Court Opinion

ID: 4232439
Source: CourtListenerOpinion
Date Created: 2017-12-26 20:16:21.177526+00
Date Added: 2024-06-11T14:43:05.995995
License: Public Domain

COTTEN SCHMIDT & ABBOTT
      REPLY TO:                            ———————— L.L.P. ————————                       BRIAN D. ESENWEIN, J.D., C.P.A.
      FORT WORTH OFFICE                                                                   PARTNER – ADMITTED IN TEXAS
                                                      ATTORNEYS AT LAW
                                                                                                STATE BAR NO. 06665900
      100 Energy Way, Ste. 2000
      Fort Worth, Texas 76102                      FORT WORTH  CORPUS CHRISTI                besenwein@csa-lawfirm.com
      Telephone (817) 338-4500                                                              FILED  IN
      Facsimile (817) 338-4599
                                                HOUSTON  NEW ORLEANS  CALIFORNIA   2nd COURT OF APPEALS
                                                                                      FORT WORTH, TEXAS
                                                      December 6, 2017               12/6/2017 4:18:34 PM
                                                                                          DEBRA SPISAK
                                                                                             Clerk       FILED
            Via E-Filing                                                                         COURT OF APPEALS
            Debra Spisak, Clerk                                                             SECOND DISTRICT OF TEXAS
            Court of Appeals, Second District of Texas at Fort Worth
            On Appeal from the 236th District Court, Tarrant County, Texas                          12/19/2017
                                                                                               DEBRA SPISAK, CLERK

                      Re:         Court of Appeals Case Number: 02-17-00035-CV, Scott A. Miller,
       RECEIVED
   COURT OF APPEALS
                       Appellant
SECOND DISTRICT OF TEXAS                    v. Jeremy J. Walker, d/b/a Maverick Wealth Management,
      12/06/2017                  Appellee - Letter Brief
  DEBRA SPISAK, CLERK

                      During oral argument, Appellant’s Counsel made several statements

            concerning the Record which Appellee believes are inaccurate. Appellant’s

            Counsel also misapplied a key opinion to the facts of this case.

                      Appellant’s Counsel accurately acknowledged during her rebuttal argument

            that the Arbitrators had found that Walker breached the AFA Agreement (oral

            argument at approx. 37 mins. 32 secs.). Appellant’s Counsel then back tracked by

            stating the Arbitrators may have awarded attorneys’ fees to Miller on the basis of

            the breach by Walker of one or more oral contracts. She also made a general

            reference to other written agreements, said this was not a reasoned award, and

            stated, “We don’t know what contract the Arbitrators found Mr. Walker breached.”

            (Oral argument at approx. 38 mins. 40 secs.)

            Exhibit “A” - To Appellee’s Motion for Leave to file Letter Brief                    Page 1 of 7
Inaccurate Statements Concerning the Record

       There is no evidence in the Record to support Appellant’s Counsel’s

statements regarding alleged oral agreements between Miller and Walker, and no

other written agreements with customer non-solicitation covenants were in

evidence.

       The Arbitrators awarded damages and attorneys’ fees to Miller due to the

breach of written agreements Walker made with Ameriprise according to the

Award and not for breach of any oral agreement or other written agreements (CR -

Vol. 1, p. 31). The only written agreement Walker made with Ameriprise that

contained the type of covenants referred to by the Arbitrators in the Award was the

2009 AFA Agreement.

       The statement made by Appellant’s Counsel to this Court that it was not

possible to read the Arbitrators’ minds and figure out why they awarded attorneys’

fees mischaracterizes the Record based on both the foregoing paragraph and on the

following: (Oral argument at approx. 39 mins. 08 secs.)

1.     Appellant’s Counsel stated under penalty of perjury that, the Panel found

       that the 2009 AFA Agreement prohibited solicitation of Miller’s Ameriprise

       customers and awarded permanent injunctive relief on that basis (RR - Ex.

       No. 3 to Transcript, p. 2, paragraph 7, lines 10-13).

2.     Scott Miller testified his damages were caused by Walker’s breach of the

       2009 AFA Agreements (CR - Vol. II, p. 547, p. 185, lines 9-12).

Exhibit “A” - To Appellee’s Motion for Leave to file Letter Brief        Page 2 of 7
3.     The only breach of contract cause of action set forth in the Appellant’s

       Amended Statement of Claim stated that Walker breached his contracts with

       Ameriprise by failing to comply with the confidentiality and non-solicit

       provisions contained in those contracts (RR - Ex. No. 8 to Transcript, p. 23).

       The above confirms that according to the Record the 2009 AFA Agreement

was the sole contractual justification for an award of attorneys’ fees to Miller

pursuant to Section 38.001 of the Texas Civil Practice and Remedies Code.

Accordingly, the comments to the Court by Appellant’s Counsel that, “Was it the

breach of the 2009 AFA Agreement specifically that they were resting their

opinion on? That’s not made clear”, are inaccurate. (Oral argument approx. 39

mins. 05 secs.)

Omission by Appellant’s Counsel of Key Terms of the AFA Agreement

       Appellant’s Counsel was asked, “is arbitration under FINRA necessarily

exclusive of incorporating the arbitration agreement?” Ms. Blair responded that she

did not believe they are exclusive. (Oral argument at approx. 10 mins. 40 secs.)

She then qualified her response by stating that the arbitration clause contained in

the AFA Agreement excludes customer non-solicitation claims brought under

Section VIII of the AFA Agreement. (Oral argument at approx. 10 mins. 05 secs.)

Appellant’s Counsel further stated that those claims were therefore submitted to

arbitration under the requirements for arbitration between Miller and Walker

Exhibit “A” - To Appellee’s Motion for Leave to file Letter Brief          Page 3 of 7
according to the FINRA Code and not the arbitration agreement. (Oral argument at

approx. 11 mins. 40 secs.)

Appellant’s Counsel did not mention that:

1.     The sentence in the arbitration agreement containing that limitation started

       with the phrase, “Unless otherwise agreed to in writing by both parties, ...”

       which is what occurred when Ameriprise and Walker each signed a

       submission agreement that did not violate the arbitration agreement because

       Paragraph 1 of Section IX included that enabling clause; or

2.     Under the AFA Agreement, the broadly worded arbitration clause would

       automatically apply to customer solicitation disputes that were voluntarily

       submitted to arbitration, and under cited case law the FINRA Code would

       have been superseded by the parties’ agreement.

Mischaracterization by Appellant’s Counsel of the Application of Case Law to

this Appeal

       Appellant’s Counsel misrepresented the law of the case in Hollern v.

Wachovia Securities, Inc., 458 F.3d 1169 (10th Cir. 2006). Ms. Blair stated that the

Tenth Circuit held that in the context of FINRA the Uniform FINRA Submission

Agreement controls over prior written arbitration agreements. (Oral argument at

approx. 39 mins. 40 secs.)

       Appellant’s Counsel did not bring to this Court’s attention that in Hollern

the parties’ original arbitration agreement was silent on the issue of attorneys’ fees.

Exhibit “A” - To Appellee’s Motion for Leave to file Letter Brief           Page 4 of 7
(Id at 1774) Moreover, the Court in Hollern cited another Tenth Circuit opinion

that stated:

       “The parties may extend that authority, however in their submission to the

       arbitrators so long as the submissions do not violate the express provisions

       of the original arbitration agreement.” Id at 1174

Hollern holds that the Arbitrators’ authority can be expanded by the parties under a

written submission agreement when the arbitration language is silent on a

particular matter.

       The specific language in the arbitration agreement in the AFA Agreement

regarding attorneys’ fees distinguishes Hollern from this case, and the opinion

issued by the Tenth Circuit supports the Appellee’s position on Appeal, and is in

conflict with the Appellant’s oral argument.

The Undersigned’s Attorneys’ Fees Affidavit

       Through no one’s fault, time expired before the undersigned was able to

present his five minutes of allocated time for oral argument to the Court, and the

following supplemental information is provided to aid the Panel during its

deliberations.

       The Attorneys’ Fees Affidavit submitted in the arbitration by the

undersigned in the arbitration (RR - Ex. No. 30 to Transcript) contained several

statements regarding the FINRA Arbitrators’ general authority to award attorneys’

fees to Walker payable by Miller. Appellant’s Counsel argued that the affidavit

Exhibit “A” - To Appellee’s Motion for Leave to file Letter Brief         Page 5 of 7
supported Appellant’s positon on Appeal, and Mr. Disney was asked by one of the

Justices why Walker was entitled to seek attorneys’ fees from Miller under the

arbitration agreement. (Oral argument approx. 31 mins. 24 secs.)

       The undersigned could have further responded to the Court by stating that

when the affidavit was prepared at the end of the arbitration hearing on damages,

Walker was seeking attorneys’ fees from both Ameriprise (as a signatory to the

AFA under which the Arbitrators’ authority to award Walker attorneys’ fees

against Ameriprise was clear), and Miller (who Appellee contended had no

standing to bring any claims or recover any damages or fees under the AFA

Agreement) (CR - Vol. I, p. 168). Walker was also asking the Arbitrators to

reconsider its ruling on permanent injunction and conclude that Miller was not

covered by the AFA Agreement (CR - Vol. I, p. 172).

       The undersigned was effectively advising the Arbitrators in general and

qualifying terms through his Attorneys’ Fees Affidavit that if Miller did not have

standing and was not allowed to assert any claims against Walker under the AFA

Agreement, the Arbitrators still had authority to award Walker his attorneys’ fees

against Miller under various alternative theories. The undersigned acknowledges

the affidavit did not draw a distinction between Ameriprise and Miller as to such

general FINRA rules, but none was required.

       When the Panel awarded Miller compensatory damages under the AFA

Agreement in the final Award, Miller was also subject to the narrow attorneys’

Exhibit “A” - To Appellee’s Motion for Leave to file Letter Brief       Page 6 of 7
fees language in the arbitration agreement, (just like Ameriprise and Walker were),

whereupon those general statements in the undersigned Attorneys’ Fees Affidavit

were negated and rendered moot, and the Arbitrators were authorized to award

attorneys’ fees to Walker from Miller under the arbitration clause.

Summary

       Miller submitted his claims against Walker under the arbitration agreement

in the AFA Agreement. The narrow arbitration clause regarding the Arbitrators’

authority to award attorneys’ fees applies to Miller and that language controls over

all else, and according to Hollern, the FINRA Uniform Submission Agreement will

not be read to violate the parties’ arbitration agreement.

                                                    Respectfully submitted,

                                                    /s/ Brian D. Esenwein

                                                    Brian D. Esenwein, J.D.,C.P.A.
                                                    State Bar No. 06665900
                                                    COTTEN SCHMIDT & ABBOTT, LLP
                                                    100 Energy Way, Suite 2000
                                                    Fort Worth, Texas 76102
                                                    Telephone: 817-338-4500
                                                    Facsimile: 817-338-4599
                                                    besenwein@csa-lawfirm.com

                                                    COUNSEL FOR APPELLEE
                                                    JEREMY J. WALKER

BDE/cmg
cc: Rick K. Disney (of the firm)

Exhibit “A” - To Appellee’s Motion for Leave to file Letter Brief             Page 7 of 7