PetitionCal. Super. - 6th Dist.November 3, 2017ATTORNEY OR PARTY WITHOUT ATTORNEY (Name Slefe Ber numoer and address): FOR COURT USE CNL y ADR-106 - Gregory C. Simonian CASAS RILEY SIMONIAN LLP 55 North 3rd Street Campbell, CA 95008 TELEPHONE Noc 6 5 0 - 9 4 8 - 7 2 0 0 FAxNO.(oplronal): 650 -948 -722 0 E-MAIL ADDRESS (Opconal). ATTDRNEYFDR(meme) SteVe MOrey SUPERIOR COURT OF CALIFORNIA, COUNTY OF Santa Clara sTREETADDREBB 191 North Fizst Stzeet MAILING ADDRESS DITYANDzIPDDDE; San Jose, Calif ornia 95 1 13 BRANDH NAME; Downtown Courthouse PETITIONER: Steve Morey RESPONDENT:Concez.t Wealth Management, Inc., et al PETITION TO ~ CONFIRM ~ CORRECT ~ VACATE CONTRACTUAL ARBITRATION AWARD Jurisdiction (check all that apply):~ Action is a limited civil case Amount demanded ~ does not exceed $10,000 C3 exceeds $10,000, but does not exceed $25,000 Q3 Action is an unlimited civil case (exceeds $25,000) CASE NUMBER: 17CV318589 NOTICE: You may use this form to request that the court confirm, correct, or vacate an award in an arbitration conducted pursuant to an agreement between the parties that is subject to Code of Civil Procedure section 1285 et seq. snd that does not involve an attorney-client fee dispute. If you are requesting court action after an attorney-client fee arbitration award, please read Alternative Dispute Resolution form ADR-105, Information Regarding Rights After Attorney-Client Fse Arbitration. 1. Petitioner and respondent. Petitioner (name each): Steve Morey alleges and requests relief against respondent(name each): Concert IA)ealth Management, Inc., (now known as Encompass Go, Inc.); Concert Global Group, Ltd. (now known as Omni Global Group, Ltd) and Felipe Luna, individually and as Trustee of Felipe Luna and Elizabeth Luna Family Trust. 2. Contractual arbitration. This petition requests the court to confirm, correct, or vacate an award in an arbitration conducted according to an agreement between the parties that is subject to Code of Civil procedure section 1285 et seq. 3. Pending or new action. a. Q3 A court case is already pending, and this is a petition filed in that action. (Ilso, proceed toitem 4) b. ~ This petition commences a new action. (If so, completeitems 3b(1) through 3b(4)) (1) Petitioner's capacity. Each petitioner named in item 1 is an individual, Cl except petitioner (slate name and complete one or more of the following): (a) ~ is a corporation qualified to do business in California. (b) ~ is an unincorporated entity (specify): (c) ~ is a representative (specily): (d) C3 is (specify other capacity); (2) Respondent's capacity. Each respondent named in item 1 is an individual,~ except respondent (sta(e name and complete one or more of the following): (a) ~ is a business organization, form unknown. (b) ~ is a corporation. (c) ~ is an unincorporated entity (spsciiy): (d) ~ is a representative (specify): (s) ~ is (specify other capacity): Form Approved for Onlional Use Judlciaicounciiofcaiifornia QfP'SSential ADR-ice INew January I, ECCS) & FJFOT(ns- PETITION TO CONFIRM, CORRECT, OR VACATE CONTRACTUAL ARBITRATION AWARD (Alternative Dispute Resolution) Morey, Pepef ofs Code of Civil Procedure, 3 1235 et sec. Steve Electronically Filed by Superior Court of CA, County of Santa Clara, on 9/17/2021 2:57 PM Reviewed By: R. Tien Case #17CV318589 Envelope: 7290970 PETITIONER: Steve Morey RESPONDENT:Concert Wealth Nanagement, Inc., et al CASE NUMBER: 17CV318589 3.b. (3) Amount or property in dispute. This petition involves a dispute over (check and complete ell that apply): (a) ~ the following amount of money(specifyamount): $ (b) ~ property (ii the dispute involves property, complete both of the fol/owing): (i) consisting of (identify propertyin dispute): (ii) having a value of (specify value ofpropertyin dispute): $ (4) ~ Venue. This court is the proper court because (complete (a) or (b)): (a) ~ this is Ihe court in the county in which the arbitration was held. (b) ~ the arbitration was not held exclusively in any county of California, or was held outside of California, and (check one or more of the following): (i) ~ this is the court in the county where the agreement was made. (ii) ~ this is the court in Ihe county where the agreement is to be performed. (iii) ~ the agreement does not specify a county where it is to be performed and was not made in any county in California, and the following party resides or has a place of business in this county (name of party): (iv) ~ the agreement does not specify a county where it is to be pertormed and was not made in any county in California, and no party to this action resides or has a place of business in California. 4. Agreement to arbitrate. a. Date. Petitioner and respondent entered into a written agreement on or about(dele): Sept . 6, 20 11 b. Qg Attachment. A copy of the agreement is submitted as Attachment 4(b) and incorporated herein by this reference. c. Arbitration provision. Paragraph 3 rt of the agreement provides for arbitration of disputes arising out of the agreement as follows (either copy the arbitration provision in full or summarize the provision): This Agreement is made and shall be construed under the laws of the State of California. In the event of a dispute between the parties relating to this Agreement, such dispute shall be submitted to arbitration pursuant to California Arbitration taw [Title 9 of the Cade of Civil procedures Section 122o et. sen ) The prevailing party in such arbitrationshall be entitled to reimbursement for its costs and reasonable attorney's fees. This clause does not constitute a waiver of any nght including the right to choose the forum, whether arbitration or adludication, In which to seek resolution of disputes. Nothing in this clause will waive or limit any rights that a chant may have under federal and state securities laws. 5. Dispute subject to arbitration. A dispute arose between petitioner and respondent concerning the following matter covered by the agreement to arbitrate (summarize the dispute): Breach of Fiduciary Duty, Professional Negligence 6. Arbitrator. The following person was duly selected or appointed as arbitrator(name of each arbitrator); Hon. Catherine Gallagher (Ret.) - JAMS Silicon Valley 7. Arbitration hearing. The arbitration hearing was conducted as follows (complete both of the following): a. Date(eschdeleolerbilralion): January 28-29, 2021 b. Location (city and state where arbitration was conducted): via zoom 8. Arbitration award. a. Date of award. The arbitration award was made on (date): September 8, 2021 b. Terms of award. The arbitration award (check one or more of the following): (I) Q3 requires ~ petitioner QQ respondent to pay the other party this amount: $ (2) ~ requires neither partyto paythe other anything. (3) ~ is different as to different petitioners and respondents. (4) ~ provides (specify other terms or check item 8(c) and allach a copy of the award): 473,426.28 c. Q3 Attachment of Award. A copy of the award is submitted as Attachment 8(c). 9. Service of award. a. The signed award or an accompanying document indicates that the award was served on petitioner on (dele): 9/10/2 021 b. ~ Petitioner alleges thats signed copy of the award was actually served on(date): ABR-Ioa [New Januaw I, 2004I ILfQ' Essential ~ r3Forms. PETITION TO CONFIRM, CORRECT, OR VACATE CONTRACTUAL ARBITRATION AWARD (Alternative Dispute Resolution) Morey, Steve Page2ofa r PETITIONER: Steve Morey RESPONDENT:Concert Wealth Management, Inc., et al CASE NUMBER 17CV318589 10. Petitioner requests that the court (check ail Ihal apply): a. Q3 Confirm the award, and enter Judgment according to it. b. Q Correct the award and enter judgment according to the corrected award, as follows: (1) The award should be corrected because (check ail that apply): (a) Q the amount of the award was not calculated correctly, or a person, thing, or property was not described correctly. (b) Q the arbitrator exceeded his or her authority. (c) Q the award is imperfect as a matter of form. (2) The facts supporting the grounds for correcting the award alleged in item 10b(1) are as follows (if addifionaf space is required, check here Q and submff facie on an affachmenf labeled 10b(2)): (3) The award should be corrected as follows (If additional space is required, check here Q and describe requested correction on an affachmenf labeled 10b(3)): c. Q Vacate (cancel) the award. (1) The award should be vacated because (check aff Ihal apply): (a) Q the award was obtained by corruption, fraud, or other unfair means. (b) Q an arbitrator was corrupt. (c) Q the misconduct of a neutral arbitrator substantially prejudiced petitioner's rights. (d) Q the arbitrator exceeded his or her authority, and the award cannot be fairly corrected. (e) Q the arbitrator unfairly refused to postpone the hearing or to hear evidence useful to settle the dispute. (f) Q an arbitrator failed to disclose within the time for disclosure a ground for disqualification of which the arbitrator was then aware. (g) Q an arbitrator should have disqualified himself or herself after petitioner made a demand to do so. (2) The facts supporting the grounds for vacating the award alleged in item 10c(1) are as follows (I/addfficnaf space is required, check here Q and submit facts on an affachmenf labeled 10c(2))f Sep 15, 2821 (3) Petitioner Q does Q does not request a new arbitration heading. d. Q3 Award petitioner interest from (dale): (1) Q at the statutory rate. (2) Q3 strata of 1(j %peryear. e. Q3 Award petitioner costs of suit: (1) Q3 in the amount of: $ 4 8, 845. 28 SncludadinArbxratur'IvinalAwardi (2) Q according to proof. f. Q3 Award petitioner attorney fees incurred in this action (check only Ifafforney fees are recoverable in fhfsaciion according Io sfalufe or Ihe parties'greemenl)J (1) Q3 in the amount of: $ 229, 25Q. QQ (inciudadinAIBRratal'TFinalAward) (2) Q according to proof. 0 Qx Award petitioner the following other relief (describe refiefrequeSted;if addiffonaf spaceis required, check here and describe relief on an affachmenl labeled 10g)J Post-award, prejudgment Inferesf of $55. 71/day Irom March 29, 2021 through date of Enlry of Judgment. See attachment IOg. Qx 11. Pages and attachments. Number of pages attached: 33 Date: 09/17/2071 I'rrniyinrcy I Rimnrit RTI ITYPE OR PRINT NAME) AOR.IBB INaw January I, 966ul Cf(9; Essen1fel c Scam gaF nns (SIGNATURE OF PETITIONER OR ATTORNEY) PETITION TO CONFIRM, CORRECT, OR VACATE CONTRACTUAL ARBITRATION AWARD (Alternative Dispute Resolution) tuforey, steve P696 6 af 6 A1.1.ac.zmenl.ttach e t 4.b. I INVESTMENT ADVISORY SERVICES AGREEMENT This Investtnent Advisory Client Services Agreement ("Agreement" ) is entered into this dav Of r"-m/s.V/A.FZL .20 / ! by and between CONCERT Wealth tMana ament, Inc. ("Advisor" ). a Securities Exchan 'e Commission (SEC) Registered Investment Advisor doin business in California. and / r st Client will be provided tvith a variety ol'investment-related services. Advisor ayees to provide such services under ihe follotving terms and conditions; I. Services In providing all services hereunder, Advisor is entitled to rely on tlte financial infonnmion and other inl'ormation provided by Client without any duty or obli ation to investi ate the accuracy or completeness of the information. 'fhe information provided by Client will include a brief description ol'he investment and financial objectives. uidelines and any restrictions for Client's Account(s). Advisor will review Client's objectives periodically with Client. I-loumver, it is Client's responsibility to notify Advisor promptly of any chan es in the objectives ot'the Account(s). Advisor will initiate tbc steps necessary, including arrangin for the transfer of funds or securities, to open Client's Account(s). Client a rccs to notily Advisor in tvritin of any additions and to ive at least seven (7) days* notice of any intended withdratvals. Client hereby appoints Advisor io mana e Client's Account(s) and in connection therewith, to initiate transactions on Client's behalf in accordance with the terms of the tradin ~ authorization sct forth in Section 2 below. 2. Autburit)'lient hcrcby appoints to Advisor unlitnited and unrestricted discretionary authority to, invest and reinvest, direct aod mana c thg assets held in the Account(s). and at Client's sole risk. Advisor is not required to notify Client prior to any tmnsaction, and tiormally will not do so. Client hereby designates Advisor as the agent and anorney-in-fact with a limited power of attorney. Client authorizes Advisor in its discretion to a rc ate purchases and sales of securities I'or the Account(s) with purchases and sales of securities of the same issuer for other Clients of Advisor occurring on the same day. When transactions are so aggre ated, the actual prices applicable to the a rcgated transactions will be avera ed, and the Account(s) and the accounts of other participating Clients of Advisor will be deemed to have purchased or sold their proportionate shares of thc securities involved at the average price so obtained. Client further provides Advisor with the authority to retain or terminate a Sub-Advisor/Money Manager as the agent and attorney- in-fact, with a limited potver of attorney. to manage assets in the Account(s) on a discretionary basis. on condition tlrat Client receives full disclosure of the agreement between the Advisor and Sub-Advisor/Money Manager. Jk Custody The securities and I'unds held in Client's Investment Account(s) shall be held in the custody of: ,8 Charles Scluvab 0 Pershing 0 Mor an Stanleyr Cl Fidelity Q TD Ameritrade 0 JP Morgan 0 Other The assets in the Account(s) shall be held lor safekeeping with the Custodian. Advisor shall not act as Custodian for the assers in the Account(s) and shall not be liable to Cliem for any act, conduct or omission by Custodian. 4. Proxies Client understands and agrees to retain authority and responsibility lo vote nil proxies for which are solicited for securities held in the Account(s). CONCERT Wealth Mana ement will not vote proxies. nor advise Clients how to vore proxies I'or securities held in Client Account(s). 1871 I'he Alameda Suite 350 San Juae. I 'A 95 l26 eaaeen etleal,'Iareelaeal rsMIWltuYt 72 5. Reports Advisor will furnish or cause Client io be furnished a report derailing the securities and cash held in the Account(s) as soon as reasonably possible after rhe end of each quarterly period. Copies of confirmations of transactions executed will be sent promprly to the Client or its designated party by the Custodian. Advisor does not assume responsibility for the accuracy of information furnished by Client or any other party. 6. Confidential Relationship All information and advice famished by either party to the other shall be treated as confidential and shall not be disclosed to third parties except as required by law. 7. Liability Neither Advisor nor any of their directors, employees, officers or affiliates shall be liable for any act or omission in the course of, or connecred with. its performance of ibis a reement. except in the case of v'illful misfeasance, bad faith or gross negligence or as orherwise provided for by federal or state law, All actions taken by Advisor hereunder, either before or ager the death or incapacity of the undersi ned. but before receipt by Advisor of information of such death or incapacity, shall be bindin'Client and Client's legal representatives ivho shall hold Advisor harmless hereunder from all liability arising from such action so taken. 8. Non Exclusive Contract Client undcrsbuids that Advisor may perform advisory services for various other Clients and may give advice or take actions for those Clients that differ from the advice iven or the timin or the nature of any action laken for Client. Client further understands that Advisor will not have any obligation to purchase or sell. or to recommend for purchase or sale of any securities which Advisor. its principals, aAiliates or employees may purchase or sell for any other client or themselves if in Advisor's opinion such transaction appears inadvisable for Client's Account(s). 9. Client Authority Client represents that employment of Advisor is authorized by, or has been accomplished in accordance with. and does not violate. the documents governing the Account(s). Client agrees to furnish Advisor with true copies of all governin documents. Client further a rees to notii'y Advisor of any event which might affect this authority or the validity of thc Agreement. Additionally, if an Account is subject to ERISA, Client represents and warrants (i) that Cliem is a "named tiduciary'ith respect to control or mana ement of the assets of the Account; (ii) that Client agrees to obtain and maintain a bond, satislyin the requirements of Section 4 I2 of FRISA and to include Advisor and its agents among those insured under that bond; and. (iii) Client represents that Advisor's investment strate y is appropriate for the Account's assets. lb. Fees and Charges Client will pay an Annual Fee (Management Fee), ivhich is billed quarterly in accordance with the Annual Fee Rate on Schedule A which appears on the last page of this A reement. The Annual Fee Rate is subject to negotiation depmiding upon a number of factors, including size of the Account(s). The Mana ement Fee will be assessed at the beginning of each quarter and based on rhe value of the Account(s') assets (securities. cash and cash equivalents) under mana ement as of the close of business on the last business day ol'he preceding quarter. payable in advance and upon deposit of any additional funds or securities in the Account(s). Management Fec = I/4 (Annual Fce rate) X (Total Assets Under Management) The initial Iviana emem Fee is due upon execution of this Agreement. Mana ement fees based on any assets deposited after the beginning of the quarter will bc pro-rated I'or the remainder of the quarter. Additional deposits of funds and/or securities will be subject to the same billing procedures. This includes deposits of stocks, bonds, mutual funds and any other seciirities approved by Advisor for investment in the Account(s). Client may have multiple Accouius, and inay elect to have Management Fees debited I'rom one previously selected Accoum. Mmiagement Fees not debited from an Account are not subject to a pro rata refund stated in this section. Management Fees.will be prorated only to the respective Accoum where such fees were debited. Clierit authorizes Custodian to deduct all Mana ement Fees from Client's Account(s), or similar Account. Cliem will receive disclosure of'all hlanagement Fees paid from the Account on Client's Account statements. Client may also incur certain charges imposed by third parties other than Concert Wealth Mana ement Inc. in connection with investmems made through the Account(sl. includin but not limited to transaction fees, no-load mutual fund l2b-I distribution fees (trail commissions). cenain deferred sales charges on previously purchased mutual funds and IRA and Qualified Retirement Plan fees. Client acknowledees and agrees that the Mana ement Fee schedule (Annual Rate) set forth in Schedule A is in effect I'or Client's Account(s) and shall continue until thirty (30) days al)er Advisor has notified the Client in writing of any change in the amount of the fees or charges applicable to the Client's Account, at which time the new fees or charges will become effective. 1 tt71 The Alameda Suite 350 San Jose. CA 95126 cvnccn ctieai saic m ai rev.(Mi(i)jt(l(CY 73 Cc))~C u&T I I. Termination Client may terminate &his ¹reement without penalty ivithin tive (5) business days of i&s si nin . or thereafrer by providing &Air&i (30) durs notice to concert wealth &vlanagemenu This A reement may also bc terminated by either pan& upon receipt of' 0-day ivritten notice by the other party. The Tenuination Date i&ill be calculated Irom the date thai the nolice is received (no& .vent) plus 30 days. Mana ament Pccs &vill bc prorated through the Termination Date and based on thc &otal number of davs in rhe quarter. Reimbursements will be cafe ulaied froni alier rhe Termination Date to the end of ihe quaner and ivif 1 be refunded to the debited Account(s) or by check to the Client of record. (A Dc-I ink notice will also also accepted as a 30-day notice). In the event of'termination of'this agrcemenl, Advisor shall not be obli a&ed to recommend any action ivith respect to the assets in. or liquidation of the Account(s). I 2. Dkiclaimers and Limitations Advisor or its el'flliates may, in thc course of its business obtain material. non-public or other confidential information that. il'isclosed. mi ht OFfcct an investor's decision to buy. sell or hold a security. Advi&or mid iks aftiliates are restricted From disclosing or using this information under applicablc lair, and arc under no obli ation to disclose &he information to Client or usc it for Clienfs benefit. In no event will Advisor be obli ared to etfecl any transaction iihich Advisor believes ivould violate any applicable state or lederal lais, rule or regulation. or the rules or re 'ulations of any re 'ulatoD or sell- re 'ulatory body. Client acknowledges tlrm Advisor. in prov idin the services specified herein. is basin investmem advice on ccrrain infomiai ion. ivhich the Cliem has ibm ished. Advisor. its employees and a ents shall not be liable for any missratemem or omission contained in s i&eh disclosure or any lass. liability. claim. dame e or expenses whatsocvcr, as incurred. arisin out of'r arlribu&able io such Irnsslaten1ent of oui lsslun. The Client's inves&mcnts are subject to risks associated ivith investin in securities. including various markci. currency. economic„ politicol and business risks. Client acknowled es that the past pmformancc of Advisor is not ni.cessarily indicanvc of future performance and that there is and can be no uarantee ot'uch t'uture pm.l'ormance. Client funher understands thai there is nu guarantee that Clicnfs investment objectives will be achieved. In thc event that the Client directs Advisor to use a panicular broker or dealer. thc Advisor may not be authorized under ihose circumstances to ne otiatv conlmissions and may not be able to obtain vulumc discounts or best ex& cuiion. In uddition, under these circumstances a disparity in commission char es may exist between thc commissions char ed to cliems who direct thc Advisor to use a particular broker or dealer. Clicm acknowledges and a rees that Advisor does im& undertake liduciarv or investment Advisor status in relationship io assets not placed directly in its advisory pro rams and subject to this contract. 13. Agreement IVO& Assignable This Agreement may not bc assi ncd or transferred in any manner by any party without tlte ivritten consent of all palsies receivin or rcnderin seivices hereunder. 14. Arbitration This Agreement is made and shall be construed under the laws of the State of California. In the event of' dispute between the parties relatin 'o ihis A reement. such dispute shall be submitted tu arbitration pursuant to California Arbitration Law (Title 9 of the Code of Civil Procedures Section 1280 ct. seq.). The prcvailin pan) in such arbirration shall be en&i&lcd to reimbursemenl for Iis costs and reasonable attorney's fi".es. This clause does not constitute: a ivaiver of any riglu includin die ri br to choose thc Ibnlm. iiherher arbitration or adjudication. ! irhich lo seek resolution of&lisputcs. Nothin« in rhis clause will ivaive or limii any rights that a client may have under I'edcral an state securities laws. 15. Acknoiilcdgenlents Client acknoivled es that he she has read thic Agreement and will mailnain a copy ol this A reement I'or I'uture reference. Additionallv. Client hereby acknowledges receipt of'dvisor's Disclosure Document (Irorm ADV I'an II) as required pursuant to Rulc 304-3 (17CER 273.304-3) under thc Investmcnt Advisors Act of'040 prior to or on the date (shown below) of the C lien&'s si ning of'his ¹reemenu Clien& also acknow led es rcceipi ot Advisor's Initial Privacy Polici Notice in conjunction ivith this a rcemcm. IG. Entire Agreement This a reemem including Schedule A auached hereto constitute the entire a reement between the panies ivith respect to the investmmu mid mana ament of the Client's accuunt(s) and supercedes all prior negotiations and a icemen&sf The entire agreenlent may bc amended only hy written document signed by both parlies. All lwadings used in this Agreement are for convenience only and shall not affect the construction or interpretation of an& of its provisions. Each ol'he provisions of'his A reement is severable, and thc invalidity and inapplicability of one or more provisions, in whole or in par&. shall not affect any other provision. This a reement and the riglns and obli ations of the panies hereunder shall be co&is&rued and interpreted under the la&vs of the slate of CaliFornia. I g71 I'hc Alameda Suiw 330 .'1'ul Josi, CA 9513G con&en chen& llpcenwal Ivv,&M(r))t(IE'F 74 TIIIS AGREEIVIENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE IN SECTION I(. // A'eed to this (&~ ~j; j/ n /I./py vt /" C)ient's Smnaturu'7 y (-'i;7/-'//Y)g'( Client N nne (Piint or Type) j. davof 4-(!/j p/tw) Vvk'ri'SO j i Client s Stgnature Client Name (Print or Type) Cllcrt((s), Please ulsoimlicu(e widt yaarini(iuls rliu(yon have received tliefolliiwitr„«mrteriulsi i i'li I!We have received the Concert Wealth i&tuna 'ement Disclosure Document (ADV Purr li uml Sclieilale Fl I,'e have received the Concert Wealth dana ement biitiul Privacv Pulity A'a(ice lfClient is n corporutioii, partnersliip, (nevi or otlii'r anti(ye:ill innliuriced imlii'ideals tnns( sigir ivith title der(gita(ion( (cxainplesi Cliaimnim. President. Vice Presiilrn(, .i(unaging Director, Cia(terai Pariimr, Sole Oivirer, Trustee. )dames Plan Fidaciari, Execiitori edmiiiistroior, etc.l SCHEDULE A Annual Fee Rate ()uanerly Ivlmina 'meat I'cc = /'7 (Annual Fce Rati:& X ('I'otal Assets L'niter (vien:ieement) FLAT PERCENTAGE r jtt, Client Initials d Client Initials CONCERT Wealth Manaacment, Inc / I i sy:,- '4 ~PMWp/( investntent Advisor Representative as A ent of Advisor Name: ~A /// t C. f Inv "Im ui Aevi ur Repiiacniailv (plait piinil D.tc: Qk&~ / i i i I) Bvn '.'elip'e Luna. President CONCERT Wealth Mana ement, Inc. I Da l((7 I The Alameda Suiie 330 .'lan)use. CA 9512(v eeniwn cheat:i nemeni rev.(MIQ+IQY 75 Attac ament S.c.t ch ent 8.0 JAMS ARBITRATION CASE REFERENCE NO. 1110022568 Steve Morey, Claimant, and Concert Wealth Management, Inc.; Patrick White; Felipe Luna, an individual and as Trustee of the Felipe Luna and Elizabeth Luna Family Trust; and Omni Global Group, Ltd, formerly known as Concert Global Group, Ltd., Respondents. Final Arbitration Award This case was arbitrated on January 28-29, 2021, before Arbitrator Hon. Catherine Gallagher (Ret.). Claimant Steve Morey (" Claimant" or "Mr. Morey") is represented by Gregory C. Simonian. Respondent Patrick White ("Mr. White") was not represented. He advised the Arbitrator he was too ill to participate. While Mr. White testified at the arbitration, he was excused as a party but participated as a witness. Mr. Morey's claims against Mr. White are stayed. Respondent Concert Wealth Management, Inc. ("Concert" ) was not represented by counsel, but was represented by corporate officer Elizabeth Luna. Respondent Felipe Luna, as an individual and as Trustee of the Felipe Luna and Elizabeth Luna Family Trust, and Omni Global Group, Ltd. (formerly known as Concert Global Group Ltd.) were represented by David I. Kornbluh. Prior to the hearing, Mr. Morey and the Concert Respondents (Concert, Felipe Luna, individually and as Trustee of the Felipe Lina and Elizabeth Luna Family Trust, and Omni Global Group Ltd. (collectively, "Concert Respondents") submitted arbitration briefs. The proceedings were not reported. Witnesses were sworn and testified. Documents were admitted into evidence. At the conclusion of the hearing, the parties submitted Proposed Findings of Fact and Conclusions of Law. On March 29, 2021, the undersigned issued an Interim Arbitration Award in favor of Mr. Morey and against Concert, and permitting Mr. Morey, as the prevailing party, to file, 14 days from receipt of the Interim Award, a motion for attorneys'ees and costs. The Interim Award provided that Concert would have 10 days from receipt of a motion to file an opposition to the motion, that Mr. Morey would have 5 days to file a reply and that the matter would be deemed submitted for decision at the time the reply is due, unless a party, in writing, requested an oral argument. The Interim Award was issued to and served upon the parties on April 15, 2021. On April 28, 2021, Mr. Morey filed a motion for attorneys'ees and costs. On May 7, 2021, Concert Respondents filed an opposition to the motion, and a request to correct the Interim Award. On May 12, 2021, Mr. Morey filed a reply to Concert Resondents'y 27th submission. Oral argument was not requested by either party. Facts and Nature of Disoute The following is a statement of those facts found by the Arbitrator to be true and necessary to this Final Arbitration Award. To the extent this recitation differs from any party's position, that is the result of the Arbitrator's resolution of the factual disputes, including the making of determinations as to credibility of witnesses and the relevancy of evidence, as well as determinations of the burden of proof, and an overall weighing of the evidence. In 2005, Mr. Morey, a sole proprietor, was doing business as Morey Transport. During the same year Mr. Morey set up a retirement trust with the name Steve Morey, a Sole Proprietor dba Morey Transport 401K Plan ("401K Plan" or the "Plan"). The 401K Plan is governed by the Employee Retirement Income Security Act, 29 U.S.C. section 1001, et seq. ("ERISA"). Mr. Morey and his wife, Kate Morey, were the trustees of the Plan. The Prototype Plan documents submitted as Respondent's Exhibit 107 allow for the appointment of an ERISA 3(38)(A) Investment Manager, stating in section 3.3.9: Investment Manaaer. The employer may employ as an investment manager or manager(s) to manage all or part of the Trust Fund an (i) investment advisor registered under the Investors Advisory Act of 1940; (ii) bank, as defined in said Act; or (iii) insurance company qualified to perform investment manager services in more than one state. Any investment manager shall have all powers of Trustee and the management of such part of the Trust Fund, including power to acquire or dispose of assets. In the event an investment manager is so appointed, the Trustee shall not be liable for acts or omissions of such investment or be under any obligation to invest or otherwise manage that part of the Trust Fund which is subject to the management of the investment manager. The employer shall notify the Trustee in writing of any appointment of an investment manager and shall provide the Trustee with the investment manager's written acknowledgement that it is a fiduciary with respect to the Plan. In October 2006, Mr. Morey opened an account for the 401K Plan at UBS, and transferred funds to the account. Respondent Mr. White was the financial advisor for the Plan account at UBS from its inception in 2006 through 2009 (when he left UBS). Mr. White, however, did not provide any written acknowledgment that he was a fiduciary with respect to the Plan. Mr. Morey and Mr. White knew each other since high school. After Mr. Morey graduated from high school he entered the Marines and served a tour of duty in Vietnam. He has no training in investments or securities and completed only one college course. After the Marines, he worked for a family business called CAP Concrete which went bankrupt. Afterwards, he started Morey Transport to haul gravel, sand and cement. He and his wife have been married for over 38 years, are both in their early 70s, and work in the business. They lived in a rented house in Menlo Park raising their daughters until the home was sold due to the death of the owner and now they rent an apartment in Menlo Park. Several of Mr. Morey's relatives died young and he wanted to invest for security for his wife should he pass. Mr. White and Mr. Morey both frequented the Italian Club in Menlo Park and in the mid-2000s, Mr. Morey needed Mr. White for investment advice since he was not experienced in this area. Mr. Morey told Mr. White about an old retirement account presumably from CAP Concrete years earlier which was "lost." Mr. White traced down the account and invested it at UBS. Mr. Morey's intent was to always retain the principal amount that he invested to be security for his wife. The investment did well and Mr. Morey did take funds out from time to time depending on business needs. Mr. Morey claims he did not read the papers that Mr. White gave him that were necessary to open the accounts at UBS and subsequently Concert Wealth. Mr. Morey testified that he relied completely on Mr. White who would hand him the completed paperwork for his signature. He did receive monthly statements from Schwab while his account was managed by Mr. White at Concert Wealth. At all relevant times, Concert was a Registered Investment Advisor located in San Jose, California. Concert is now known as Encompass Go and is an active corporation with the California Secretary of State. Concert received compensation for providing investment advice to others as to the value of securities and as to the advisability of investing in, purchasing or selling securities. Concert was required to register with the Securities and Exchange Commission, and as such, its activities are governed by the Investment Advisor's Act of 1940 and its implementing regulations. In December 2009, Mr. White, via an independent contractor agreement, began working for Concert as an Independent Advisor Representative ("IAR"). The agreement between Mr. White and Concert required that Concert oversee Mr. White's compliance with all applicable laws, rules and regulations (i.e., securities laws) in the conduct of his IAR activities, and that Mr. White comply with Concert's policies and procedures governing the conduction of its business as an investment advisor. In discovery in this case, Ms. Luna testified as the Person Most Knowledgeable (PMK) about Concert Wealth Management. According to Claimant's Exhibit 6, she is the co-Chief Executive Officer of Concert Wealth's parent company, Concert Global Group Ltd., and was the Executive Vice President of Concert Wealth Management. She holds an Accredited Investment Fiduciary (AIF) Certification as well as a Series 65 real estate license. Her husband, Felipe Luna, was also with Concert Wealth Management. He was CEO, Chairman of the Board and Chief Investment Officer of its parent, Concert Global Group, Ltd, and has Series 3, 7, 8, 63 and 65 licenses. Mr. White also has a Series 7 and 63 licenses. Concert was required to maintain its compliance policies and procedures, and records of its compliance. While Concert was required to produce its compliance policies in this case, Concert failed to produce its compliance policies and failed to produce evidence of its ongoing compliance efforts and obligations. Concert admitted that it failed to search its computer servers for the compliance policies and procedures. Concert did prepare a brochure for investors which indicated that it would prepare an investment plan for all investors. Although requested in discovery, no investment plan for Mr. Morey was produced. Ms. Luna testified she did not know how compliance was tracked, and did not know what topics were covered in its compliance policies and procedures. She does not know what its policy was regarding prudent account portfolio management in the 2011 to 2017 timeframe, and does not know if its compliance policies discussed IAR responsibilities relative to asset allocation strategies. Concert has no record of Mr. White's compliance or non-compliance with Concert's policies and procedures, and Concert does not know if Mr. White complied with its policies and procedures. Mr. White could not recall if he ever saw or received Concert's compliance policies, and admitted that he had never seen a compliance policy statement that had been prepared by Concert. Ms. Luna admitted that Concert had a fiduciary duty to Mr. Morey and also had a duty to supervise Mr. White, although at the arbitration hearing she testified that she didn't know if Concert complied with its supervisory obligation of Mr. White, perhaps because she has never seen any documents indicating that Mr. White was supervised nor did she know if any records indicating Concert did actually supervise him. In September 2011, Mr. Morey entered into an Investment Advisory Service Agreement (the "IASA") with Concert (which is referred to as "Advisor" therein). The IASA names Mr. White as Mr. Morey's IAR. Concert and Mr. White agreed in the IASA to provide Mr. Morey with investment advisory services in exchange for a fee for those services. The IASA was signed by Mr. Morey, Mr. White, and Mr. Luna on behalf of Concert. Mr. White did not review the IASA with Mr. Morey before he signed it. Section 2 of the Investment Advisory Services Agreement expressly states: "Client hereby appoints to Advisor unlimited and unrestricted discretionary authority to invest and reinvest, direct and manage the assets held in the Account(s) at Client's sole risk. Advisor is not required to notify Client prior to any transaction, and normally will not do so...." Section 5 requires Concert to provide Mr. Morey with "a report detailing the securities and cash held in the Account(s) as soon as reasonably possible after the end of each quarterly period." Section 9, entitled "Client Authority," provides in part that: Additionally, if an Account is subject to ERISA, Client represents and warrants (i) that Client is a "named fiduciary" with respect to control or management of the assets of the account; (ii) that Client agrees to obtain and maintain a bond, satisfying the requirements of Section 412 of ERISA and to include Advisor and its agents among those insured under that bond; and (iii) Client represents that Advisor's investment strategy is appropriate for the Account's assets. Id. Neither Mr. White nor Concert provided written acknowledgment that they were fiduciaries of the 401K Plan, and Mr. Morey did not obtain a bond. In October 2011, the account assets of the 401K Plan were transferred by Mr. White from UBS to a new account at Schwab managed by Concert and Mr. White. The Schwab account was titled, "S. Morey TT, Steve Morey a Sole Proprietor dba Morey Transportation 401K Plan." Mr. Morey received monthly statements from Schwab while his account was managed by Mr. White at Concert. Neither Mr. White nor Concert ever provided an acknowledgement that it was a fiduciary with respect to Mr. Morey's 401K Plan. By the end of October 2011, the sum of $56,260,27 was deposited into the Schwab account. Upon taking control of the 401K account at Schwab, Mr. White changed the stock Mr. Morey held at UBS and purchased stock in a handful of companies in the shale oil industry. Between August 2012 and August 2014, Mr. Morey deposited an additional $51,572 into the account for a total of $ 106,716 deposited into the account. By June 2014, Mr. White consolidated Mr. Morey into three shale oil companies: Halcon Resources, Kodiak Oil and Sandridge Energy. At that time, the account had a value of $ 166,327.95. By January 2015, the value of Mr. Morey's account had fallen to $42,323.25. Mr. White concentrated Mr. Morey into two oil companies, Halcon and Whiting Petroleum, which had acquired Kodiak Oil. By August 2015, the value of Mr. Morey's account had fallen to $30,409.90. Mr. White then sold Mr. Morey's shares in Whiting Petroleum and purchased more shares of Halcon, leaving Mr. Morey invested in just one stock, Halcon. Mr. Morey spoke to Mr. White several times during the period of declining value and expressed concern over the performance of the account. In response to Mr. Morey's concerns, Mr. White told Morey words to the effect: "hang in there, I know what I'm doing," "you haul rocks and this is what I do....," "sit tight...you are invested for the long term," "the price of oil will recover" and that "what goes down must come back up." Mr. White believed the price of oil would recover, and Mr. Morey trusted Mr. White's judgment. Mr. White admitted that Mr. Morey's account was not allocated or diversified, and admitted that he did not prepare a written asset allocation strategy for Mr. Morey. While Concert's person most knowledgeable, Elizabeth Luna ("Ms. Luna"), testified that it was Concert's policy to prepare Investment Policy Statements for its clients, an investment policy statement was never developed or prepared for Mr. Morey by Concert. A written investment or allocation strategy likewise was never developed nor prepared for Mr. Morey. Mr. White admitted that he did not manage Mr. Morey's account consistent with the principles of Modern Portfolio Theory. Between September 2011 and May 2016, Concert never met with Mr. White or Mr. Morey to review Mr. Morey's account, and Concert never spoke to Mr. White regarding Mr. Morey's account. While Concert acknowledged that it had a duty to supervise Mr. White's activities, Concert (through its personal most knowledgeable) does not know if it complied with its supervisory obligations with respect to Mr. White, and has no record of any supervision of Mr. White nor any record of any review of Mr. Morey's account with Concert. Mr. White admitted that no one at Concert oversaw his compliance with applicable securities laws and regulations, and that he did not receive supervision from any Concert Wealth Management representative with respect to any of his accounts. By May 2016, the value of Mr. Morey's account had fallen to $3,090.05. In May 2016, Mr. White met with Mr. Morey at a restaurant in Menlo Park and told Mr. Morey that Halcon had filed bankruptcy and that Mr. Morey had lost everything. On June 28, 2017, Mr. White received a 45-day notice of termination from Concert. Mr. White testified that it was clear the firm was not doing well and would probably be closing. On June 21, 2018, Mr. Morey filed with JAMS a Demand for Arbitration against Felipe Luna and Elizabeth Luna dba Concert Wealth Management, Inc. (i.e., Concert) and Mr. White (the "Demand"). The Demand asserts claims for professional negligence and breach of fiduciary duties, and is based upon the allegations that "no reasonable professional investment advisor would consolidate 100% of a client's investments into a single stock in an industry spiraling downward," and that "as a direct result of the gross mismanagement of Mr. Morey's investments - and specifically the failure to reasonably diversify Mr. Morey's investments - Mr. Morey has been damaged in an amount between approximately $ 112,766.40 to $ 162,107.50, not including his recoverable attorneys'ees and costs." Mr. Morey's Demand and arbitration brief, liberally construed, assert claims for breach of fiduciary duties (under both California law and ERISA), negligence, negligence per se, and violation of the Investment Advisors Act of 1940. At the arbitration hearing, Mr. Morey's standard of care expert, Thomas Taliaferro, testified that the damage to Mr. Morey's account was "total and permanent" by May 2016. Patricia Koetting was Mr. Morey's damages expert. Based on her review of Mr. Morey's Schwab account and information provided by Mr. Taliaferro comprising benchmark portfolios under a 60'/o equity and 40'/o fixed income allocation and a 70'/o equity and 30'/o fixed income allocation, Ms. Koetting calculated Mr. Morey's damages. Her testimony and opinions were uncontroverted: Scenario 1: Claimant's out of pocket loss as of June 30, 2017 was $103,642. Adding interest at legal rate of 10'/o for the period of June 30, 2017 through January 28, 2021, Claimant's economic losses total $ 140,783. Scenario 2: If Claimant's account had been prudently managed under a 60/40 allocation, the value of his account as of June 30, 2017 would have been $149,689. Adding interest at the legal rate of 10'/o for the period of June 30, 2017 through January 28, 2021, Claimant's economic losses total $203,331. Scenario 3: If Claimant's account had been prudently managed under a 70/30 allocation, the value of his account as of June 30, 2017 would have been $ 155,984. Adding interest at the legal rate of 10'/o for the period of June 30, 2017 through January 28, 2021, Claimant's economic losses total $211,882. On October 13, 2020, the Arbitrator issued an order, stipulated to by the parties, stating that it "is the understanding of the Arbitrator and the Parties that Judge Manoukian's order compelling arbitration found that Concert Wealth Management/ Encompass Go, Concert Global Group/Omni Global Group and Felipe Luna (Concert Defendants) are the alter egos of one another for purposes of this arbitration and therefore subject to alter ego liability in the event of a finding of liability against Concert Wealth Management in the arbitration." Discussion I. ERISA Preemption Concert Respondents contend that ERISA preempts any state law claims relating to fiduciary duties of an ERISA account. Mr. Morey's opening and closing briefs do not address ERISA preemption. ERISA's express preemption provision, 29 U.S.C. I) 1144(a), provides that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title" except for laws regulating insurance." "ERISA's preemption clause is one of the broadest ever enacted by Congress, and it preempts even generally applicable laws, not just laws aimed exclusively at employee benefit plans." Gen. Am. Life /ns. Co. v. Castonguay(9th Cir. 1993) 984 F.2d 1518, 1521 (internal citations omitted). "The pre-emption provision was intended to displace all state laws that fall within its sphere, even including state laws that are consistent with ERISA's substantive requirements." Metropolitan Life /ns. Co. v. Massachusetts (1985) 471 U.S. 724, 739. 'n employee benefit plan includes "any plan ... established or maintained by an employer ... to the extent that by its express terms or as a result of surrounding circumstances such plan ... (i) provides retirement income to eniployees, or (ii) results in a deferral of income by employees for periods extending to the termination of covered employment or beyond ..." 29 U.S.C. f 1002(2). The 40)K Plan at issue in the arbitration falls within the scope of 29 U.S.C. f 1002(2), and thus is governed by ERISA. Claimant does not argue to the contrary. "lf a state law 'relate[s] to ... employee benefit plan[s],'t is pre-empted." Pilot Life Ins. Co. v. Dedeaux (1987) 481 U.S. 41, 45. The pre-emption clause "is not limited to state laws specifically designed to affect employee benefit plans," and extends to common law claims (e.g., state tort and contract claims) that relate to ERISA plans. Id. at 47-48. A law "relates" to an employee benefit plan "if it has a connection with or reference to such a plan." Shaw v. Delta Air Lines, Inc. (1983) 463 U.S. 85, 97. The Ninth Circuit employs a "relationship test" in analyzing "connection with" preemption, "under which a state law claim is preempted when the claim bears on an ERISA- regulated relationship, e.g., the relationship between plan and plan member, between plan and employer, between employer and employee." Paulsen v. CNF Inc. (9th Cir. 2009) 559 F.3d 1061, 1082. "Because of ERISA's explicit language, and because state laws regulating these relationships (or the obligations flowing from these relationships) are particularly likely to interfere with ERISA's scheme, these laws are presumptively preempted." Gen. Am. Life, 984 F.2d at 521 (internal citation omitted). Mr. Morey's state law claims against Concert for breach of fiduciary duty and negligence bear upon an ERISA regulated-relationship, i.e., the relationship between the Plan and its fiduciary. See 29 U.S.C. H 1104 (fiduciary duties of a Plan fiduciary) and 1109 (liability for breach of fiduciary duties). The common law claims are based upon the misconduct of a Plan fiduciary in managing and investing the funds of the Plan. Because ERISA regulates the relationship between the Plan and a Plan fiduciary, Mr. Morey's state law claims have a connection to an ERISA plan, and are therefore preempted by ERISA. However, Mr. Morey's claim for violation of the Investment Advisors Act of 1940, 15 U.S.C. 5 80b-3, is not preempted. 29 U.S.C. 5 1144(d) provides that ERISA shall not be construed "to alter, amend, modify, invalidate, impair, or supersede any law of the United States (except as provided in sections 1031 and 1137(b) of this title) or any rule or regulation issued under any such law." To the extent that Mr. Morey has a claims for violation of the Investment Advisors Act of 1940, it is not barred by ERISA. II. Mr. Morey's Breach of Fiduciary Duty Cause of Action Mr. Morey contends that Concert and Mr. White are fiduciaries to the Plan, that they breached their fiduciary duties to the Plan and that the breaches of fiduciary caused Mr. Morey economic loss and emotional distress damages. These are ERISA claims. Concert Respondents contend that because they were never "investment managers under ERISA", they are not liable under ERISA for Mr. Morey's losses. "Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate..." 29 U.S.C.[I 1109(a). A. Fiduciaries under ERISA Mr. Morey contends that Concert and Mr. White owed fiduciary duties to Mr. Morey as a matter of law. In addition, Mr. Morey contends that Concert and Mr. White had unrestricted discretionary control over Mr. Morey's plan account and were compensated for their services. 29 USC 5 1002(21)(A) provides in pertinent part that: (A) person is a fiduciary with respect to a plan to the extent (i) he exercises anv discretionarv authoritv or discretionarv control resoectina manaaement of such alan or exercises anv authoritv or control resoectina manaaement or disoosition of its assets, (ii) he renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or (iii) he has any discretionary authority or discretionary responsibility in the administration of such plan. Such term includes any person designated under section 1105(c)(1)(B) of this title. "To help fulfill ERISA's broadly protective purposes, Congress commodiously imposed fiduciary standards on persons whose actions affect the amount of benefits retirement plan participants will receive." John Hancock Mut. Life ins. Co. v. Harris Tr. 8 Sav. Bank (1993) 510 U.S. 86, 96. "Under traditional trust law, although a beneficiary could obtain damages from third persons for knowing participation in a trustee's breach of fiduciary duties, only the trustee had fiduciary duties." Mertens v. Hewiff Assocs. (1993) 508 U.S. 248, 262. "ERISA, however, defines 'fiduciary'ot in terms of formal trusteeship, but in functional terms of control and authority over the plan, see 29 U.S.C. g 1002(21)(A), thus expanding the universe of persons subject to fiduciary duties-and to damages-under [g 29 U.S.C. g 1109(a)]." id. It "makes no distinction between named and unnamed fiduciaries." Gianton ex rei. ALCOA Pres. Drug Plan v. AdvancePCS inc. (9th Cir. 2006) 465 F.3d 1123, 1124. In reference to ERISA 3(21)(A)/29 U.S.C. g 1002(21)(A)(i), the same portion of the statute relied upon by Mr. Morey, one court stated that "[t]he plain language of the statute establishes that it imposes fiduciary duties not only on those entities that exercise discretionary control over the disposition of plan assets, but also imposes such duties on entities or companies that exercise 'any authority or control'ver the covered assets." Briscoe v. Fine (9th Cir. 2006) 444 F.3d 478, 490-91. (emphasis in original). In Cox v. Eichier (N.D. Cal. 1990) 765 F. Supp. 601, an action by ERISA plan trustees against a securities dealer and its account executive, the court noted that it was not disputed by the parties that the defendants were retained by the trustees not only to advise the plan concerning investments, but also to manage the plans'ssets, and that they were given discretionary authority to make investments on behalf of the plans subject to the conservative investment objectives and requirements set forth by the trustees. The court therefore found that the defendants "fell squarely within the definition of an ERISA fiduciary under section 1002(21)(A)." Cox, 765 F.Supp. at 606. Under the IASA, Concert (as "Advisor"), and Mr. White as Concert's agent and Mr. Morey's IAR, were given "unlimited and unrestricted discretionary authority to invest and reinvest, direct and manage the assets held in the Account(s) at Client's sole risk," and they were "not required to notify Client prior to any transaction, and normally will not do so." The evidence presented further reflects that between October 2001 and May 2016, Mr. White divested Mr. Morey of the stocks he held prior contracting with Concert, purchased stocks in a few shale oil companies, further consolidated Mr. Morey's interest in the shale oil industry, and ultimately left Mr. Morey and the Plan with one stock, in the shale oil industry. Based upon this evidence, Concert, through Mr. White, exercised their discretionary authority and control respecting management or disposition of the Plan's assets, i.e., the stocks held in the Plan's 401k account. Concert Respondents do not dispute the foregoing. Consistent therewith, under section 1002(21)(A)(i), Concert is an ERISA fiduciary. 1. Concert's "Investment Managers" Argument Respondents contend that under the terms of the Plan and ERISA, the trustee of the Plan (Mr. Morey) bore responsibility to manage and control Plan assets. Respondents argue that under ERISA, the only method for a plan trustee to delegate the trustee's responsibility to manage and control plan assets is to appoint an investment manager (citing 29 U.S.C. g 1105(c)(3), and an essential step in the appointment of an investment manager is that person's written acknowledgement that he or she is a fiduciary with respect to the Plan (citing 29 U.S.C. 5 1002(38)(C)). Respondents conclude that because Mr. Morey never obtained a writing from Respondents wherein Respondents acknowledged they were fiduciaries with respect to the Plan, Respondents were never "investment managers" under ERISA and, for that reason, Respondents are not liable under ERISA for Mr. Morey's losses. "Every employee benefit plan shall be established and maintained pursuant to a written instrument[, and] such instrument shall provide for one or more named fiduciaries who jointly or severally shall have authority to control and manage the operation and administration of the plan." 29 U.S.C. 5 1102(a)(1). "For purposes of this subchapter, the term 'named fiduciary'eans a fiduciary who is named in the plan instrument, or who, pursuant to a procedure specified in the plan, is identified as a fiduciary (A) by a person who is an employer or employee organization with respect to the plan or (B) by such an employer and such an employee organization acting jointly." 29 U.S.C. g 1102(a)(2). "Any employee benefit plan may provide... (3) that a person who is a named fiduciary with respect to control or management of the assets of the plan may appoint an investment manager or managers to manage (including the power to acquire and dispose of) any assets of a plan." 29 U.S.C. 5 1102(c)(3). 10 With certain exceptions not applicable here, "all assets of an employee benefit plan shall be held in trust by one or more trustees." 29 U.S.C. g 1103(a). 29 U.S.C. 5 1103(a) further provides that: Such trustee or trustees shall be either named in the trust instrument or in the plan instrument described in section 1102(a) of this title or appointed by a person who is a named fiduciary, and upon acceptance of being named or appointed, the trustee or trustees shall have exclusive authority and discretion to manage and control the assets of the plan, except to the extent that- (2) authority to manage, acquire, or dispose of assets of the plan is delegated to one or more investment managers pursuant to section 1102(c)(3) of this title. The term "investment manager" means any fiduciary (other than a trustee or named fiduciary, as defined in section 1102(a)(2) of this title)- (A) who has the power to manage, acquire, or dispose of any asset of a plan; (B) who (i) is registered as an investment adviser under the Investment Advisers Act of 1940; (ii) is not registered as an investment adviser under such Act by reason of paragraph (1) of section 203A(a) of such Act, is registered as an investment adviser under the laws of the State (referred to in such paragraph (1)) in which it maintains its principal office and place of business, and, at the time the fiduciary last filed the registration form most recently filed by the fiduciary with such State in order to maintain the fiduciary's registration under the laws of such State, also filed a copy of such form with the Secretary; (iii) is a bank, as defined in that Act; or (iv) is an insurance company qualified to perform services described in subparagraph (A) under the laws of more than one State; and (C) has acknowledged in writing that he is a fiduciary with respect to the plan. (emphasis added) 29 U.S.C. g 1105(c) provides that: (1) The instrument under which a plan is maintained may expressly provide for procedures (A) for allocating fiduciary responsibilities (other than trustee responsibilities) among named fiduciaries, and (B) for named fiduciaries to designate persons other than named fiduciaries to carry out fiduciary responsibilities (other than trustee responsibilities) under the plan. (2) If a plan expressly provides for a procedure described in paragraph (1), and pursuant to such procedure any fiduciary responsibility of a named fiduciary is allocated to any person, or a person is designated to carry out any such responsibility, then such named fiduciary shall not be liable for an act or omission of such person in carrying out such responsibility... 11 (3) For purposes of this subsection, the term "trustee responsibility" means any responsibility provided in the plan's trust instrument (if any) to manage or control the assets of the plan, other than a power under the trust instrument of a named fiduciary to appoint an investment manager in accordance with section 1102(c)(3) of this title. Under ERISA, "plan trustees bear the responsibility to 'manage and control'lan assets," and "the only method for a plan trustee to delegate the 'trustee responsibility'o manage and control plan assets is to appoint an 'investment manager.'" Schetter v. Prudential-Bache Sec. inc. (E.D. Cal. 1988) 695 F. Supp. 1077, 1082. "An essential step to the appointment of an 'investment manager's that person's written acknowledgment that he or she is a fiduciary with respect to the plan." Schetter, 695 F. Supp. at 1082-83. "If an investment manager or managers have been appointed under section 1102(c)(3) of this title, then, notwithstanding subsections (a)(2) and (3) and subsection (b), no trustee shall be liable for the acts or omissions of such investment manager or managers, or be under an obligation to invest or otherwise manage any asset of the plan which is subject to the management of such investment manager." 29 U.S.C. 5 1105(d). In Procacci v. Drexel Burnham Lambert, inc., (E.D. Pa. Oct. 16, 1989) No. CIV. A. 89-0555, 1989 WL 121984, the plaintiffs, trustees of a pension plan, alleged that defendants Drexel Burnham Lambert, Inc. and Anthony Tedeschi failed to administer the plan properly in that they entered into high risk investments in contravention of the Plan's goals of conservative, low risk investments, and included a claim for violation of ERISA. The defendants moved to dismiss the ERISA claim, arguing that that they had no authority to manage or control Plan assets and therefore were not fiduciaries with respect to the Plan because the plaintiffs failed to properly delegate their exclusive authority over the plan assets in the manner ERISA requires (i.e., the complaint did not allege that defendants acknowledged their fiduciary status in writing pursuant to section 1002(38)). The defendants argued that because the plaintiffs never properly delegated their exclusive fiduciary responsibilities, the plaintiffs never relinquished their exclusive control and authority over the Plan assets and the defendants had no authority with respect to the Plan assets, and could not be subject to ERISA liability for their alleged mismanagement of the Plan. Id. at *3-*4. The District Court rejected the defendants'rgument, stating as follows: In my view, defendants'osition is premised on a fundamental misconception of the interrelationship between "investment manager" status, "fiduciary" status and ERISA liability. The purpose of section 1002(38), which permits delegation of trustee authority to investment managers, is to allow the named trustees to insulate themselves from ERISA liability for the acts of the investment manager, not to protect fiduciaries from liability for their own misconduct. See 29 U.S.C. i) 1105(d)(1). Therefore, the lack of a proper delegation under section 1002(38), while it may leave the trustee open to ERISA liability, does not insulate the investment manager from ERISA liability. 12 Procacci at 4. The court further stated that: Taken as a whole, the ERISA provisions dealing with fiduciaries and fiduciary responsibilities and the accompanying legislative history demonstrate that it is fiduciary status, rather than "investment manager" status which subjects a party to ERISA liability. The plain language of section 1002(21)(A) specifically contemplates extension of the fiduciary label and responsibility to investment advisers. Whether a fiduciary is also an investment manager is wholly immaterial to the issue of fiduciary liability under ERISA. Defendants'ontention that ERISA liability extends to brokers and investment counselors only when a written acknowledgement of fiduciary status is executed would circumvent the language of section 1002(21)(A). In such a case, ERISA liability would not turn on whether a broker took discretionary control or rendered investment advice for a fee, but rather would depend upon the existence of a writing acknowledging such status. Such a conclusion is contrary to both the language of the statute and its legislative history. Procacci at *5 (emphasis in original); see also /obeyer v. Berkshire Life ins. Co., 250 (D. Md. 2003) F. Supp. 2d 544, 561 n.25, aff'd, 372 F.3d 261 (4th Cir. 2004) (citing Procacci as "explaining that the 'purpose of [29 U.S.C. g ] 1002(38), which permits delegation of trustee authority to investment managers, is to allow the named trustees to insulate themselves from ERISA liability for the acts of the investment manager, not to protect fiduciaries from liability for their own misconduct'"). The Procacci court concluded that the complaint's allegations that the defendants exercised discretion and control over the Plan and rendered advice to the Plan for compensation were sufficient to alleged that the defendants were ERISA fiduciaries. Id. at *6. In Schiffli Embroidery Workers Pension Fund v. Ryan, Beck 8 Co., (D.N.J. Sept. 25, 1992) No. CIV. A. 91-5433, 1992 WL 249880, the plaintiff, a pension fund, brought an action against a securities broker and its former employee who acted as broker and investment advisor for Schiffli, managing a portion of its pension funds. The plaintiff alleged that the defendants, in accepting the responsibilities of investment manager of the fund, assumed fiduciary duties to the pension assets they managed and were liable under ERISA for failing prudently to invest and diversify them. On a motion to dismiss, the court found that "because it is undisputed that defendants have not 'acknowledged in writing'hat they are Schiffli's fiduciaries, they are not 'investment managers'nder ERISA." ld. at *5. The court, however, further stated as follows: This conclusion, however, does not foreclose plaintiff's ERISA claim. The category of those with fiduciary duties toward ERISA pension plans is wider than the category of investment managers, as the wording of 29 U.S.C. g 1002(38) itself suggests. ERISA states that, in addition to those exercising discretionary control respecting the management of plan assets or in the management of a plan, anyone is a fiduciary with respect to a plan "to the extent ... he renders investment advice for a fee or other compensation, direct or indirect, with respect 13 to any moneys or other property of such plan, or has any authority or responsibility to do so." 29 U.S.C. g 1002(21)(A). Thus, defendants may be liable for breaches of fiduciary duty involved in the rendering of advice for a fee, even if they have not met the requirements of an "investment manager" under ERISA. Schiffli at *6; see also 175 A.L.R. Fed. 129 citing Procacci and Schiffii as cases finding that "persons or entities with responsibility for management of ERISA plan assets or investments may be considered a fiduciary under g 1002(21)(A) notwithstanding their failure to fall within the definition of an "investment manager" contained in 29 U.S.C. 5 1002(38)." In the present case, Mr. Morey never obtained a writing from Concert or Mr. White in which they acknowledged that they were fiduciaries with respect to the Plan. As a result, Respondents were never "investment managers" under ERISA. However, for the reasons noted in the cases cited above, the fact that Concert Respondents were never investment managers under ERISA does not mean that Respondents are not liable under ERISA for Mr. Morey's losses. The question is instead whether Concert Respondents are "fiduciaries" under ERISA. For the reasons noted above, because Concert, through Mr. White, exercised discretion and control over the plan assets, the Concert Respondents are fiduciaries under ERISA, and thereby may be held liable under ERISA for breach of their fiduciary obligations. B. Breach Mr. Morey contends that Concert and Mr. White breached their fiduciary duties to Mr. Morey by: (1) failing to prepare an Investment Policy Statement and failing to review any such statement; (2) failing to prepare periodic performance reports; and (3) failing to diversify the 401K account. 29 U.S.C. g 1104(a)(1)(A) provides in relevant part that a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and- (A) for the exclusive purpose of: (i) providing benefits to participants and their beneficiaries; and (ii) defraying reasonable expenses of administering the plan; (B) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; (C) by diversifying the investments of the plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and 14 (D) in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this subchapter and subchapter III. "Fiduciary duties imposed by ERISA include 'proper management, administration, and investment of fund assets, the maintenance of proper records, the disclosure of specified information, and the avoidance of conflicts of interest.'" Ehlen Floor Covering, inc. v. Lamb (11th Cir. 2011) 660 F.3d 1283, 1287 (citing Massachusetts Muf. Life lns. Co. v. Russell (1985) 473 U.S. 134, 142-3. Section 1104(a)(1)(B) "imposes a 'prudent person'tandard by which to measure fiduciaries'vestment decisions and disposition of assets." Fifth Third Bancorp v. Dudenhoeffer (2014) 573 U.S. 409, 419. "It is not enough to show that a fiduciary's investment decisions turned out badly; to prevail, a plaintiff must show that those decisions were objectively imprudent at the time they were made." Gedek v. Perez (W.D.N.Y. 2014) 66 F.Supp.3d 368, 374. Consistent with the foregoing, Concert owed the Plan fiduciary duties to (1) act with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would; (2) maintain proper records and properly manage the Plan's investment, and (3) diversify the investments of the Plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so. The evidence presented at the hearing established that Concert, acting through Mr. White, breached its fiduciary obligations to the Plan. While Concert was required to diversify the Plan's investments, Concert did not do so, and instead consolidated the Plan's investments in a single stock. No facts or circumstances were presented that that would have excused the failure to diversify the account. The record further established that Concert breached its fiduciary duties to properly manage the account and maintain appropriate records. While Concert was required to develop and prepare an Investment Policy Statement for Mr. Morey (and review same with Mr. Morey), Concert failed to do so. In sum, Concert breached its fiduciary obligations to the Plan, and these breaches caused damage to Mr. Morey. In light of the parties'tipulation and order, Concert Wealth Management/ Encompass Go, Concert Global Group/Omni Global Group and Felipe Luna (collectively, the Concert Respondents) are the alter egos of one another for purposes of this arbitration and therefore subject to alter ego liability in light of the foregoing finding of Concert's breach of fiduciary duty under ERISA. C. Damaaes and Preludament Interest Mr. Morey contends that he has suffered economic losses in the amount of $149,689, and is entitled to 10% interest on this sum from June 30, 2017 through January 28, 2021, for a total $203,331. Mr. Morey further contends that Concert's conduct caused stress in Mr. Morey's marriage resulting in emotional distress to Mr. Morey, and that Mr. Morey is entitled to non-economic damages for emotional distress 15 at a rate of $35 per day from May 20, 2016 through January 29, 2021 or $60,025 [$35 per day X 1715 days = $60,025], plus prejudgment interest from January 28, 2021. 29 U.S.C. IJ 1132(a) provides in part that a civil action may be brought "(2) by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under section 1109 of this title;" and "(3) by a participant, beneficiary, or fiduciary... (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan." "A fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter shall be personally liable to make good to such plan any losses to the plan resulting from each such breach,... and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary." 29 U.S.C. 5 1109(a)(emphasis added). "'Losses to the plan'n rJ 1109 [should be construed] broadly in order to further the remedial purposes of ERISA." Roth v. Sawyer- Cleator Lumber Co. (8th Cir.1995) 61 F.3d 599, 604 ((citations omitted). While restitution is available under section 1109(a), there is no basis for recovery of compensatory or punitive damages. Massachusetts Mul. Life lns. Co. v. Russell (1985) 473 US 134, 144. Losses are measured by the difference in how the plan in question performed and how the plan would have performed had it been invested like "other funds being invested during the same period in proper transactions." Donovan v. Bierwirth (2d Cir.1985) 754 F.2d 1049, 1056. "Where several alternative investment strategies were equally plausible, the court should presume that the funds would have been used in the most profitable of these" and "[t]he burden of proving that the funds would have earned less than that amount is on the fiduciaries found to be in breach of their duty." ld. In calculating damages caused by a breach, the district court should presume that "but for the breach, the Fund would have earned even more than it actually earned, [and that] there is a 'loss'or which the breaching fiduciary is liable." Dardaganis v. Grace Capital inc. (2d Cir.1989) 889 F.2d 1237, 1243. Any "uncertainties in fixing damages will generally be resolved against the wrongdoer." ld. at 1233. Consistent with the foregoing authority, Mr. Morey is not entitled to recover emotional distress damages. Nonetheless, as a result of Concert's breach of fiduciary duty, Mr. Morey lost most of the 401k investment. The evidence established that the Plan's out of pocket loss as a result of Concert's failure to diversify the Plan account and Concert's other breaches of fiduciary duty was $ 103,642. Mr. Morey offered evidence that if Mr. Morey's account had been prudently managed under a 60 equity and 40 percent fixed income allocation, the value of his account as of June 30, 2017 (the day that Concert terminated Mr. White) would have been $149,689. Concert makes no argument as to the value would have been less if the account had been prudently managed. Based upon the evidence presented, the Arbitrator finds that the Plan's losses resulting from Concert's breaches of fiduciary duty are $ 149,689. With respect to Claimant's claim for prejudgment interest, "although ERISA does not mandate the award of prejudgment interest to prevailing plan participants," courts 16 "have long recognized that the district court may do so at its discretion in accordance with general equitable principles." Ford v. Uniroyal Pension Plan (6th Cir. 1998) 154 F.3d 613, 616; see a/so Blankenship v. Liberty Life Assur. Co. of Boston (9th Cir. 2007) 486 F.3d 620, 627. "The interest rate prescribed for post-judgment interest under 28 U.S.C. 5 1961 is appropriate for fixing the rate of pre-judgment interest unless the trial judge finds, on substantial evidence, that the equities of that particular case require a different rate." Grosz-Salomon v. Paul Revere Life lns. Co. (9th Cir. 2001) 237 F.3d 1154, 1164. Havinq considered the equities of the arbitration, the Arbitrator concludes that pre-judgment interest is necessary to fully compensate Claimant. The Arbitrator finds +tat the 10% interest rate requested by Claimant, and not objected to by Concert, is appropriate given the equities of the present case, and the period for which preludgment interest is requested (June 30, 2017 to January 28, 2021) is appropriate. Claimant ,therefore is entitled to 10% interest on $ 149,689 for the period June 30, 2017 through January 28, 20K, for a total $20%331. IV. Respondents'equest for Correction of the Interim Award Respondents have filed a request for correction of the Interim Award. The Arbitrator intended the Interim Award, with limited exceptions noted below, to be fully and finally binding on the parties. The Interim Award does not permit the parties to reargue evidentiary and legal issues decided in the Interim Award, and, with the exception of attorneys'ees and costs, does not permit the parties to raise new arguments that could have been made prior to the issuance of the Interim Award. While the Interim Award does not state that it is subject to a motion for reconsideration or "correction," it was the Arbitrator's intent that the Interim Award be subject to modification: (1) pursuant to a motion for reconsideration; and (2) pursuant to a request to correct a clerical error in the Interim Award. Cal. Civ. Proc. Code section 1008(a), while not binding on the Arbitrator, provides a useful guideline in ruling on Conceit Respondents'equest for correction of the Interim Award. Section 1008(a) provides that a party seeking reconsideration of an order may,... based upon new or different facts, circumstances, or law, make application to the same judge... that made the order, to reconsider the matter and modify, amend, or revoke the prior order." The intent of the statute was "to restrict motions to reconsider to circumstances where a party offers the court some fact or authority that was not previously considered by it." Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1500. The fact that a litigant disagrees with the ruling at issue is insufficient to support a motion for reconsideration. Id. "The burden under section 1008 is comparable to that of a party seeking a new trial on the ground of newly discovered evidence: the information must be such that the moving party could not, with reasonable diligence, have discovered or produced it at the trial." New York Times Co. v. Superior Court (2005) 135 Cal.App.4th 206, 212-213 (citation omitted). 17 Each of the arguments raised in the request for correction were not raised by Concert Respondents at the arbitration hearing, in their closing brief, or prior to issuance of the Interim Award, and Concert Respondents do not offer any argument as to why the arguments were not raised prior to issuance of the Interim Award. The Arbitrator will, nonetheless, address the merits of the new arguments, below. A. Comparable Fault Concert Respondents'irst argument is that Mr. Morey's comparable fault was not considered by the Interim Award. The comparative fault doctrine "is designed to permit the trier of fact to consider all relevant criteria in apportioning liability," and "evaluate the relative responsibility of various parties for an injury (whether their responsibility for the injury rests on negligence, strict liability, or other theories of responsibility), in order to arrive at an 'equitable apportionment or allocation of loss.'" Pfeifer v. John Crane, Inc. (2013) 220 Cal.App.4th 1270, 1285 (citations omitted). "The defendant bears the burden of establishing that some nonzero percentage of fault is properly attributable to other entities." Soto v. BorgWarner Morse TEC Inc. (2015) 239 Cal.App.4th 165, 202 (citation omitted). Where the defendant claims that the plaintiff's own negligence contributed to the plaintiff's harm, the defendant must prove both of the following: (1) the plaintiff was negligent; and (2) the plaintiff's negligence was a substantial factor in causing the plaintiff's harm. Judicial Council Of California Civil Jury Instruction 405. Concert Respondents failed to meet their burden of proof to establish that Mr. Morey's negligence, or that any such negligence was a substantial factor in causing Mr. Morey's harm. B. Date of Loss Concert Respondents next argue that while the Interim Award selected the date of damage as June 30, 2017, it failed to identify the date of loss. Concert Respondents contend that the date of loss was May 2016. At the arbitration hearing, Mr. Morey offered evidence regarding the date of loss from Ms. Koetting. Concert Respondents'rgument as to the calculation of Mr. Morey's damages is not persuasive, and does not provide a basis to change the Interim Award. C. Amount of Damaaes No Readilv Ascertainable and 10% Preiudqment Interest Finally, Concert Respondents'equest for correction argues that: (1) no prejudgment interest should be awarded because the amount of damages was not certain and not readily ascertainable; (2) if the Final Award includes prejudgment interest, it should not be at ten percent, and instead should be set at 1% or less. Concert Respondents assert that Mr. Morey first suggested a 10% prejudgment interest 18 rate in his closing brief, and Concert Respondents "have not had an opportunity to object before now." At the arbitration hearing, Ms. Koetting offered testimony regarding the appropriate interest rate for Mr. Morey's prejudgment interest request, and offered calculations of Mr. Morey's damages (which included prejudgment interest) using the 10% figure. The Arbitrator is satisfied, based upon the evidence presented, that the equities of this arbitration justify the 10% rate and the award of prejudgment interest. Consistent with the foregoing, Concert Respondents'equest to correct the Interim Award is DENIED. V. Mr. Morey's Investment Adviser's Act Cause of Action Mr. Morey's proposed findings of fact and conclusions of law assert a negligence per se cause of action which, in order to establish a duty of care, borrows a registered investment advisors duty to supervise all persons acting on his behalf under the Investment Advisors Act of 1940. Even assuming, that in light of ERISA preemption, Mr. Morey is asserting a cause of action under the Investment Advisors Act of 1940, the claim nonetheless fails. "[T]here exists a limited private remedy under the Investment Advisers Act of 1940 to void an investment advisers contract, but that the Act confers no other private causes of action, legal or equitable." Transamerica Mortg. Advisors, inc, v. Lewis (1979) 444 U.S. 11, 24. Mr. Morey does not seek to void the IASA, and is otherwise not entitled to a private cause of action, legal or equitable, for violation of the Investment Advisers Act of 1940. Even assuming that Mr. Morey was entitled to seek restitution, any such claim would be limited to the consideration given under the contract, less any value conferred by the other party." Transamerica tviortg., 444 U.S. at 24 n. 14. Any such recovery would be less than the award to Mr. Morey pursuant to his ERISA claim (above). Consistent with the foregoing, the Arbitrator finds in favor of Concert and against Mr. Morey on his claim for violation of the Investment Advisers Act of 1940. Vl. Attorneys'ees and Costs Mr. Morey, as the prevailing party in the arbitration proceeding, seeks reimbursement of costs and attorneys'ees in accordance with paragraph 14 of the IASA. The IASA's arbitration provision provides in part that the prevailing party in an arbitration of a dispute between the parties relating to the IASA shall be entitled to "reimbursement of its costs and reasonable attorneys'ees." Consistent with the balance of this Final Award, Mr. Morey is the prevailing party in the arbitration, and is entitled to recover his costs and attorneys'ees from Concert Respondents pursuant to paragraph 14 of the IASA. Mr. Morey's motion for attorneys'ees and costs is supported by the declaration of his counsel, Mr. Simonian. The declaration sets forth: (1) his experience (/fan 1-5); (2) 19 his law firms daily billings in this matter from April 27, 2017 through April 22, 2021, which reflect total attorneys'ees in the amount of $346,782.50 ($ 6 and exhibit 2); (3) the time spent preparing the present motion, from April 22-28, 2021, in the amount of $ 13,250 (9 38 and exhibit 5); (4) the work performed by other attorneys'ees in his firm on the matter from April 2017 through July 2019 ($g 7-12); (5) his takeover of the case toward the end of July 2019, and his work on the matter thereafter ('93[13-27); (6) his hourly rates, and the hourly rates of other members of the firm who worked on the arbitration, and his views on the time expended in the matter and the hourly rates (fig 30-32); and (7) the costs advanced by his firm, totaling $54,544.07, which includes $3,000 in sanctions ordered to be paid by Concert but not paid (gg 33-39). Consistent with the foregoing, Mr. Morey's motion seeks attorneys'ees and costs in the amount of $414,576.57. Concert Respondents'pposition to the motion is not supported by a declaration or other evidence. Mr. Morey's reply requests attorneys'ees for time associated with the preparation of the reply, totaling $6,000 (12 hours x $500 per hour). As result, the total amount of attorneys'ees and costs sought by Mr. Morey is $420,576.57. A. Reasonable Attornevs'ees Mr. Morey contends that the requested attorneys'ees in the amount of $366,032.50 ($346,782.50 + $ 13,250 + $6,000) are reasonable. Mr. Morey asserts that the amount of time expended (over 800 hours) is not unreasonable, and that the hourly rates at issue are reasonable. Concert Respondents contend that the request for attorneys'ees is not reasonable, on the grounds that: (1) the hearing was two days with four witnesses and two experts; (2) only three non-expert witnesses were deposed, for four hours each; (3) it is unreasonable that Mr. Morey seeks attorneys'ees for the large number of attorneys working on the matter, which suggests inefficiencies; (4) Mr. Morey unreasonably over litigated the arbitration, which is exemplified by his discovery motions and subpoena, and the time spent on the present motion; and (5) the requested fees should be reduced to $150,000, which they contend is "a more than reasonable amount of fees to litigate and conduct a two-day arbitration." In reply, Mr. Morey contends that his attorneys'ees are in direct proportion to Concert Respondents'itigation tactics. "In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs." Civil Code g 1717(a). 20 "The trial court has broad authority to determine the amount of a reasonable fee." PLCM Group, Inc. v. Drexier (2000) 22 Cal.4th 1084, 1095. "The fee setting inquiry in California ordinarily begins with the "lodestar," i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate." PLCM Group, 22 Cal.4th at 1095. "The reasonable hourly rate is that prevailing in the community for similar work." id. The party seeking attorney's fees and costs "bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates." ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1020 (citation omitted). A court may require a defendant to produce records sufficient to provide "a proper basis for determining how much time was spent on particular claims," and "the evidence should allow the court to consider whether the case was overstaffed, how much time the attorneys spent on particular claims, and whether the hours were reasonably expended." Christian Research Inst. v. Ainor (2008) 165 Cal.App.4th 1315, 1320. "Absent circumstances rendering the award unjust, an attorney fee award should ordinarily include compensation for all the hours reasonably spent, including those relating solely to the fee." Ketchum v. Moses (2001) 24 Cal.4th 1122, 1133. Based upon the record presented, including the declaration of Mr. Simonian and the Arbitrator's knowledge and familiarity with the Bay Area legal market, the Arbitrator is satisfied that the hourly rates requested by Claimant's counsel are consistent with the prevailing rate in the community for comparable legal services by attorneys of similar skill and experience. Concert Respondents do not argue to the contrary. A review of the billing entries and declaration of Mr. Morey's counsel, however, establishes that the hours incurred by counsel are too high under the circumstances of this case. The billing records demonstrate that the final amount of hours was over 800 hours for 7 separate attorneys and a paralegal. After reviewing the bills, the Arbitrator finds that the time spent on the arbitration was excessive and should be reduced. The Arbitrator finds that Mr. Morey is entitled to recover reasonable attorneys'ees in the amount of $229,250. B. Costs Mr. Morey contended that he is entitled to reimbursement of his costs, including the costs of arbitration, under the IASA, and that his costs total $54,544.07. Mr. Simonian recently requested an additional $ 1,249.88 in JAMS arbitration fees owed by Concert which Mr. Morey paid so that his total request for costs is $55,793.95 Concert Respondents contend that: (1) recovery of arbitration fees paid by Mr. Morey on behalf of Mr. White is premature because the claims against Mr. White him are stayed and have not reached their final disposition; (2) Mr. Morey, as the prevailing party, is entitled to reimbursement of the fees advanced on behalf of Concert; (3) Mr. Morey is not entitled to recover his own arbitration costs, citing Cal. Civ. Proc. Code g 1284.2; (4) postage costs are not recoverable under Cal. Civ. Proc. Code g 1033.5(b)(3); (5) Westlaw, parking and CourtCall costs are not recoverable under Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 776; and (6) costs for the 21 Ontellus Stevens Creek BMW subpoena should be disallowed because information regarding Mr. White's finances was not necessary or relevant to the arbitration, citing Cal. Civ. Proc. Code g 1033.5(c)92); and (7) the request for $3,000,00 in sanctions is duplicative, and should be reduced by the amount previously awarded (i.e., $3,000). "The Award of the Arbitrator may allocate attorneys'ees and expenses and interest (at such rate and from such date as the Arbitrator may deem appropriate) if provided by the Parties'greement or allowed by applicable law." JAMS Rule 24(g). The parties'greement provides that the prevailing party is entitled to "reimbursement of its costs," and Mr. Morey has provided evidence of the costs it incurred in the arbitration. See Simonian Decl., $ 33. Except as noted below, Mr. Morey is entitled to reimbursement of such costs. Concert Respondents, in large part, rely upon Cal. Civ. Proc. Code H 1032 and 1033.5 to reduce the amount of costs requested by Mr. Morey. "Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding." Cal. Civ, Proc. Code g 1032(b). Cal. Civ. Proc. Code section 1033.5(a) identifies recoverable costs under section 1032, and section 1033.5(b) identifies non-recoverable costs, including postage and photocopying costs. "Allowable costs shall be reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation." Id., g 1033.5(c)(2). "Allowable costs shall be reasonable in amount." Id., g 1033.5(c)(3). "Items not mentioned in this section and items assessed upon application may be allowed or denied in the court's discretion." Id., g 1033.5(c)(4). Concert Respondents'eliance upon Cal. Civ. Proc. Code 5 1033.5 is misplaced. "The provisions of the Code of Civil Procedure for allocation of costs of suit (CCP g 1032 et seq.) do not control arbitration awards." Cal. Prac. Guide Alt. Disp. Res. Ch. 5-I, $ 5:434.1 (citing Britz, Inc. v. Alta-Laval Food & Dairy Co. (1995) 34 Cal.App.4th 1085, 1106 fn. 9 and Austin v. Allstate Ins. Co. (1993) 16 Cal.App.4th 1812, 1815); see also Pilimai v. Farmers Ins. Exch. Co. (2006) 39 Cal.4th 133, 149. Even assuming for a moment that the provisions of Cal. Civ. Proc. Code 5 1033.5(b) apply to the arbitration, the Arbitrator finds that the following costs identified by Mr. Morey were reasonably necessary to the conduct of the arbitration and are reasonable in amount, and thus recoverable by Mr. Morey from Concert Respondents pursuant to Cal. Civ. Proc. Code 5 1033.5(a) and 1033.5(c)(4): (1) Westlaw/research fees, CourtCall, copy costs, subpoena costs, Veritext, court reporting fees, delivery charges, parking fees, filing fees, process fees, and postage fees; (2) Mr. Morey's arbitration fees paid by Mr. Morey's counsel; (3) Concert's arbitration fees paid by Mr. Morey's counsel, Casas Riley Simonian LLP. In light of the foregoing, only two categories of costs remain, i.e., the arbitration fees of Mr. White that were paid by Mr. Morey, and the $3,000 in monetary sanctions awarded to Mr. Morey that have not been paid by Concert. Concert, while not disputing that Mr. Morey is entitled to the $3,000, asserts that the request for attorneys'ees needs to be reduced by the amount previously awarded. Concert's argument is not 22 persuasive. Concert has not paid the $3,000 in monetary sanctions awarded to Mr. Morey. By including the previously awarded but unpaid sanctions award in the amount of costs recoverable by Mr. Morey as the prevailing party, this order necessarily takes the place of and supersedes the prior unpaid award of sanctions. With respect to Mr. White's share of the arbitration fees ($ 14,948.67) that were paid by Mr. Morey, Mr. Morey argues that the fees are recoverable under Cal. Civ. Proc. Code H 1281.98(b)(4), Cal. Civ. Proc. Code g 1033.5(c)(4) and Labor Code tr2802 and the authority set forth in Trustee Services, Inc. v. Ridgegafe East HOA (1994) 27 Cal.App.4th 503 on the ground that Concert Wealth was legally obligated to indemnify White. Cal. Civ. Proc. Code g 1281.98 provides in pertinent part that: (a) In an employment or consumer arbitration that requires, either expressly or through application of state or federal law or the rules of the arbitration provider, that the drafting party pay certain fees and costs during the pendency of an arbitration proceeding, if the fees or costs required to continue the arbitration proceeding are not paid within 30 days after the due date, the drafting party is in material breach of the arbitration agreement, is in default of the arbitration, and waives its right to compel the employee or consumer to proceed with that arbitration as a result of the material breach. (b) If the drafting party materially breaches the arbitration agreement and is in default under subdivision (a), the employee or consumer may unilaterally elect to do any of the following: (4) Pay the drafting party's fees and proceed with the arbitration proceeding. As part of the award, the employee or consumer shall recover all arbitration fees paid on behalf of the drafting party without regard to any findings on the merits in the underlying arbitration. Because Mr. Morey's claims against Mr. White are stayed, Mr. Morey is not a prevailing party in his claims against Mr. White. The fees Mr. Morey paid on behalf of Mr. White are therefore not recoverable pursuant to the IASA or Cal. Civ. Proc. Code g 1033.5(c)(4). Mr. White is not the "drafting party" of the IASA, and thus Mr. Morey is not entitled to recover fees paid on behalf of Mr. White pursuant to Cal. Civ. Proc. Code g 1281.98(b)(4). Trustee Services, Inc. v. Ridgegate East HOA (1994) 27 Cal.App.4th 503, cited by Mr. Morey, similarly does not provide a basis for Mr. Morey to recover fees paid on behalf of Mr. White from Concert Respondents. Accordingly, Mr. Morey is not, as the prevailing party in the arbitration between Mr. Morey and Concert Respondents, entitled to recover the $14,948.67 in arbitration fees he paid on behalf of Mr. White from Concert Respondents. In addition, to conclude the Arbitration, Mr. Morey recently paid $1,249.88 in JAMS arbitration fees which was owed by Concert. In connection with that payment, on August 23, 2021, Mr. Simonian requested this amount to be added to the award. „Mr. Moray is entitled to be reimbursed by Concert Respondents for costs incurred in the amount of $40,845.28. ( $55,793.95 - $ 14,948.67). C. Conclusion Re Motion for Attornevs'ees and Costs , Mr. Moray's request to recover attorneys'ees and costs from Concert ResPondents is GRANTED in the amount of $270,095.28 including $ 1,249.88 in funds Mr. Morey recently paid for part of Concert's fees owed to JAMS for the arbitration ($229,250 + $40,845.28). Vlt. Final Arbitration Award The Arbitrator hereby enters a Final Arbitration Award in favor of Claimant Steve Moray and against Respondents Concert Wealth Management, Inc., Felipe Luna, an individual and as Trustee of the Felipe Luna and Elizabeth Luna Family Trust, and Omni Global Group, Ltd, formerly known as Concert Global Group, Ltd. in the amount of , $473,426.28 ($270,095.28 + $203,331). Dated: September 8, 2021 Hon. Catherine Gallagher (Ret.) Arbitrator 24 SERVICE LIST Case Natne Morav. Steve vs. Concert Wealth Manaaamcnt. Inc. Reference ¹: 1110022568 Hear Type: Case Type: Arbitration Business/Commercial Panelist: Gallagher, Catherine, Dclancy, George, Daniel L. Casas Casse Riley Simonian LLP Daniel L. Casas 55 N. 3rd Street Campbell, CA 95008 dcasas@legalteam.corn Party Represented: Steve Morey Claimant Phone: 650-948-7200 Fax: 650-948-7220 David Kornbluh Ventura Hersey & Muller, LLP David Kornbluh 1506 Hamilton Ave. San Jose, CA 95125 dkornbluh@venturahersey.corn Party Represented: Concert Global Group Ltd. Elizabeth Luna Felipe Luna Respondent Phone: 408-512-3022 Fax: 408-512-3023 Greaorv C. Simonian Cases Riley Simonian LLP Claimant Phone: 650-948-7200 Fax: 650-948-7220 Gregory C. Simonian 55 N. 3rd Street Campbell, CA 95008 gsimonian@legalteam.corn Assistant's Emails: coneillolegalteam.corn Party Represented: Steve Moray Patrick White Patrick White 885 Oak Grove Ave ¹208 Menlo Park, CA 94025 pwhiteomenlooakscapital.corn Party Represented: Patrick White Respondent Phone: 650-375-2636 9/2/2027 Page 2 of 2 PROOF OF SKRVICK BY K-Mail Re: Morey, Steve vs. Concert Wealth Management, Inc. Reference No. 1110022568 I, Lisa Midel, not a party to the within action, hereby declare that on September 10, 2021, I servedthe attached Final Arbitration Award on the parties in the within action by electronic mail at San Jose, CALIFORNIA, addressed as follows: Daniel L. Casas Esq. Gregory C. Simonian Esq. Casas Riley Simonian LLP 55 N. 3rd Street Campbell, CA 95008 Phone: 650-948-7200 dcasas@legalteam.corn gsimonian@legalteam.corn Parties Represented: Steve Morey Mr. Patnck Whtte 885 Oak Grove Ave. ¹208 Menlo Park, CA 94025 Phone: 650-375-2636 pwhite@menlooakscapital.corn Parties Represented: Patrick White David Kornbluh Esq. Ventura Hersey Ec Muller, LLP 1506 Hamilton Ave. San Jose, CA 95125 Phone: 408-512-3022 dkornbluh venturahersey.corn Parties Represented: Concert Global Group Ltd. Elizabeth Luna Felipe Luna I declare under penalty of perjury the foregoing to be true and correct. Executed at San Jose, CALIFORNIA on September 10, 2021. IJtsa fidel JAM'midel jamsadr.corn Au.ac zmen1. ". gtt h t 10g Attachment 10g Morey is entitled to post-arbitration, pre-judgment interest at 10N, from March 29, 2021, through Entry of Judgment at the rate of $55.71/day. $203,331 -: 365 days x 10'/o = $ 55.71/day Authoritv: Cal. Civil Code f3287; Cal. Code of Civil Procedure $685.10; Britz, Inc. v. Alfa- Iaval Food d'r Dairy (1995) 34 Cal.App.4'" 1085, 1106-1107; Pierotti v. Tartan (2000) 81 Cal. App. 4'h 17.
