Ghaus Malik v. Robin Arias, et al.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 GHAUS MALIK, No. 2:25-cv-03111-DJC-CKD (PS) 12 Plaintiff, 13 v. ORDER AND 14 ROBIN ARIAS, et al., FINDINGS AND RECOMMENDATIONS 15 Defendants. 16

17 18 19 Plaintiff Ghaus Malik proceeds pro se in this action filed on October 27, 2025. (ECF No. 20 1, “Compl.”) Before the court is defendants Robin Arias’ and Wells Fargo Advisors’ motion to 21 dismiss the complaint pursuant to Federal Rule 12(b)(6) and affirm an August 2025 arbitration 22 award. (ECF No. 11.) Plaintiff has filed an opposition (ECF No. 13), and defendants have filed a 23 reply (ECF No. 14). On January 21, 2026, the motion was taken under submission without 24 argument pursuant to Local Rule 230(g). (ECF No. 16.) For the reasons set forth below, the 25 undersigned will recommend that defendants’ motion be granted. 26 //// 27 //// 28 //// 1 I. Background 2 Plaintiff, a California resident, brings this action against defendants Arias and Wells Fargo 3 Advisors (“Wells Fargo”) in the form of a petition to partially vacate an arbitration award issued 4 by the Financial Industry Regulatory Authority (“FINRA”) in August 2025. (Compl. at 1.) The 5 relevant case background is as follows: 6 In July 2023, plaintiff Ghaus Malik filed a pro se action in federal court, Malik et al. v. 7 Malik et al., 2:23-cv-01344 CKD (E.D. Cal.), asserting claims against his two adult sons Farhan 8 and John Malik, Wells Fargo Clearing Services LLC, and Wells Fargo employee Robin Arias. 9 The claims concerned the ownership and control of a family-owned company, G. and P. Malik 10 LLC, and the distribution of its assets. Plaintiff subsequently obtained counsel, and the case 11 proceeded on the Third Amended Complaint (“TAC”) filed June 24, 2024. In the TAC, plaintiff 12 asserted claims of fraud, conversion, breach of fiduciary duty, and elder abuse against the Malik 13 brothers. Plaintiff also asserted claims of conversion, breach of fiduciary duty, and elder abuse 14 against Wells Fargo and Arias in connection with the company’s bank account. (Id., ECF No. 60.) 15 On September 17, 2024, the undersigned granted the Wells Fargo defendants’ motion to send the 16 claims against them to arbitration per the parties’ arbitration agreement. (Id., ECF No. 92 at 15 17 (“All claims against the Wells Fargo defendants shall be subject to binding FINRA arbitration, 18 and these court proceedings are stayed as to defendants Wells Fargo and Arias pending 19 completion of arbitration.”)). Plaintiff’s claims against the Malik brothers proceeded to the 20 summary judgment stage, and, on November 7, 2025, summary judgment was granted for 21 defendants. (Id., ECF No. 134.) The case was closed on November 24, 2025. (Id., ECF No. 141.) 22 Meanwhile, in the FINRA arbitration in August 2025, plaintiff and the Wells Fargo 23 defendants participated in a five-day evidentiary hearing on plaintiff’s claims of conversion, 24 breach of fiduciary duty, and elder abuse, Case No. 24-02022. (See ECF No. 12, Lamirand Decl., 25 ¶ 5.) On August 18, 2025, the three-person arbitration panel issued its decision and award. (ECF 26 No. 12-1, Lamirand Decl., Ex. 1.) The panel reviewed the pleadings and other materials 27 submitted by the parties, including the Wells Fargo account agreement, and heard testimony from 28 an expert witness, defendant Arias, and two other witnesses. (Id.) The panel’s decision described 1 the case as follows: 2 The essence of the claim was that Arias breached his fiduciary duty by failing to read or otherwise consider G. and P. Malik’s operating 3 agreement or to seek further information about the actions of the LLC members upon transfer of all the funds from the existing LLC’s 4 account by one member. Respondents’ expert testified that neither Arias nor Wells Fargo had a duty, fiduciary or otherwise, to consider 5 the LLC operating agreement or the actions of LLC members who were authorized signatories to the Wells Fargo account. Claimants 6 did not have expert testimony to the contrary. 7 (ECF No. 12-1 at 4.) The panel denied the claims in their entirety. Id. 8 Plaintiff, again proceeding pro se, filed the instant petition on October 27, 2025, to 9 partially vacate the arbitration award. (ECF No. 1.) 10 II. The Complaint 11 In the petition, plaintiff seeks to vacate the FINRA award as to the elder abuse claim. He 12 alleges that the panel disregarded the law, refused to hear material evidence, and exceeded its 13 powers by “effectively nullifying controlling law protecting elders.”1 (ECF No. 1 at 2.) Plaintiff 14 largely reiterates his claims against the Wells Fargo defendants as set forth in the TAC in the 15 federal case. He alleges that, during the FINRA hearing on his claims, the panel “refused to hear . 16 . . evidence showing petitioner’s elder/vulnerable status.” (Id. at 6.) Petitioner argues that the 17 panel failed to consider his vulnerability and other factors bearing on elder abuse, ignoring 18 “controlling law safeguarding elders from financial exploitation[.]” (Id.) 19 Petitioner asks the court to vacate the portion of the award denying the elder abuse claim 20 and remand for rehearing of that claim. (Id. at 6-7.) 21 III. Defendants’ Motion to Dismiss 22 A. Legal Standards 23 “In response to a complaint to vacate an arbitration award, a party may simultaneously 24 move to dismiss under Rule 12(b)(6) and move to confirm the award.” Eagle Sys. & Servs., Inc. 25 v. Int’l Ass’n of Machinists, No. 2:16–CV–02077–JAM–EFB, 2016 WL 7324753, at *2 (E.D. 26 Cal. Dec. 16, 2016). 27

28 1 At the time of filing, plaintiff was 92 years old. (Id.) 1 Dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure may be warranted 2 for “the lack of a cognizable legal theory or the absence of sufficient facts alleged under a 3 cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). In 4 evaluating whether a complaint states a claim on which relief may be granted, the court accepts as 5 true the allegations in the complaint and construes the allegations in the light most favorable to 6 the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. United States, 915 F.2d 7 1242, 1245 (9th Cir. 1989). Particularly because plaintiff proceeds pro se, the court liberally 8 construes the pleadings and affords plaintiff the benefit of any doubt. Bretz v. Kelman, 773 F.2d 9 1026, 1027 (9th Cir. 1985). Nevertheless, the court does not accept as true allegations that are 10 merely conclusory, unwarranted deductions of fact, or unreasonable inferences. Sprewell v. 11 Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). A court may consider documents 12 “whose contents are alleged in a complaint and whose authenticity no party questions,” despite 13 such documents not being physically attached to the pleadings. Knievel v. ESPN, 393 F.3d 1068, 14 1076 (9th Cir. 2005). 15 Judicial review of an arbitration award is “both limited and highly deferential.” 16 PowerAgent Inc. v. Electronic Data Systems Corp., 358 F.3d 1187, 1193 (9th Cir. 2004). “Under 17 the [Federal Arbitration Act], courts may vacate an arbitrator’s decision only in very unusual 18 circumstances.” Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 568 (2013) (quoting First 19 Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 942 (1995)) As the Ninth Circuit recently 20 stated: 21 Federal courts rarely vacate arbitration awards. Even when faced with a legal error, we do not vacate an award unless the arbitrator 22 manifestly disregarded the law, acted completely irrationally, or violated one of the narrow provisions under the Federal Arbitration 23 Act (FAA). For factual errors, our review is even more deferential: We generally do not vacate an award based on a factual error and 24 only recognize a narrow exception for “legally dispositive facts.” See Pac. Reinsurance Mgmt. Corp. v. Ohio Reinsurance Corp., 935 F.2d 25 1019, 1025–26 (9th Cir. 1991).

26 VIP Mortgage Inc. v. Gates, 162 F.4th 1010, 1013 (9th Cir. 2025). Title 9, section 10 of the U.S. 27 Code lists the grounds on which a court can vacate an arbitration award under the FAA: 28 1 (1) where the award was procured by corruption, fraud, or undue means; 2 (2) where there was evident partiality or corruption in the arbitrators, 3 or either of them; 4 (3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing 5 to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been 6 prejudiced; or 7 (4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the 8 subject matter submitted was not made. 9 9 USC § 10(a). “[A]ny party to the arbitration may apply to the court . . . for an order confirming 10 the award, and thereupon the court must grant such an order unless the award is vacated, 11 modified, or corrected as prescribed in sections 10 and 11 of this title.” 9 U.S.C. § 9. 12 B. Discussion 13 This case does not present the “very unusual circumstances” in which a FINRA award 14 should be vacated. Plaintiff has not pled specific facts suggesting that the arbitrators manifestly 15 disregarded the law, acted completely irrationally, or fall under one of the narrow FAA grounds 16 for vacating an award. 17 Plaintiff argues in conclusory terms that the panel ignored elder abuse law and refused to 18 hear evidence material to his elder abuse claim, such that 9 U.S.C. § 10(a)(3) is the most 19 applicable standard. However, plaintiff was represented by counsel at a five-day evidentiary 20 hearing in which both parties had the opportunity to present evidence and argument. Plaintiff 21 pleads no specific facts suggesting that, in reviewing the pleadings and/or ruling on the evidence, 22 the panel ignored or “nullified” the law governing one of the claims. 23 As for refusing to hear evidence, plaintiff alleges that defendants 24 declared in front of the FINRA [panel] that the 92-year-old plaintiff who is a physician by profession is a very sophisticated and 25 knowledgeable person about financial matters and knew what was going on with the LLC, and there is not evidence of . . . elder[] 26 abuse[.] 27 (Compl. at 6.) Plaintiff alleges that the FINRA panel “agreed with” this “misleading” testimony 28 and found “no evidence of elder abuse.” (Id.) While plaintiff disagrees with the panel’s evaluation 1 | of the evidence, this is not a basis for vacating the award. Rather, it would appear that □□□□□□□□□□□ 2 || claims have been thoroughly litigated, both in federal court and before a FINRA panel, and, in 3 || both cases, have been found lacking in merit. 4 As it does not appear the complaint can be cured by amendment, the undersigned will 5 || recommend dismissal and confirmation of the FINRA award. 6 C. Conclusion 7 Accordingly, IT IS HEREBY ORDERED that plaintiff's motion for expedited ruling 8 | (ECF No. 17) is DENIED as moot. 9 IT IS HEREBY RECOMMENDED THAT: 10 1. Defendants’ motion to dismiss (ECF No. 11) be GRANTED; and 11 2. The FINRA award in Case No. 24-02022 be confirmed. 12 These findings and recommendations are submitted to the United States District Judge 13 || assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1). Within fourteen (14) 14 | days after being served with these findings and recommendations, any party may file written 15 || objections with the court and serve a copy on all parties. Such a document should be captioned 16 || “Objections to Magistrate Judge’s Findings and Recommendations.” Any reply to the objections 17 || shall be served on all parties and filed with the court within seven (7) days after service of the 18 || objections. Failure to file objections within the specified time may waive the right to appeal the 19 || District court’s order. Turner v. Duncan, 158 F.3d 449, 455 (9th Cir. 1998); Martinez v. YIst, 951 20 | F.2d 1153, 1156-57 (9th Cir. 1991). 21 | Dated: June 23, 2026 / □□ I / dle ae

23 UNITED STATES MAGISTRATE JUDGE 24 25 26 || 2/fiel2042.mtd.sol.fécrs 27 28