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Renard v. Ameriprise Financial Services, Inc.

United States Court of Appeals, Seventh Circuit

January 30, 2015

PAUL J. RENARD, Petitioner-Appellant,
v.
AMERIPRISE FINANCIAL SERVICES, INC., Respondent-Appellee

Argued September 22, 2014.

Page 564

Appeal from the United States District Court for the Eastern District of Wisconsin. No. 13-CV-555-JPS -- J.P. Stadtmueller, Judge.

For Paul J. Renard, Petitioner - Appellant: Terry J. Gerbers, Attorney, Gerbers Law S.C., Green Bay, WI.

For Ameriprise Financial Services Incorporated, Respondent - Appellee: Ryan S. Stippich, Attorney, Reinhart Boerner Van Deuren S.C., Milwaukee, WI.

Before WOOD, Chief Judge, and EASTERBROOK and SYKES, Circuit Judges.

OPINION

Page 565

Wood, Chief Judge.

At the time Ameriprise Financial Services fired Paul J. Renard, one of its financial advisers, Ameriprise took the position that Renard owed it money. Renard did not agree, and so Ameriprise initiated arbitration to resolve the issue. At the arbitration, Renard denied that he had any debts to Ameriprise and filed several counterclaims against the firm. The arbitrators rejected Renard's counter-claims and awarded Ameriprise most of what it sought.

Renard did not accept the panel's decision; instead, he filed suit in state court to vacate the award. Ameriprise removed the action to the federal district court and asked the court to confirm the award. The court obliged, and added an order requiring Renard to pay additional interest. Renard has now appealed, arguing that Ameriprise's counsel procured the arbitral award through fraud and that the arbitrators acted in manifest disregard of both the Wisconsin Fair Dealership Law (WFDL) and Minnesota tort law. His showing, however, falls far short of the high standard needed to upset the outcome of an arbitral proceeding, and so we affirm the district court's judgment.

I

Ameriprise is a member of the Financial Industry Regulatory Authority (FINRA), a self-regulatory organization that oversees brokerage firms and exchange markets. On August 6, 2009, Ameriprise and Renard entered into a franchise agreement under which Renard became a financial adviser affiliated with Ameriprise. Minnesota law governs the agreement, with the exception of " all issues relating to arbitrability," which are " governed by the terms set forth in [the] agreement, and to the extent not inconsistent with this agreement, by the rules of arbitration of FINRA." Franchise Agr. § 26.A. The agreement to arbitrate states that it " is governed by and enforceable under the terms of the Federal Arbitration Act." Id. at § 27.H.

On May 11, 2011, after receiving a customer complaint that Renard had solicited exchange-traded fund (ETF) transactions in contravention of Ameriprise policy, Ameriprise placed Renard under special regulatory supervision. On June 22, 2011, Ameriprise issued a Notice of Termination to Renard. The Notice detailed several reasons for his dismissal: Renard allegedly solicited inverse and leveraged ETF transactions, marked solicited orders as unsolicited, used unapproved sales literature and an external email system, and failed to update certain forms. The Notice asserted that Renard had breached the franchise agreement by engaging in these actions and that Ameriprise was thus entitled to terminate the agreement.

While Renard was affiliated with Ameriprise, Ameriprise had loaned him money to build his practice. In exchange for the loans, Renard had executed four promissory notes, which required Renard to pay the full amount immediately if Renard's affiliation with Ameriprise ever ended. Ameriprise's termination of its relationship with Renard thus caused the unpaid balances on the promissory notes, totaling approximately $530,000, to become due. After Renard failed to make immediate payments on the notes, Ameriprise initiated arbitration under the auspices of FINRA, as specified by the franchise agreement's arbitration clause. See Franchise Agr. § 27.A.

A panel of three arbitrators held an evidentiary hearing in ...


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