Claimant Throws Kitchen Sink at UBS -- But Gets Flushed Down the Drain

May 26, 2011

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in October 2008, Claimant Charles Churchill asserted the following causes of action:

violations of the discrimination provisions of the Americans with Disabilities Act of 1990 ("ADA") and the New York City Human Rights Law ("NYCHRL"),
misrepresentations,
breach of contract,
violations of
- standards of commercial honor,
- just and equitable principles of trade,
- the duty of good faith and fair dealing,
interference with existing and prospective business relationships, and
intentional and negligent infliction of emotional distress.

Apparently, not quite exhausted from his first round of allegations, Claimant Churchill filed an Amended Statement of Claim in which he withdrew his ADA and NYCHRL claims but added claims of maltreatment and illegal termination.In the Matter of the Arbitration Between Charies P. Churchill, Claimant vs. UBS Financial Services, Inc.. Respondent (FINRA Arbitration 08-03790, May 10, 2011).

By way of damages and relief, Claimant sought:

not less than $750,000 in compensatory damages,
not less than $300,000 in punitive damages,
attorneys' fees on his ADA and NYCHRL claims.
at least $750, 000 in compensatory damages for the misrepresentation claim;
at least $2,500,000.00 on his claims of breach of contract, breach of standards of commercial honor, breach of just and equitable principles of trade and violation of the duty of good faith and fair dealing;
at least $2,500,000.00 in compensatory damages plus punitive damages on his claims of interference with existing and prospective business relationships;
$100,000 in compensatory damages plus punitive damages on his claims of Intentional and negligent infliction of emotional distress for terminating Claimant due to his wife's health and unfounded assumption he would churn or defalcate his customers' accounts;
a declaratory award that his promissory note ("Note") and employee forgivable loan ("EFL") are void and he is relieved of any repayment obligations or obligation to comply with any anti-solicitation provisions; and
interest, fees, and various costs.

The Amended Claim modified downward some of the damages initially sought and, thereafter, tt the close of the hearing. Claimant requested compensatory damages in the amount of $1,293,599.00 and attorneys' fees and costs in the amount of $1,338,300.00.

Can We Get A Word in Edgewise?

Respondent UBS generally denied the allegations, asserted various affirmative defenses, and filed a Counterclaim asserting breach of promissory note and unjust enrichment. Apparently not to be outdone by Claimant's expansive pleading and amendments, Respondent filed an Amended Counterclaim, which added claims of fraud and false and frivolous allegations.

In its Answer and Counterclaim, Respondent requested dismissal with prejudice, costs, attorneys' fees,and compensatory damages in the amount of $280,530.31 plus interest. Respondent further asked for reimbursement of all costs it incurred in connection with Claimant's hiring and employment, including any fees paid to a third party professional recruiter, attorney, or other. At the close of the hearing. Respondent requested compensatory damages in the amount of $290,814.74 plus interest, costs, and attorney's fees.

Taking the Gloves Off

On or about May 17, 2010, Respondent UBS filed a Motion for Sanctions for Failure to Provide Privilege Log. An in-person pre-hearing conference was conducted on May 20, 2010. The FINRA Arbitration Panel considered all submissions and oral arguments and, after due deliberation, issued an Order dated May 24,2010, granting the Motion for Sanctions for Failure to Provide Privilege Log to the extent that Claimant was deemed to have waived all objections based upon attorney client privilege and/or confidentiality with respect to:

All communications between Claimant and Louis Galante, Esq. or his Law Firm; and
All communications between Claimant and any other attorney between August 14 and September 1, 2006.

On or about July 15,2010, Respondent filed a Motion for Dismissal and Sanctions and following a conference conducted on October 8,2010, the Panel denied the Motions for Dismissal without prejudice. However, the Panel awarded Respondent all reasonable attorneys' fees, costs and expenses incurred between November 1, 2008 and October 1,2009 in defending against Claimants claims to the extent based upon the allegation that Claimants wife's was physically disabled.

Let's Just End This Already

The FINRA Arbitration Panel found that Claimant failed to prove his claims by a preponderance of the evidence and was liable to and ordered to pay to Respondent UBS

$290,814.74 in compensatory damages for the unpaid principal on the Note plus interest from April 14, 2011 until full payment;
$52,893.32 in pre-Award interest; and
$150,000 in attorneys' fees (pursuant to the terms of the Note and the Panel's October 2010 Order).

SIDE BAR: I dunno about you but I'm exhausted by this one. Not that there's anything even remotely funny here, but, you know, the Claimant filed this laundary list of allegations and sought a kitchen sink full of damages and, in the end, the Respondent walks away with some half a million bucks. Somewhere, somebody really miscalculated -- and it wasn't UBS.

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