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ROSENTHAL & COMPANY v. DODICK

October 17, 1973

ROSENTHAL & COMPANY, PLAINTIFF,
v.
JACK M. DODICK, DEFENDANT.



The opinion of the court was delivered by: Bauer, District Judge.

MEMORANDUM OPINION AND ORDER

This cause comes on the defendant's motion to dismiss or alternatively, for a change of venue.

This is an action based on diversity of citizenship seeking to redress an alleged breach of a Customer's Agreement between the plaintiff and defendant.

The plaintiff, Rosenthal & Company ("Rosenthal"), is a limited partnership organized under the laws of the State of Illinois, with its principal place of business at Chicago, Illinois. The plaintiff Rosenthal is a broker and dealer in commodities. The defendant, Jack M. Dodick ("Dodick") is a citizen and resident of the State of New York and allegedly an experienced, sophisticated and knowledgeable trader in commodities. The amount in controversy, exclusive of costs and interest, exceeds the sum of $10,000.00.

The plaintiff in the complaint alleges, inter alia, the following facts:

  1.  On or about February 15, 1973 Rosenthal and
      defendant Dodick entered into a Customer's
      Agreement which provided, among other things,
      that "all monies which the undersigned
      [defendant Dodick] owes to you [plaintiff
      Rosenthal] at any time shall be repayable to
      you at your office in Chicago." From time to
      time and in accordance with statements of
      accounts (purchase and sale), plaintiff and
      defendant entered into agreements for the
      purchase of certain commodities. As to each
      transaction plaintiff caused a written
      confirmation to be mailed from the office in
      Chicago to the defendant. Defendant did not
      in any manner or at any time object to the
      written confirmations or any of the terms
      thereof.
  2.  After plaintiff made purchases on the
      defendant's behalf, plaintiff demanded that
      defendant deposit with them additional
      monies, in accordance with the Customer's
      Agreement. Defendant Dodick failed and
      refused to deposit the additional funds
      demanded. Thereupon the plaintiff Rosenthal
      liquidated defendant Dodick's account. After
      allowing full credit for the commodities
      liquidated and all other just set offs or
      claims, defendant is indebted to plaintiff in
      the sum of $444,492 plus interest.
  3.  On or about March 2, 1973 plaintiff demanded
      that defendant deposit with them additional
      sums of money for margin. At that time the
      market price of commodities purchased for the
      defendant had dropped and the defendant's
      previous deposits of margins were inadequate.
      In order to induce plaintiff to continue to
      carry defendant's account, defendant made and
      delivered to plaintiff his personal check for
      $100,000.00 dated March 3, 1973. On or about
      March 5, 1973 the defendant ordered the
      drawee bank to stop payment on the check. The
      check was returned to the plaintiff
      dishonored on or about March 12, 1972. By
      this time the market price of the commodities
      in question had dropped still further. As a
      direct and proximate result of these wrongful
      acts of the defendant plaintiff was injured
      in the sum of $444,492.97. Further the
      actions of the defendant were willful and
      malicious. Plaintiff ought to have and
      recover punitive damages in the sum of
      $450,000 and the amount of the dishonored
      check.

The defendant in his instant motion contends that the plaintiff has failed to properly allege that this Court has subject matter jurisdiction over this action. Further, the defendant contends that this Court lacks jurisdiction over the person of the defendant. In the alternative the defendant contends that this Court should transfer this action to the Southern District of New York in the interest of justice and for the overall convenience of the parties and witnesses.

The defendant, in support of his motion, has submitted his affidavit which states in relevant part:

  1.  "I have never been in Illinois for the
      purpose of transacting any business with
      Rosenthal & Company. I never made any
      telephone calls to Rosenthal & Company in
      Illinois. Rosenthal & Company has a business
      office located at 2 Coentis Slip, New York
      City, New York (hereinafter referred to as
      `Rosenthal's New York office')."
  3.  "The customer documents attached to the
      complaint as Exhibit A was presented to me by
      Mr. Claude C. Huang and executed by me at Mr.
      Claude C. Huang's residence in New Jersey on
      February 15, 1973 and Mr. Huang delivered
      them to Mr. Philip Smith of Rosenthal's New
      York office."
  4.  "On February 21, 1973 and February 23, 1973 I
      delivered two checks totalling $50,000 to
      Claude Huang in New York City and he
      delivered them to Mr. Philip Smith of
      Rosenthal's New York office. They were
      deposited by Rosenthal in New York City. All
      of the purchases made by plaintiff allegedly
      on my behalf were executed by Rosenthal's New
  ...

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