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JP Morgan Caught In The Middle of Dueling Address Changes in Customers' Divorce
May 15, 2023
As a marriage begins to collapse, the husband instructs JP Morgan to change the brokerage account's address of record. When the wife learns of the change, she instructs JP Morgan to reinstate the original address. What's the appropriate response for a brokerage firm caught in the middle of an unfolding divorce? Do you play a game of address ping-pong and go back and forth with address changes? Do you get to pick and choose which spouse's demands you will follow? In a recent FINRA Arbitration, we're asked to consider this very issue.
Case in Point
In a FINRA Arbitration Statement of Claim filed in November 2022, public customer Claimant Civetta, representing herself pro se, asserted forged documentation (as pertaining to a joint account). Claimant Civetta sought $50,000 in compensatory damages and "an explanation as to why the events occurred; and an apology letter from Respondents"
In the Matter of the Arbitration Between Diane Civetta, Claimant, v. J.P. Morgan Securities, LLC and Mark M. Minkler, Respondents (FINRA Arbitration Award 22-02708)
https://www.finra.org/sites/default/files/aao_documents/22-02708.pdf
https://www.finra.org/sites/default/files/aao_documents/22-02708.pdf
FINRA member firm J. P. Morgan Securities and associated person Minkler generally denied the allegations and asserted affirmative defenses.
Award
The sole FINRA Arbitrator denied Claimant Civetta's claim but found J. P. Morgan Securities and Minkler jointly and several liable for reimbursement of $240 in filing fees.
The Sole FINRA Arbitrator offered a comprehensive and thoughtful "Explained Decision":
Claimant, acting pro se, brings this action. This brief summary is provided as a courtesy to the parties but is not intended to be an exhaustive analysis of this matter.
The gravamen of the claim seems to be that Respondent JP Morgan Securities changed the mailing address for account statements at the request of the account holder, Claimant’s husband, with whom she is engaged in a divorce action.
It is not entirely clear why Claimant objected to the address change or how she was harmed by it. At all times relevant herein, Claimant could access the account information electronically, so it does not seem that she was being deprived of access to any information. If she had wanted to receive hard copy duplicate statements by having them mailed to her at her own residence, JP Morgan was willing to do so and, most recently, provided a copy of the one-page request form as Exhibit A in its Answer. Claimant never completed the form or returned it. As for the individual Respondent, the undisputed evidence is that he had no role with respect to designating or changing the address to which account statements are sent.
Claimant prays for a damage award of $50,000.00 but offers no economic evidence of any type. If one assumes that this prayer for relief is a prayer for punitive damages, there is no evidence offered which would support such a claim, even assuming that such damages might be available. Alternatively, if Claimant is seeking equitable relief, such as requiring JP Morgan to reinstate the original mailing address for the account statements, there is no basis for such an order, especially since she can already request hard copies of her own.
Claimant supplies 27 pages of material as an attachment to her claim. Those pages are poorly organized and often duplicative. By way of example, a letter dated November 3, 2022 from Dee Lee of JP Morgan Securities is set forth 4 times and a change of address notice dated June 17, 2021 is set forth twice, yet a letter from JP Morgan Securities dated September 27, 2022 and referred to in later correspondence is not included at all. It may have been that at the outset Claimant was confused or uninformed. Making that assumption, arguendo, it would then follow that no matter how poorly articulated and organized, the claim was nevertheless filed in good faith.
However, JP Morgan responded in clear prose and provided materials which might have assisted her had she chosen to utilize them. Instead, she has continued with this confused presentation and poorly supported claim. In its final submission of April 11, 2023, JP Morgan Securities alleges that the claim is not merely unsupported, but frivolous. It therefore seeks to have all fees assessed against Claimant. I agree that Claimant's prosecution of this claim has been conducted poorly, but that fact must be balanced against the need to offer individuals an effective pathway to raise issues and concerns. I have concluded to assess a majority of the fees against Claimant as set forth, but I do not accept the suggestion that she should shoulder the entire cost.
Bill Singer's Comment
All things considered, a fairly classy Award replete with a thoughtful Explained Decision from Sole FINRA Public Arbitrator Peter E. Gillespie.
By way of recap, Claimant Civetta represented herself pro se. Apparently, the genesis of her lawsuit had something to do with her husband's changing of the address on their JP Morgan account at a time when they were embroiled in divorce proceedings. As Claimant Civetta saw it, there was some "forgery" afoot here. As Arbitrator Gillespie saw it, the husband did, in fact, request a change of the initial standing-instruction address of record but that did not occur as the result of any alleged forgery. Unstated and unexplained is whether there was any legal obligation to prevent one tenant from requesting an address change -- or what the preferred industry practice is when a brokerage firm is confronted with dueling change-of-address demands from divorcing spouses (joint tenants or otherwise).
As to Respondent JP Morgan's response to the "dueling" address-change requests from the now divorcing husband and wife, the Award notes that Respondent JP Morgan was willing to provide Claimant Civetta with "hard copy duplicate statements by having them mailed to her at her own residence;" however, Claimant failed to complete and return the necessary form for that purpose. Moreover, as the Awards asserts, Claimant still had "access" to the substantive information about the account.
Not explained in the Award and likely the core issue in dispute is what happens when Joint Tenants instruct their brokerage firm to change the address of record to two different addresses -- or, for example, a husband sends instruction on Monday to alter the standing address to 123 Maple Street and then on Tuesday the wife sends instructions to alter the address to 456 Main Street. As best I can infer from the Award, JP Morgan's solution was to honor the first change of address from the husband and then offer to send duplicate account statements to the wife pursuant to a form (which she apparently declined to submit).
I compliment Arbitrator Gillespie for trying to fashion some form of compassionate justice in consideration that Claimant is both forced to arbitrate before the FINRA forum and is handling her own case. Compliments aside, I'm not quite sure how the Arbitrator dismissed all of the customer's claim but found the two industry respondents jointly and severally liable for some filing fees. I appreciate the motivation on that softening of the blow approach despite Arbitrator Gillespie's finding that "Claimant's prosecution of this claim has been conducted poorly . . . [but, nonetheless] filed in good faith."
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