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Dever v. Ward

Superior Court of Massachusetts, Plymouth

June 26, 2018

David L. WARD et al.[1]


          Raffi N. Yessayan, Justice of the Superior Court

         James Dever filed numerous tort claims against his former employer, Moors & Cabot ("M & C"), its counsel, Michaels, Ward & Rabinovitz, and several individuals associated with those two entities. This matter is before the court on the defendants’ Renewed Motion to Dismiss pursuant to G.L.c. 231, § 59H following a remand by the Appeals Court.


         Moors & Cabot ("M & C") is a licensed securities broker-dealer in Massachusetts. Daniel Joyce ("Joyce") is the President of M & C. Dever is a manager in the securities brokerage industry and was hired by M & C on November 16, 2009. In November of 2011, Dever became the manager of M & C’s Norwell office. Joyce and M & C disputed the amount of compensation Dever was due under his employment agreement. Dever believed he was owed $2, 000, 000 in revenue, commission, and salary. In the midst of this salary dispute, Devers learned that M & C broker Aaron Foley ("Foley") had compliance issues and suggested to Joyce that he conduct an investigation into Foley’s activities. Dever told Joyce that Foley had violated M & C’s policies and procedures by introducing a penny stock, Protext Mobility, to M & C client Paul Chen through a private placement without M & C’s approval. Dever believed this conduct violated NASD and FINRA rules. Dever sent an email to M & C’s Board of Directors explaining his position. On November 6, 2011, Dever complained to the Duxbury Police Department that Foley had threatened to come to his house in Duxbury and confronted his wife. Instead of investigating Foley, Joyce terminated Dever’s employment on November 9, 2011. M & C offered Dever a separation agreement, which he refused.

         On December 16, 2011, Dever filed a statement of claim against M & C for wrongful termination and breach of contract. M & C filed a statement of answer and counterclaim, in which it denied owing Devers further compensation and claimed that Dever lied to Joyce about Foley’s conduct. At some point, Foley signed an affidavit admitting that he had solicited the purchase of the stock to Chen, and regulators began investigating M & C.

         The parties proceeded to arbitration before the Financial Industry Regulatory Authority ("FINRA"). Michaels, Ward & Rabinovitz represented Joyce and M & C in the arbitration. Dever alleges that Attorney Daniel Rabinovitz informed him before the final arbitration hearing that if he withdrew his claim for arbitration, M & C would not prosecute him criminally. On July 11, 2012, Attorney David Ward emailed Devers’ attorney, Eric Karp, and several others stating that Dever made threatening phone calls to Joyce and Foley at M & C’s office. The same day, M & C executive Michael Braun called the Boston Police Department and reported that Dever threatened Joyce by stating he was "going to get him" and "my family is not the only family going to be hurt." Foley reported to the Boston Police Department that Dever threatened him, "I am going to kill you, mother fucker" and "I am going to kill you, you think you can come to me, you’re dead."

         On July 13, the Boston Police advised Foley that if the threats were made in Hanover, the Hanover Police had jurisdiction. Foley then reported the threats to the Hanover Police. On July 13, Foley sought a "No Harassment Order" against Dever from the Hingham District Court On July 18, Attorney Karp informed M & C and Joyce’s attorney that he intended to add Foley as a respondent in the pending arbitration proceeding. The same day, Foley filed an application for a criminal complaint against Dever in the Hingham District Court.

         In July, Joyce and M & C branch office manager Vernon Gibson obtained "Harassment Prevention Orders" against Dever in the Boston Municipal Court. On August 2, 2012, Attorney Rabinovitz prosecuted a criminal complaint on Foley’s behalf at a Clerk’s hearing in Hingham District. Court. However, the court declined to issue a criminal complaint. Attorney Rabinovitz took a boxing stance and told Dever if he dropped the arbitration, his clients would drop the criminal complaints in the BMC. Soon thereafter, the BMC issued a criminal complaint for harassment against Dever at a probable cause hearing that was continued on multiple occasions for arraignment. In August, Joyce and Gibson moved to voluntarily withdraw the harassment protection orders issued in the BMC on jurisdictional grounds because they did not reside in Suffolk County.

         The arbitration proceeding lasted three years. During that proceeding, Joyce and M & C placed into evidence the police reports, no harassment orders, and criminal complaints against Dever. Dever alleges that Joyce and M & C willfully presented this false evidence to the arbitration panel to defeat his claims for compensation. He moved to strike the evidence of his alleged criminal conduct from the record, which the panel denied. However, the arbitrators issued an order that no further references to the criminal matters would be allowed into evidence. On July 1, 2014, FINRA entered an arbitration award denying Dever’s claims and awarding Foley $75, 000 on his counterclaim for defamation. The arbitration award was confirmed in Superior Court on March 13, 2015 in SUCV2014-02129. Dever filed an appeal of that decision on April 8, 2015. Dever did not pay the $75, 000 judgment against Foley, claiming a financial inability to do so. This resulted in a FINRA enforcement proceeding against Dever to determine his ability to pay.

         Dever filed this action against Ward; Rabinovitz; Michaels, Ward & Rabinovitz, LLP; Joyce; M & C; and Foley on June 9, 2015. On July 2, Foley sent an email to Dever and the FINRA enforcement officer calling Dever an "unfit man," accusing him of "disingenuous and disgusting behavior" and threatening to garnish his wages and escrow his earnings to pay the arbitration award. On July 20, Dever amended the complaint in this action to add claims against Foley based on this email.

         Count I of the Amended Complaint alleges civil conspiracy, Count II alleges fraud, Count III alleges abuse of process in the Hingham. District Court, Count IV alleges abuse of process in the BMC, Count V alleges malicious prosecution in the Hingham District Court, Count VI alleges malicious prosecution in the BMC, Count VII alleges defamation, Count VIII alleges intentional infliction of emotional distress, and Count IX alleges negligent infliction of emotional distress against all defendants. Count X alleges libel against Foley, Count XI alleges intentional infliction of emotional distress against Foley, and Count XII alleges negligent infliction of emotional distress against Foley. Dever’s appeal of the Superior Court decision confirming the FINRA arbitration award was dismissed for failure to prosecute on March 20, 2016.

         In a Memorandum of Decision and Order dated November 23, 2016, this Court allowed the defendants’ special motion to dismiss Dever’s Amended Complaint pursuant to G.L.c. 231, § 59H. The Appeals Court affirmed this Court’s determination that Dever’s claims were based solely on the defendants’ petitioning activity in the FINRA arbitration and in the District Court and BMC and that said activity was not devoid of reasonable factual support or an arguable legal basis. See Dever v. Ward, 92 Mass.App.Ct. 175, 180-81 (2017). However, the Appeals Court remanded the case to this Court for a determination of a second basis on which Dever might avoid dismissal of this action by making an alternative showing under Blanchard v. Steward Carney Hosp., 477 Mass. 141 (2017). See Dever v. Ward, 92 Mass.App.Ct. at 184.


         Whether FINRA Arbitration is ...

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