Pennsylvania Record

Wednesday, October 16, 2019

Superior Court backs ruling that couple do not have to go through arbitration after suing securities broker

State Court

By Charmaine Little | Sep 16, 2019


PITTSBURGH - The Superior Court of Pennsylvania affirmed that a couple are not subject to arbitration in their negligence claim against a wealth management company and their securities broker after they lost investments.

The Superior Court affirmed the ruling from the Court of Common Pleas of Allegheny County on August 30 that denied a motion to compel the couple to arbitration. Judge John Musmanno authored the opinion; judges Paula Francisco Ott and Deborah A. Kunselman concurred. 

James and Christine Antis sued Andrew James Pravlik and Pittsburgh Wealth Management Group Inc., alleging negligence, unjust enrichment and unfair trade practices. They said they suffered losses connected to an investment via James Antis’s IRA. While both sides agree that the arbitration agreement is relevant, there was a disagreement of whether it actually applied to the plaintiffs.

“After reviewing the record, we discern no abuse of the trial court’s discretion in denying defendants’ motion to compel,” the superior court ruled.

The lower court had ruled that there wasn’t enough evidence to prove that the defendants were agents of an introducing firm, which is required by the arbitration agreement. The defendants also failed to show that a broker-dealer had a contract with the FCC. Pravlik said in his deposition that the defendants didn’t have information to show that the broker-dealer was an introducing firm.

“The trial court’s analysis is supported by the record, and we agree with its determination,” the superior court said.

Pravlik had been working with PWM as its director of investments and was Antis’ securities broker. First Clearing LLC (FCC) was noted as the clearing broker and custodian of Antis’ IRA. On top of that, Pravlik had to be registered with a FINRA-licensed broker-dealer to be able to work as a securities broker.

On July 8, 2013, ]Antis signed an IRA enrollment form with FCC. While none of the defendants signed the agreement, the arbitration clause in question was included. It said, “All of the parties to this agreement are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which the claim is filed,” according to the lawsuit. The defendants said the arbitration clause pertains to them and filed a motion to compel. The Antis' responded and said there’s no proof that FCC is included in the lawsuit. 

When the plaintiffs deposed Pravlik regarding the motion to compel, he said he wasn’t an FCC employee, but rather was an “agent” of an “introducing firm” as detailed in the arbitration clause.

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