United States District Court, D. Nevada
before the court is defendant Westminster Financial
Securities, Inc.'s (“Westminster”) motion to
compel arbitration. (ECF No. 17). Plaintiff Mary Krevosh
(“Krevosh”) filed a response (ECF No. 22), to
which defendant replied (ECF No. 27).
is a broker-dealer that is registered with the Securities and
Exchange Commission (“SEC”) and is a member of
the Financial Industry Regulatory Authority
(“FINRA”). (ECF No. 1 at 2). Upon opening two new
investing accounts with Westminster in 2012, Krevosh and her
husband signed new account forms, each of which contained an
arbitration clause stating, in relevant part:
ANY CONTROVERSY BETWEEN YOU AND U.S. OR PERSHING LLC AND U.S.
SHALL BE SUBMITTED TO ARBITRATION BEFORE AND ONLY BEFORE THE
FINANCIAL INDUSTRY REGULATORY AUTHORITY.
(ECF No. 17-3, 17-4, 17-5).
October 2012, Krevosh and her husband also signed a margin
agreement, which provides, in pertinent part:
THIS AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE. BY
SIGNED [sic] AN ARBITRATION AGREEMENT THE PARTIES AGREE AS
• ALL PARTIES TO THIS AGREEMENT ARE GIVING UP THE RIGHT
TO SUE EACH OTHER IN COURT, INCLUDING THE RIGHTS TO A TRIAL
BY JURY, EXCEPT AS PROVIDED BY THE RULES OF THE ARBITRATION
FORUM IN WHICH A CLAIM IS FILED.
(ECF No. 17-6). In November 2013, Krevosh and her husband
signed additional Westminster agreements with similar
arbitration clauses (collectively, the “arbitration
agreements”). (ECF No. 17-7, 17-8).
April 2017, Krevosh initiated an arbitration proceeding (the
“2017 arbitration”) against Westminster through
FINRA, alleging various acts of wrongdoing and seeking an
award of damages. (ECF No. 17 at 2). Among other things,
Krevosh alleged that she and her husband purchased a bronze
statue from former Westminster financial advisor Louis
Telerico for $200, 000, but did not receive the statue and
consequently incurred $200, 000 in losses. Id.
Krevosh stated in her FINRA claim that she initiated
arbitration with Westminster pursuant to “FINRA rule
12200, which requires a member or an associated person to
arbitrate disputes arising out of the associated person or
member's business activity or the contract entered into
between the parties.” (ECF No. 17-1 at 1).
the pendency of the arbitration, Westminster requested that
Krevosh produce all documents and information relating to the
purchase of the statue, all documents and information
relating to money provided or received in relation to the
purchase, and all documents and information relating to her
claimed losses. Id. On or about June 2018, after the
close of discovery in the arbitration case, Krevosh filed an
amended statement of claim with FINRA, reiterating her claim
regarding the purchase of the statue. Id. at 3.
18, 2018, the parties attended a mediation conference in
Chicago, Illinois, before mediator Jeffrey Grubman
(“mediator Grubman”). (ECF No. 22 at 7). The
parties were unable to reach a settlement during the
mediation. Id. However, the parties continued their
negotiations and finally reached an agreement on July 20,
2018. Id. The agreement was memorialized by an email
from mediator Grubman to the parties' respective counsel
(the “settlement email”). Id. The
settlement email stated the basic terms of the agreement and
indicated that a draft settlement agreement would be prepared
thereafter. (ECF No. 22-1). On the same day, Krevosh's
counsel filed a letter of settlement with FINRA to inform it
that a settlement had been reached and that the arbitration
case should be closed. (ECF No. 22 at 8).
the settlement was reached, Westminster came into possession
of evidence that had not been previously disclosed by
Krevosh, which suggested that her claims regarding the statue
were false. (ECF No. 17 at 3). Specifically, Westminster
discovered that Krevosh rescinded the transaction to purchase
the statue in September 2012 and was reimbursed for the money
she claimed to have lost. (ECF No. 17 at 3); (ECF No. 17-2).
Westminster confronted Krevosh with this newly discovered
information, Krevosh refused to explain the discrepancy. (ECF
No. 17 at 4). Instead, Krevosh filed the instant suit on
August 2, 2018, seeking to enforce the 2017 arbitration
“settlement agreement.” (ECF No. 1). On August 17,
2018, Westminster filed its answer and counterclaims against
Krevosh, asserting claims for fraud and abuse of process.
(ECF No. 7).
August 31, 2018, Westminster filed the instant motion to
compel arbitration, which the court now considers. (ECF No.
Federal Arbitration Act (“FAA”) provides for the
enforcement of arbitration agreements in any contract
affecting interstate commerce. 9 U.S.C. § 2;
AT&T Mobility LLC v. Concepcion, 563 U.S. 333,
339 (2011). A party to an arbitration agreement can invoke
his or her rights under the FAA by petitioning federal courts
to direct that “arbitration proceed in the manner
provided for in such agreement.” 9 U.S.C. § 4.
When courts grant a petition ...