Case 2:18-cv-01877-AB Document 24 Filed 06/25/19 Page 1 of 13 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA Thrivest Specialty Funding, LLC Petitioner, v. William E. White, Respondent. : : : : : : : : : : : Case No. 2:18-cv-1877 Judge Brody RESPONDENT’S APPLICATION TO VACATE THE EMERGENCY ARBITRATOR’S INTERIM AWARD OF EMERGENCY RELIEF IN RESPONSE TO THRIVEST’S EMERGENCY MOTION TO CONFIRM ARBITRATION AWARD In response to Thrivest’s Emergency Motion to Confirm Arbitration Award, William E. White (the “Respondent”), requests respectfully that the Court vacate the Emergency Arbitrator’s Interim Award of Emergency Relief entered in the matter captioned Thrivest Specialty Funding, LLC v. White, AAA Case No. 01-18-0001-4765 on June 4, 2019 (the “Emergency Award”). The reasons for this application are set forth in the attached memorandum. Respectfully submitted, /s/ Robert C. Wood Robert C. Wood (0071861) THE LAW OFFICES OF ROBERT C. WOOD 1907 Leonard Ave., Suite 100 Columbus, Ohio 43219 (614) 252-3146 (Telephone) (614) 258-3505 (Facsimile) rwood@rwoodlaw.com Counsel for the Respondent Dated: June 25, 2019 Case 2:18-cv-01877-AB Document 24 Filed 06/25/19 Page 2 of 13 MEMORANDUM IN SUPPORT OF RESPONDENT’S APPLICATION TO VACATE THE EMERGENCY ARBITRATOR’S INTERIM AWARD OF EMERGENCY RELIEF IN RESPONSE TO THRIVEST’S EMERGENCY MOTION TO CONFIRM ARBITRATION AWARD I. RELEVANT BACKGROUND On April 11, 2018, Thrivest commenced arbitration (the “Demand”)1 against Mr. White in the matter captioned Thrivest Specialty Funding, LLC v. William E. White, 01-18-0001-4765, pursuant to the Non-Recourse Finance Transaction (Sales and Purchase Agreement) dated December 16, 2016 (the “Assignment Agreement”). On May 1, 2018, Thrivest filed a Complaint to Compel Arbitration in the United States District Court for the Western District of Pennsylvania which was transferred to this Court on May 4, 2018.2 This matter was dismissed on August 30, 2018.3 On April 26, 2019, the Unites States Court of Appeals for the Third Circuit remanded this matter for further proceedings.4 II. LAW AND ARGUMENT A. Under the Express Terms of §4 of the Federal Arbitration Act (“FAA”), the Court is required to adjudicate issues regarding the failure to comply with Arbitration Agreements. In relevant portion, §4 of the FAA provides that “if the . . .failure, neglect, or refusal to perform [the Arbitration Agreement]. . . be in issue, the court shall proceed summarily to the trial thereof.” Id. See also Nuclear Installation Services, Co. v Nuclear Services Corp., 468 F. Supp 1187, at 1190 (E.D. P.A. 1979) (“If the Court finds that there is a dispute as to the making of the agreement to arbitrate or as to a breach of that agreement, it must proceed to trial on the disputed issue.”) 1 Dkt. 1. See Thrivest Specialty Funding v. William E. White, 2:18-cv-00563 (W.D. Pa. May 4, 2018). 3 Dkt. 13. 4 See Thrivest v. White, No. 18-3005, 2019 WL 1868828 (Apr. 26, 2019). 2 2 Case 2:18-cv-01877-AB Document 24 Filed 06/25/19 Page 3 of 13 Similarly, the United States Supreme Court has long held that it is the province of a federal court to consider issues relating to the making and performance of the agreement to arbitrate. See Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445-446 (2006)(citing Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404 - 404 (1967) (“a federal court . . . may consider. . . the issues relating to the making and performance of the agreement to arbitrate”). Here, Mr. White’s challenge is to the arbitration agreement, itself, not the Assignment Agreement as a whole. Accordingly, this Court - and not an Arbitrator - should consider the challenge. B. The Court must determine whether Thrivest’s failure to satisfy the conditions precedent renders the Arbitration Agreement unenforceable. Under Section 6(z) of the Assignment Agreement (the “Arbitration Agreement”): (1) written notice of a dispute; (2) a meeting among Thrivest and Mr. White in Philadelphia, PA “to attempt to resolve the dispute without the necessity of moving forward with binding Arbitration through the American Arbitration Association (‘AAA’)” within 30 days of the written notice; and (3) the expiration of 60 days from the meeting of the parties are all preconditions to demanding Arbitration. Given the significant expense associated with Arbitration, these preconditions are the separate and valuable consideration upon which the Arbitration Agreement is based, and the parties “unconditionally” agreed to observe in the event of a dispute. It is undisputed that the Thrivest failed to provide the requisite written notice of a dispute, meet with Mr. White in Philadelphia, or wait 60 days after the meeting prior to demanding arbitration. These omissions are a material breach of the Arbitration Agreement. The Court, not an arbitrator, is tasked to determine whether this breach excuses the performance of Mr. White under the Arbitration Agreement, or otherwise renders it unenforceable. 3 See Buckeye Check Cashing, Inc. v. Case 2:18-cv-01877-AB Document 24 Filed 06/25/19 Page 4 of 13 Cardegna, 546 U.S. 440, 445-446 (2006). Accordingly, Mr. White submits that arbitration cannot be compelled under these circumstances. C. Thrivest concedes that it failed to perform certain conditions precedent expressly required under the Arbitration Agreement prior to demanding Arbitration. At footnote 2 to the Demand, Thrivest admits that it failed to satisfy certain conditions precedent prior to commencing arbitration pursuant to the Arbitration Agreement: Although the Arbitration Clause encourages a pre-arbitration meeting in Philadelphia for the purpose of discussing resolution, such a meeting is not practicable in view of White’s health and the impending April 12, 2018 deadline imposed by White for Thrivest to accept rescission of the Agreement. . . Id. In making this concession, Thrivest mischaracterizes the express mandates of the Arbitration Agreement as language that “encourages” rather than requires that certain preconditions be fulfilled prior to demanding arbitration. It is well settled in Pennsylvania, however, that “arbitration agreements are to be strictly construed and not extended by implication.” See Callan v. Oxford Land Dev., Inc., 858 A.2d 1229, 1233 (Pa. Super 2004). Again, the Court, and not an Arbitrator must apply these standards of analysis while adjudicating this challenge to the Arbitration Agreement. See Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445-446 (2006). D. The Emergency Award is: (1) based upon a manifest disregard for the law; (2) completely irrational; and (3) at odds with this Court’s and the Third Circuit’s prior dispositions of all similar requests of Thrivest for Emergent Relief. Since its inception and throughout the course of this litigation, Thrivest has made numerous applications for emergent relief before this Court In re: National Football League Players’ Concussion Injury Litigation, Case No. 2:12-md-02323-AB, and the United States 4 Case 2:18-cv-01877-AB Document 24 Filed 06/25/19 Page 5 of 13 Court of Appeals for the Third Circuit, In re: National Football League Players’ Concussion Injury Litigation, Case Nos. 18-1040, 18-1482, 18-1639, 18-2184, 18-2582, 18-3005, each of which has been summarily denied.5 While neither this Court, nor the Third Circuit articulated the reasons for denying every request of Thrivest for emergent relief, it is axiomatic that irreparable loss or damage is, by definition, that which cannot be remedied with money. Given that Thrivest is seeking money damages from Mr. White, it was repeatedly unable to establish the requisite burden to merit the relief requested. This Court and the Third Circuit may have also viewed the emergent requests for the escrow of funds or bonds pending resolution as disguised and/or impermissible attempts to obtain pre-judgment attachment. 1. The Emergency Arbitrator disregarded and failed to apply the analysis expressly under R-38 The analysis under Rule-38(b) of the Commercial Arbitration Rules and Mediation Procedures expressly requires a showing of: (1) a need for “emergency relief”; and (2) a need for emergency relief “on an emergency basis.”6 In order to meet the standard for emergency relief under R-38(e), there must be “immediate and irreparable loss or damage shall result in the absence of emergency relief, and that such party is entitled to such relief.”7 5 On May 3, 2018, In re: National Football League Players’ Concussion Injury Litigation, Case No. 2:12-md02323-AB, the Claimant filed an “Emergency Motion for Limited, Expedited Discovery in Advance of Preliminary Injunction Hearing”(ECF 9957) which was denied. On June 13, 2018, In re: National Football League Players’ Concussion Injury Litigation, Case No. 2184 Claimant, in file a Motion to Expedite Appeal (Doc. No. 003112955853) (arguing that “there is a serious risk of dissipation that worsens with time”) which was denied. On June 29, 2018, In re: National Football League Players’ Concussion Injury Litigation, Case No. 2:12-md-02323AB, Claimant filed a “Motion for Bond Pending Appeal” (ECF 10114-2) (alleging that because “one can reasonably conclude that Mr. White’s medical expenses will mount and his capacity to work will diminish as his ALS progresses” that it “it faces a significant likelihood of irreparable harm”) which was denied. On September 11, 2018, In re: National Football League Players’ Concussion Injury Litigation, Case Nos. 18-1040, 18-1482, 181639, 18-2184, 18-2582, 18-3005, Claimant filed a Motion For the Issuance of a Bond or Escrow Pending Resolution of Appeal (Doc. No. 033113031054) (again making the identical arguments that because “one can reasonably conclude that Mr. White’s medical expenses will mount and his capacity to work will diminish as his ALS progresses” that it “it faces a significant likelihood of irreparable harm”) which was denied. 6 See Rule 38(b) of Commercial Arbitration Rules and Mediation Procedures. 7 See Rule 38(e) of Commercial Arbitration Rules and Mediation Procedures. 5 Case 2:18-cv-01877-AB Document 24 Filed 06/25/19 Page 6 of 13 In determining the Emergency Award, however, the Emergency Arbitrator failed to perform any analysis under Rule-38 whatsoever in blatant disregard of the law.8 Instead, the Arbitrator, at the urging of Thrivest,9 focused upon only two factors. First, the likelihood of success on the merits merits. And second, the possibility that funds could be dissipated. 10 Even if this were the applicable standard - and it is not - there is no basis to conclude that either factor is present upon the record before the Arbitrator. On May 9, 2019, Thrivest directed correspondence to Mr. White requesting that he provide the following in advance of the hearing for emergency relief on May 15, 2019: 11 1. Mr. White’s Notice of Monetary Award Claim Determination from the Claims Administrator (the “Notice of Monetary Award”), including any Monetary Award Calculation Attachment; 2. The documents submitted to the Claims Administrator pursuant to Section VII (Payment of the Monetary Award) of the Notice of Monetary Award, including he Payment Election Form, Form W-9, and Statement of Attorney Fees and Expenses; 3. All documents from the Claims Administrator regarding any pending or finalized liens or any holdbacks relating to such liens, including documents sufficient to identify any portion of Mr. White’s award currently being held by the Claims Administrator; 4. Documents sufficient to identify to whom the Claims Administrator distributed Mr. White’s monetary award and where Mr. White first deposited the proceeds; 5. An accounting of the award proceeds, detailing any use or transfer of funds and showing where and by whom the proceeds are currently held; 6. Information concerning any other anticipated distributions to Mr. White by the Claims Administrator; 7. Information concerning Mr. White’s current assets and liabilities (whether individually or jointly held); 8. Information regarding any significant liabilities or expenses (in excess of $10,000) anticipated by Mr. White over the next 12 months. 8 See generally Determination and Award, Exhibit B to Thrivest’s Emergency Motion To Confirm Arbitration Award. 9 Thrivest Correspondence to Arbitrator dated May 7, 2019, a true and accurate copy of which is attached hereto and incorporated herein at Exhibit A. 10 See Determination and Award at 16. 11 Thrivest’s Discovery Correspondence to Respondent dated May 9, 2019, a true and accurate copy of which is attached hereto as Exhibit B. 6 Case 2:18-cv-01877-AB Document 24 Filed 06/25/19 Page 7 of 13 Mr. White objected to production of these documents for purposes of the Emergency Hearing. And on May 15, 2019, the Respondent directed correspondence to the Emergency Arbitrator, which in part, provides that:12 The cases the Claimant referenced in its May 7, 2019 correspondence are inapposite. In each instance, the aggrieved party came to the tribunal with known facts that established irreparable harm in the absence of relief. Given that the Claimant can only speculate, and does not have known facts to support its request for emergency relief, it seeks desperately expedited discovery from which it can fish for information that might help it meet the standard. This conduct is improper, however, under R-38. The Claimant must come with known facts which justify a need for emergency relief on an emergency basis - not file the request based upon speculation and then seek discovery to search for them. On May 13, 2019, via email, the Arbitrator determined that the requested discovery would be considered as a preliminary issue on May 15, 2019.13 The preliminary discovery issue was discussed as follows:14 Mr. Buckley: With respect to the discovery that was sought, you know, I really don’t want to delay the hearing. I want to move ahead with that today. . . Arbitrator: So if you’re going forward with the hearing. . .your, in effect, withdraw[al]of your request for the emergence for the Discovery is without prejudice . . . So, to be clear, to date, Thrivest has not established that any provision in its Assignment Agreement is enforceable, including those that would require Mr. White make the disclose of any information whatsoever to Thrivest. It, nonetheless, sought extensive emergent discovery in advance of the May 15, 2019 hearing. After withdrawing its discovery request, and electing to move forward with the hearing, the Arbitrator concluded, in the Determination and Award, that 12 Respondent’s Letter to Arbitrator dated May 15, 2019, a true and accurate copy of which is attached hereto as Exhibit C. 13 Email of Arbitrator dated May 13, 2019, a copy of which is attached hereto as Exhibit D. 7 Case 2:18-cv-01877-AB Document 24 Filed 06/25/19 Page 8 of 13 “Respondent through his lack of transparency regarding the status of the settlement funds has created the emergent situation in which he now belatedly finds himself.”15 There is simply no rational basis upon which to support this conclusion. The Arbitrator, in arriving at this conclusion, failed to point to any authority that required Mr. White to make disclosures to Thrivest. The Arbitrator also didn’t find that any provision of the Assignment Agreement is enforceable, including provisions that would require disclosure. In May of 2018, the Arbitrator denied Thrivest’s request for prehearing discovery.16 On May 15, 2019, Thrivest withdrew its request for pre-hearing discovery as a preliminary matter, and chose to proceed with the hearing. The question, then, is how Mr. White could possibly fail to be transparent, without any obligation make disclosures or to produce information whatsoever. The conclusion is nonsensical. 2. There is no rational basis for the Arbitrator’s conclusion that Mr. White has likely dissipated the funds During the hearing, counsel for Mr. White stated the following in response to concerns that funds have been dissipated:17 So, initially, I wanted to point out that to the extent Thrivest is claiming that there’s an emergency, there isn’t. . .Thrivest is in the same position as most litigants at the beginning of litigation. There’s always a chance that at the end of the road you won’t be able to recover. They haven’t been able to point to . . . any known fact, that indicated that Mr. White hasn’t made provisions to pay them or isn’t willing to pay them. Just for Your honor’s reference, Mr. White did, in fact, offer to pay them back the $475, plus a reasonable rate of interest, and Thrivest said it wasn’t interested in that. . . the Monday after the Friday that the decision came out, I called Mr. Buckley. Mr. Buckley didn’t call me. I called him to offer the $475 plus a reasonable rate of 14 Transcript of R-38 Emergency Measures of Protection Hearing on May 15, 2019 at 8-13 (“R-38 Transcript”), a true and accurate copy is attached hereto and incorporated herein at Exhibit E. 15 See Determination and Award at 16. 16 See Determination and Award at 2. 17 R-38 Transcript at 82-87 8 Case 2:18-cv-01877-AB Document 24 Filed 06/25/19 Page 9 of 13 interest. He said he wasn’t interested. I offered prior to this hearing. . .Let’s pick a day. Let’s see if we can meet and. . .mediate this . . .in Pittsburgh. Maybe we can get it worked out. . . All I’ve heard is we want the maximum amount we feel we’re due under the contract, plus attorney fees. Otherwise, there’s nothing to talk about. (Emphasis Added). The Arbitrator, in the Determination and Award, also seized upon testimony from class counsel, Mr. Seeger, from the May 2, 2019 hearing wherein Mr. Seeger indicated his belief that Mr. White, at that time, did not have $750,000 to escrow, and concern that Mr. White would get stuck paying the legal fees of Thrivest.18 In response to this issue, counsel for Mr. White indicated his belief that “Mr. Seeger had a basis for saying that when he said it.”19 And on May 16, 2019, counsel for Mr. White confirmed to the Arbitrator that Mr. White had not received $750,000 from the Claims Administrator as of May 2, 2018.20 3. The Emergency Award does not preserve the status quo, is not designed to prevent irreparable harm and confers an unfair advantage upon Thrivest. The record of proceedings on May 15, 201921 demonstrates clearly that the Emergency Award that Thrivest seeks to confirm was neither obtained in order to address a demonstrable emergency nor to prevent irreparable harm as required under Rule 38. It does not preserve the status quo but rather creates a species of relief the character of which is unprecedented. In effect, the Emergency Award was secured to operate as an insurance policy for Thrivest that has excess coverage in the amount of $436,296.00 more than Thrivest claims it is owed pursuant to the repayment schedule attached to the Assignment Agreement at Exhibit B as of June 30, 2019. This result is patently absurd, bears no relationship to rational analysis, and is supported by no legal authority. Particularly, where, here, the Emergency Arbitrator determined that 18 See Determination and Award at 15-16. R-38 Transcript at 62. 20 See email from Respondent to Arbitrator dated May 16, 2019, a copy of which is attached hereto as Exhibit F and incorporated herein by reference. 19 9 Case 2:18-cv-01877-AB Document 24 Filed 06/25/19 Page 10 of 13 approximately $250,000.00 in legal fees should be set aside without reviewing a single invoice. And instead, relied entirely upon the testimony of Peter Buckley, counsel for Thrivest as follows:22 Mr. Buckley: Next, Your honor, I just wanted to, to the extent you wanted any evidence of . . you know, we’ve requested an escrow that will provide, you know, not only the amount that’s owed today, but also the amount that will be owed if this goes through the forseeable, you know, arbitration as well as attorney fees that we’re claiming under the agreement. I made some representations to Your honor in my submission that I’m prepared certainly to back up . . . but, you know, to date the legal expense here has been approximately $250,000, which we are seeking to recover under the Agreement, you know, fee-shifting provision and certainly would like Your Honor to consider that as evidence when considering this request and in determining the appropriate amount of escrow. Arbitrator: Any objection to that, Mr. Wood? Mr. Wood: Yes, Absolutely. Arbitrator: I know you object to the relief. My question is do you object to the submission of these documents. Mr. Wood: Yes, absolutely, Your Honor. . .I don’t believe those would be appropriate for the Arbitrator to consider as part of this request. Arbitrator: All right. . . . I will overrule it without prejudice meaning I am noting your objection to that and will look at it both to admissibility and weight. I’d obviously have to look at the redactions and so forth to make a determination on the objection. Mr. Wood: Your Honor, I would like to make an additional objection. The fee-shifting provision of the Agreement . . .first requires a breach of the Agreement and there’s been no breach by Mr. White. There’s been no breach, so any and all expenses, th[e] legal fees they’re claiming aren’t a result of a breach. Despite this exchange during the May 15, 2019 hearing, the Emergency Arbitrator did not review any of the legal bills, including the redactions thereto, or make a determination on Mr. White’s objection consistent with his representation to the parties. Instead, he simply regurgitated Mr. Buckley’s testimony which asserted that Thrivest “has expended nearly 21 See generally R-38 Transcript. 10 Case 2:18-cv-01877-AB Document 24 Filed 06/25/19 Page 11 of 13 $250,000 in legal fees and expenses on this matter, and has offered “lightly redacted” legal bills23 in support of its request that that amount be considered pursuant to the fee-shifting provisions. . .”24 Next, while acknowledging Mr. White’s position “that there must first be a breach before the fee-shifting provision would be triggered,”25the Arbitrator somehow reasoned, without citing any legal authority whatsoever, that requiring $250,000 to be escrowed, on an emergency basis, for prospective legal fees and expenses is not a substantive application of the fee-shifting provision of the Assignment Agreement. Again, this result is outrageously irrational and offends notions of fairness and common sense. 4. The Emergency Award is Violative of 28 U.S.C. § 1322 This Court maintains jurisdiction over this action pursuant to 28 U.S.C. § 1322. The Emergency Award, however, does not require confirmation of a Final Award by this Court prior to disbursement of funds. The Emergency Award provides that “Attorney Wood shall hold the Escrowed Funds in escrow in his trust account pending and subject to a Final Award, further order of the arbitrator, or written agreement signed by the parties.”26 Accordingly, the Emergency Award was obtained in manifest disregard for the law. E. The Emergency Arbitrator did not have the authority under the Arbitration Agreement to make the Interim Award the of Emergency Relief. In relevant portion, Section 6(z) of the Arbitration Agreement provides that: “Either Buyer or Seller may apply (in the event of an emergent issue) to a Pennsylvania state or federal 22 R-38 Transcript at pages 55-58. No legal bills were submitted to the Arbitrator. The Arbitrator relied entirely upon the testimony of Mr. Buckley. 24 See Determination and Award at 18. 25 Id at 18. 26 See Emergency Arbitrator’s Interim Award of Emergency Relief at 2. 23 11 Case 2:18-cv-01877-AB Document 24 Filed 06/25/19 Page 12 of 13 court for interim or emergent relief. . .” Id. The Arbitration Agreement does not confer power upon the Arbitrator to grant emergent relief. Additionally, the Commercial Arbitration Rules and Mediation Procedures, upon which the Interim Award of Emergency Relief is based, are not incorporated into the Arbitration Agreement. “Whether the arbitrators exceeded their authority by awarding interim injunctive relief depends on an examination of the Agreement to determine what remedial powers the Agreement confers upon the arbitrators.” Island Creek Coal Sales Co. v. Cty of Gainesville, Fl, 729 F. 2d 1046 (6th Cir. 1984). III. REQUEST FOR HEARING For the reasons stated herein, Mr. White requests that the Emergency Award be vacated and the Complaint to Compel Arbitration be denied. Mr. White requests a hearing on this matter to the extent the Court believes it would aid in its consideration. Respectfully submitted, /s/ Robert C. Wood Robert C. Wood (0071861) THE LAW OFFICES OF ROBERT C. WOOD 1907 Leonard Ave., Suite 100 Columbus, Ohio 43219 (614) 252-3146 (Telephone) (614) 258-3505 (Facsimile) rwood@rwoodlaw.com Counsel for the Respondent 12 Case 2:18-cv-01877-AB Document 24 Filed 06/25/19 Page 13 of 13 CERTIFICATE OF SERVICE I, Robert C. Wood, hereby certify that the foregoing was electronically filed on this date; it is available for viewing and downloading on the Court’s CM/ECF system; and it will be served on all counsel of record via the Court’s CM/ECF system. Dated: June 25, 2019 13 Case 2:18-cv-01877-AB Document 24-1 Filed 06/25/19 Page 1 of 8 Fox 2000' a: 5' ?Oth Flow: a Cl) Fe! 1 i' 295: {2'1 l?lz'I'liR C. Direct 215.299.2854 limail: I?Buckleyr?g Foanlhsehildcom May 7, 2019 VIA The Honorable Steven 1. Platt The Platt Group, Inc. P.O. Box 6604 Annapolis, MD 2140] Re: Thrivest Specialtv Funding, LLC v. William E. White, No. 01?18-0001-476 Dear Judge Platt: I write on behalf of Claimant Thrivest Specialty Funding, LLC in advance oftomorrow?s hearing on Thrivest?s application for emergency interim relief. Following Thrivest?s successful appeal ofthe District Court?s order enjoining this arbitration, Thrivest's application is ripe for disposition. Pursuant to Rule 38, Thrivest seeks an interim order directing Re5pondent William E. White to escrow the disputed funds and adequate security in his attorney?s trust account pending final disposition ofthis arbitration. Thrivest is entitled to this relief for two reasons. 1. Mr. White Has Not Held The Distribution ?In Trust? As Required; An Iniunetion Is Necessary To Protect Thrivest?s Property In His Possession. In exchange for Thrivest?s $500,000 advance in December 2016, Mr. White agreed to hold the proceeds of his award in the NFL Concussion Class Action (the ?Distribution") ?in trust? for Thrivest until he satis?ed his payment obligations under the Agreement. 52 Agreement at 2(e) A l-wr? in'uT?' .lTlmI . (fl'rl-T-lfidl l? Eli it) '1 "Iii-'1 Fluff Hum- .i?Jl'Jz'Y Jew Mil" - . W- Case Document 24-1 Filed 06/25/19 Page 2019 Page 2 (Exhibit A).l Indeed, at the time, Mr. White expressly and irrevocably directed that his attorney (Robert C. Wood, Esq.) satisfy his Thrivest obligations from the Distribution in the attorney?s escrow account before remitting any balance to him. Limited Irrevocable Power of Attorney (Exhibit D) and Irrevocable Authorization and Directive (Exhibit F). In that regard, Mr. White committed to pay Thrivest ?[w]ithin three (3) business days? of receiving the Distribution and ?prior to paying any expenses or making any other distributions.? Agreement at The interim relief requested here is thus consistent with the parties? intentions as expressed through the Agreement and documents executed contemporaneously. Moreover, the injunction sought by Thrivest is consistent with Thrivest?s ownership of the disputed funds, which Mr. White sold to Thrivest in exchange for the $500,000 advance more than two years ago. See Agreement at (?Seller absolutely sells to Buyer all rights, title, bene?ts and interests of Seller in and to the TSF Distribution and all proceeds of [the] Distribution until Buyer has collected the TSF Distribution?). Because Thrivest holds title to the disputed funds and Mr. White is entitled to hold the Distribution only ?in trust? until he satis?es his obligations to Thrivest, it is not appropriate for Mr. White treat the funds as his own while this arbitration is pending. Under law (which governs the Agreement), the owner of property is entitled to injunctive reliefto preserve and protect the property pending resolution ofa diSpute. American Express Travel Related Services Company, Inc. v. Laug?n, 623 A.2d 854, 856?857 (Pa. Super. Ct. 1993) (af?rming injunction enjoining the concealing or dissipation of disputed funds held by fiduciary); and East Hills TV Sporting v. Dibert, 531 A.2d 507, 509 (Pa. Super. Ct. 1987) (holding that seller may be enjoined from using funds in seller?s bank so as to prevent potential loss of funds belonging to buyer). Indeed, although Thrivest is requesting only that Mr. White escrow the disputed funds and suf?cient security in his attorney?s trust account, law would support an injunction freezing all accounts containing funds claimed by Thrivest. Citizens Bank of v. Myers, 872 A.2d 827, 836 (Pa. Super. Ct. 2005) (upholding injunction freezing bank account as necessary to preserve funds belonging to someone other than account holder). Mr. White has violated the Agreement by treating the Distribution as his own prior to complying with his obligations to Thrivest. As such, Thrivest would be entitled to an injunction compelling Mr. White to escrow his entire $3.5 million Distribution pending the outcome ofthis arbitration. Thrivest, however, believes that a more limited injunction would suf?ce and thus seeks only to I All exhibit references refer to the exhibits to Thrivest?s Demand for Arbitration and Application for Emergency Interim Relief. Case 2:18-cv-01877-AB Document 24-1 Filed 06/25/19 Page 3 of 8 Fox May 7, 2019 Page 3 escrow the disputed funds and adequate security for the additional interest and attorneys? fees that are likely to accrue until this dispute is resolved on the merits. 2. Thrivest Is Likely To Succeed On The Merits And Dissipation OfThe Disputed Funds Constitutes lrreparable Harm. Thrivest is also entitled to injunctive relief because it is likely to succeed on the merits and, without an escrow ofthe disputed funds and adequate security, Thrivest will be irreparably harmed by Mr. White?s likely dissipation. Under law, equitable relief of this nature requires ?a showing that plaintiffs are likely to become entitled to the encumbered funds upon final judgment, and without the preliminary injunction, plaintiffs will probably be unable to recover those funds.? Patel v. Patel, No. 14?2949, 2016 WL 1720404, at *2 (ED. Pa. Apr. 29, 2016) (citing Hoxworth v. Blinder, Robinson Co., Inc., 903 F.2d 186, 197 (3d Cir. 1990)). Rule 38 requires even less, empowering the emergency arbitrator to issue emergency interim relief upon a showing that ?immediate and irreparable loss or damage shall result in the absence of [such] relief." The Third Circuit has made clear that "Thrivest's contract gave it only the right to receive settlement funds after the funds are disbursed to a class member, and [that] the District Court's power over the funds and the class ends at that point.? (Opinion at p. 33). Because the Third Circuit took issue only with assignments that allow the funder to ?stand in the shoes? ofa class member and request payment directly in the NFL Concussion Class Action (Opinion at p. 27), Mr. White's payment obligation in Section 2(c) ofthe Agreement is necessarily enforceable. Agreement at 2(c) (?Within three (3) business days after Seller?s collection and receipt of any Distribution, Seller shall distribute, or cause to be distributed, all such collections and receipts to Buyer, prior to paying any expenses of Seller or making any other distributions, until Buyer has received the TSF Distribution in Indeed, the Third Circuit said, ?[e]ven ifthe parties had attempted to create a true assignment,? the District Court ?did not have the authority to preclude Thrivest from litigating any of its remaining rights under the agreement.? (Opinion at p. 33). To the extent that Mr. White will argue any ofthe ?standard contract defenses" highlighted by the Third Circuit as potentially available on a case?by?case basis, Thrivest will address each brie?y: I Capacity to contract. Mr. White has never challenged his capacity to contract, nor could he. His counsel in the District Court and Third Circuit conceded his capacity to enter into the Agreement. Moreover, to confirm Mr. White?s diagnosis and capacity to make Case 2:18-cv-01877-AB Document 24-1 Filed 06/25/19 Page 4 of 8 Fox May 7, 2019 Page 4 independent legal and ?nancial decisions, Thrivest sought the opinion of Mr. White?s treating neurologist at Ohio State, Kevin Weber, MD. Dr. Weber con?rmed Mr. White?s ALS diagnosis and his professional opinion that the disease ?has in no way impaired [Mr White?s] ability to make his own legal, medical, and financial decisions," moreover, based on a review of White?s medical records, Dr. Weber indicated that Mr. White has never ?lacked capacity to make independent legal, medical and ?nancial decisions.? Physician?s Statement of Mental Competency (Exhibit B). Unconscionabilitv and Fraud. There can be no argument that Mr. White was forced to Sign the Agreement or that an agreement advancing him $500,000 at the lowest, non- recourse rate in the market is so one?sided that he had no meaningful choice but to Sign. Thrivest cautioned Mr. White (in bold) to review the agreement with ?an attorney and/or a trusted ?nancial advisor who can assist [him] in determining whether this transaction will best ful?ll [his] ?nancial needs and objectives and protect [his] interests in the event [he] chooses to proceed with this transaction.? Agreement at 6(cc). The Agreement contained clear disclosure ofthe financial terms and Mr. White initialed every page. What?s more, Mr. White?s attorney here notarized his signature on the document. There is no basis to challenge enforcement on either unconscionability or fraud grounds. Usurv. In Obermaver, Rebmann, Maxwell l-lippel v. West, et al., No, 16-1376, 2018 WL 1074310, *1 (3d Cir., Feb. 27, 2018), the Third Circuit reviewed a non?recourse purchase of future litigation proceeds similar to Thrivest?s Agreement with Mr. White. Focusing on substance, not form, the Court explained: ?a transaction that neither guarantees the lender an absolute right to repayment nor provides it with security for the debt is not a loan, and as a result, cannot be subject to New York?s usury laws.? Li. at Accordingly, the Third Circuit rejected an argument that the purchase agreements were unenforceable because they are usurious. ?e id, So too here. But even ifthe usury laws did apply (which they do not), Thrivest?s $500,000 advance would not have been subject to a maximum interest rate. 41 Pa. Stat. Ann. 201 ("maximum lawful rate ofinterest shall not apply to an obligation to pay a sum of money in an original bona tide principal amount of more than see also ST 1343.01 (usury limit not applicable to principal indebtedness over $100,000). It is uncontested that Mr. White never paid Thrivest the TSF Distribution after receiving his $3.5 million Distribution from the Claims Administrator, and he has no defense. As such, Thrivest is likely to succeed on its breach of contract claim. In turn, Thrivest is entitled to recover ?all costs and expenses incurred (including reasonable attorney?s fees) paid to enforce the terms ofthe Case 2:18-cv-01877-AB Document 24-1 Filed 06/25/19 Page 5 of 8 Fox May 7, 2019 Page 5 Agreement.? Agreement at As detailed below, the award in Thrivest?s favor will be substantial. Despite requests and his obligation under the Agreement to provide such information, Mr. White has never shared any information with Thrivest about his Distribution, nor provided Thrivest with any assurance that the disputed funds have been set aside or that Mr. White is otherwise able to satisfy his obligations under the Agreement. Indeed, during a May 2, 2018 telephonic hearing on Class Counsel?s request for a temporary restraining order enjoining this arbitration, Class Counsel assured the Court that Mr. White ?does not have? $750,000 to escrow as Thrivest had requested at that time. That representation coupled with Mr. White?s lack oftranSparency and the ?nancial challenges presented by his disease demonstrate that there is a serious risk that Thrivest will receive an award but ultimately be unable to recover. Under these circumstances and considering that Mr. White has had the benefit of Thrivest?s $500,000 advance for more than two years, the emergency arbitrator should order him to escrow the disputed funds and adequate security for the additional interest and attorneys? fees that are likely to accrue until this dispute is resolved on the merits. 3. The Emergency Arbitrator Should Order Mr. White To Escrow $1,250,000 Pending Resolution OfThis Arbitration. The following schedule tracks ?Exhibit B?Repayment Schedule? to the Agreement and shows the amount ofthc TSF Distribution if paid by the date indicated over the course ofthe next year: Date Amount 5/31/2019 5 801,020.80 6/30/2019 813,703.63 7/31/2019 826,587.27 8/31/2019 839,674.90 9/30/2019 5 852,969.75 10/31/2019 866,475.10 11/30/2019 5 880,194.29 12/31/2019 5 894,130.70 1/31/2020 908,287.77 2/28/2020 5 922,669.00 3/31/2020 5 937,277.92 Case 2:18-cv-01877-AB Document 24-1 Filed 06/25/19 Page 6 of 8 Fox May 7, 2019 Page 6 4/30/2020 952,118.16 5/1/2020 5 967,193.36 Throughout this dispute, Thrivest has encouraged Mr. White (through his counsel) to ful?ll his obligations under the Agreement or, at the very least, to pay the amount he does not dispute, so as to avoid incurring additional interest. Thrivest?s pleas have been met with silence. In addition, Thrivest has repeatedly cautioned Mr. White (through his counsel) that this diSpute is resulting in substantial costs and expenses to enforce the terms ofthe Agreement. Mr. White has similarly ignored Thrivest?s well?intentioned warnings resulting in protracted proceedings in this arbitration, in the District Court, and in the Third Circuit?where, ultimately, Thrivest prevailed as it had predicated when Mr. White first refused to honor the Agreement. Thrivest?s legal expenses with respect only to the proceedings involving Mr. White are in excess of $235,000 at present, and that amount (and the accumulated interest) will only grow as Mr. White continues to dispute his clear obligations under the Agreement?through which Thrivest provided him a $500,000 non?recourse advance while he waited years for his anticipated $3.5 million award in the NFL Concussion Class Action. Although Thrivest is entitled to freeze Mr. White?s entire $3.5 million distribution, Thrivest reSpectfully requests that the emergency arbitrator enter interim relief in the form prOposed (attached), requiring Mr. White to escrow $1,250,000 in his attomey?s trust account pending ?nal disposition ofthis arbitration. Respectfully submitted, Peter C. Buckley Enclosure (Proposed Interim Award of Emergency Relief) cc: Robert C. Wood, Esquire (via e?mail) Case Document 24-1 Filed 06/25/19 Page 7 of 8 AMERICAN ARBITRATION ASSOCIATION THRIVEST SPECIALTY FUNDING, LLC, Claimant, V. i Case No. 01-18-0001-476 WILLIAM E. WHITE, 5 Respondent. INTERIM AWARD OF EMERGENCY RELIEF AND NOW, upon consideration of the Application for Emergency Interim Relief ?led by Claimant Thrivest Specialty Funding, LLC and the hearing thereon on May 8, 2019, IT IS HEREBY ORDERED that the Application is GRANTED. IT IS FURTHER ORDERED as follows: 1. Within two (2) business days, Respondent William E. White shall cause the sum of One Million Two Hundred Fifty Thousand Dollars ($1,250,000) (the ?Escrowed Funds?) to be deposited into the trust account of his attorney, Robert C. Wood, Esquire; 2. Within one (1) business day of receipt, Attorney Wood shall provide Thrivest with evidence that Mr. White has so complied and, in addition, furnish evidence of insurance coverage in an amount in excess of the Escrowed Funds; 3. Attorney Wood shall hold the Escrowed Funds in escrow in his trust account pending a ?nal award, further order of the arbitrator, or written agreement signed by the parties; 4. Deposit of the Escrowed Funds as set forth herein shall not alter the parties? rights and obligations under the Agreement, including to the accrual of additional interest on unpaid obligations Case 2:18-cv-01877-AB Document 24-1 Filed 06/25/19 Page 8 of 8 5. This Interim Award of Emergency Relief shall be enforceable in any court of competent jurisdiction. IT IS SO ORDERED: The Honorable Steven 1. Platt, Emergency Arbitrator Case 2:18-cv-01877-AB Document 24-2 Filed 06/25/19 Page 1 of 2 2000 Market Street 20th Floor Philadelphia, PA 19103-3222 Tel (215) 299-2000 Fax (215) 299-2150 www.foxrothschild.com PETER C. BUCKLEY Direct No: 215.299.2854 Email: PBuckley@FoxRothschild.com May 9, 2019 VIA E-MAIL (rwood@rwoodlaw.com) Robert C. Wood, Esq. Wood Law Limited 68 North High Street Building B, Suite 202 New Albany, Ohio 43054 Re: Thrivest Specialty Funding, LLC v. William E. White, No. 01-18-0001-476 Dear Rob: Thrivest’s application for emergency interim relief is scheduled for a hearing on May 15, 2019. In advance of that hearing, I write to request that Mr. White produce the following relevant documents and information: 1. Mr. White’s Notice of Monetary Award Claim Determination from the Claims Administrator (the “Notice of Monetary Award”), including any Monetary Award Calculation Attachment; 2. The documents submitted to the Claims Administrator pursuant to Section VII (Payment of the Monetary Award) of the Notice of Monetary Award, including the Payment Election Form, Form W-9, and Statement of Attorney Fees and Expenses; 3. All documents from the Claims Administrator regarding any pending or finalized liens or any holdbacks relating to such liens, including documents sufficient to identify any portion of Mr. White’s award currently being held by the Claims Administrator; 94790388 Case 2:18-cv-01877-AB Document 24-2 Filed 06/25/19 Page 2 of 2 Robert C. Wood, Esq. May 9, 2019 Page 2 4. Documents sufficient to identify to whom the Claims Administrator distributed Mr. White’s monetary award and where Mr. White first deposited the proceeds; 5. An accounting of the award proceeds, detailing any use or transfer of funds and showing where and by whom the proceeds are currently held; 6. Information concerning any other anticipated distributions to Mr. White by the Claims Administrator; 7. Information concerning Mr. White’s current assets and liabilities (whether individually or jointly held); 8. Information regarding any significant liabilities or expenses (in excess of $10,000) anticipated by Mr. White over the next 12 months. Based on our prior discussions, I anticipate that Mr. White will refuse to comply with most or all of these requests. In the absence of compliance (or a promise of compliance) by the close of business tomorrow, I will seek Judge’s Platt’s assistance. Should you have any questions or wish to communicate any of the requested information to me over the phone, please reach out to me to discuss. Very truly yours, Peter C. Buckley cc: Christopher C. Popper, Esq. 94790388 Case 2:18-cv-01877-AB Document 24-3 Filed 06/25/19 Page 1 of 4 WOOD LAW LIMITED COUNSELLOR & ATTORNEY AT LAW May 15, 2019 VIA EMAIL DELIVERY The Honorable Steven I. Platt THE PLATT GROUP, INC. P.O. Box 6604 Suite 2420 Annapolis, MD 21401 Subject: Thrivest Specialty Funding, LLC v. William E. White; Case No. 01-18-0001-476 Judge Platt: As set forth in his Answering Statement, Mr. White objects to the jurisdiction of the AAA based upon the failure of the Claimant to comply with the dispute resolution provision of the “Non-Recourse Finance Transaction (Sales and Purchase Agreement) dated December 16, 2016 (the “False Assignment”). And he does not, by responding to the Claimant’s correspondence of May 7, 2019, waive, impliedly or otherwise, jurisdictional challenges to the AAA or any Arbiters, or does he otherwise consent to the jurisdiction of the AAA. I. The AAA Does Not have Jurisdiction to Adjudicate this Dispute The False Assignment expressly requires: (1) 30 days written notice of a dispute; (2) a meeting among the parties to the False Assignment in Philadelphia, PA within 30 days of the receipt of the notice; and (3) the passage of 60 days following the meeting as preconditions to demanding Arbitration. In relevant portion, Section 6(z) of the False Assignment provides that: Within thirty (30) days of [written] notice of a dispute, Buyer and Seller agree to meet at an agreed upon location in Philadelphia, PA to attempt to resolve the dispute in good faith without the necessity of moving forward with binding Arbitration through the American Arbitration Association. Should the dispute not be resolved between the parties within 60 days of the above referenced meeting, either party may seek remedies exclusively through a binding arbitration request to the American Arbitration Association and/or one of their representatives. The Claimant neither provided written notice of a dispute to Mr. White, nor met with him in Philadelphia, PA prior to requesting this Arbitration. The failure of the Claimant to 68 NORTH HIGH STREET, BUILDING B, SUITE 202 • NEW ALBANY, OH • 43054 • PHONE(614)252-3146 • EMAIL RWOOD@RWOODLAW.COM Case 2:18-cv-01877-AB Document 24-3 Filed 06/25/19 Page 2 of 4 –2– May 15, 2019 satisfy and perform these conditions precedent are, among other things, a material breach of the Dispute Resolution provisions of the False Assignment. Accordingly, the AAA does not have jurisdiction to consider this dispute. II. The Claimant is Not Entitled To Relief Under R-38 of the Commercial Arbitration Rules and Mediation Procedures Rule 38(b) requires a showing of: (1) a need for “emergency relief ”; and (2) a need for emergency relief “on an emergency basis.” Here, the Claimant cannot demonstrate that either are present because, well, neither exist. To be sure, both the United States District Court for the Eastern District of Pennsylvania, In re: National Football League Players’ Concussion Injury Litigation, Case No. 2:12-md-02323-AB, and the United States Court of Appeals for the Third Circuit, In re: National Football League Players’ Concussion Injury Litigation, Case Nos. 18-1040, 18-1482, 18-1639, 18-2184, 18-2582, 18-3005, have considered and repeatedly denied all similar requests by the Claimant.1 The Claimant, in order to meet the standard for emergency relief under R-38(e), must demonstrate “that immediate and irreparable loss or damage shall result in the absence of emergency relief, and that such party is entitled to such relief.” Irreparable loss or damage is that which cannot be remedied with money. It is undisputed that the Claimant is seeking money damages. The Claimant has requested an emergency escrow measure to ensure that, in the event it can ultimately prove it is owed money under the terms of the False Assignment, it will have a fund set aside from which to collect. In so doing, without pointing to any facts which establish an emergency, it speculates that over time its prospects for collecting a judgment might decrease. The cases the Claimant referenced in its May 7, 2019 correspondence are inapposite. In each instance, the aggrieved party came to the tribunal with known facts that established irreparable harm in the absence of relief. Given that the Claimant can only speculate, and On May 3, 2018, In re: National Football League Players’ Concussion Injury Litigation, Case No. 2:12-md-02323-AB, the Claimant filed an “Emergency Motion for Limited, Expedited Discovery in Advance of Preliminary Injunction Hearing”(ECF 9957) which was denied. On June 13, 2018, In re: National Football League Players’ Concussion Injury Litigation, Case No. 18-1482 Claimant, in file a Motion to Expedite Appeal (Doc. No. 003112955853) (arguing that “there is a serious risk of dissipation that worsens with time) which was denied. On June 29, 2018, In re: National Football League Players’ Concussion Injury Litigation, Case No. 2:12md-02323-AB, Claimant filed a “Motion for Bond Pending Appeal” (ECF 10114-2) (alleging that because “one can reasonably conclude that Mr. White’s medical expenses will mount and his capacity to work will diminish as his ALS progresses” that it “it faces a significant likelihood of irreparable harm) which was denied. On September 11, 2018, In re: National Football League Players’ Concussion Injury Litigation, Case Nos. 18-1040, 18-1482, 18-1639, 182184, 18-2582, 18-3005, Claimant filed a Motion For the Issuance of a Bond or Escrow Pending Resolution of Appeal (Doc. No. 033113031054) (again making the identical arguments that because “one can reasonably conclude that Mr. White’s medical expenses will mount and his capacity to work will diminish as his ALS progresses” that it “it faces a significant likelihood of irreparable harm) which was denied. 1 Case 2:18-cv-01877-AB Document 24-3 Filed 06/25/19 Page 3 of 4 –3– May 15, 2019 does not have known facts to support its request for emergency relief, it seeks desperately expedited discovery from which it can fish for information that might help it meet the standard. This conduct is improper, however, under R-38. The Claimant must come with known facts which justify a need for emergency relief on an emergency basis - not file the request based upon speculation and then seek discovery to search for them. III. On April 26, 2019, In re: National Football League Players’ Concussion Injury Litigation, Case Nos. 18-1040, 18-1482, 18-1639, 18-2184, 18-2582, 18-3005, the Court made no finding that the False Assignment is enforceable and presumed that it is subject to all claims and defenses of Mr. White. During the appellate proceedings,2 the Claimant argued vigorously that False Assignment did not fall within the purview of the December 8, 2017 and February 20, 2018 orders3 because the assignment applied to the settlement proceeds rather than the claims. The Claimant was wrong. The Court stated that: “The District Court found that the antiassignment provision language applied to assignment of proceeds. This is a question of interpretation reviewed for clear error. . . and we identify no clear error. Accordingly, we adopt the District Court’s interpretation and conclude that any true assignments contained within the cash advance agreements - that is, contractual provisions that allowed the lender to step into the shoes of the player . . . . were void ab initio.” Id at 28. The Court went on to affirm the District Court’s December 8, 2017 order in so far as it “voided any true assignment set forth in the cash advance agreements.” Id. at 29. The Court also noted that “deciding whether any specific contractual provision is a “true” assignment or false one requires examining the language of the specific contract. Id at 29 footnote 13. The False Assignment purports to be a true assignment but it is demonstrably false.4 The Court determined that the Claimant could not step into the shoes of a player in order to submit a claim for settlement proceeds to the Claim Administrator. As part of its ruling, the Court stated that “We express no opinion as to the ultimate enforceability of any of the cash advance agreements. . . .We presume that the full array of standard contract defenses By their clear terms, the December 8, 2017 and February 20, 2018 orders applied to all assignment agreements entered into by class members, so the District Court necessarily rejected the arguments raised by Thrivest in its opposition . . . To the extent Thrivest attempts to appeal the denial of the motion to withhold, it failed to brief that issue and instead addressed only the December 8, 2017 and February 20, 2018 orders. Any argument a to the order denying the motion to withhold is therefore forfeited. Further, we conclude that Thrivest cannot bootstarp its arguments regarding the December 8, 2017 and February 20, 2018 orders to its July 16, 2018 notice of appeal. Accordingly, we will dismiss as untimely Thrivest’s appeal in case number 18-2582. Id. at 17. 3 The Orders are attached to Exhibit H and I of the Demand, respectively. 4 The False Assignment, in various places, including sections 2(c), (2)(d), and 2(f) contains statements indicating that an a true assignment (“Seller has agreed to assign and sell”; “Seller has agreed to assign and sell to Buyer”; Seller absolutely assigns”; “Seller and Buyer intend that this transaction be a true sale, in an abundance of caution, in the events that such sale and assignment ever is characterized as a loan or other financial accommodation and not a true sale”) 2 Case 2:18-cv-01877-AB Document 24-3 Filed 06/25/19 Page 4 of 4 –4– May 15, 2019 will also apply in any subsequent litigation regarding these agreements. As noted by Judge Brody in her December 8, 2017 order, some of the class members are cognitively impaired, and it is possible that some of them lacked the capacity to contract at the time they entered into the agreements.5 Id at 32. The Court concluded by making it crystal clear that: Going forward, the litigation funding companies will be able to pursue, outside of the claims administration process, whatever rights they may continue to have under the cash advance agreement with class members. We offer no opinion as to the companies’ prospects for success in enforcing the funding agreements. Indeed our opinion today should in no way suggest that an individual agreement is enforceable. Any questions going to the enforceability of the funding agreements will have to be litigated or arbitrated in the appropriate fora. Id at 34. Mr. White has asserted various defenses regarding the enforceability of the False Assignment, including without limitation, failure to perform and satisfy a condition precedent which establishes that the AAA does not have jurisdiction to adjudicate this dispute. By extension, the Arbitrator, lacks jurisdiction to consider this request. Assuming arguendo that the AAA has jurisdiction - and it does not - the Claimant can neither demonstrate an emergency nor entitlement to emergent relief under R-38. Best regards, /s/ Rob Wood Robert C. Wood The Claimant wrongly concludes that Mr. White has not waived that defense. Counsel for the Class indicated “that the class was not making an argument on appeal that class members lacked contractual capacity.”Id. at 32 footnote 16. 5 Case Document 24-4 Filed 06/25/19 Page 1 of 1 Robert Wood From: The Platt Group Sent: Monday, May 13, 2019 7:16 PM To: Buckley, Peter C. Cc: Robert Wood; Reed, Eric Popper, Christopher 0; Matthew Conger Subject: Re: FW: Thrivest v. White Request for Documents and information (Please Respond by COB on May 10) Mr. Buckley Mr. Wood and Mr. Conger It is 6:20 pm Ijust returned from a Private Mediation and will be similarly occupied tomorrow until into the evening . If the parties are prepared to agree, I would be willing to speak with Counsel tomorrow evening after 7:00 pm and after hearing argument perhaps dispose of Mr. Buckleys requested preliminary discovery . However I can't help but note the potential if not the immediate practical difficulty in requiring a response to these discovery requests before the scheduled Conference Call Hearing on the next day, Wednesday at 1:30 pm even ifI decided to order it . This is particularly true in light of the condition precedent/ jurisdictional issue being raised . Alternatively I suggest/ direct dealing with it as a preliminary issue on Wednesday and if the discovery is ordered in whole or in part extending the Hearing to another day in order to address compliance and other issues I leave it to Counsel and Mr. Conger . The Default disposition absent agreement, is to consider this request as a preliminary issue on Wednesday . Judge Steven I. Platt (Ret.) The Platt Group Inc. PO. 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On Mon, May 13, 2019 at 5:45 PM Buckley, Peter C. wrote: Judge Platt Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 1 of 97 1 1 AMERICAN ARBITRATION ASSOCIATION 2 - - - 3 4 5 6 THRIVEST SPECIALTY : No. 01-18-0001-4765 FUNDING, LLC, : Claimant : R-38 Emergency Measures : of Protection Hearing vs. : : WILLIAM E. WHITE, : Respondent : 7 - - 8 Wednesday, May 15, 2019 9 - - 10 11 12 13 14 Emergency Arbitration hearing in the above-captioned matter was held at the offices of Fox Rothschild, 2000 Market Street, 20th Floor, Philadelphia, Pennsylvania 19103, beginning at 1:30 p.m., on the above date, before DEBRA ANNE GERSTEMEIER, Registered Professional Reporter and Notary Public of the Commonwealth of Pennsylvania. 15 16 17 18 19 20 21 - - - 22 E L I T E L I T I GA T I ON S OL UT I ONS , 23 24 LLC One Penn Center 1617 JFK Boulevard, Suite 340 Ph i l ade l ph i a, Pe nns y l v ani a 1 91 03 www. e l i t e l s l l c . c o m ~ ( 2 1 5 ) 5 6 3 - 3 7 0 3 ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 2 of 97 2 1 2 A P P E A R A N C E S: 3 4 5 THE ARBITRATOR BY: STEVEN I. PLATT, ESQUIRE (ret) 5 Park Place Annapolis, Maryland 21401 6 7 8 9 10 11 FOX ROTHSCHILD, LLP BY: PETER C. BUCKLEY, ESQUIRE CHRISTOPHER C. POPPER, ESQUIRE 2000 Market Street, 20th Floor Philadelphia, Pennsylvania 19103 Telephone: (215) 299-2000 E-mail: pbuckley@foxrothschild.com --Representing the Claimant 12 13 14 15 16 17 LAW OFFICES OF ROBERT C. WOOD BY: ROBERT C. WOOD, ESQUIRE 68 North High Street Building B, Suite 202 New Albany, Ohio 43054 Telephone: E-mail: rwood@rwoodlaw.com --Representing the Respondent 18 19 ALSO PRESENT: 20 Joseph Genovesi - Thrivest Specialty 21 22 23 24 ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 3 of 97 3 1 2 C O N T E N T S - - - - - - - - - 3 4 TESTIMONY OF: 5 6 PETER C. BUCKLEY Page Number By: By: Mr. Buckley.....................25 Mr. Wood........................34 7 8 E X H I B I T S - - - - - - - - - - 9 EXHIBIT NO. PAGE MARKED 10 11 (No exhibits marked by the court reporter.) 12 13 14 15 16 17 18 19 20 21 22 23 24 ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 4 of 97 4 1 DEPOSITION SUPPORT INDEX 2 - - - - - - 3 Direction to Witness Not to Answer Page 4 None 5 6 7 Request for Production of Documents Page 8 None 9 10 11 Stipulations Page 12 None 13 14 15 Question Marked Page 16 None 17 18 19 Confidential Portions Page 20 None 21 22 23 24 ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 5 of 97 5 1 2 THE ARBITRATOR: This is the 3 emergency arbitration 4 proceeding/hearing in the case of 5 Thrivest Specialty Funding, LLC 6 versus William E. White, and that is 7 America Arbitration case No. 8 01-18-0001-476 (sic). 9 And I'll ask counsel for 10 Thrivest and then for Mr. White to 11 identify themselves now that we have 12 a record, again, and indicate who 13 you represent for that purpose. 14 15 16 MR. BUCKLEY: Thank you, Your Honor. This is Peter Buckley. I'm 17 here with my colleague Chris Popper. 18 And we also have Joe Genovesi, who 19 is the president of Thrivest, here 20 in the room today. 21 MR. WOOD: Yes. Thank you, 22 Judge Platt. 23 am here on behalf of Mr. White. 24 It's Rob Wood, and I THE ARBITRATOR: All right. ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 6 of 97 6 1 And I know that Thrivest wanted 2 Mr. White to be present, but counsel 3 has indicated that he is not. 4 Mr. Buckley, you've indicated 5 that you have co-counsel with you as 6 well as at least one witness; am I 7 correct? 8 9 10 MR. BUCKLEY: That's correct, Your Honor. THE ARBITRATOR: All right. 11 There are, obviously, some 12 preliminary matters. 13 know and I'm sure do know because 14 I've had communications from both 15 parties through counsel on the 16 subject, this hearing was set 17 pursuant to a previous call in which 18 we set this hearing for this date 19 and time. 20 And as you may I received via email and 21 correspondences between that date 22 and today's date from Mr. Buckley 23 via email requesting certain 24 preliminary relief before this ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 7 of 97 7 1 hearing. 2 when I got back from doing what I 3 was doing with another case, and 4 indicated that I was available the 5 next evening if everybody could 6 agree. 7 I responded that evening For many reasons, I'm sure, 8 there was no agreement to convene by 9 telephone or otherwise at 7:00 p.m. 10 on Tuesday, last night. 11 understood that and suggested in the 12 alternative in my response that we 13 take up as a preliminary matter the 14 relief requested, particularly since 15 there didn't appear to be any 16 practical alternative to that 17 suggestion. 18 And I And so that's where we are 19 right now. 20 Mr. Buckley, and for that matter, 21 Mr. Wood, any preliminary relief 22 that you want to pursue before we 23 get to the substance of the hearing. 24 And I'll consider, MR. BUCKLEY: Thank you, Your ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 8 of 97 8 1 Honor. 2 With respect to the Discovery 3 that was sought, you know, I really 4 don't want to delay the hearing. 5 do want to move ahead with that 6 today. 7 to respond to the Discovery speaks 8 for itself, as does Mr. White's 9 failure to appear in response to the Frankly, I think the failure 10 Notice to Attend that we served on 11 him in advance of this hearing. 12 I And so seeing as though Your 13 Honor has only been appointed to 14 this date for the purposes of this 15 emergency motion, you know, I will 16 reserve right to pursue, obviously, 17 this Discovery in the 18 arbitration-in-chief and would ask 19 that, you know, Your Honor take into 20 account the lack of transparency in 21 the sharing of any information in 22 considering the relief. 23 24 You know, of course, if Your Honor thinks that that information ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 9 of 97 9 1 would be relevant and that for some 2 reason, you know, we failed in our 3 proof because we haven't, as 4 Mr. Wood points out in his brief and 5 filing, come forth with specific 6 facts that we have not been 7 permitted to discover, we certainly 8 would request that Your Honor allow 9 us an opportunity to get that 10 information, but we think we can 11 sustain our proof without it and 12 therefore would intend to proceed. 13 THE ARBITRATOR: All right. 14 Mr. Wood, do you want to comment at 15 all at this point based on that? 16 And then you can comment if you want 17 to. 18 I'm going to note for the 19 record, because we do have a record 20 through the court reporter that is 21 present -- and I'll say to the court 22 reporter even though he or she -- 23 for the record, who is the court 24 reporter and from what company? ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 10 of 97 10 1 MR. BUCKLEY: Debbie 2 Gerstemeier. I always have a little 3 trouble with her last name. 4 she's with Elite Court Reporting 5 here in Philadelphia. 6 a copy of the transcript, Your 7 Honor -- 8 THE ARBITRATOR: 9 MR. BUCKLEY: 10 And We will order Okay. -- and circulate it after the hearing. 11 THE ARBITRATOR: 12 All right. Thank you. Ms. Gerstemeier, 13 if you are present, just so I have a 14 general idea based on Counsel's 15 representation that he would 16 circulate the transcript, which 17 means he's going to order it, how 18 long do you anticipate -- and I 19 realize you don't know how long this 20 hearing will be, but ballpark it, if 21 you can, on how long it would take 22 to transcribe these proceedings that 23 we're having this afternoon and 24 circulate them? ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 11 of 97 11 1 THE COURT REPORTER: Usually 2 it is 10-14 days, but if you need it 3 sooner I can certainly get it to you 4 sooner. 5 6 7 MR. BUCKLEY: We'll pay to expedite it, Your Honor. THE ARBITRATOR: I suspect, 8 Mr. Buckley, I thought that I would 9 hear that fairly quickly. 10 I'll let Mr. Buckley negotiate 11 with you and pay you whatever he 12 wants to pay you to expedite it, but 13 I'd suggest in light of the fact 14 that this is a AAA R-38 we're 15 proceeding in and it's styled as a 16 request for emergency relief, that 17 that would justify the speed, 18 whatever speed you can proceed at 19 accordingly. 20 So, we'll do that. Mr. Buckley, I understand your 21 position. And I haven't heard from 22 Mr. Wood yet, because he doesn't 23 know what I'm thinking. 24 I'm going to do, I'm going to note But what ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 12 of 97 12 1 that the decision is as you 2 requested. 3 you're not requesting a continuance 4 of the hearing, if I understand you 5 correctly. We will proceed -- 6 Do I? 7 MR. BUCKLEY: 8 9 Yes, you do, Your Honor. THE ARBITRATOR: All right. 10 And we will therefore proceed unless 11 Mr. Wood gives me a reason that I 12 haven't heard to not do so. 13 And as far as me saying I need 14 or don't need evidence, my attitude 15 is or my position is as the 16 emergency arbitrator that we're 17 proceeding under AAA rules generally 18 and in particular R-38, which is the 19 rule entitled Emergency Measures of 20 Protection. 21 least initially of whether or not 22 you have presented sufficient 23 evidence or proof to get the relief 24 you are requesting. You'll be the judge at ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 13 of 97 13 1 I will be rendering a decision 2 based on the evidence that's 3 presented to me and the record that 4 is made at this hearing. 5 won't be doing, unless you give me a 6 reason that I haven't heard so far, 7 would be to go back and forth with 8 the parties on here's what I need to 9 do what you want. What I I'm not going to 10 do that with either Respondent or 11 Claimant. 12 So if you're going forward 13 with the hearing, the record will 14 further reflect that you reserved - 15 and certainly you have the right to 16 do that and the record will, of 17 course, reflect that - your, in 18 effect, withdraw of your request for 19 the emergence for the Discovery is 20 without prejudice to renewing it at 21 any time and further proceedings not 22 just with the emergency arbitrator 23 but ultimately with the panel or the 24 single arbitrator that takes over on ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 14 of 97 14 1 the permanent relief or the final 2 relief requested. 3 Mr. Wood, if that works for 4 you or at least you don't object to 5 it, that's how we're going to 6 proceed. 7 any part of what I just said and are 8 inclined to do so, now is the time 9 to tell me. 10 11 If you wish to be heard on MR. WOOD: Thank you, Your Honor. 12 Obviously, I don't have an 13 objection to them agreeing to move 14 forward with the hearing absent the 15 Discovery. 16 You had indicated -- and maybe 17 you're going to do that now, Your 18 Honor. 19 call that one of the first things 20 that you would do during this 21 hearing is inquire as to your 22 jurisdiction. 23 24 You had indicated during our THE ARBITRATOR: Yeah. And you've raised that as an issue, and ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 15 of 97 15 1 Claimant, Thrivest, has addressed it 2 at least partially in their 3 submissions. 4 I'm going to have a full 5 hearing and allow Thrivest to 6 present their case, including their 7 evidence and arguments with regard 8 to jurisdiction. 9 as quickly as possible, I'm going to I'm then going to, 10 ask that the transcript be 11 distributed in as expedited a manner 12 as Mr. Buckley suggested he was 13 paying to do. 14 of that as soon as possible. 15 I would need a copy Ms. Gerstemeier, it's helpful 16 to me if you can send my copy as a 17 hard copy, just because it's 18 easier - I'm not necessarily at the 19 same location as my staff most of 20 the time - to an address that is as 21 follows: 22 middle initial I, Platt, paren, RET, 23 retired, 5 Park Place, i.e., like 24 the Monopoly game, Suite 109, Judge Steven, S-T-E-V-E-N, ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 16 of 97 16 1 Annapolis, Maryland 21401. 2 can do that UPS or FedEx, that will 3 aid me in expediting the ruling. 4 If you I will then deal with the 5 request for emergency relief, 6 including the jurisdictional issues, 7 based on the record and the evidence 8 presented and the arguments in this 9 case and in this hearing and 10 anything else I have in the file 11 leading up to this hearing and will 12 issue a hopefully not 13 too-longwinded, but nonetheless, 14 reasoned opinions, as I think that 15 obviously will not be the last stop 16 on these issues. 17 as soon as I can, meaning as soon as 18 I get what I need to do it, which is 19 the transcript and the opportunity 20 to further review the exhibits and 21 the evidence and the arguments that 22 are being made at this hearing. 23 24 And I'll do that So to answer your question in a longwinded with fashion, Mr. Wood, ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 17 of 97 17 1 I'm going to inquire about it, but 2 I'm not going to rule on it other 3 than in the context of a full-scale 4 ruling on all issues that I think 5 are necessary. 6 7 MR. WOOD: Honor. 8 9 Understood, Your THE ARBITRATOR: Okay? Mr. Buckley, that's what I intend to 10 do. 11 do something different, let me know, 12 but otherwise we'll proceed in that 13 manner. 14 15 16 If you want to tell me I should MR. BUCKLEY: It works for me, Your Honor. THE ARBITRATOR: All right. 17 Then it's your request for emergency 18 relief. 19 It's my understanding -- and 20 I'm a great believer in letting 21 counsel, particularly on these kinds 22 of issues and these requests for 23 emergency/injunctive relief or 24 otherwise, I'm letting you know -- ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 18 of 97 18 1 it looks based on what I've read, 2 which is everything I've gotten, 3 perhaps not for the last time, but 4 it appears that my understanding -- 5 and I've read the Third Circuit 6 opinion as well as the trial court, 7 the U.S. District Court judge's 8 opinion that was partially reversed 9 and partially affirmed. It appears 10 that the argument -- and I'm only 11 dealing with the request for 12 emergency relief, but if a 13 jurisdictional relief exists, it 14 exists. 15 but any other. 16 it as an emergency arbitrator. 17 Not only for this relief, But I'm dealing with It appears that the position 18 of the Respondent is, in a nutshell, 19 One, there's a jurisdictional issue 20 because essentially the conditions 21 precedent in the contract has not 22 been met or was not met, and 23 apparently the contention is it 24 still hasn't been met. And, Two, ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 19 of 97 19 1 even if the AAA has jurisdiction for 2 this or any further proceeding, 3 besides the jurisdictional issue, 4 there's an issue of capacity to sign 5 the contract that is sought to be 6 enforced. 7 Is that essentially your 8 position, Mr. White (sic), on behalf 9 of your client? 10 MR. WOOD: 11 THE ARBITRATOR: 12 13 14 15 rather. Uh -Mr. Wood, I'm sorry. MR. WOOD: Yeah, that's okay, all right. Yes, Your Honor. I think you 16 stated it correctly. 17 initial issue is we do contest the 18 jurisdiction of the AAA due to the 19 failure of the condition precedent. 20 I think the You know, the underlying 21 defenses, they're set forth in the 22 answering statement. 23 capacity is just one. 24 The mental So in terms of the R-38, I ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 20 of 97 20 1 mean, even if there's jurisdiction, 2 obviously we don't think the 3 conditions exist to merit that. 4 I just wanted to make sure you 5 understood that also. 6 THE ARBITRATOR: So, All right. 7 And, Mr. Buckley, you can tell me as 8 you go, but you presented - and it's 9 always appreciated - and articulated 10 in written form the relief you were 11 requesting, the R-38 relief. 12 Is that still the proposed 13 order, still the relief you're 14 requesting, or is there something 15 more or less? 16 17 MR. BUCKLEY: That's still the relief, Your Honor. 18 THE ARBITRATOR: Okay, good. 19 Then, Mr. Buckley, you're the 20 person seeking this relief, so I'll 21 have you proceed with whatever 22 evidence documents. 23 24 I have various documents, and I think I went over what I had even ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 21 of 97 21 1 during the scheduling conference. 2 But for the sake of seeing, what I 3 have received and -- and I 4 understand the difference between 5 evidence and argument, but to the 6 extent that I've received documents, 7 meaning that I'm looking at the 8 original, I have the original Demand 9 for Arbitration, which includes a 10 Request for Emergency Relief, and I 11 have exhibits that were attached to 12 that request which are labeled in 13 the notebook that is in front of me 14 A through L. 15 Is there any objection to my 16 considering for the purposes of 17 considering the R-38 relief 18 requested any of those documents as 19 evidence in this case? 20 MR. WOOD: 21 The Respondent doesn't object. 22 THE ARBITRATOR: 23 MR. BUCKLEY: 24 THE ARBITRATOR: Mr. Buckley? No, Your Honor. So, I will ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 22 of 97 22 1 summarily admit all of the, quote, 2 exhibits - and, again, I understand 3 the difference between a pleading 4 and a document that's submitted as 5 an exhibit and, therefore, 6 evidence - the Demand for 7 Arbitration and Application for 8 Emergency Relief filed by 9 Mr. Buckley and his law firm on 10 behalf of his client Thrivest; and I 11 will also consider, again, knowing 12 the difference between pleadings and 13 evidence, all of the documents 14 submitted as exhibits and 15 attachments, which are not a whole 16 lot different - they're less, but 17 not conflicting - including the 18 opinions of the U.S. District Court 19 and the Third Circuit. 20 admitting them. 21 I'm also All of that is admitted 22 summarily for purposes of this 23 hearing without any prejudice or any 24 objection that either party through ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 23 of 97 23 1 counsel might have in a future 2 proceeding. 3 they're summarily admitted as 4 evidence to be considered in 5 arguments of counsel. 6 But for this purpose, That said, you can assume that 7 all of that is now in evidence. 8 if you wish to argue about it or 9 have a witness testify about it, you 10 may do so. 11 And Okay? Mr. Buckley, you're the one 12 asking for relief, so I'll ask you 13 to proceed. 14 MR. BUCKLEY: Thank you, Your 15 Honor. 16 indulgence, I will take advantage of 17 the somewhat relaxed nature of the 18 arbitration proceeding. 19 And with Your Honor's You know, certainly if Your 20 Honor feels it necessary to swear me 21 in at any point in time, I can do 22 that. 23 I want to just submit in terms of 24 initially with respect to the But I have a few things that ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 24 of 97 24 1 condition precedent that's been 2 discussed on the mediation in 3 Philadelphia. 4 to make some representations to Your 5 Honor. 6 7 8 9 You know, I just want Is that okay to proceed that way? THE ARBITRATOR: ask Mr. Wood. Well, let me Essentially, what 10 you're going to do is make 11 representations concerning those 12 issues, and my question to him is: 13 Do you want him sworn as a 14 witness -- 15 16 17 MR. WOOD: Yes, yes. Absolutely. THE ARBITRATOR: -- and you 18 may cross-examine, or are you 19 satisfied that you can make 20 counter-representations if you wish? 21 22 23 24 MR. WOOD: No, no. I would like him sworn in. THE ARBITRATOR: All right. But I gather you do not object to ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 25 of 97 25 1 him, quote, testifying after I swear 2 him in, as long as you can ask him 3 questions? 4 5 MR. WOOD: As long as I can ask him questions, that's fine. 6 THE ARBITRATOR: All right. 7 If you don't mind, Mr. Buckley, we 8 will -- hold on one second. 9 one thing I have to jump away from 10 I have my desk for a second. 11 (Brief pause.) 12 Sorry, gentlemen. I bought a 13 car. And I'll maybe hire one of you 14 to sue the people who sold it to me, 15 but now I'm back. 16 All right. Mr. Buckley, if 17 you don't mind, please raise your 18 right hand. 19 20 MR. BUCKLEY: Honor. 21 22 It's up, Your - - PETER C. BUCKLEY, having been 23 duly sworn, was examined and testified 24 as follows: ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 26 of 97 26 1 - - - 2 E X A M I N A T I O N 3 - - - 4 THE ARBITRATOR: If you would 5 state your name, your law firm and 6 who you represent and your current 7 business address. 8 9 MR. BUCKLEY: Peter Buckley. I am at Fox Rothschild. I represent 10 Thrivest Specialty Funding. 11 we're located at 2000 Market Street 12 in Philadelphia on the 20th floor. 13 THE ARBITRATOR: And All right. 14 And you wanted to tell me -- and 15 Mr. Wood is present. 16 ability to cross-examine under the 17 terms that we just discussed, which 18 is the reason you were sworn, if you 19 want to make representations, you 20 may do so. 21 And with the Again, we're operating, as 22 both counsel, all counsel know, 23 under relaxed rules, under the AAA 24 rules that apply to these ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 27 of 97 27 1 proceedings. And so I will hear any 2 objections, but my method of dealing 3 with the objections under relaxed 4 rules is that if you want to make 5 them, make them, particularly when 6 there's a record. 7 overrule them without prejudice, 8 meaning that I have been doing this 9 for a while, I know what is I will likely 10 admissible and what should be 11 admitted and not admitted and what 12 should be a matter of weight. 13 will reserve on those issues until I 14 do the decision. 15 you can expect your objection to be 16 dealt with in the reasoned opinion 17 and issues quoted. 18 And I And if you object, All right? With that in mind, 19 Mr. Buckley, tell me what you want 20 to tell me. 21 22 MR. BUCKLEY: Thank you, Your Honor. 23 THE ARBITRATOR: With the 24 understanding that you'll be ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 28 of 97 28 1 cross-examined by Mr. Wood. 2 MR. BUCKLEY: Understood. 3 The first point I want to 4 make, Your Honor, this is with 5 respect to the fact that Thrivest 6 did not demand a pre-arbitration 7 mediation in Philadelphia. 8 first point I want to make, Your 9 Honor, is that in part it was due to 10 timing and in part it was due to the 11 absence of any meaningful 12 opportunity at resolution. 13 The So with respect to the timing, 14 on March 19 of 2018, Mr. Wood wrote 15 to Thrivest and provided the company 16 with a waiver relinquishing rights 17 under attempted assignment, which is 18 a form that the Claims Administrator 19 had used in the claims 20 administration process, certainly 21 prior to the Third Circuit's 22 decision. 23 form was that if Thrivest signed the 24 document, it would receive the And the import of that ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 29 of 97 29 1 return of its principal-only in 2 exchange for relinquishment of all 3 of its other rights under the 4 Agreement. 5 waiver deadline was April 12th of 6 2018. 7 submit the waiver by April 12th of 8 2018 for it to be effective. 9 we're supposed to have 30 days, but And that document, the In other words, we had to And 10 we didn't get it from Mr. Wood until 11 March 19. 12 preliminary discussions with 13 Mr. Wood that went nowhere, and on 14 April 11th, 2018 filed the instant 15 arbitration the day before the 16 deadline. 17 And so we engaged in some Without getting into the 18 detail of any discussions about 19 settlement, the offer that we 20 received, which was accept 21 rescission and obtain return of 22 principal only, was communicated to 23 us by Mr. Wood as the only option. 24 And after we filed the arbitration ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 30 of 97 30 1 and the April 12th, 2018 waiver 2 deadline passed, Mr. Wood wrote, 3 among other times, to me on May 4th 4 of 2018 that, "Thrivest's election 5 to refuse the rescission offered by 6 the court constitutes a rejection 7 that it must now live with." 8 that was in the context of Mr. Wood 9 basically representing that Mr. And 10 White intended to keep the principal 11 after Thrivest did not accept his 12 ultimatum to accept rescission by 13 the April 12th deadline. 14 You know, throughout, we have 15 certainly had discussions and been 16 open to resolution. 17 conversations have never gone 18 anywhere productive, and so it's our 19 belief that any pre-arbitration 20 mediation in Philadelphia would be 21 futile. 22 have much time to do anything prior 23 to April 12th or April 11th when the 24 arbitration was filed, but also Those Not only because we didn't ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 31 of 97 31 1 because Mr. Wood communicated that 2 there was really no room to 3 negotiate and, you know, we weren't 4 willing to accept the rescission 5 option. 6 On May 10, 2019, last Friday, 7 I wrote an email to Mr. Wood and 8 recounted some of the history of the 9 settlement conversations in this 10 case, including the fact that prior 11 to the arbitration he told us that 12 rescission was the only option and 13 including the fact that Mr. White 14 after Thrivest did not accept 15 rescission indicated that he 16 intended to keep even the principal 17 and also recounting some of the more 18 recent discussions we've had about 19 resolution and basically saying that 20 for all of those reasons we see no 21 reason to believe that mediation in 22 Philadelphia would be anything other 23 than futile. 24 position should change, he should And if Mr. White's ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 32 of 97 32 1 make an offer that approaches, you 2 know, balance and the costs of 3 enforcement, and we would consider 4 having such a mediation. 5 I have not received any 6 response to my May 10, 2019 email 7 from Mr. Wood, nor has Mr. Wood 8 requested or indicated an openness 9 to a mediation in Philadelphia at 10 any time since we commenced this 11 arbitration more than a year ago nor 12 during any of the extensive 13 proceedings in the district court 14 and in the Third Circuit. 15 I will also note that -- 16 THE ARBITRATOR: 17 MR. BUCKLEY: All right. I will also note 18 that we'd previously -- 19 understanding that there would be no 20 agreement reached upon a global 21 resolution, we'd previously 22 discussed an escrow arrangement with 23 Mr. Wood in June of 2018 and 24 indicated an openness to foregoing ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 33 of 97 33 1 the continued accrual of interest if 2 the money would be set aside. 3 Mr. Wood responded by saying that 4 Mr. White's position has not changed 5 and he would not agree to even 6 escrow the disputed funds. 7 And And so, you know, in sum - and 8 this is probably more argument than 9 testimony - we think that any 10 pre-arbitration mediation would have 11 been futile and therefore is not a 12 jurisdictional prerequisite for this 13 proceeding. 14 That's my testimony. 15 THE ARBITRATOR: All right. 16 Anything else? 17 want to tell me in the form of 18 testimony? 19 20 21 Anything else you MR. BUCKLEY: Not on that issue, Your Honor. THE ARBITRATOR: All right. 22 Mr. Wood, do you want to 23 cross-examine on that issue, or any 24 other for that matter, within the ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 34 of 97 34 1 scope of what he just said? 2 MR. WOOD: I do, Your Honor. 3 - - - 4 CROSS-EXAMINATION 5 - - - 6 7 BY MR. WOOD: Q. So, my first question is: Earlier 8 you mentioned that I communicated 9 Mr. White's position to be that your only 10 option was to or Thrivest's only option was 11 to accept rescission. 12 13 But wasn't that what the Court said, Mr. Buckley? 14 A. (Brief pause.) 15 Q. Did you not hear the question? 16 A. No, that's not what the Court said. 17 Q. Okay. So are you saying that the 18 forms that the Claims Administrator sent did 19 not give you the right to accept rescission? 20 Are you saying that that was Mr. White's 21 position? 22 A. I'm saying that the form certainly 23 gave us that option. We chose not to accept 24 it, and we communicated to Mr. White through ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 35 of 97 35 1 you that we believe that our agreement -- 2 Q. Well, did -- 3 A. We believe that our agreement -- 4 Q. Well, I guess -- 5 A. We believe that our agreement would 6 ultimately be enforced by the Third Circuit 7 and that Mr. White should honor his 8 obligations under it, and you communicated 9 to us that Mr. White was not interested in 10 any resolution other than rescission in 11 exchange for return of principal. 12 Q. Again, I just want to be clear. 13 think it's a "yes" or "no". 14 a "yes" or "no" answer. 15 18 I'm looking for Wasn't rescission -- 16 17 I THE ARBITRATOR: Well -- BY MR. WOOD: Q. Wasn't the recission what the 19 District Court required Mr. White to tender 20 to Thrivest? 21 A. No. 22 Q. Isn't that what was required? 23 A. No. 24 Q. Okay. ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 36 of 97 36 1 A. The District -- 2 Q. Uhm, in my -- 3 A. The District Court said on Page 5 of 4 6 of its December 8th, 2017 opinion that if 5 the third-party funder is willing to accept 6 rescission and execute a valid waiver 7 relinquishing any claims or rights under the 8 entire agreement creating the assignment or 9 attempted assignment, then the Claims 10 Administrator will be authorized to withhold 11 from the class member's monetary award the 12 amount already paid to the class member 13 under the Agreement and return it to the 14 third-party funder. 15 Q. Yeah. I'm not, I'm not sure what 16 that -- how that -- I guess I just want to 17 be clear so that Judge Platt understands, 18 that your statement -- well, let me ask it 19 to you in the form of a question. 20 I'll ask you a "yes" or "no". 21 Again, Mr. White did not ask Thrivest to 22 accept recission of its own volition. 23 Wasn't it the Claims Administrator that 24 required he tender that? ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 37 of 97 37 1 A. I don't know what Mr. White decided 2 to do. 3 was the only thing he was willing to accept. 4 And despite the fact that others have 5 honored their contracts and paid the 6 contractual sum owed through agreement, that 7 did not happen with Mr. White. 8 9 10 11 Q. I know that you told me that that Okay. So, let's move to a different part of the Agreement. So Section, I think, 6, 6(z), of the contract, does it not require -- 12 THE ARBITRATOR: When you're 13 referring to the contract, I'm 14 assuming you're referring to the 15 contract with Thrivest. 16 17 MR. WOOD: Your Honor. 18 I am. I'm sorry, That's Exhibit A. THE ARBITRATOR: Okay. That's 19 fine. 20 just wanted to make sure I wasn't 21 coming to the wrong conclusion. 22 23 That's what I thought. MR. WOOD: Yeah. I Thank you for that clarification. 24 ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 38 of 97 38 1 2 BY MR. WOOD: Q. Mr. Buckley, does not the dispute 3 resolution provision require 30-days written 4 notice to Mr. White and then a meeting in 5 Philadelphia within 30 days? 6 there's no agreement, wouldn't it be another 7 60 days before you could file or Thrivest 8 could move forward with arbitration? 9 what Provision 6(z) says? 10 MR. BUCKLEY: And then if Isn't Your Honor, I'm 11 certainly happy to defer to the 12 document. 13 argument. 14 15 I don't want to engage in THE ARBITRATOR: I was just going to say. 16 All right. Let's do this, 17 Mr. Wood. Either party's counsel 18 can refer to contract, and I have it 19 in front of me. 20 witness, whether it's Mr. Buckley or 21 anyone else, to read me the 22 contract. 23 argue that that's what it says. 24 Okay? I don't need the And you can certainly ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 39 of 97 39 1 MR. WOOD: 2 Okay. Well, again, that is what it says. 3 THE ARBITRATOR: Well, whether 4 it says that or not, I will look to 5 the contract to see what it says, 6 period. 7 MR. WOOD: 8 So, I do want to ask another 9 question of Mr. Buckley, which isn't 10 11 12 I understand. in the written agreement. BY MR. WOOD: Q. Did you ever receive from Mr. White 13 any tacit or written notification saying 14 that he waived any portion of the dispute 15 resolution provision? 16 A. You said to me that there is no 17 contract and that the contract doesn't exist 18 because of what Judge Brody wrote in her 19 December 8th, 2017 order. 20 something that's referenced in our -- And that is 21 Q. So that -- 22 A. That's actually referenced in our 23 Demand as one of the reasons why we brought 24 the arbitration, because Mr. White was ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 40 of 97 40 1 2 3 4 denying that the Agreement even existed. Q. What date was that, Mr. Buckley? What date was that? A. Well, it was certainly in that time 5 period between March 19 and April 11, 2018. 6 It's referenced in paragraph 58 of our 7 Demand. 8 9 Q. And so was that after the December 8, 2017 order that voided the Agreement? 10 A. It was after December 8, 2017. 11 Q. Okay. 12 13 So at that time, he would have been correct. A. I disagree. 14 MR. WOOD: 15 you can read. 16 the decisions. 17 MR. WOOD: That Okay. BY MR. WOOD: 21 Q. 22 sure. 24 Yeah. will be determined ultimately. 19 23 You said you can read THE ARBITRATOR: 18 20 Well, Your Honor, So, yeah, so I just want to make Other than what you've just said, did you ever receive any correspondence from ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 41 of 97 41 1 Mr. White indicating that he waived these 2 preconditions under Section 6(z) of the 3 dispute resolution provision? 4 A. Well, certainly, your correspondence 5 of March 19, 2018 where you ask Thrivest to, 6 you know, complete the waiver form; and the 7 other subsequent conversations where you 8 indicated that you didn't believe that there 9 was an agreement that could be enforced 10 anymore; and indeed in the subsequent 11 proceedings in front of Judge Platt and 12 otherwise, Mr. White took the position that 13 there was no agreement to arbitrate at all. 14 And so, yeah, I think several times 15 throughout that period Mr. White through 16 counsel indicated that he didn't believe 17 that he had any obligations to Thrivest, 18 including the obligation to mediate or 19 arbitrate. 20 front of Judge Platt where, you know, 21 Mr. Wood simply refused and then class 22 counsel, you know, sought an injunction that 23 was ultimately reversed by the Third 24 Circuit. And I recall proceedings in ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 42 of 97 42 1 Q. Okay. So, these dates were all prior 2 to the April 26th, 2019 Third Circuit 3 opinion, correct? 4 A. Yes. 5 Q. And my last question really is: You 6 indicated that there was a rush to file the 7 Demand April 11th before the form was due. 8 Why was that? 9 What was the rush? MR. BUCKLEY: I'm not sure I 10 should answer that, Your Honor. 11 That's sort of my litigation 12 strategy, you know. 13 MR. WOOD: Well, you stated to 14 the Court that it was necessary 15 to -- 16 THE ARBITRATOR: Well, then 17 you can go back into your attorney 18 capacity and object to the question 19 if you wish to. 20 MR. BUCKLEY: 21 THE ARBITRATOR: 22 23 24 Objection. And the basis for the objection is? MR. BUCKLEY: That the reasons why we decided to file on a certain ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 43 of 97 43 1 date are protected by the attorney 2 work product doctrine. 3 THE ARBITRATOR: Okay. 4 Mr. Wood, do you want to be heard on 5 that? 6 7 8 9 MR. WOOD: Well, I think Mr. -THE ARBITRATOR: The attorney work product and the attorney client 10 privilege are by definition not 11 relaxed, so tell me why I shouldn't 12 sustain that objection. 13 MR. WOOD: Well, I think 14 Mr. Buckley opened the door by 15 stating that his failure to comply 16 with the conditions precedent were 17 because there was some deadline or 18 there was some reason it needed to 19 be done before April 12th. 20 that was his testimony. 21 22 THE ARBITRATOR: I mean, All right. And the -- 23 MR. WOOD: He opened the door. 24 THE ARBITRATOR: -- ruling, ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 44 of 97 44 1 Mr. Buckley, you did say that, and 2 I'll either consider it or I won't. 3 And I won't if your position is "I 4 can't tell you what it was because 5 of attorney/client privilege or 6 attorney work product." 7 8 9 MR. BUCKLEY: Well, certainly we felt, Your Honor -THE ARBITRATOR: You tell me 10 which one you want to do. 11 MR. BUCKLEY: Certainly, Your 12 Honor, we felt that we wanted to 13 commence the arbitration prior to 14 the expiration of this ultimatum 15 that was provided. 16 17 THE ARBITRATOR: MR. BUCKLEY: 19 THE ARBITRATOR: 21 22 That's your answer, right? 18 20 Okay. Yes, Your Honor. That was the reason. MR. BUCKLEY: Well, that and because we wanted to make sure -- 23 THE ARBITRATOR: 24 MR. BUCKLEY: I guess. That and because ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 45 of 97 45 1 we wanted to make sure that we got 2 moving as quickly as possible so 3 that Mr. White didn't dissipate the 4 assets, a portion of which he had 5 sold to Thrivest in exchange for a 6 $500,000 advance in December of 7 2016. 8 9 10 THE ARBITRATOR: Mr. Wood, does that answer your question? 11 12 All right. MR. WOOD: Yes sir. Yes, Your Honor. 13 THE ARBITRATOR: 14 Objection is withdrawn. 15 MR. WOOD: 16 17 Thank you. Your Honor, I don't have any more questions. THE ARBITRATOR: Mr. Buckley, 18 any further testimony in light of 19 the cross? 20 21 22 23 24 MR. BUCKLEY: No, Your Honor. - - (WITNESS EXCUSED.) - - MR. BUCKLEY: Next, Your ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 46 of 97 46 1 Honor -- 2 THE ARBITRATOR: All right. 3 MR. BUCKLEY: 4 step down from the stand. 5 hopefully Your Honor received an 6 email from me to Mr. Conger that was 7 a May 10, 2019 email. -- I'd like to 8 THE ARBITRATOR: 9 MR. BUCKLEY: And I did. I'd like to 10 enter into evidence, Your Honor, the 11 transcript from the Third Circuit as 12 well as the two videos, links of 13 which were provided in that email, 14 as evidence of Mr. White's capacity 15 to enter into the Agreement in 16 December 2016 with Thrivest. 17 THE ARBITRATOR: 18 19 All right. Mr. Wood, any objection to? MR. WOOD: I'm not sure what 20 we -- I'm sorry, Your Honor. 21 not sure what we're referring to. 22 When was it? 23 THE ARBITRATOR: 24 I'm There was an email received -- well, I got it ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 47 of 97 47 1 from Mr. Conger. But Mr. Conger 2 sent me an email from Mr. Conger 3 attaching it as an exhibit. 4 that was on April 29, 2019 at 10:10 5 a.m. 6 you as well. Now, he's showing a copy to Okay? 7 MR. WOOD: 8 THE ARBITRATOR: 9 10 13 14 15 April 29th? Yeah. And he's attaching Mr. Buckley's email and attachments to him. 11 12 And Do you know what I'm talking about? MR. WOOD: find it. I will see if I can April 29th, you said? MR. BUCKLEY: Now, the one I'm 16 looking at, Your Honor, I sent 17 Mr. Conger an email copying Mr. Wood 18 on May 10, 2019 attaching the 19 transcript of the argument in the 20 Third Circuit and including two 21 links to videos posted by -- 22 THE ARBITRATOR: Right. 23 that was the content. 24 that was the content of what I And Correct, and ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 48 of 97 48 1 received from Mr. Conger which you 2 had sent to him. 3 MR. BUCKLEY: Right. 4 offering that into evidence. 5 THE ARBITRATOR: So, I'm Okay. Again, 6 Mr. Wood, do you have what we're 7 talking about? 8 MR. WOOD: No. 9 THE ARBITRATOR: It's 10 essentially the opinion of the Third 11 Circuit as well as the District 12 Court. 13 14 15 16 MR. WOOD: Yes, yes, Your Honor, yes. THE ARBITRATOR: I'm sure you got that. 17 MR. WOOD: Yes, Your Honor. 18 THE ARBITRATOR: So the 19 question is: 20 objection to my admitting those 21 formally into evidence? 22 Do you have any MR. WOOD: Well, I mean, for 23 what purpose? For what purpose are 24 they being offered? ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 49 of 97 49 1 2 3 4 5 THE ARBITRATOR: For this hearing. MR. WOOD: I mean, for what purpose? THE ARBITRATOR: The email to 6 Mr. Conger, "Please see below 7 attached. 8 reactivate this matter and request 9 the arbitrator schedule the R-38 Plaintiff requested AAA 10 hearing." 11 or sends as a chain his 12 back-and-forth with Mr. Buckley. 13 And yourself as well, okay, but I'm 14 going all the way back to 2018. 15 16 17 18 19 He then attaches a chain MR. BUCKLEY: No, Your Honor. I think you're on a different -THE ARBITRATOR: A Third Circuit opinion. MR. BUCKLEY: Your Honor, 20 we're talking about something 21 different, Your Honor. 22 23 24 THE ARBITRATOR: Oh, you're talking about the May 10th email? MR. BUCKLEY: Yes, Your Honor. ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 50 of 97 50 1 2 THE ARBITRATOR: well. 3 I got that as I understand, okay. MR. BUCKLEY: That's all I'm 4 moving into evidence at this point, 5 Your Honor, is the May 10 email with 6 the Third Circuit transcript and the 7 two videos. 8 9 THE ARBITRATOR: All right. Any objection to that, Mr. Wood? 10 MR. WOOD: Well, again, I 11 guess I don't have an objection to 12 the admission of the Third Circuit 13 transcript. 14 is. I mean, it is what it 15 THE ARBITRATOR: 16 MR. WOOD: All right. Are you offering 17 the posts, the interviews with 18 Mr. White, and for what purpose? 19 MR. BUCKLEY: To demonstrate 20 his capacity to enter into the 21 contract. 22 23 24 MR. WOOD: I mean, I don't how that's relevant to this hearing. MR. BUCKLEY: Would you like ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 51 of 97 51 1 2 me to respond, Your Honor? THE ARBITRATOR: Well, one of 3 your arguments, one of your 4 defenses, Mr. Wood, is that he 5 wasn't competent. 6 something that Mr. Buckley would 7 have to prove, particularly since 8 you raised it. 9 is he wants me to look at the video And that was And what he's saying 10 for the purpose of determining 11 what -- and I may or may not think 12 it's probative, but he wants me to 13 look at it because he's submitting 14 it as evidence that he was of a 15 capacity. 16 I haven't looked at it. I 17 know it's there and I will look at 18 it if I admit it, but that's his 19 reason for submitting it, I presume. 20 And the issue would be, if your 21 objection is it doesn't have 22 anything to do with this case, then 23 you'd have to take the position that 24 it doesn't have anything to do with ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 52 of 97 52 1 his capacity. 2 that as an issue. 3 And you've raised As I understand, Mr. Buckley, 4 that's what you're doing; is that 5 correct? 6 MR. BUCKLEY: 7 THE ARBITRATOR: 8 MR. WOOD: 9 Yes, Your Honor. Yeah. Okay. So I guess I understood this hearing to be about 10 whether or not Thrivest can 11 establish irreparable harm or if 12 you're saying that they might -- 13 THE ARBITRATOR: Well, if your 14 position is, even if they could 15 establish irreparable harm, that he 16 didn't have the capacity. 17 certainly if there was no contract 18 because he didn't have the capacity 19 to execute it, then whether they 20 could have irreparable harm, for 21 what, breaching a contract that 22 doesn't exist, as a practical matter 23 that would be the decision. 24 MR. WOOD: And I understand. ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 53 of 97 53 1 2 That's what we're doing, Your Honor. THE ARBITRATOR: Okay. So you 3 don't object, if I hear you 4 correctly, to the video or to the 5 transcript? 6 MR. WOOD: 7 THE ARBITRATOR: 8 9 No. All right. Without objection, it's admitted. MR. BUCKLEY: Okay. And then 10 for the same reason, Your Honor, 11 you've already admitted Exhibit B to 12 the Demand, but I just want to point 13 out with respect to the issue of 14 capacity the physician's statement 15 of mental competency that was 16 executed by Kevin Weber, Mr. White's 17 treating physician, in connection 18 with the transaction in which he 19 indicated that at no time has 20 Mr. White lacked capacity to make 21 independent legal, medical, and 22 financial decisions, and that his 23 ALS has in no way impaired his 24 ability to make his own legal, ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 54 of 97 54 1 medical, and financial decisions. 2 And I understand that that's already 3 been admitted. 4 5 THE ARBITRATOR: correct. 6 7 MR. WOOD: 10 11 12 Yeah, that's correct. 8 9 That's MR. BUCKLEY: Next, Your Honor. MR. WOOD: You can go ahead, Mr. Buckley. MR. BUCKLEY: Next, Your 13 Honor, I just wanted to, to the 14 extent you wanted any evidence of -- 15 you know, we've requested an escrow 16 that will provide, you know, not 17 only the amount that's owed today, 18 but also the amount that will be 19 owed if this goes through the 20 foreseeable, you know, arbitration 21 as well as the attorneys fees that 22 we're claiming under the agreement. 23 24 I made some representations to Your Honor in my submission that I'm ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 55 of 97 55 1 prepared certainly to back up, but I 2 did want to advise Your Honor that 3 in response to Mr. Wood's request we 4 have produced what I would describe 5 as "lightly redacted" copies of all 6 of our legal invoices in this case 7 issued to date, including the one 8 that was issued just the other day. 9 And Mr. Wood has copies of 10 those documents. 11 keep them confidential and has also 12 agreed that the production of those, 13 you know, lightly redacted invoices 14 will not be argued to be a waiver of 15 the attorney/client privilege. 16 He has agreed to But, you know, I'll represent 17 to Your Honor that we've incurred, 18 on the White matter only we've 19 incurred, you know, to date over 20 $240,000 in legal expenses paid to 21 Fox Rothschild and, in addition, 22 another $8,000 in arbitration 23 expenses paid to AAA. 24 know, to date the legal expense here And so, you ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 56 of 97 56 1 has been approximately $250,000, 2 which we are seeking to recover 3 under the Agreement's, you know, 4 fee-shifting provision and certainly 5 would like Your Honor to consider 6 that as evidence when considering 7 this request and in determining the 8 appropriate amount of any escrow. 9 10 THE ARBITRATOR: All right. Any objection to that, Mr. Wood? 11 MR. WOOD: Yes, absolutely. 12 THE ARBITRATOR: I know you 13 object to the relief. 14 is do you object to the submission 15 of these documents. 16 MR. WOOD: My question Yes, absolutely, 17 Your Honor. 18 analysis of the legal bill to 19 determine reasonableness. 20 There has not been an As Mr. Buckley pointed out, 21 there's a lot of redaction within 22 the, within the invoices. 23 24 So, no, I mean, I don't believe those would be appropriate ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 57 of 97 57 1 for the arbitrator to consider as 2 part of this request. 3 THE ARBITRATOR: All right. 4 Well, my ruling will be as I've said 5 it would be under the relaxed rules; 6 so I will overrule it without 7 prejudice, meaning I am noting your 8 objection to that and will look at 9 it both as to admissibility and 10 weight. 11 at the redactions and so forth and 12 will detail it in the order to make 13 a determination on the objection. 14 I'd obviously have to look MR. WOOD: Your Honor, I would 15 like to make an additional 16 objection. 17 The fee-shifting provision of 18 the Agreement, Exhibit A that 19 Mr. Buckley is referencing, first 20 requires a breach of the Agreement. 21 And there's been no breach by Mr. 22 White. 23 any and all the expenses, their 24 legal fees they're claiming, aren't There's been no breach, so ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 58 of 97 58 1 there as a result of a breach. 2 THE ARBITRATOR: I understand. 3 Your objection there is that legal 4 fees shouldn't be considered in 5 this. 6 and find jurisdiction, that that 7 shouldn't be part of any relief, 8 period, for that reason. 9 10 Is that a fair statement of your position? 11 12 13 If I am going to consider it MR. WOOD: Yes. Yes, Your Honor. THE ARBITRATOR: All right. 14 Well, again, that objection along 15 with the previous one will be 16 considered both as to admissibility 17 objections, but for the time being 18 I'm overruling it with the idea that 19 I will be looking at it with both of 20 those issues in mind. 21 So go ahead, Mr. Buckley. 22 MR. BUCKLEY: Your Honor, I 23 have, I think, just one more piece 24 of evidence that I want to enter, ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 59 of 97 59 1 and then I'm prepared to make 2 argument. 3 THE ARBITRATOR: 4 MR. BUCKLEY: All right. I don't know 5 that I submitted this yet, but the 6 transcript of the May 2, 2018 7 telephonic hearing on the temporary 8 restraining order wherein class 9 counsel sought to enjoin this 10 hearing which had been previously 11 scheduled for sometime in May 2018 12 before Judge Brody -- 13 THE ARBITRATOR: 14 MR. BUCKLEY: Right. On Page 5 of 15 that transcript, Mr. Seeger, who was 16 representing Mr. White at the time, 17 said -- and he was calling him 18 "Mr. W," to preserve his anonymity, 19 I guess, but "Mr. W would have to 20 put up $750,000, that I can assure 21 you he does not have. 22 to be stuck paying their attorneys' 23 fees." 24 He is going And he says that's No. One. But in other words, you know, ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 60 of 97 60 1 we've been frustrated from getting 2 much information, if any, from 3 Mr. White about what he's done with 4 the award and where it's gone and so 5 forth. 6 we've had from any attorney 7 representing Mr. White was 8 Mr. Seeger, who said that he doesn't 9 have the money in May of 2018, he 10 The only representation that doesn't have $750,000. 11 And so, you know, I will send 12 that to Mr. Conger and submit that 13 to Your Honor for consideration, 14 that transcript. 15 THE ARBITRATOR: And Mr. Wood. 16 You'll send that to Mr. Wood as 17 well? 18 19 20 MR. BUCKLEY: Of course, Your Honor. THE ARBITRATOR: All right. 21 And, Mr. Wood, do you want to 22 preliminarily note any objection to 23 that or not? 24 First of all, for my ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 61 of 97 61 1 information, Mr. Seeger, is he with 2 your firm or is with a different 3 firm, different lawyers? 4 MR. WOOD: He's not, Your 5 Honor. 6 you know, for the whole -- 7 8 9 He serves as class counsel, THE ARBITRATOR: Okay. I want the record to reflect accordingly. So he was representing 10 Mr. Wood, or Mr. W, as he put it, in 11 his capacity as class counsel, 12 correct? 13 14 15 16 17 18 19 MR. WOOD: That's correct, Your Honor. THE ARBITRATOR: All right. Thank you. Any objection to my considering that transcript? MR. WOOD: Well, to the extent 20 Mr. Seeger made that comment, he did 21 not make it, he did not make it as, 22 you know, individual counsel for 23 Mr. White. 24 And I would also indicate for ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 62 of 97 62 1 the record that as of May, as of 2 that date, whatever it is -- what 3 was of the date? 4 what, I'll withdraw that because I 5 don't know what the date was. Well, you know 6 MR. BUCKLEY: 7 THE ARBITRATOR: 8 MR. WOOD: 9 May 2nd, 2018. Okay. Okay. Well, I'm going to assume that Mr. Seeger had 10 a basis for saying that when he said 11 it. 12 THE ARBITRATOR: 13 So you're not objecting, and 14 accordingly it will be admitted and 15 it will be submitted to Mr. Conger 16 with a copy to Mr. Wood if he 17 doesn't have it already. 18 it can either be attached to the -- 19 I suspect you're just going to send 20 it to Mr. Conger and he'll then send 21 it to me? 22 MR. BUCKLEY: 23 THE ARBITRATOR: 24 All right. And then Yes, Your Honor. And you might want to put an explanatory, whatever ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 63 of 97 63 1 way. If you transmit it online, 2 just tell him what it is and why and 3 that it was pursuant to the hearing 4 and it was admitted without 5 objection. 6 MR. BUCKLEY: 7 THE ARBITRATOR: 8 Anything else, Mr. Buckley? 9 MR. BUCKLEY: 10 11 12 Will do. Thank you. Well, Your Honor, I wasn't prepared -THE ARBITRATOR: I'll hear your argument, but anything other? 13 MR. BUCKLEY: 14 prepared for Mr. White -- 15 MR. WOOD: 16 MR. BUCKLEY: Well, I wasn't I'm sorry? I wasn't 17 prepared for Mr. White not to 18 attend. 19 Mr. Wood could be called as a 20 witness to testify about, you know, 21 Mr. White's monetary award and where 22 that money was paid and where it 23 stands now. 24 us about that, I think that would be It does strike me that If Mr. Wood will tell ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 64 of 97 64 1 2 helpful for this record. THE ARBITRATOR: 3 ask Mr. Wood. 4 question. 5 Well, let me Let me ask Mr. Wood a Mr. Wood, One -- and this is 6 just what I want you to know and you 7 can do. 8 testify as a witness. 9 at your request so that you could 10 11 I allowed Mr. Buckley to He was sworn cross-examine him. I'm not suggesting that you 12 need to testify or that you should 13 testify or that you even want to 14 testify. 15 Mr. Buckley calls you formally, then 16 we'll deal with it. 17 you to know that you have that same 18 privilege. 19 do want to testify and Mr. Buckley 20 wants you sworn as a witness, I'll 21 do the same thing I did with him. 22 That's up to you. And if But I do want In other words, if you If you don't want to testify, 23 that's fine. 24 his case. And then he's still in If he calls you as a ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 65 of 97 65 1 witness, then I'll hear argument on 2 whether or not you should have to 3 testify and, if so, to what. 4 then we'll go from there. 5 And So, you know, I just wanted 6 everybody and the record to reflect 7 that that's how I'm looking at this 8 situation as it proceeds. 9 to Mr. Buckley -- my question to you According 10 is, do you have any further 11 witnesses? 12 discussion forward of do you wish to 13 call any other witnesses. 14 MR. BUCKLEY: 15 THE ARBITRATOR: That brought this No. Okay. Do you 16 have any other witnesses? 17 Otherwise, I'll ask Mr. Wood if he 18 has any witnesses. 19 we'll hear them. 20 then I'll be prepared to hear 21 argument from both sides. 22 23 24 And if he does, And if he doesn't, Do you have any other witnesses? MR. WOOD: Your Honor, I don't ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 66 of 97 66 1 have any witnesses. 2 3 THE ARBITRATOR: Okay. Mr. Wood, that was you, right? 4 MR. WOOD: Yes. 5 THE ARBITRATOR: That was 6 Mr. Wood saying he didn't have any 7 witnesses, right? 8 MR. WOOD: 9 THE ARBITRATOR: 10 Correct. do you have any further witnesses? 11 MR. BUCKLEY: 12 THE ARBITRATOR: 13 Mr. Buckley, No, Your Honor. All right. Are you gentlemen prepared to argue? 14 MR. BUCKLEY: Yes, Your Honor. 15 MR. WOOD: 16 THE ARBITRATOR: Yes, Your Honor. I'll give you 17 the option that the court reporter 18 is going to transcribe the hearing, 19 and we can do one of two things or 20 both. 21 right now or I can trigger a written 22 or a closing argument if you wish in 23 lieu thereof or in addition thereto 24 after you get the transcript and We can have oral argument ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 67 of 97 67 1 have the opportunity to think about 2 it or research further if you want. 3 4 If there's no agreement, then we'll have oral argument now. 5 6 MR. BUCKLEY: We'd like to proceed now, Your Honor. 7 THE ARBITRATOR: Would you 8 like to talk with me without -- 9 okay. 10 Mr. Wood, are you ready to proceed as well? 11 MR. WOOD: I would prefer to 12 do the written. 13 agreement, I'm prepared to go 14 forward. 15 But if there's no THE ARBITRATOR: All right. 16 Then we'll have oral argument as we 17 speak. 18 Mr. Buckley, it's your request 19 for emergency relief. 20 you, sir. 21 22 23 24 MR. BUCKLEY: We'll hear Thank you, Your Honor. I think our May 7, 2019 letter to Your Honor, you know, fairly ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 68 of 97 68 1 outlines the arguments, but I think 2 it's important here, especially 3 since Mr. Wood focused on the 4 irreparable harm analysis in his 5 submission, to focus in on the first 6 argument, which has nothing to do 7 with irreparable harm. 8 that Mr. White in the Agreement 9 agreed that he would hold the And that is 10 proceeds of any award, all of the 11 proceeds, in trust for the benefit 12 of Thrivest until he satisfied his 13 obligations to Thrivest under the 14 Agreement. 15 Mr. White has not done that. 16 He's violated that trust. 17 you know, taken those funds and used 18 them for his own benefit, and that 19 is a violation of the promises that 20 he made in the Agreement. 21 He has, In the Agreement, Mr. White 22 sold to Thrivest a portion of his 23 award once received. 24 that's very important, because the And I think ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 69 of 97 69 1 Third Circuit has made very clear 2 that obligations that exist outside 3 of the Claims Administration process 4 are not affected by the 5 anti-assignment provision in the NFL 6 concussion settlement agreement and 7 thus may be enforceable in 8 arbitration or litigation, as the 9 case may be, which is why we're 10 here. 11 And so, you know, we're not 12 asking that Mr. White escrow his own 13 money. 14 the money that he agreed to hold in 15 trust for the benefit of Thrivest. 16 And that money that is owed under 17 the Agreement is not his money. 18 It's Thrivest's money. 19 We're asking that he escrow And so as a matter of fairness 20 in equity, if we're not allowed to 21 hold onto our asset until this 22 arbitration decides whether it's 23 ours or not, neither should he. 24 I think that that trust language in ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 And Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 70 of 97 70 1 Section 2 of the Agreement and the 2 caselaw that we cite about, you 3 know, escrowing disputed property 4 pending resolution is relevant here 5 and is an independent basis to award 6 the escrow that we requested. 7 is actually less than we'd be 8 entitled to under the Agreement. 9 Which And I think that's another 10 important point, Your Honor. 11 requesting an escrow that, you know, 12 provides us with protection as this 13 matter proceeds and as interest 14 continues and legal fees continue to 15 accumulate. 16 Mr. White was not allowed to 17 distribute to himself any funds, any 18 of the $3.5-million award from the 19 case, until Thrivest's obligations 20 were satisfied. 21 We're But under the Agreement And so that language and those 22 promises in the Agreement would 23 allow Your Honor to order the escrow 24 of the entire award. But we're not ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 71 of 97 71 1 asking for that. 2 for only an amount sufficient to 3 cover what's owed today, the 4 attorneys fees and a reserve for 5 attorneys fees that are going to be 6 incurred throughout this case and 7 the additional interest that will 8 accrue as the arbitration proceeds. 9 We're only asking And I will point out that the 10 arbitration clause contains sort of 11 an expeditious resolution clause, 12 which hopefully will be the case. 13 But that's the first reason 14 why Your Honor should order the 15 escrow in the amount that we've 16 requested, because Mr. White 17 promised to hold the entire award in 18 trust, not to distribute any of it 19 until he satisfied his obligations 20 to Thrivest. 21 and authorized and directed Mr. Wood 22 to do the same in the irrevocable 23 authorization and directive, which 24 is Exhibit F to the Demand. And, indeed, he signed ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 72 of 97 72 1 So, that's the first reason. 2 The second reason, Your Honor, 3 is the injunctive relief analysis. 4 And I submit here that, you know, 5 that the R-38 does not require a 6 finding of irreparable harm. 7 only requires the immediate -- 8 excuse me. 9 finding of likelihood of success on It It doesn't require the 10 the merits, but it requires that you 11 find that there is an immediate or 12 irreparable loss or damage that 13 shall result in the absence of 14 relief. 15 Now, we have no insight 16 whatsoever other than Mr. Seeger's 17 representations on behalf of 18 Mr. White, but Mr. White's failure 19 to share any information whatsoever 20 about his award, what he's done with 21 it, where it is, et cetera, which he 22 was required under the Agreement to 23 provide to Thrivest through some of 24 the covenants, he promised to keep ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 73 of 97 73 1 Thrivest up-to-date and to tell them 2 what was going on, there is a 3 serious concern that Thrivest will 4 get to the end of this arbitration 5 and that its agreement will be 6 enforced, despite Mr. White's 7 arguments, and that ultimately 8 Thrivest will not recover anything 9 as a result of the funds having been 10 11 dissipated. And, you know, that's a 12 serious concern here, and it's 13 exacerbated by Mr. White's refusal 14 to share any information with this 15 arbitrator about what has happened 16 to the funds. 17 Mr. Wood did not put any evidence on 18 that there's been anything done to 19 secure these funds or anything done 20 to protect Thrivest's interests. 21 And I'll note that With respect to the likelihood 22 of success on the merits, you know, 23 we've heard several arguments 24 raised. I've addressed them in our ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 74 of 97 74 1 May 7 filing, but, you know, the 2 capacity to contract, you know, 3 clearly Mr. White not only signed 4 and initialed the Agreement; 5 Mr. Wood himself notarized 6 Mr. White's signature on the 7 document. 8 of the treating physician that he 9 had the capacity to enter into this There's a certification 10 agreement. And, indeed, after the 11 December 2016 agreement, Mr. White, 12 you know, was interviewed on TV and 13 delivered the invocation at the 14 memorial service for his football 15 coach at Ohio State. 16 eloquent and certainly demonstrates 17 that he had the capacity to enter 18 into this contract through which 19 Thrivest paid him $500,000 that he 20 had the use of for several years 21 before he received any award from 22 the NFL concussion case in terms 23 that were clearly disclosed in a 24 disclosure statement on the first It was very ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 75 of 97 75 1 page and an Exhibit B which shows 2 the amount owed over time. 3 4 So, clearly, Mr. White had the capacity to contract. 5 I haven't heard any arguments 6 about unconscionability or fraud, 7 but certainly there can be no 8 argument that this Agreement, which 9 Mr. Wood notarized, you know, 10 through which Thrivest paid 11 Mr. White $500,000 was not forced 12 upon him. 13 right to say "no" and decide to 14 manage his financial affairs in 15 other ways while he awaited his 16 award. 17 He certainly had the And, again, you know, there 18 was some reference. I haven't heard 19 Mr. Wood make this argument, but to 20 the extent that it's referenced in 21 the Third Circuit and Your Honor has 22 any questions, you know, it's very 23 clear that these agreements are not 24 subject to the usury limitations, ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 76 of 97 76 1 because the repayment obligation is 2 completely contingent upon the 3 receipt of an award. 4 them riskier transactions. 5 Mr. White didn't receive an award, 6 he would have been able to keep the 7 $500,000 that Thrivest advanced to 8 him without any recourse as to his 9 other assets. Which makes And if And that makes it 10 different and, therefore, not alone. 11 And that's the Obermayer case in the 12 Third Circuit. 13 But even if it was alone, 14 which it's not, the usury limits in 15 Pennsylvania which governs the 16 agreement in Ohio which -- where 17 Mr. White lives, the usury caps 18 don't apply to transactions in 19 Pennsylvania over $50,000 and in 20 Ohio over $100,000. 21 also not a reason for any defense to 22 Mr. White's payment obligation. 23 24 And so that is And then, finally, you know, Mr. Wood makes this argument in his ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 77 of 97 77 1 filing that somehow because 2 Thrivest's Agreement was not a true 3 assignment of rights or claims in 4 the class action or under the class 5 action settlement, that it's 6 therefore a false assignment which 7 is not enforceable. 8 the Third Circuit's analysis. 9 And that is not The Third Circuit was saying - 10 and Your Honor has read the 11 opinion - that a true assignment 12 that actually gave Thrivest the 13 right to stand in the shoes of 14 Mr. White and obtain the award from 15 the Claims Administrator on his 16 behalf, that that was within the 17 Court's power to invalidate pursuant 18 to its authority, but that the 19 Court's power ends when the money 20 gets paid. 21 opinion, the Third Circuit makes 22 clear that the District Court's 23 authority certainly did not extend 24 to how class members choose to use And on Page 31 of the ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 78 of 97 78 1 their settlement proceeds after they 2 are disbursed. 3 And that's exactly what's 4 going on here. As the Court points 5 out with respect to Thrivest, 6 Thrivest's Agreement, on Page 33 of 7 the decision, "Thrivest's contract 8 gave it only the right to receive 9 settlement funds after the funds are 10 disbursed to a class member. 11 the District Court's power over the 12 funds in the class ends at that 13 point." 14 And And so the idea that somehow 15 the promise in paragraph 2(c) of the 16 agreement to remit payment to 17 Thrivest in the amount on Exhibit B 18 to the Agreement within 3 days of 19 receiving an award from the Claims 20 Administrator, that is clearly 21 outside the scope of the 22 anti-assignment language in the 23 settlement agreement. 24 Circuit has made clear that those And the Third ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 79 of 97 79 1 rights, if otherwise enforceable in 2 contract, are enforceable. 3 here, you know, we've heard a number 4 of excuses, but none that I think 5 are valid excuses. 6 this contract which Mr. White 7 signed, initialed every page, and 8 through which he received $500,000 9 in December of 2016 with no And And, therefore, 10 obligation to do anything unless and 11 until he was paid the proceeds of a 12 claim in the NFL concussion case is 13 enforceable. 14 And, you know, we certainly 15 have sympathy for Mr. White and an 16 understanding of the health 17 challenges that he's facing, but 18 those were the same health 19 challenges through which my client 20 gave him a $500,000 advance in 21 December of 2016. 22 he has refused to honor those 23 obligations, even now that the Third 24 Circuit has made clear that that And throughout, ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 80 of 97 80 1 repayment obligation is outside the 2 scope of the anti-assignment 3 provision in the Agreement and even 4 despite the fact that, you know, 5 there's clearly no 6 unconscionability, fraud, usury 7 defense here. 8 9 And so, you know, we're going to have to proceed with this 10 arbitration. 11 go through and get the arbitrator to 12 decide this case on the merits. 13 We're going to have to And I'm not asking Your Honor 14 to make any of those decisions now. 15 All I'm asking is that Your Honor 16 preserve for the time being a 17 situation where those funds which 18 are to be held in trust are not 19 dissipated in the interim. 20 there's certainly -- you know, you 21 don't have to decide whether there 22 was capacity or how the Third 23 Circuit's decision is to be 24 interpreted. And All you have to decide ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 81 of 97 81 1 is that there's a likelihood that 2 Thrivest will succeed and that the 3 funds which Mr. White agreed to hold 4 in trust, a subset of those, $1.25 5 million, which is what we're 6 requesting, that those be set aside 7 so that we don't get to the end of 8 this road and Mr. White get not only 9 the benefit of Thrivest's $500,000 10 advance but all of the proceeds of 11 the settlement without having any 12 obligation whatsoever to pay 13 Thrivest what he promised. 14 that's what we're trying to avoid 15 today. 16 17 THE ARBITRATOR: Mr. Wood? 19 MR. WOOD: 21 Thank you, sir. 18 20 And Platt. Thank you, Judge Thank you, Judge Platt. So, initially, I wanted to 22 point out that to the extent 23 Thrivest is claiming that there's an 24 emergency, there isn't. There's ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 82 of 97 82 1 not. 2 position as most litigants at the 3 beginning of litigation. 4 always a chance that at the end of 5 the road you won't be able to 6 collect. 7 Thrivest is in the same There's They haven't been able to 8 point to any fact, any known fact 9 that indicates that Mr. White hasn't 10 made provisions to pay them or isn't 11 willing to pay them. 12 Just for Your Honor's 13 reference, Mr. White did, in fact, 14 offer to pay them back the 475 plus 15 a reasonable rate of interest, and 16 Thrivest said it wasn't interested 17 in that. 18 that was just recently. 19 And that was just, and It also refused the rescission 20 a couple of years ago, which, I 21 mean, if you subtract or factor in 22 the amount of legal fees they say 23 they've spent on this, it would have 24 made more sense for them to take the ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 83 of 97 83 1 2 rescission back then. So this whole idea that there 3 is some, there is some emergency 4 that needs to be addressed because 5 of those decisions in my opinion is 6 completely meritless. 7 Again, all litigants are in a 8 position when they're litigating 9 that ultimately a judgement -- you 10 know, you may not be able to 11 collect. 12 I also want to point out that 13 in -- and, Judge Platt, you said you 14 read the decision. 15 understanding from the Third Circuit 16 opinion that it absolutely made no 17 finding that any provision, any 18 provision of Thrivest's Agreement is 19 enforceable; and that in order to 20 establish the enforceability of any 21 portion of the Agreement, it would 22 need to be determined by either an 23 arbitrator or a court. 24 It's my express So to the extent that ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 84 of 97 84 1 Mr. Buckley pointed to provisions in 2 the Agreement that he says requires 3 Mr. White to do certain things, 4 well, there's no determination that 5 that's enforceable at all at this 6 point, none. 7 willingness to resolve the case by 8 paying back the 475 plus a 9 reasonable rate of interest is that 10 uncertainty, so everyone could, you 11 know, take the ball and go home. 12 But we're here. 13 So part of Mr. White's So, the Third Circuit made 14 clear that, you know, if Thrivest 15 wanted to, you know, pursue its 16 claims, they would certainly be -- 17 it's presumed at least that it would 18 be subject to Mr. White's defenses. 19 Mr. White has asserted defenses, as 20 you're aware. 21 The failure of conditions 22 precedent, I think Mr. Buckley's 23 testimony establishes that Mr. White 24 didn't waive it, at least expressly. ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 85 of 97 85 1 At no time was there contact where 2 Mr. White said, hey, let's just move 3 forward with this. 4 I also did not hear a viable 5 reason for the need for Thrivest to 6 file its arbitration in April of 7 2018. 8 9 I think it's also very important to understand that from 10 December 8th through April 11 26th -- excuse me, December 8th of 12 2017 through April 26th -- uh, April 13 19th, the Agreement was completely 14 invalid. 15 Mr. White didn't make the motion. 16 Class counsel made the motion on 17 behalf of the class, and the judge 18 did. 19 was follow the orders. 20 Mr. White didn't do it. All Mr. White did after that Judge Platt, if you look at 21 both the December 8th and the 22 February 20th orders, they required 23 Mr. White to do certain things. 24 Third Circuit makes it clear that ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 The Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 86 of 97 86 1 Judge Brody at the time had 2 jurisdiction over Mr. White to 3 require him to do those things. 4 to the extent Thrivest has painted 5 Mr. White as some sort of renegade 6 who all of a sudden turned tail and 7 didn't want to pay, it just is not 8 true. 9 simply did what he was required to 10 11 It's not true at all. So He do by the court. And, again, a day after or 12 whatever it was, the Monday after 13 the Friday that the decision came 14 out, I called Mr. Buckley. 15 Mr. Buckley didn't call me. 16 called him to offer him the 475 plus 17 a reasonable rate of interest. 18 said he wasn't interested. 19 offered prior to this hearing: 20 let's pick a day. 21 can meet and, you know, mediate this 22 thing in Pittsburgh. 23 get it worked out. 24 I He I Hey, Let's see if we Maybe we can You know, "We're not ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 87 of 97 87 1 interested." 2 All I've heard is: Hey, we 3 want the maximum amount, the amount 4 we feel we're due under the 5 contract, plus attorneys fees. 6 Otherwise, there's nothing to talk 7 about. 8 9 So, again, I think that this position has created the emergency. 10 This has created the emergency. In 11 my estimation, that's not a 12 reasonable position to take. 13 look -- and I don't know who drafted 14 the Agreement, but if you look at -- 15 Mr. White certainly didn't draft it. 16 If you look at the Agreement, the 17 dispute resolution provision is 18 really aimed at getting to a fair 19 resolution or giving the parties a 20 chance to reach a fair resolution 21 prior to initiating arbitration. 22 And that didn't happen. 23 failure of that, you know, Mr. White 24 submits, is a material breach, is a If you And the ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 88 of 97 88 1 material breach of this Agreement, 2 which, you know, is going to cost 3 both parties money. 4 So moving along, I guess 5 that's what I want to say about the 6 Agreement and the actions Mr. White 7 has taken under the direction of the 8 courts. 9 Now moving onto the relief 10 that's being requested, again, you 11 didn't hear one stitch of evidence 12 from Thrivest to indicate there's 13 any irreparable harm. 14 saying: 15 we're going to -- you know, we 16 believe we'll ultimately succeed. 17 But by the time that we get there, 18 Mr. White may not have the money to 19 pay it. 20 Hey, look. It's simply We believe Again, that's not an 21 emergency. That is not grounds to 22 request or receive emergency relief. 23 As I understand it, those 24 situations, you know, from the cases ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 89 of 97 89 1 that were put forward by Thrivest, 2 the claimants or the petitioners in 3 those instances came to the tribunal 4 with known facts that showed people 5 were embezzling money or stealing or 6 doing other things. 7 not, that's just not the case here. 8 9 10 11 And that's just So, again, Mr. White would close by saying -- oh, one other point I want to make clear. In terms of the mental, in 12 terms of the capacity to contract, 13 Mr. Buckley pointed out that -- I 14 can't remember. 15 It's an exhibit to the Demand. 16 Mr. White has a diagnosis that was 17 made by Dr. Weber, who diagnosed 18 Mr. White with ALS. 19 separate diagnosis for a cognitive 20 disability that's completely 21 unrelated to the ALS determination. 22 It's an exhibit. But Mr. White has a So, we're also not asking that 23 the Court, you know -- or, excuse 24 me, that Judge Platt make those ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 90 of 97 90 1 decisions. We think that's beyond 2 the scope of this hearing. 3 Mr. White is asking at this point is 4 for Judge Platt to take a look at 5 the contract and determine that 6 there has been no -- that Thrivest 7 did not comply with provision 6(z) 8 of its Agreement and that that 9 failure results in AAA not having What 10 jurisdiction and, by extension, you 11 know, Judge Platt not having 12 jurisdiction to provide the relief 13 that's being requested. 14 But I think we close in the 15 file that we made today by saying 16 even if you found that you do have 17 jurisdiction to hear this, that 18 Thrivest has fallen short of meeting 19 the, uh, the standard. 20 21 22 So with that said, I don't have anything further. THE ARBITRATOR: All right. 23 Mr. Buckley, you're the moving 24 party, and you have the last word ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 91 of 97 91 1 2 3 for that reason. Do you have anything further to argue? 4 MR. BUCKLEY: 5 quick points, Your Honor. 6 Yes. Just two Anything that happened 7 recently is irrelevant to the 8 question of whether it would be 9 futile to demand mediation in 10 Philadelphia in April of 2018. 11 I think we've, you know, set forth a 12 sufficient record that it was made 13 very clear to us that not only would 14 there not be a mediation in April of 15 2018, but that if we wanted anything 16 other than, you know, the rescission 17 and the return of principal, we were 18 wasting our time because, in 19 Mr. Wood's words, "there is no 20 agreement." 21 And When he said "there is no 22 agreement," there was no mistaking 23 his point; they were not honoring 24 anything in the Agreement, any ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 92 of 97 92 1 promise, you know, and it didn't 2 exist. 3 And then, finally, with 4 respect to the evidence, you know, 5 supporting the risk of dissipation 6 here, you know, we issued a valid 7 Notice to Attend to Mr. White. 8 did not show up. 9 response to a valid Notice to He He did not come in 10 Attend. 11 Your Honor as well, because I don't 12 know that we've sent that yet. 13 we sent a Notice to Attend on May 14 14, and he's not here today. 15 And I'll share that with But He hasn't told us what he did 16 with the money, and the only thing 17 we've heard is that Mr. Seeger was 18 saying he doesn't have the ability 19 even to escrow $750,000. 20 But putting that aside, you 21 know, the point is that it's not his 22 asset until he satisfies his 23 obligation to Thrivest. 24 to hold these funds in trust, you He agreed ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 93 of 97 93 1 know, and he has not done that. 2 has violated his trust. 3 He And we're asking for less than 4 what we'd frankly be entitled to 5 under the Agreement. 6 says you can't distribute any money 7 to yourself until you pay Thrivest. 8 He got a $3.5 million award. 9 saying only set aside 1.25, which The Agreement We're 10 should be plenty and should be more 11 than enough to secure his 12 obligations to Thrivest. 13 entitled to ask for more, but we 14 haven't done that, in deference to 15 him and his current needs. 16 We'd be But, again, we have to 17 remember that this is a case where 18 we gave this gentleman $500,000 to 19 use as he saw fit in December of 20 2016 and now, 2 1/2 years later, you 21 know, he has still refused to honor 22 any of his obligations under the 23 Agreement and even to show up for an 24 arbitration to discuss that. ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 94 of 97 94 1 And so we do have legitimate 2 concern and Your Honor should impose 3 an escrow that will help us get to 4 the end of this proceeding without 5 having the funds dissipated. 6 frankly, what I think should happen, 7 Your Honor, is, you know -- and this 8 is really up to Mr. White, but, you 9 know, I've urged this. And, Pay what's 10 undisputed. Let's fight about 11 what's disputed, but let's stop 12 accruing interest on the portion 13 that Mr. White seems to concede now 14 that he owes. 15 Thank you. 16 THE ARBITRATOR: 17 Anything further, Counsel, Thank you. 18 from anybody? 19 adjourn the proceedings. 20 If not, we will You're going to send, 21 Mr. Buckley, two things. One, the 22 matter you just mentioned, which is 23 in Notice to Attend for the record; 24 and, Two, the proceeding, the matter ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 95 of 97 95 1 that we mentioned earlier. 2 Mr. Wood -- and Madam Court 3 Reporter, if you're still there, do 4 you have a better idea or the same 5 idea or a different idea on how long 6 you think it'll be before the 7 transcript is prepared and sent out? 8 9 MR. BUCKLEY: We'll order your fastest turnaround. 10 THE COURT REPORTER: Okay, 11 okay, yeah. 12 to her Friday and so it will be to 13 you this weekend. 14 I can probably have it THE ARBITRATOR: And you're 15 going to send it personal delivery 16 to me, correct? 17 will. 18 19 THE COURT REPORTER: THE ARBITRATOR: Thanks, ma'am. 22 Thanks, counsel. 23 MR. BUCKLEY: 24 Yes. Okay, yeah. 20 21 Or Mr. Buckley Thank you, Your Honor. ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 96 of 97 96 1 THE ARBITRATOR: And as soon 2 as I can, I'll get to work on the 3 decision and you'll have it very 4 shortly. 5 6 MR. BUCKLEY: Honor. 7 8 9 10 11 12 Thank you, Your MR. WOOD: Thank you, Your Honor. THE ARBITRATOR: Thank you. - - (Hearing concluded at approximately 3:00 p.m.) 13 14 15 16 17 18 19 20 21 22 23 24 ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case 2:18-cv-01877-AB Document 24-5 Filed 06/25/19 Page 97 of 97 97 1 CERTIFICATE 2 3 4 5 6 7 8 9 10 I, Debra Anne Gerstemeier, a Registered Professional Reporter, certify that the foregoing is a verbatim transcript of the testimony as taken stenographically by and before me at the time, place and on the date hereinbefore set forth, to the best of my ability. I do further certify that I am neither a relative nor employee nor attorney nor counsel of any of the parties to this action, and that I am neither a relative nor employee of such attorney or counsel, and that I am not financially interested in the action. 11 12 13 DEBRA ANNE GERSTEMEIER RPR, NOTARY PUBLIC 14 15 Registered Professional Reporter, Certified Shorthand Reporter 16 Date: May 15, 2019 17 18 19 20 (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.) 21 22 23 24 ELITE LITIGATION SOLUTIONS, LLC ~ (215) 563-3703 Case Document 24-6 Filed 06/25/19 Page 1 of 2 Robert Wood To: Robert Wood Subject: RE: Thrivest Specialty Funding, LLC v. William E. White - Case 0148-0001-4765 From: Robert Wood Date: May 16, 2019 at 11:20:20 AM EDT To: Matthew Conger Cc: "Popper, Christopher "Reed, Eric Matthew Conger Subject: Re: Thrivest Specialty Funding, LLC v. William E. White - Case 01-18-0001-4765 Matthew: During the hearing yesterday, I indicated that Mr. Seeger must have had some basis for indicating that Mr. White did not have $750,000 to escrow during the TRO on May 2, 2018. This will confirm that Mr. White had not received $750,000 from the Claims Administrator as of May 2, 2018. Also, it was my recollection from the hearing yesterday that Mr. Buckley confirmed to Judge Platt, in response to a question from him, that he would provide to me a copy of the hearing transcript upon receipt. His position is that I misunderstood. Please forward to Judge Platt. Thanks Rob On May 15, 2019, at 3:41 PM, Buckley, Peter C. wrote: Mr. Conger, during today?s hearing, I committed to sharing the attached Notice to Attend and transcript of a May 2, 2018 TRO hearing in the NFL Concussion Class Action with Judge Platt. Please forward this e-mail to him. Judge Platt, the reference in the TRO transcript to Mr. White?s not having $750,000 to escrow is at page 5, In. 22?25. On page 10, Mr. Seeger explains that Mr. White authorized him to represent him at the hearing. Peter Buckley Partner Fox LLP 2000 Market Street Case 2:18-cv-01877-AB Document 24-6 Filed 06/25/19 Page 2 of 2 20th Floor Philadelphia, PA 19103?3222 (215) 299?2854 - direct (215) 299-2150- fax This email contains information that may be con?dential and/or privileged. If you are not the intended recipient, or the employee or agent authorized to receive for the intended recipient, you may not copy, disclose or use any contents in this email. If you have received this email in error, please immediately notify the sender at Fox LLP by replying to this email and delete the original and reply emails. Thank you. <5 8258049_1_Fina1, TRO Hearing,