimant filed a reply in support of his Motions to Reconsider and to Stay.
Claimant seeks reconsideration of an order of March 25, 2020 dismissing his claims with prejudice ("Dismissal Order"). The Dismissal Order was based, not on the merits of the case, which cannot be determined, but on a finding that Claimant materially and intentionally failed to comply with discovery obligations, despite orders that he do so and sanctions for his non-compliance. No determination can be made on the merits of any claims or defenses because this case has not been heard, the parties' witnesses and respective experts have not been questioned, and Claimant, a key witness, has not been examined. Claimant's case has been scheduled to be heard on the merits three times and Claimant has postponed the Special Proceeding twice and failed to appear the third time.After the Dismissal Order, only Columbus' Counterclaims remained in the case until Claimant filed Motions for Reconsideration and to Stay. In the motion for reconsideration, Claimant's Limited Attorney argued that the Dismissal Order should be vacated because Claimant had a right to an attorney for the Special Proceeding convened on March 19, 2020. However, Claimant had an attorney at the time and the Special Proceeding could not take place precisely because neither Claimant nor Claimant's Attorney of Record appeared, without prior notification to FINRA, the Arbitrator or Respondent.The entire record, except for other arbitration awards not material to this case attached to pleadings, has been carefully reviewed in detail and reconsidered. For the reasons set out in the Dismissal Order, the decision to dismiss Claimant's claims with prejudice is affirmed and Claimant's motion for reconsideration is denied. Since the motion for reconsideration has been decided, Claimant's motion to stay the decision on the Counterclaims is moot.Columbus' Counterclaims are based on the grounds that Claimant's claims were frivolous. However, there has been no finding that Claimant's claims were frivolous, because that issue has not been tried on the merits. It is clear that if this case had proceeded normally, Columbus would have incurred expert costs and attorneys' fees. However, whether more fees and costs than necessary have resulted due to Claimant's actions cannot be determined without an opportunity for evaluation after a hearing. Accordingly, Columbus' Counterclaims are dismissed. . . .