Warren v. Geller
| Decision Date | 03 May 2019 |
| Docket Number | CIVIL ACTION NO. 11-2282 |
| Citation | 386 F.Supp.3d 744 |
| Parties | Terrell LeBeaux WARREN Individually and on Behalf of Her Minor Children Frank William Warren, IV, Tyrell L. Warren, Isaiah M. Warren, and Mykiah M. Warren v. Benjamin GELLER, et al. |
| Court | U.S. District Court — Eastern District of Louisiana |
James E. Shields, Sr., James E. Shields, Sr., Attorney at Law, Gretna, LA, Robert P. Wynne, Wynne Firm, PC, Houston, TX, for Terrell LeBeaux Warren.
Benjamin Geller, Austin, TX, pro se.
Thomas P. Hubert, Robert Louis Walsh, Jones Walker, New Orleans, LA, for Arlyn Nelson.
George C. Freeman, III, James L. Michaels, Robert J. Dressel, Barrasso,Usdin, Kupperman, Freeman & Sarver, LLC, New Orleans, LA, for Morgan Keegan & Company, Inc., Beatriz Cadena, Frances Moore.
SECTION: "G"
Pending before the Court are two motions: (1) Defendants Raymond James & Associates, Inc., as successor to Morgan Keegan & Company, Inc., Frances "Polly" Moore, and Beatriz Cadena's (collectively "Defendants") "Motion to Confirm Arbitration Award and for Entry of Final Judgment;"1 and (2) Plaintiff Terrell LeBeaux Warren individually and on behalf of Frank William Warren, IV, Tyrell L. Warren, Isaiah M. Warren, and Mykiah M. Warren's ("Plaintiff") "Motion to Vacate Arbitration Award."2 Having considered the motions, the memorandum in support and opposition, oral argument, and the applicable law, the Court will grant the motion to confirm the arbitration award and deny the motion to vacate the arbitration award.
Plaintiff filed the initial complaint in this action on September 12, 2011.3 On August 21, 2012, Plaintiff filed an amended complaint.4 On March 6, 2013, Plaintiff filed a second amended complaint.5 The second amended complaint names Benjamin Geller ("Geller"), Beatriz Cadena ("Cadena"), Frances Moore ("Moore"), Morgan Keegan & Company, Inc. ("Morgan Keegan"), Arlyn Nelson ("Nelson"), Virginia Insurance Company ("Virginia Insurance"), GE Life and Annuity Assurance Company ("GE"), Genworth Life and Annuity Insurance Company ("Genworth"), and Continental Casualty Company ("Continental") as defendants.6 On January 23, 2014, all defendants except for Geller, Cadena, Moore, and Morgan Keegan were dismissed from the action.7
Plaintiff alleges that Geller was a sports agent and financial adviser to decedent Frank Warren ("Warren"), a former professional football player with the New Orleans Saints of the National Football League ("NFL").8 Plaintiff is the widow of Frank Warren, who is bringing this action individually and on behalf of her four minor children who were fathered by Warren.9 Plaintiff alleges that in 1994, Geller suggested to Warren that he purchase a life insurance policy from Nelson.10
Plaintiff alleges that Nelson represented himself to be a licensed insurance broker, but this was false as he was not licensed as an agent to sell insurance in the State of Louisiana.11 Plaintiff alleges that nonetheless, on September 26, 1994, Nelson, "who was located in Washington State, prepared and filled out" an application for a $ 1,000,000 life insurance policy for Warren and mailed the application to Geller.12 Plaintiff alleges that Geller had Warren sign the document in New Orleans, Louisiana, and it was sent back to Geller in Washington State.13 Plaintiff alleges that Warren paid all premiums until his death in 2002.14
Plaintiff alleges that upon Warren's death, Nelson made a claim to Genworth for payment of $ 1,000,000 under Warren's life insurance policy.15 Plaintiff alleges that this money was to be paid to the Frank Warren Irrevocable Insurance Trust, of which Geller was trustee.16 According to Plaintiff, Warren never appointed Geller as trustee of the Trust.17 Rather, Plaintiff alleges that "the two Trust documents [needed to establish the Trust] were somehow notarized containing blanks, where the trustees were to be named and one of the Trust documents did not have the Parish where it was notarized, filled in [sic]."18
According to Plaintiff, investment bank Morgan Keegan received the proceeds from Warren's life insurance policy and put them into the Trust account of which it was in charge.19 "The funds were then," according to Plaintiff, "through breach of fiduciary duty, negligence and fraud allowed to be jettisoned to Geller."20 This was done, Plaintiff alleges, through the actions of Moore and Cadena, employees of Morgan Keegan, who acted in concert with Geller and Nelson to divert the money from the Trust to Geller after Nelson conspired with Gellar to open a Morgan Keegan account for the Trust.21 According to Plaintiff, Geller depleted most of the Trust funds within nineteen months, leaving a balance of $ 189,468.92 by the end of December, 2004.22 Plaintiff alleges that by December, 2007, all of the Trust funds were exhausted and the Trust account was closed with a balance of zero.23
Plaintiff brings, among other causes of action, claims against Geller, Cadena, Moore, and Morgan Keller for breach of fiduciary duty, breach of due diligence, negligence, fraud, and conversion.24
Plaintiff filed the initial complaint in this action on September 12, 2011.25 On August 21, 2012, with leave of Court, Plaintiff filed an amended complaint.26 Then, on March 6, 2013, with leave of Court, Plaintiff filed a second amended complaint.27
On May 20, 2013, the Court stayed and administratively closed the matter pending resolution of a criminal case against Geller.28 On October 24, 2013, the Court re-opened the matter following resolution of Geller's criminal trial.29 On October 3, 2014, the Court granted a motion to stay the case again, pending arbitration.30
On January 30, 2019, Defendants filed the instant "Motion to Confirm Arbitration Award and for Entry of Final Judgment."31 On February 6, 2019, Plaintiff filed the instant "Motion to Vacate Arbitration Award."32 On February 20, 2019, Plaintiff filed an opposition to the motion to confirm.33 On March 4, 2019, Defendants filed a reply in further support of the motion to confirm.34 On April 16, 2019, Defendants filed an opposition to the motion to vacate.35 On April 24, 2019, the Court heard oral argument on both motions.36
Defendants assert that on May 18, 2016, Plaintiff initiated arbitration (the "Arbitration") against Defendants, asserting various claims related to the misappropriation of trust funds by Geller.37 Defendants assert that at the conclusion of Plaintiff's case-in-chief, the Defendants moved to dismiss the Arbitration on the grounds that Plaintiff had failed to assert a claim under any regulation or law—state or federal—upon which damages could be awarded.38 Defendants assert that the Panel deferred ruling on Defendants' motion until after the conclusion of their case-in-chief, at which time Defendants reasserted their motion and "the Panel unanimously found no civil responsibility by [them] for the criminal misdeeds of the Trustee [Geller]."39 Defendants assert that accordingly, the Panel dismissed Plaintiff's claims against Defendants with prejudice.40 Further, Defendants state that in the written Award, the Panel stated that "no breach of a fiduciary duty under any law or regulation [had been] presented [by Plaintiff]" and that Geller, as trustee, "was the person solely responsible for the asset destruction of the trust."41
Defendants argue that if Plaintiff wished to challenge the Award, she was required to file a motion to vacate, modify, or correct the Award by January 10, 2019, three months after the Award was delivered to the parties on October 10, 2018.42 Defendants assert that all claims by Plaintiff against Defendants have been fully and finally resolved by the Award, which dismissed Plaintiff's claims against Defendants and denied "[a]ny and all claims for relief not specifically addressed [t]herein[.]"43 Subsequently, Defendants argue that the claims that have been resolved against Defendants are "separate, distinct, and independent from any claims that may still remain against Geller" and thus the Court should enter final judgment now so that Defendants do not have to wait until proceedings with Geller conclude.44
In opposition, Plaintiff argues that she did timely move to vacate the arbitration award because the award was entered on November 6, 2018 and she filed a motion to vacate three months later on February 6, 2019.45 Plaintiff asserts that "a motion to vacate, modify, or correct an award must be served upon the adverse party or his attorney within three months after the award is filed or delivered."46 Plaintiff claims that the Final Arbitration Award was rendered on November 6, 2018, and that Defendants refer to a partially executed award on October 10, 2018.47 Plaintiff assert that the Court should look to the fully executed Final Arbitration Award, not the interim, partially executed award, as the action that started the three-month limitations period.48
In reply, Defendants' reassert that the limitations period began to run on October 10, 2018 and expired on January 10, 2019.49 Defendants argue that accordingly, Plaintiff's motion to vacate, filed on February 6, 2019, was untimely by 27 days.50
Defendants claim that the Award was delivered to the parties through FINRA's online portal and the parties were notified by e-mail on October 10, 2018.51 Defendants claim that the award was signed by two of the three arbitrators who served on the arbitration panel, Mary Elizabeth Skelnik and Daniel Patrick Hurley, but not the third arbitrator, the Honorable Frank A. Little, Jr.52 Defendants further claim that in the e-mail notification, the Award was referred to as "Executed Award with Two Signatures[.]"53...
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