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
Scott A. Miller v. Jeremy J. Walker, D/B/A Maverick Wealth Management
Combined Opinion