PSI removed the state court confirmation action to the United States District Court for the Southern District of Florida, invoking diversity of citizenship jurisdiction under 28 U.S.C. Davis filed three pleadings: (1) a petition for confirmation of the award (2) a motion for attorneys' fees and (3) a motion for modification or correction of the award or, in the alternative, a motion to vacate the award only to the extent that the arbitrators ruled on the issue of attorneys' fees. Pursuant to the account agreement, Davis sought to have a judgment entered upon the award in a state court in Dade County, Florida. The panel's award also stated that “each party to bear all of its own additional cost and attorneys' fees.” in the amount of $483,684.00 and punitive damages in the amount of $300,000.00. After the arbitration hearing, the arbitration panel awarded to Davis compensatory damages under Section 517.011 et seq. Davis did not claim attorneys' fees, and neither party presented any evidence or argument on the issue of attorneys' fees. Davis sought relief including compensatory damages, punitive damages, recision, prejudgment interest, and costs. Thus, in 1991, Davis initiated an arbitration before the AAA against PSI and Rukrigl, asserting claims for fraud, breach of fiduciary duty and negligence, and alleging violations of federal securities laws and Florida's Blue Sky Laws,. Davis claimed that this conduct caused him to suffer severe financial damages, including the loss of capital in his account and the loss of a reasonable rate of return on his funds. This Contract shall be governed by the laws of the State of New York․ Any controversy arising out of or relating to my account ․ shall be settled by arbitration in accordance with the rules then obtaining of either the American Arbitration Association or the Board of Governors of the New York Stock Exchange as I may elect.ĭavis alleged that despite his stated desire for “low risk, high grade” investments, PSI recommended and sold to him $800,000.00 worth of highly speculative limited partnerships. Davis signed an account agreement, which provided in pertinent part: In 1985, Davis, a Florida resident, opened an investment account with PSI, a Delaware corporation with its principal place of business in New York, through Peter Rukrigl (“Rukrigl”), an account executive at PSI's Miami office. For the reasons that follow, we affirm that portion of the district court's judgment confirming the punitive damages award, vacate the district court's order on attorneys' fees and remand the case for consideration of the attorneys' fees issue on the merits. Davis cross-appeals, arguing that the district court erred in confirming the arbitrators' ruling that each party was to bear its own attorneys' fees. PSI contends that the arbitrators lacked the authority to award punitive damages and that the confirmation of the punitive damages award violates its due process rights. (“PSI”) appeals the district court's judgment confirming an award of punitive damages made by an arbitration panel to Appellee Richard A. 93-4653.Īppellant Prudential Securities, Inc. Hanzman, Hanzman & Criden, P.A., Miami, FL, for appellee in No. Kavaler, Cahill Gordon & Reindel, New York City, for appellant in No. Kurzner, Fowler, White, Burnett, Hurley, Banick & Strickroot, Miami, FL, Thomas J. Decided: July 31, 1995īefore BIRCH and DUBINA, Circuit Judges, and JOHNSON, Senior Circuit Judge.īrian D. PRUDENTIAL SECURITIES, INC., f/k/a Prudential-Bache Securities, Incorporated, Defendant-Appellee. f/k/a Prudential-Bache Securities, Incorporated, Defendant-Appellant. United States Court of Appeals,Eleventh Circuit.
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