Massachusetts Mutual Life Insurance Company et al v. Justin
| Massachusetts District Court | |
| Judge: | Mark G Mastroianni |
| Case #: | 3:24-cv-30060 |
| Nature of Suit | 896 Other Statutes - Arbitration |
| Cause | 09:1 U.S. Arbitration Act |
| Case Filed: | Apr 26, 2024 |
| Terminated: | May 08, 2024 |
| Last checked: Saturday Oct 26, 2024 7:17 AM EDT |
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Defendant
Paul Justin
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Represented By
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Plaintiff
C.M. Life Insurance Company
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Represented By
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Plaintiff
MML Bay State Life Insurance Company
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Represented By
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Plaintiff
Massachusetts Mutual Life Insurance Company
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Represented By
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| Docket last updated: 2 hours ago |
| Wednesday, May 08, 2024 | ||
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1
pgs
order
Order Dismissing Case
Wed 05/08 1:48 PM
Judge Mark G. Mastroianni: ORDER entered. ORDER DISMISSING CASE(Lendon, Tyler) |
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| 23 | 23
order
Order on Motion for Hearing
Wed 05/08 1:35 PM
Judge Mark G. Mastroianni: ELECTRONIC ORDER entered denying2 Motion for Order Under the Federal Arbitration Act Compelling Arbitration Before the AAA. The parties agree that their disputes must be arbitrated in accordance with a binding agreement. However, the parties disagree as to whether the applicable contractual language requires that the arbitration be before FINRA, AAA, or both. The court concludes, based on a plain-language reading of the contract and the purposes underlying the arbitration provision, that the arbitration must go forward before FINRA. The contract provides: "The arbitration will be held under the auspices and rules of the Financial industry Regulatory Authority, Inc. ('FINRA') or its successor organization, if [Defendant] has registered with Affiliated Broker-Dealer and the dispute is between [Defendant] and Affiliated Broker-Dealer. If [Defendant] is not registered with Affiliated Broker-Dealer, if the dispute is not between [Defendant] and Affiliated Broker-Dealer, or if FINRA for any reason does not have jurisdiction or declines to hear the dispute, then arbitration will be held under the auspices and rules of the American Arbitration Association ('AAA')." (Dkt. No. 1-1 42.) It is undisputed that Defendant "has registered with Affiliated Broker-Dealer," MML Investor Services, Inc. ("MMLIS"). It is also undisputed that there is a dispute involving at least Defendant and MMLIS, and Plaintiffs agree that this particular dispute (or subset of the overall dispute) is properly in arbitration before FINRA. Plaintiffs argue, however, that they have a separate dispute with Defendant that must be arbitrated before AAA. The court does not agree. First, it is clear that the dispute between MMLIS and Defendant and the dispute between Plaintiffs and Defendant are overlapping and intertwined, not separate. As Defendant points out, "MMLIS's counterclaims against [Defendant] in the FINRA proceeding, and [Plaintiffs'] demand in the AAA arbitration are nearly identical." (Dkt. No. 15 at 6; compare Dkt. No. 17-2, Dkt. No. 17-3.) Second, the contract does not specifically state that arbitration should proceed before two separate tribunals in a situation like this, where there is an intertwined dispute (or disputes) involving both Plaintiffs and MMLIS, as well as Defendant. Instead, the contract indicates that the arbitration should be held either before FINRA or before AAA, but not both, with FINRA serving as the default option and AAA serving as the backup. Under the plain language of the contract, the arbitration is to be held before FINRA because there is a dispute between Defendant and MMLIS; furthermore, under the second sentence, the arbitration is not to be held before AAA because, again, there is a dispute between MMLIS and Defendant, and FINRA has jurisdiction and has not declined to hear the overall dispute. To the extent that the contract is ambiguous as applied to this situation, in the sense that it is unclear how it applies when there are related, overlapping disputes (or perhaps one overarching dispute) between all the interested parties, that ambiguity should be construed against Plaintiffs, as the drafters of the contract language. See Nat'l Grid Holdings, Inc. v. Comm'r of Revenue, 52 N.E.3d 173, 184 (Mass. App. Ct. 2016) (explaining "the general rule that an ambiguous contract is construed against its author, which rests upon the practical and fair premise that the drafter had the capacity and opportunity for clear expression and that he should bear the detriment of unclear expression." (internal quotation marks omitted)). Plaintiffs could (and should) have specified in the contract that separate arbitrations would be held when there are disputes between both the Affiliated Broker-Dealer and Defendant and Plaintiffs and Defendant. Third, the "prime objective" behind arbitration agreements "is to achieve streamlined proceedings and expeditious results." Preston v. Ferrer, 552 U.S. 346, 357 (2008) (internal quotation marks omitted). This objective would be frustrated by reading the contract here to provide for two competing, and potentially conflicting, arbitration decisions as to overlapping facts and legal arguments. Plaintiffs argue that FINRA does not have jurisdiction over Plaintiffs because they are not FINRA members. Plaintiffs cite FINRA Rule 13200(b), which states: "Disputes arising out of the insurance business activities of a member that is also an insurance company are not required to be arbitrated under the Code." This rule does not state that FINRA arbitration is unavailable as to non-members or members that are also insurance companies; it merely says that such disputes "arising out of the insurance business activities of" an insurance company member "are not required to be arbitrated under the Code." However, Defendant is not relying on the FINRA Code but, instead, the parties' contract. See Commonwealth Equity Servs., LLC v. Ohio Nat'l Life Ins. Co., 2019 WL 1470131, at *5 (D. Mass. Apr. 3, 2019) ("The Court first concludes that the Addendum contains a valid, enforceable arbitration agreement between the parties, not just those entities already bound to FINRA arbitration under the FINRA Rules."); id. at *6 (collecting cases for proposition that courts may compel FINRA arbitration for non-members). Moreover, courts "have narrowly interpreted" the "insurance business activities" language in FINRA Rule 13200(b) to apply only to "claims that are intrinsically insurance claims." PFS Investments, Inc. v. Imhoff, 2011 WL 35538, at *8 (E.D. Mich. Mar. 25, 2011) (internal quotation marks omitted); see IDS Life Ins. Co. v. Royal All. Assocs., Inc., 266 F.3d 645, 652 (7th Cir. 2001) (explaining that "[t]he purposes of the exclusion are to keep arbitrators away from issues that are peculiar to insurance, such as reserves, reinsurance, actuarial calculations, rates, coverage, and mandatory terms, and to prevent arbitrators from being swamped with insurance claims, which are apt to be more numerous than securities claims.... No technical insurance issue is involved in the alleged tortious interference by the defendants with the plaintiffs' employees, however; nor is the allegation at all typical of claims against insurance companies." (citation omitted)). Here, there is no contention that the dispute at issue is intrinsically insurance-related; rather, it is more analogous to an employment dispute which is not covered by the "insurance business activities" exception. Plaintiffs also cite Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 221 (1985), for the proposition that courts are to "rigorously enforce agreements to arbitrate, even if the result is 'piecemeal litigation.'" The Supreme Court in Dean Witter Reynolds explained that it was "not persuaded by the argument that the conflict between two goals of the Arbitration Act -- enforcement of private agreements and encouragement of efficient and speedy dispute resolution -- must be resolved in favor of the latter in order to realize the intent of the drafters." Id. In that case, the contract required arbitration as to the supplemental state-law claims, but not the federal securities claim, so the defendant filed a motion to compel only the supplemental state-law claims. Id. at 215. The Supreme Court reversed the Ninth Circuit's decision affirming the district court's denial of the motion compel and held that courts must compel arbitration of the arbitrable claims, "even where the result would be the possibly inefficient maintenance of separate proceedings in different forums," because that is what the parties agreed to. Id. at 217-21. But here, as in ATT&T Mobility LLC v. Concepcion, 563 U.S. 333, 345 (2011), the "two goals" of the Federal Arbitration Act "do not conflict," because the court interprets the contract to require one arbitration, rather than two. Accordingly, under the court's reading of the contract, the "two goals" of enforcement of the parties' agreement and efficiency are in harmony, further supporting the court's construction. The court therefore concludes that the arbitration provision calls for arbitration before FINRA in this situation. Accordingly, Plaintiffs' motion to compel arbitration before AAA is denied and Plaintiffs' petition (Dkt. No. 1) is dismissed. This case shall be closed. (Lendon, Tyler) |
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| Tuesday, May 07, 2024 | ||
| 22 | 22
minutes
Motion Hearing
Tue 05/07 3:47 PM
Electronic Clerk's Notes for proceedings held before Judge Mark G. Mastroianni: Motion Hearing held on 5/7/2024. (Attorneys present: Atty Roffman, Atty Wong, Atty Miller, Atty Gaeta) Court hears arguments re 2 MOTION for Hearing and for Order Under the Federal Arbitration Act Compelling Arbitration Before the AAA filed by MML Bay State Life Insurance Company, C.M. Life Insurance Company, Massachusetts Mutual Life Insurance Company. Court takes the matter under advisement. A separate order shall issue. (Court Reporter: Leigh Gershowitz at Leigh_Gershowitz@mad.uscourts.gov.) (Rivera, Christina) |
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order
Order on Motion for Leave to File Document
Tue 05/07 11:22 AM
Judge Mark G. Mastroianni: ELECTRONIC ORDER entered denying19 Motion for Leave to File Reply. The court denies Plaintiffs' motion for leave to file a reply brief, given the timing of the filing and the inability of Defendant to file a written response before today's hearing, although the court acknowledges that there is some need to move expeditiously. Plaintiffs may make the arguments contained in the proposed reply brief at the hearing today. (Lendon, Tyler) |
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misc
Notice of correction to docket made by Court staff
Tue 05/07 10:18 AM
Notice of correction to docket made by Court staff. Correction: Entry 18 corrected because: Entry 18 used an incorrect description category and was refiled correctly as docket entry19 (Zamorski, Michael) |
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motion
Leave to File Document
Tue 05/07 9:37 AM
MOTION for Leave to File Reply by C.M. Life Insurance Company, MML Bay State Life Insurance Company, Massachusetts Mutual Life Insurance Company.(Roffman, Ian) |
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Att: 1
Exhibit Reply
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respm
Response to Motion
Tue 05/07 9:26 AM
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| Monday, May 06, 2024 | ||
| 17 | 17
2
pgs
respm
Affidavit in Opposition to Motion
Mon 05/06 3:33 PM
AFFIDAVIT of Frank N. Gaeta in Opposition re2 MOTION for Hearing and for Order Under the Federal Arbitration Act Compelling Arbitration Before the AAA filed by Paul Justin.(Gaeta, Frank) |
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Att: 1
Exhibit A,
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Att: 2
Exhibit B,
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Att: 3
Exhibit C,
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Att: 4
Exhibit D
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2
pgs
respm
Affidavit in Opposition to Motion
Mon 05/06 3:31 PM
AFFIDAVIT of Paul R. Justin in Opposition re2 MOTION for Hearing and for Order Under the Federal Arbitration Act Compelling Arbitration Before the AAA filed by Paul Justin.(Gaeta, Frank) |
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Att: 1
Exhibit A
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respm
Response to Motion
Mon 05/06 3:29 PM
RESPONSE to Motion re2 MOTION for Hearing and for Order Under the Federal Arbitration Act Compelling Arbitration Before the AAA filed by Paul Justin. (Gaeta, Frank) |
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order
Order on Motion for Leave to Appear
Mon 05/06 8:31 AM
Judge Mark G. Mastroianni: ELECTRONIC ORDER entered granting13 Motion for Leave to Appear Pro Hac Vice Added George C. Miller. Attorneys admitted Pro Hac Vice must have an individual upgraded PACER account, not a shared firm account, to electronically file in the District of Massachusetts. Counsel may need to link their CM/ECF account to their upgraded individual pacer account. Instructions on how to link CM/ECF accounts to upgraded pacer account can be found at [LINK:https://www.mad.uscourts.gov/caseinfo/nextgen-current-pacer-accounts.htm#link-account] . (Zamorski, Michael) |
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| Friday, May 03, 2024 | ||
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motion
Appear Pro Hac Vice
Fri 05/03 11:36 AM
MOTION for Leave to Appear Pro Hac Vice for admission of George C. Miller Filing fee: $ 125, receipt number AMADC-10399364 by Paul Justin.(Gaeta, Frank) |
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Att: 1
Exhibit A
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notice
Notice of Appearance
Fri 05/03 11:30 AM
NOTICE of Appearance by Frank N. Gaeta on behalf of Paul Justin (Gaeta, Frank) |
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| Wednesday, May 01, 2024 | ||
| 11 | 11
order
Order ~Util - Set Motion and R&R Deadlines/Hearings
Wed 05/01 1:52 PM
Judge Mark G. Mastroianni: ELECTRONIC ORDER entered. re:2 Motion for Expedited Hearing and for Order Under the Federal Arbitration Act Compelling Arbitration Before the AAA. Defendant shall file a response to Plaintiff's motion (Dkt. No. 2) no later than May 6, 2024. The court will hold a Zoom hearing on May 7, 2024 at 12:00 p.m. Plaintiff shall provide Defendant's counsel with notice of this order. (Lendon, Tyler) |
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| Tuesday, April 30, 2024 | ||
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service
Summons Returned Executed
Tue 04/30 12:18 PM
SUMMONS Returned Executed Paul Justin served on 4/26/2024, answer due 5/17/2024. (Roffman, Ian) |
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| Monday, April 29, 2024 | ||
| 9 | 9
order
Order
Mon 04/29 12:34 PM
Judge Mark G. Mastroianni: ELECTRONIC ORDER entered. re2 MOTION for Hearing and for Order Under the Federal Arbitration Act Compelling Arbitration Before the AAA filed by MML Bay State Life Insurance Company, C.M. Life Insurance Company, Massachusetts Mutual Life Insurance Company. Under the Federal Arbitration Act, "[a] party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under title 28, in a civil action or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement." 9 U.S.C. § 4. The statute continues: "Five days' notice in writing of such application shall be served upon the party in default. Service thereof shall be made in the manner provided by the Federal Rules of Civil Procedure." Id. Plaintiffs seek an expedited hearing, but they have not yet demonstrated that appropriate service of process has been accomplished. (See Dkt. No. 3 at 7 ("A process servicer has been retained to serve Justin and such service of process will be initiated as early as the date of this filing."). Accordingly, pursuant to 9 U.S.C. § 4, the court must wait at least five days after notice and service upon Defendant before holding a hearing on Plaintiffs' petition to compel arbitration. See UnionMutual Stock Life Ins. Co. of Am. V. Beneficial Life Ins. Co., 774 F.2d 524, 526 (1st Cir. 1985); see also Bridgeport Mgmt., Inc. v. Lake Mathews Min. Properties, Ltd., 2014 WL 953831, at *2 (N.D. Cal. Mar. 6, 2014) (collecting cases). Plaintiffs shall notify the court promptly upon notice and service of Defendant so that the court can schedule a hearing shortly thereafter.(Lendon, Tyler) |
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| Friday, April 26, 2024 | ||
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notice
Notice of Appearance
Fri 04/26 2:30 PM
NOTICE of Appearance by Christopher H. Lindstrom on behalf of C.M. Life Insurance Company, MML Bay State Life Insurance Company, Massachusetts Mutual Life Insurance Company (Lindstrom, Christopher) |
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notice
Notice of Appearance
Fri 04/26 2:15 PM
NOTICE of Appearance by Sara Lonks Wong on behalf of C.M. Life Insurance Company, MML Bay State Life Insurance Company, Massachusetts Mutual Life Insurance Company (Lonks Wong, Sara) |
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| 6 | 6
service
Summons Issued
Fri 04/26 2:13 PM
Summons Issued as to Paul Justin. Counsel receiving this notice electronically should download this summons, complete one for each defendant and serve it in accordance with Fed.R.Civ.P. 4 and LR 4.1. Summons will be mailed to plaintiff(s) not receiving notice electronically for completion of service. (Zamorski, Michael) |
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notice
Notice of Case Assignment
Fri 04/26 2:13 PM
ELECTRONIC NOTICE of Case Assignment. Judge Mark G. Mastroianni assigned to case. If the trial Judge issues an Order of Reference of any matter in this case to a Magistrate Judge, the matter will be transmitted to Magistrate Judge Katherine A. Robertson. (Zamorski, Michael) |
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misc
Corporate Disclosure Statement
Fri 04/26 1:43 PM
CORPORATE DISCLOSURE STATEMENT by C.M. Life Insurance Company, MML Bay State Life Insurance Company, Massachusetts Mutual Life Insurance Company. (Roffman, Ian) |
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13
pgs
respm
Memorandum in Support of Motion
Fri 04/26 1:40 PM
MEMORANDUM in Support re2 MOTION for Hearing and for Order Under the Federal Arbitration Act Compelling Arbitration Before the AAA filed by C.M. Life Insurance Company, MML Bay State Life Insurance Company, Massachusetts Mutual Life Insurance Company.(Roffman, Ian) |
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Att: 1
Exhibit 1
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motion
Hearing
Fri 04/26 1:39 PM
MOTION for Expedited Hearing and for Order Under the Federal Arbitration Act Compelling Arbitration Before the AAA by C.M. Life Insurance Company, MML Bay State Life Insurance Company, Massachusetts Mutual Life Insurance Company.(Roffman, Ian) |
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10
pgs
cmp
Complaint
Fri 04/26 1:36 PM
COMPLAINT PETITION Under the Federal Arbitration Act to Compel Arbitration Before the AAA against Paul Justin Filing fee: $ 405, receipt number AMADC-10387787 (Fee Status: Filing Fee paid), filed by C.M. Life Insurance Company, MML Bay State Life Insurance Company, Massachusetts Mutual Life Insurance Company.(Roffman, Ian) |
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Att: 1
15 pgs
Exhibit A,
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Att: 2
Civil Cover Sheet,
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Att: 3
Category Form
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