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Patrick R. Murray v. Citigroup Global Markets

November 14, 2011

PATRICK R. MURRAY, PLAINTIFF,
v.
CITIGROUP GLOBAL MARKETS, INC., DEFENDANT.



The opinion of the court was delivered by: Katz, J.

MEMORANDUM OPINION

This case involves Plaintiff Patrick R. Murray's ("Murray") claims that Defendant Citigroup Global Markets, Inc., d/b/a Smith Barney ("CGMI") fraudulently induced Murray to sign loan documents in connection with his employment. Murray also claims that CGMI illegally confiscated his assets related to a capital accumulation plan account ("CAP account"). The matter is currently before the Court on Murray's motions to vacate, modify, or correct portions of a Financial Industry Regulatory Authority ("FINRA") arbitration ruling, (Doc. 38; Doc. 44), and on CGMI's cross-motion requesting that this Court confirm the FINRA ruling and award costs and fees incurred while seeking confirmation. (Doc. 39). Also pending is CGMI's motion to strike the transcript of Murray's direct examination from the FINRA hearing,*fn1 (Doc. 52), Murray's oral request for leave to amend his Complaint, (Transcript of Oral Argument at 5, 41) ("Tr."), and Murray's oral request for a hearing on the constitutionality of the FINRA arbitration process, id, and Murray's motion to deem his requests for admission as being admitted by CGMI. (Doc. 48).

For the reasons stated herein, Murray's motions to vacate, modify, or correct are denied; Murray's motion to deem his requests for admission as being admitted by CGMI is denied;

Murray's requests for leave to amend and for a hearing are denied; CGMI's motion to confirm is granted; CGMI's motion to strike is granted; and CGMI's request for costs and fees is denied.

I. Factual Background

This Court summarized the factual background of the instant matter in its November 24, 2009 Memorandum Opinion compelling arbitration (Doc. 31):

[Murray] was hired on July 7, 2000 by [CGMI] as a financial advisor in its Sandusky office. At that time he executed several documents including, but not limited to, the following: 1) A Uniform Application for Securities Industry Registration or Transfer ("U-4 Form"); 2) A promissory note ("Note") memorializing the loan by CitiGroup Global Markets to Murray ("the Loan") in the amount of $1,508,401; and 3) Addendum to the Promissory Note Forgivable Loan Agreement ("Addendum to the Note") which extended the length of the repayment period from seven years to nine years.

The Loan was to be repaid in nine equal annual installments, with payments commencing on the first anniversary date of the execution of the Note. That instrument further provided that upon termination of Murray's employment with Defendant, the outstanding balance became immediately due and payable, together with interest accruing from date of termination at the rate of prime plus 10% per annum.

Plaintiff resigned his employment on April 3, 2009, having made eight annual payments pursuant to the Note . . . .

Murray v. Citigroup Global Markets, Inc., d/b/a Smith Barney, 2009 U.S. Dist. LEXIS 109681 (N.D. Ohio Nov. 24, 2009).

II. Procedural Background

Murray sued CGMI in the Ohio Court of Common Pleas for Erie County on May 27, 2009, alleging, inter alia, that CGMI fraudulently induced him to sign the addendum to the promissory note. CGMI removed the action to this Court on July 2, 2009, and on November 24, 2009, this Court granted CGMI's motion requesting that Murray be compelled to arbitrate the matter as required by multiple agreements governing Murray's employment. (Doc. 31). Arbitration commenced on September 29, 2010 in front of a FINRA panel consisting of three neutral arbitrators who were jointly selected by both parties. On April 15, 2011, the FINRA panel issued a final decision awarding CGMI $40,153.00 in compensatory damages--the prorated balance remaining on the note, with interest continuing to accrue--and awarding Murray $25,705.95 in compensatory damages. (Doc. 39, Ex. A).

On May 6, 2011 Murray filed the instant motion to vacate, modify, or correct portions of the FINRA ruling. CGMI filed its response, cross-motion for confirmation, and request for costs and fees on May 23, 2011. On June 16, 2011, Murray filed a second motion to vacate, modify, or correct, accompanied by a twenty-five page memorandum in support. (Doc. 43; Doc. 44). Further, on October 18, 2011--less than one week before oral argument--Murray filed all 170 pages of his direct examination transcript from the FINRA hearing. (Doc. 51). Two days later, on October 20, 2011, CGMI filed a letter objecting to the transcript as untimely, unnecessary, and prejudicial. (Doc. 52). Oral Argument was held on October 24, 2011, during ...


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