Skari v. Murnane

Background

Alan Skari brought the action to enforce an order issued by the Montana Commissioner of Securities and Insurance (MCSI). The complaint also asserted additional claims for damages beyond those listed in the Montana order. According to the complaint, Ryan Michael Murnane, a formerly licensed stockbroker, made excessive trades in Skari’s brokerage accounts from 2014 to 2015 and in later years in order to generate commissions. Skari alleged that he was hospitalized during the relevant period and therefore was not communicating with Murnane about the trades.

After an investigation, the MCSI determined that Murnane had churned the accounts—that is, had made excessive trades to generate commissions—and ordered him to pay Skari $313,069. The opinion states that this amount had not been paid. Murnane failed to answer the complaint, and Skari moved for default judgment.

Damages

The court stated that a default judgment establishes legal liability, but the court must still determine the amount of damages with reasonable certainty. The court questioned whether the MCSI award included unlawful commissions in addition to the loss in account value, and it asked Skari to explain discrepancies between the MCSI materials and figures calculated from Skari’s 2016 tax returns.

Skari’s counsel said that difficulties related to the coronavirus pandemic prevented him from locating documents needed to answer the court’s questions. Because Skari did not adequately support damages above the amount stated in the Montana order, the court limited the award to $313,069.

Service

The court also examined a discrepancy between the address listed by Skari’s process server and the address in the MCSI order. After Skari’s counsel submitted documents, including photographs, the court was satisfied that service had been made at the address identified in the MCSI records.

Ruling

The court entered judgment in favor of Skari for $313,069. Prejudgment interest was ordered to run from December 7, 2018, the date of the MCSI order, and to be calculated under Montana law at the rate for federal-reserve bank prime loans plus three percent. The court noted that Skari had requested nine percent interest but had not shown that the MCSI had ordered the ten-percent interest referenced in another Montana statute.

The court did not award attorneys’ fees because Skari had not provided contemporaneous records or another basis for calculating a fee award. The Clerk of Court was directed to enter judgment and close the case.