H&R Block Wins Promissory Note Arbitration

In the Matter of the Arbitration Between H&R Block Financial Advisors, Inc., Claimant, vs. Brian Taylor Ainge, Respondent, and Charles A. Chambers (Third Party Respondent) and Andrew M. Kistler III (Third Party Respondent) (FINRA #08-02776, March 19, 2010), Claimant H&R Block (HRB) asserted breach of promissory note and unjust enrichment, arising from Respondent Ainge's alleged failure to repay sums due pursuant to a fully executed promissory note dated November 16, 2007, ("The Note"). HRB requested:

1. compensatory damage for the outstanding principle, in the amount of $330,227.88;
2. accrued note interest, at the rate of 4.39%, from November 16, 2007 through June 30, 2008;
3. post-default interest, at the rate of 7%, from June 30, 2008; and,
4. all appropriate costs and expenses, including the filing fees of $2,125.00.

Respondent Ainge (Ainge) denied the allegations and asserted the following causes of action relating to his employment/termination from HRB :

1. fraudulent inducement;
2. deceit;
3. common law fraud;
4. constructive fraud;
5. tortious interference with business activities;
6. negligent misrepresentation;
7. negligence; and,
8. failure to supervise.

In his Counterclaim and Third Party Claim, Ainge requested:

1. dismissal of Claimant's Statement of Claim with prejudice;
2. costs, including attorney's fees expended in defending this action;
3. a judgment in favor of Respondent and against Claimant and Third Party Respondents, jointly and severally;
4. compensatory damages in an amount to be determined at the arbitration hearing, but not less than $550,000.00;
5. punitive damages, in an equal amount of at least $550,000.00;
6. costs;
7. prejudgment interest; and,
8. attorney's fees.

The FINRA Panel denied Respondent Ainge's Counterclaim/Third-Party Claim and found him liable to Claimant HRB for compensatory damages in the amount of $354,443.16, inclusive of accrued note interest at the rate of 4.39% per annum, from November 16, 2007 through March 2, 2010. In keeping with the protocol in these FINRA arbitration cases, the Panel offered no explanation of its findings or decision.

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