122 F.3d 936 (11th Cir. 1997), 96-3074, American Exp. Financial Advisors, Inc. v. Makarewicz

Docket Nº:96-3074.
Citation:122 F.3d 936
Party Name:AMERICAN EXPRESS FINANCIAL ADVISORS, INC. f.k.a. IDS Financial Services, Inc., and IDS Life Insurance Company, Plaintiffs-Appellants, v. Dennis MAKAREWICZ, and Travis Tucillo, Defendants-Appellees.
Case Date:September 09, 1997
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit
 
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122 F.3d 936 (11th Cir. 1997)

AMERICAN EXPRESS FINANCIAL ADVISORS, INC. f.k.a. IDS

Financial Services, Inc., and IDS Life Insurance

Company, Plaintiffs-Appellants,

v.

Dennis MAKAREWICZ, and Travis Tucillo, Defendants-Appellees.

No. 96-3074.

United States Court of Appeals, Eleventh Circuit

September 9, 1997

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Robert W. Merkle, Ward A. Meythaler, Merkle and Magri, P.A., Tampa, FL, Eric D. Brandfonbrener, Grippo and Elden, Chicago, IL, for Plaintiffs-Appellants.

Pace Klein, Smith, Campbell & Paduano, New York City, Sara Soto, Fowler, White, Burnett, Hurley, Banick & Strickroot, P.A., Miami, FL, for Defendants-Appellees.

Appeal from the United States District Court for the Middle District of Georgia.

Before TJOFLAT and BARKETT, Circuit Judges, and HOWARD [*], Senior District Judge.

TJOFLAT, Circuit Judge:

American Express Financial Advisors, Inc. ("American Express"), and IDS Financial Services, Inc. ("IDS") appeal the district court's denial of injunctive relief and its administrative closure of their lawsuit pending industry arbitration. We hold that we lack jurisdiction over the appeal from the district court's decision to compel arbitration as to the damages claims. Regarding the district court's denial of injunctive relief, however, we find that we have jurisdiction, and we reverse.

I.

Appellants American Express and IDS provide financial services and insurance to individual and organizational clients nationwide. Appellees Dennis Makarewicz and

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Travis Tuccillo worked as financial advisors for appellants until September 14, 1995, when they ended their relationships with American Express and IDS and started their own financial consulting business. According to the appellants' original complaint, filed October 16, 1995, Makarewicz and Tuccillo took approximately 200 of appellants' clients with them when they left, departures which allegedly resulted in the withdrawal of approximately $20 million in investments managed by the appellants. In luring away these customers, appellees allegedly violated contractual agreements that they had signed as an original condition of employment by appellants. 1

On October 16, 1995, appellants brought this diversity suit against Makarewicz and Tuccillo in the United States District Court for the Middle District of Florida. They sued for breach of contract, misappropriation of trade secrets, breach of fiduciary duty, conversion, and intentional interference with prospective business relationships. Appellants sought both injunctive relief and compensatory and punitive damages. With regard to damages, however, the complaint admitted that "[p]ortions of this dispute may be arbitrable pursuant to the [National Association of Securities Dealers' ("NASD") ] Code of Arbitration Procedure." Nevertheless, appellants sought both preliminary injunctive relief to preserve the status quo pending arbitration and permanent injunctive relief for whatever claims were not arbitrable.

On October 17, appellees initiated NASD arbitration. 2 On October 18, appellants moved for a temporary restraining order ("TRO") pursuant to Fed.R.Civ.P. 65. On October 19, the appellees moved for a hearing on this motion, and on October 27, they

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moved for "an order pursuant to the Federal Arbitration Act staying this action and compelling arbitration." 3 The district court granted the appellees' motion for a hearing on the issue of preliminary injunctive relief. At the November 1, 1995 hearing, the district court listened to the arguments of both sides, but it did not rule on either the appellants' motion for a preliminary injunction or the appellees' motion to compel arbitration.

Months passed. On April 8, 1996, appellants moved for a declaration that no elements of the dispute were subject to NASD arbitration; they argued that the appellees had misrepresented their standing to initiate NASD arbitration. The district court did not respond. On June 30, 1996, the district court finally issued a terse order in which it concluded that "all of the claims raised in this action are encompassed by the standard NASD arbitration agreements executed by the parties." The court reached this conclusion "[f]or the reasons discussed by the defendants (1) in their October 27, 1995, memorandum, (2) at the November 1, 1995, oral argument, (3) in their May 1, 1996, memorandum opposing the plaintiffs'...

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