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Wells Fargo Advisors, LLC v. Runnels

Court of Appeals of Mississippi

November 19, 2013

Hubert L. RUNNELS, Jr., Appellee.

Page 138

Bradley Barron Vance, Jackson, Jonathan Edward Levine, attorneys for appellant.

David Neil McCarty, Oliver E. Diaz Jr., Jackson, attorneys for appellee.



¶ 1. Wells Fargo Advisors, LLC appeals the circuit court's denial of its motion to confirm an arbitration award and for entry of a judgment against Hubert Runnels, Jr. Wells Fargo argues that the circuit court erred in the denial of the motion because Runnels's effort to vacate the arbitration award was time-barred and Runnels failed to set forth sufficient grounds to vacate

Page 139

the arbitration award. Finding error, we reverse the circuit court's judgment and render judgment in favor of Wells Fargo against Runnels.


¶ 2. On May 10, 2007, Runnels began his employment with Wachovia Securities, LLC, in Ocean Springs. During his employment, through mergers, Wachovia became Wells Fargo.

¶ 3. At the beginning of his employment, Runnels signed a promissory note payable to Wachovia Securities, LLC, as well as its affiliates, successors, or assigns. The note provided that Runnels would repay any outstanding principal balance, including interest and all costs of collection (including attorney's fees and related costs and expenses) if his employment ended for any reason or no reason at all. The note also provided that any action instituted as a result of any controversy arising from the note was to be brought before the National Association of Securities Dealers (" NASD" ).[1] In addition, Runnels executed a Uniform Application for Securities Industry Registration or Transfer (" Form U4" ), which provided:

I agree to arbitrate any dispute, claim or controversy that may arise between me and my firm, or a customer, or any other person, that is required to be arbitrated under the rules, constitutions, or by-laws of the SROs indicated in Section 4 (SRO Registration) as may be amended from time to time and that any arbitration award rendered against me may be entered as a judgment in any court of competent jurisdiction.
(SRO is an acronym for self-regulatory organization. Based on the Form U4, Runnels was registered with the NASD as the SRO.) Runnels also executed a Pre-Dispute Arbitration Clause where he acknowledged that he understood that he was agreeing to arbitrate any dispute, claim, or controversy that may arise between him and his firm that is required to be arbitrated under the rules of the SRO with which he was registering, including the NASD and NYSE (now FINRA).

¶ 4. Runnels resigned from Wells Fargo on March 9, 2009. As of that date, Runnels was obligated to pay the outstanding principal balance of $39,150. Runnels failed and refused to pay the amount owed.

¶ 5. On August 19, 2009, Wells Fargo filed its statement of claim in arbitration with FINRA. Runnels answered the statement of claim and participated in the arbitration, without objection. On July 28, 2010, the arbitrator issued an award in favor of Wells Fargo. The arbitrator determined that Runnels was to pay $39,150 in principal, plus interest, at the annual percentage rate of 5.25% that has accrued from March 6, 2009, until July 19, 2010, and $4,927.50 in attorney's fees.

¶ 6. On July 13, 2011, Wells Fargo filed its motion to confirm the arbitration award and for entry of a judgment in the Circuit Court of Hinds County, Mississippi. On September 29, 2011, through counsel, Runnels filed his response in opposition to the motion. The circuit judge heard oral argument from counsel on December 12, 2011. On March 14, 2012, the circuit court entered the following order:

Page 140

This cause came on for hearing before this Court on the Plaintiff's Motion to Confirm Arbitration Award and for Entry of Judgment. The Court, having reviewed the pleadings and other submission, having heard the argument of the parties, and being otherwise advised in the premises herein, finds that the Motion to Confirm Arbitration Award and for Entry of Judgment is not well taken and should be denied.
It is therefore ordered and adjudged that the Plaintiff's Motion to Confirm Arbitration Award and for Entry of Judgment is denied.

The circuit judge neither made an oral ruling from the bench nor issued a written opinion. It is from this judgment that Wells Fargo now appeals.


¶ 7. Runnels argues that this Court should review this case for an abuse of discretion. He argues that the Federal Arbitration Act " imposes a heavy presumption in favor of confirming arbitration awards," and so " a court's confirmation of an arbitration award is usually routine or summary." Riccard v. Prudential Ins. Co., 307 F.3d 1277, 1288-89 (11th Cir.2002). However, federal law provides that a court may vacate an arbitration award " where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made." 9 U.S.C. § 10(a)(4) (2006). According to the United States Supreme Court, this is one of the " exclusive grounds for expedited vacatur and modification" of an arbitration award. Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 584, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008). Runnels argues that the circuit judge determined that based on the unique facts of this case the award could not be confirmed, and this determination is subject to review for an abuse of discretion. Wilson v. Greyhound Bus Lines, Inc., 830 So.2d 1151, 1156 (¶ 15) (Miss.2002).

¶ 8. Wells Fargo argues that the standard of review here is a mixed standard based on whether the issue involves a question of law or question of fact. We review errors of law de novo. Cummings v. Benderman, 681 So.2d 97, 100 (Miss.1996). Further, we apply " a de novo standard of review to the statute of limitations." Lincoln Electric Co. v. McLemore, 54 So.3d 833, 835 (¶ 10) (Miss.2010). We review issues of fact for abuse of discretion. Wilson, 830 So.2d at 1155 (¶ 9). This Court will not disturb the circuit judge's findings " unless they are manifestly wrong [or] clearly erroneous[,] or an erroneous legal standard was applied." Id. To determine whether an arbitration award should be confirmed, " it is not legitimate ... [for the court] to inquire into the original merits in favor of one party or the other, or to show that in the evidence the award ought to have been different or that the law of the case was misconceived or misapplied, or that the decision, in view of all the facts and circumstances, was unjust." Id. at 1156 (¶ 11). " The scope of judicial review ... is quite narrow, and every reasonable presumption will be indulged in favor of the validity of arbitration proceedings." Id. at 1155 (¶ 9) (citations omitted).


¶ 9. Wells Fargo's motion invoked the jurisdiction of the circuit court pursuant to the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (" FAA" ), and the Mississippi Arbitration Act, Miss.Code Ann. § 11-15-1 et seq. (" MAA" ). Wells Fargo asked the circuit court to confirm the arbitration ...

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