AWARD FINRA Dispute Resolution In the Matter of the Arbitration Between: Names of Claimants/Counter-Respondents Thomas S. Olsson and David J. Brus vs.
Case Number: 06-00693 Hearing Site: Southfield, Michigan
Name of Respondent/Counter-Claimant LaSalle Financial Services, Inc.
NATURE OF THE DISPUTE Associated Persons vs. Member REPRESENTATION OF PARTIES Thomas S. Olsson ("Olsson") and David J. Brus ("Bois"), hereinafter collectively referred to as "Claimants," were represented by William Azkoul, Esq., William Azkoul. P.C, Grand Rapids, Michigan, and Elizabeth Welch Lykins, Esq., Ryan & Lykins, P.C, Grand Rapids, Michigan. LaSalle Financial Services, Inc. ("Respondent") was represented by Stephen P. Bedell, Esq., and Miki Vucic Tesija, Esq., Foley & Lardner, LLP, Chicago, Illinois. CASE INFORMATION The Statement of Claim was filed on or about February 10, 2006. The Submission Agreement of Claimants was signed on or about January 31,2006. Claimants' Answer to Counterclaim was filed by Claimants on or about April 17, 2006. The First Amended Statement of Claim was filed on or about April 24, 2006. Claimants filed a Motion for Leave to Amend (First Amended) Statement of Claim or about January 22,2007. Respondent filed an Opposition to the Motion on or about February 12, 2007. The Statement of Answer was filed by Respondent on or about April 6, 2006. The Counterclaim was filed by Respondent on or about April 6, 2006. The Submission Agreement of Respondent was signed on or about April 5,2006. The Statement of Answer to First Amended Statement of Claim was filed on or about May 1,2006. The Statement of Answer to Second Amended Statement of Claim was filed on or about March 23, 2007.
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CASE SUMMARY Claimants asserted the following causes of action: misrepresentation, promissory estoppel, fraud in the inducement, breach of contract, and libel or slander on Form U5. The causes of action related to Claimants' allegations that Respondent induced them into an employment relationship by representing to Claimants that they would be responsible for managing a one hundred million dollar book of business with Respondent. Claimants alleged the actual value of the book of business was approximately eighteen million dollars and that they incurred losses based on the disparity of the size of the promised book of business and the actual book of business provided by Respondent. Unless specifically admitted in its Answer, Respondent denied the allegations made in the Statement of Claim and asserted affirmative defenses including the following: Claimants' Statement of Claim fails to state a claim upon which relief can be granted. Claimants' claims are barred by the doctrine of unclean hands. Claimants acted in bad faith. Claimants' damages are irrecoverable and speculative, Claimants failed to mitigate their damages, and Claimants' claims are barred by the economic loss doctrine. Respondent asserted the following causes of action in its counterclaim: breach of contract, breach of fiduciary duty, and unjust enrichment. The causes of action related to Claimants' alleged lack of production and insubordination while employed with Respondent. Respondent alleged that Claimants' conduct was in breach of their Employee Agreements. Unless specifically admitted in their Answer, Claimants denied the allegations made in the Counterclaim and asserted affirmative defenses including the following: Respondent's claims are barred by the statute of frauds. Respondent's claims are barred by the doctrine of laches. Respondent's claims are barred by the doctrine of unclean hands. Respondent was contributorily negligent, and Respondent failed to mitigate damages. RELIEF REQUESTED Claimants requested an award in the amount of: Actual/Compensatory Damages Exemplary/Punitive Damages Interest Attorneys' Fees Other Costs Other Monetary Relief Expungement
$1,900,000.00 $ 200,000.00 Unspecified Unspecified Unspecified Unspecified
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Respondent requested that the claims asserted against it be dismissed with prejudice and that it be awarded its costs, attorneys' fees, and any further relief that the Panel finds appropriate. In its Counterclaim, Respondent requested an award in the amount of: Actual/Compensatory Damages Attorneys' Fees Other Costs Other Monetary Relief
$ 560,000.00 Unspecified Unspecified Unspecified
Claimants requested that the claims asserted against them in the Counterclaim be dismissed with prejudice. OTHER ISSUES CONSIDERED & DECIDED The Panel granted Claimants' Motion for Leave to Amend Statement of Claim at the hearing on March 6, 2007. All motions and requests for sanctions are denied herein. The parties have agreed that the Award in this matter may be executed in counterpart copies or that a handwritten, signed Award may be entered. AWARD After considering the pleadings, the testimony, and the evidence presented at the hearing, the Panel has decided in full and final resolution of the issues submitted for determination as follows: 1.)
Respondent, LaSalle Financial Services, Inc., is liable for and shall pay to Claimant Thomas S. Olsson the sum of $10,000.00 in compensatory damages;
2.)
Respondent, LaSalle Financial Services, Inc., is liable for and shall pay to Claimant David J. Brus, the sum of $65,000.00 in compensatory damages;
3.)
LaSalle Financial Services, Inc.'s Counterclaim is denied and dismissed with prejudice;
4.)
In order to clarify that the circumstances surrounding their departure from LaSalle Financial Services was not sales practice related, the Panel recommends that the Form U5 information contained in the registration records maintained by the Central Registration Depository ("CRD") for Claimants, Thomas S. Olson and David J. Brus, be modified as follows:
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(a) Delete the current explanation in Section 3; (b) The replacement explanation in Section 3 shall state: "Underperformance and failure to follow firm policy and requirements— not sales practice related." Claimants, Thomas S. Olson and David J. Brus, must obtain confirmation from a court of competent jurisdiction before CRD will execute the expungement directive. 5.)
Other than Forum Fees which are specified below, the parties shall each bear their own costs and expenses incurred in this matter; and
6.)
Any relief not specifically enumerated, including punitive damages and attorneys' fees, is hereby denied with prejudice. FEES
Pursuant to the Code, the following fees are assessed: Filing Fees FINRA Dispute Resolution will retain the non-refundable filing fee for each claim: Initial Claim filing fee Counterclaim filing fee
=$ 500.00 = $ 1,250.00
Member Fees Member fees are assessed to each member firm that is a party in these proceedings or to the member firm that employed the associated persons at the time of the events giving rise to the dispute. In this matter, the member firm is LaSalle Financial Services, Inc. Member surcharge Pre-hearing process fee Hearing process fee
= $ 2,800.00 =$ 750.00 = $ 5,000.00
Forum Fees and Assessments The Panel has assessed forum fees for each hearing session conducted or each decision rendered on a discovery-related motion on the papers or a contested motion for the issuance of a subpoena. A session is any meeting between the parties and the arbitrators, including a pre-hearing conference with the arbitrators, that lasts four (4) hours or less. Fees associated with these proceedings are: One (1) Pre-hearing session with a single arbitrator x $450.00 Pre-hearing conference: August 23, 2006 1 session
=$
450.00
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One (1) Pre-hearing session with Panel x $1,200.00 Pre-hearing conference: June 29, 2006
$ 1,200.00 1 session $ 25,200.00
Twenty-One (21) Hearing sessions x $1,200.00 Hearing Dates: March 6, 2007 March 7, 2007 March 8, 2007 July 30, 2007 July 31, 2007 August 1,2007 August 2, 2007 October 22, 2007 October 23, 2007 October 24. 2007 Total Forum Fees
2 sessions 2 sessions 2 sessions 2 3 2 2 2 2 2
sessions sessions sessions sessions sessions sessions sessions
= $ 26,850.00
The Panel has assessed $26,850.00 of the forum fees to LaSalle Financial Services, Inc. Administrative Costs Administrative costs are expenses incurred due to a request by a party for special services beyond the normal administrative services. These include, but are not limited to, additional copies of arbitrator awards, copies of audio transcripts, retrieval of documents from archives, interpreters and security. LaSalle Financial Services, Inc. requested tape duplication
=$
180.00
FEE SUMMARY Claimants, Thomas S. Olsson and David J. Brus, are jointly and severally liable for:
Initial Filing Fee
[
Total Fees Less pavments Balance Refunded by FINRA Dispute Resolution Respondent, LaSalle Financial Services, Inc., is liable for: Initial Filing Fee Member Fees Costs Forum Fees Total Fees Less pavments Balance Due FINRA Dispute Resolution
=$
500.00 = $ 500.00 = $_ 1.700.00 = $ 1,200.00 = $ 1,250.00 = $ 8,550.00 =$ 180.00 = $ 26,850.00 = $ 36,830.00 = $11.180.00
= $ 25,650.00
All balances are payable to FINRA Dispute Resolution and are due upon receipt.
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ARBITRATION PANEL John A. Hubbard - Non-Public Arbitrator, Presiding Chair Miles D. Hart - Non-Public Arbitrator Norman A. Samson - Non-Public Arbitrator Concurring Arbitrators' Signatures:
John A. Hubbard Non-Public Arbitrator, Presiding Chair
Signature Date
Miles D. Hart Non-Public Arbitrator
Signature Date
Norman A. Samson Non-Public Arbitrator
Signature Date
Date of Service (For FINRA office use only)
FINRA Dispute Resolution Arbitration No. 06-00693 Award Page 6 of 6
ARBITRATION PANEL John A. Hubbard - Non-Public Arbitrator, Presiding Chair Miles D. Hart - Non-Public Arbitrator Norman A. Samson - Non-Public Arbitrator Concurring Arbitrators' Signatures:
11/30/07
/s/ John A. Hubbard John A, Hubbard Non-Public Arbitrator, Presiding Chair
Signature Date
/s/ Miles D. Hart Miles D. Hart Non-Public Arbitrator
Signature Date
/s/ Norman A. Samson Norman A. Samson Non-Public Arbitrator
11/30/07 Date of Service (For FINRA office use only)
11/30/07
11/30/07 Signature Date
rtt-iPA Jispule nesolulion AftMlivtlmn No 'C-00693
ARBITRATION PANEL John A. Hubbard - Non-Public Arbitrator, Presiding Chair Miles D. Hart - Non-Public Arbitrator Norman A. Samson - Non-Public Arbitrator Concurring Arbitrators' Signatures:
JohffA. Hubbard '' Non-Public Arbitrator. Presiding Chair
Signature Date
Miles D. Hart Non-Public Arbitrator
Signature Date
Norman A. Samson Non-Public Arbitrator
Signature Date
Date of Service (For FINRA office use only)
FINRA Dispute Resolution Artitration No. 06-00693 AiAgrd Page 6 of 6
ARBITRATION PANEL John A. Hubbard - Non-Public Arbitrator, Presiding Chair Miles D. Hart - Non-Public Arbitrator Norman A. Samson - Non-Public Arbitrator Concurring Arbitrators' Signatures:
John A. Hubbard Non-Public Arbitrator, Presiding Chair / y ^ f ^ ^ ^ ^ ^
•
Miles D. Hart Non-Public Arbitrator
Norman A. Samson Non-Public Arbitrator
Date of Service (For FINRA office use only)
Signature Date U-3Q-.3O0 7 Signature Date
Signature Date
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FINRA Dlapul»R««0Wion AAttri«onNo.DMOeBS
ARBn-RATION PANEL John A. Hubbard - Non-Pubilc Arbitrator, PresMlng Chair Miles D. Hart - Non-Public Arbitrator Nonnan A. Samson - Non-Pubiic Arbitrator Concurring Arbitrators' Signatures:
John A, Hubbard Non-Publk: Arbitrator, Preskling Chair
Signature Date
MHes D. Hart ' Non-Public Artiltrator
Signature Date
Norman A. Samson Non-Public Arbitrator
Signature Dai Date
Date of Service (For FINRA office use only)
