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Gisela Carino v. Allstate Financial Services

April 12, 2011

GISELA CARINO, PLAINTIFF-APPELLANT,
v.
ALLSTATE FINANCIAL SERVICES, LLC, ALLSTATE FINANCIAL CORP., ALLSTATE INS. CO. OF NEW JERSEY, ALLSTATE INS. CO., RICH CRIST, AS AGENT AND/OR EMPLOYEE OF ALLSTATE, AND DAN LOMBINO, AS AGENT AND/OR EMPLOYEE OF ALLSTATE, DEFENDANTS-RESPONDENTS.



On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-5032-02.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 15, 2011

Before Judges Parrillo and Skillman.

Plaintiff Gisela Carino appeals from a June 11, 2010 order of the Law Division denying her motion to reinstate her complaint against defendants*fn1 filed back on November 15, 2002. We affirm.

The matter arises out of plaintiff's failed attempt to affiliate her securities license with AFS in October 2000. AFS is a broker/dealer registered with the Securities and Exchange Commission (SEC) and is a member of the National Association of Securities Dealers (NASD), now known as the Financial Industry Regulatory Authority (FINRA).

Prior to commencing employment with ANJ as a sales producer in January 1999, plaintiff worked for Prudential Financial Services (Prudential) from May 1989 to October 1998, when she was terminated based upon allegations that her field underwriting methods placed Prudential at risk of increased liability. Plaintiff's securities license affiliation with Prudential ended with her dismissal. On October 4, 2000, plaintiff applied to AFS for a position as Field Services Specialist, which would permit her to sell security products for AFS, a relatively new actor in the securities industry. As part of her required application package, plaintiff submitted her Series 6 license issued by NASD, which was nearing its two year expiration on October 20, 2000.*fn2 On October 17, 2000, AFS rejected plaintiff's application because of her previous termination by Prudential. Plaintiff was not notified, however, until May 2001 that her application had been rejected. By that time, her Series 6 license had expired.

On November 15, 2002, plaintiff filed a complaint against defendants alleging negligence and breach of contract, and seeking damages for the expiration of her license. Specifically, plaintiff alleged that had AFS notified her of its rejection prior to October 20, 2000, her license may not have expired because she would have sought affiliation elsewhere, and, furthermore, that the lapse in licensing was irremediable in light of her discharge by Prudential.

As part of her application to AFS, plaintiff executed a Form U-4, "Uniform Application for Securities Industry Registration of Transfer," which, among other things, provided for binding NASD arbitration:

I agree to arbitrate any dispute, claim or controversy that may arise between me and my firm, or a customer, or any other person, that is required to be arbitrated under the rules, constitutions, or by-laws of the SROs indicated in Item 11 as may be amended from time to time and that any arbitration award rendered against me may be entered as a judgment in any court of competent jurisdiction.

Item 11 on plaintiff's Form U-4 listed NASD as the organization with whom she was seeking to register her license through AFS. Accordingly, defendants filed a motion to dismiss plaintiff's complaint, which the trial court granted without prejudice, holding that NASD arbitration was the appropriate forum to resolve plaintiff's dispute.

Plaintiff appealed, and we affirmed the trial court's dismissal. Carino v. Allstate Fin. Servs., LLC, No. A-3278-02 (App. Div. Dec. 30, 2003) (slip op. at 5-6). Specifically, we found that "[b]y executing the Form U-4, plaintiff agreed to arbitrate any claims she may have against AFS, in accordance with NASD rules and regulations. . . . [P]laintiff's claims arose out of her potential employment with AFS and the pre-employment Form U-4 agreement; thus, they must be arbitrated." Id. at 6.

Plaintiff then filed a demand for arbitration with NASD. Because AFC,*fn3 ANJ and Allstate were not registered with NASD and, therefore, not subject to arbitration, NASD determined to exercise jurisdiction over only AFS, Crist and Lombino, who were members or affiliates of NASD. The matter proceeded to binding arbitration before a panel of three NASD arbitrators, who conducted four pre-hearing conferences and eighteen hearing sessions over the course of nine days that extended over a period of eight months. At the conclusion of the hearing, the arbitration panel issued a unanimous decision rejecting plaintiff's claims in their entirety. Plaintiff acknowledged that she was "given full and ample opportunity to present [her] case as satisfactory to [her]."

Plaintiff subsequently filed a five-count complaint and order to show cause against all defendants, including AFC, ANJ and Allstate.*fn4 Following argument, the court denied plaintiff's show cause application on December 7, 2007, and thereafter, ...


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