Edward Jones Loses Another Appeal in Missouri Court

Edward Jones has lost another battle in its attempt to nullify a $750,000 arbitration award won in 1995 by a former rep at the firm, Channing Schwartz, of Alliance, Neb.The Missouri Court of Appeals, Western District, on May 26, rejected the St. Louis-based firms motion to vacate, the second such ruling in 15 months. In March 97, the Circuit Court of Jackson County in Kansas City, Mo., issued a similar

Edward Jones has lost another battle in its attempt to nullify a $750,000 arbitration award won in 1995 by a former rep at the firm, Channing Schwartz, of Alliance, Neb.

The Missouri Court of Appeals, Western District, on May 26, rejected the St. Louis-based firms motion to vacate, the second such ruling in 15 months. In March 97, the Circuit Court of Jackson County in Kansas City, Mo., issued a similar decision upholding the arbitrators award.

Jones, through its attorneys, has argued in both appeals that one of the arbitrators in the original case was biased against the firm because his wife worked for Smith Barney as a stockbroker. Jones has claimed that fact was not properly disclosed, which should invalidate the award. The firm also contended arbitrators exceeded their powers and disregarded the law requiring Schwartz to prove his claim of malicious prosecution on the firms part.

The court of appeals, however, called Jones argument wholly devoid of merit and upheld the Circuit Court. (To see the complete ruling, visit RRs Web site at rrmag.com. Go to this item in the Oddlots section.) Appellate Judge Thomas Newton concluded that the arbitrator, Patrick Hartigan, had in fact disclosed his wifes employment and that Edward Jones had made no objection at the time.

Furthermore, Newton stated in his ruling, the arbitrators did not give a reason in their award and therefore did not show manifest disregard of any law requiring the claimant to prove malicious prosecution.

Schwartz, now a broker with Linsco/Private Ledger in Alliance, Neb., had been the target of an ex parte TRO when he left Edward Jones in 1994. A Nebraska state judge later dissolved the TRO and chastised Edward Jones attorneys for failing to contact Schwartz before the TRO hearing. Schwartz subsequently sued his former firm in arbitration for malicious prosecution, false light publicity and tortious interference. He claimed Edward Jones turned clients against him by suggesting hed breached his contract. Schwartz claimed he never signed a contract with the firm in his 11 years there.

In November 95, a three-member NASDR arbitration panel granted Schwartz $745, 638 in damages, payment of which has been delayed while Jones has pursued two appeals.

Jones still could appeal to the Missouri Supreme Court, or even the U.S. Supreme Court. But an Edward Jones spokesperson says the firm does not anticipate any further appeals in the Schwartz matter.

Schwartz feels the firm might still appeal because it has a personal vendetta against him, he claims.

Schwartz estimates he has spent more than $200,000 in legal fees since he was hit with the TRO in 94.

TAGS: Archive
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish