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GELDERMANN & CO., INC. v. R.A. HARTLEY & SON

August 2, 1982

GELDERMANN & COMPANY, INC., PLAINTIFF,
v.
R. A. HARTLEY & SON, INC., DEFENDANT.



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

ORDER

This breach of contract action comes before the Court on the post-trial motions of both parties. Plaintiff's motion for judgment notwithstanding the verdict, Fed.R. Civ.P. 50(b), is granted, and its conditional motion for a new trial, Fed.R.Civ.P. 50(b), is denied. Plaintiff's motion for costs and attorney's fees is granted, and defendant's motion for a new trial on its counterclaims is denied.

I. Judgment Notwithstanding the Verdict

A. Rule 50(b)

Rule 50(b), Fed.R.Civ.P., governs directed verdicts and judgments notwithstanding the verdict. In the Seventh Circuit, it is well established that a motion for j.n.o.v. cannot be made unless a motion for directed verdict was made by the moving party at the close of all the evidence. 9 C. Wright & A. Miller, Fed.Prac. & Pro., § 2537, at 596 (1971); Pittsburgh — Des Moines Steel v. Brookhaven Manor Water Co., 532 F.2d 572, 575 (7th Cir. 1976). Defendant argues that plaintiff's motion for a directed verdict on the defendant's counterclaim, even if timely made and denied, is insufficient as a basis for judgment n.o.v. on plaintiff's complaint. The Court rejects this assertion. Continental Air Lines, Inc. v. Wagner-Morehouse, Inc., 401 F.2d 23, 26-27 (7th Cir. 1968), the primary case relied on by defendant, is inapposite. That case dealt solely with the situation where no motion for a directed verdict was made on the principal cause of action. 401 F.2d at 26. In the instant case, defendant's counterclaims involve disputed conduct which directly affects the outcome of the principal cause of action. In light of this fact and the rule that a motion for directed verdict is adequate if it is made with "sufficient certainty to apprise the Court of the movant's position with respect to the motion." 9 Wright & Miller, § 2533 at 530; Pstragowski v. Metropolitan Life Ins. Co., 553 F.2d 1, 3 (1st Cir. 1977), this Court finds plaintiff's motion for a directed verdict on defendant's counterclaim to be sufficient as a basis for plaintiff's j.n.o.v. motion on the underlying complaint.*fn1

B. The Legal Standard for J.N.O.V.

Defendant has offered no argument other than its procedural argument to counter plaintiff's j.n.o.v. motion. Since this Court finds that the facts and the law compel a finding that the jury verdict was erroneous, plaintiff's motion must be granted.

The Customer's Agreement ("the contract") which forms the basis for this action specifically provides that Illinois law governs any actions or proceedings arising out of the contract (contract, paragraph 23). In deciding whether to direct a verdict or enter a j.n.o.v. in a diversity case, the proper standard identified by the Seventh Circuit is that originally set out in Pedrick v. Peoria and Eastern Railroad Co., 37 Ill.2d 494, 229 N.E.2d 504, (1967). See Pittsburgh — Des Moines Steel Co. v. Brookhaven, 532 F.2d at 577-78. The Pedrick standard states that ". . . verdicts ought to be directed and judgments n.o.v. entered only in those cases in which all of the evidence, when viewed in its aspect most favorable to the opponent, so overwhelmingly favors movant that no contrary verdict based on that evidence could ever stand." 37 Ill.2d at 510, 229 N.E.2d at 514.

This Court finds 1) that plaintiff's prima facie case was established and uncontradicted by any evidence in the record, and 2) that there is no support in the record for defendant's affirmative defenses. As a result, there is simply no support for the jury's finding against the plaintiff and in favor of defendant on the complaint.

Regarding the first finding, the evidence indicates that, pursuant to paragraph 8 of the contract, plaintiff acted fully within its rights in restricting trading by defendant for a period of approximately one hour on January 9, 1981, and in imposing a new set of restrictions effective as of the start of trading on Monday, January 12, 1981. This Court finds no vagueness nor ambiguity in paragraph 8 or any other part of the contract. Paragraph 8 reads in pertinent part, "Customer acknowledges Geldermann's right to limit the number of open positions which Customer may maintain or acquire through Geldermann. . . ." Where there is no vagueness or ambiguity in a written contract, it will preclude any contrary implied agreement.

Additionally, this Court finds that plaintiff acted properly and reasonably within the contract when it set new margin requirements and restrictions. Plaintiff's action, governed by paragraph 5 of the agreement, was a permissible attempt to restrict further losses resulting from defendant's heavy volume of speculative trading on hedge account margins (and, in some cases, no margins).

Finally, it is undisputed that defendant left an unpaid balance or debit when it liquidated its account with plaintiff. This finding, coupled with the foregoing, compels this Court's determination that plaintiff's prima facie case was established and uncontradicted. Therefore, this Court believes that the jury's ...


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