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Ronwin v. Piper

OPINION FILED MARCH 29, 1983.

EDWARD RONWIN, PLAINTIFF-APPELLANT,

v.

PIPER, JAFFRAY & HOPWOOD, INC., ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County; the Hon. Warren D. Wolfson, Judge, presiding.

JUSTICE HARTMAN DELIVERED THE OPINION OF THE COURT:

Plaintiff, Edward Ronwin, appeals from the dismissal of his complaint against defendants Piper, Jaffray & Hopwood, Inc. (hereinafter Piper), George C. McKann, Paul M. Steinbrink, Paul W. Fairchild (hereinafter the panel or the arbitrators), and the New York Stock Exchange (hereinafter N.Y.S.E.).

Ronwin, who possessed a juris doctorate in law and an advanced degree in biochemistry, attributed his substantial losses in the commodities market to Piper. He and Piper agreed to submit his claim to arbitration. After a lengthy hearing, conducted under the auspices of the N.Y.S.E., Ronwin's claim was denied. Thereafter, Ronwin filed a complaint in the circuit court of Cook County seeking to have the arbitrators' decision vacated. The complaint was dismissed. Ronwin appeals. We affirm.

At the arbitration hearings, Ronwin testified that he had acquired a substantial amount of stock which he later sold for approximately $81,000. He learned of the $13,000 tax consequences on the sale and asked Robert Westlund, general manager of Piper's Des Moines, Iowa office, if the $81,000 could be used to generate the $13,000 tax payment he would have to make. Westlund suggested gold futures and bond futures markets. He told Ronwin that as interest rates went down the price of bond futures would go up; the price of gold would "bottom out" at $550; and bond futures would bottom at $65. None of these predictions proved to be correct.

At his request, Westlund spoke with one of Piper's more experienced commodities brokers who was "cautiously optimistic" about the bond futures market. Ronwin relied upon this man's opinion, but continued to suffer substantial losses. He had authorized Piper to withdraw money from his money market account to cover these losses, but complained that because these withdrawals were sometimes not recorded until a day after they were made he was given a "false picture" of the magnitude of his losses.

On cross-examination, Ronwin admitted that he had read, signed and received a copy of a commodity account agreement and risk disclosure statement prepared by Piper which explained that commodities trading involved a very high degree of risk. He also admitted that he kept a running log of all the transactions he entered into, that he knew that he had lost approximately $4,000 in his first two gold futures trades, but explained, "It's like a drug. You get high * * *." Ronwin then rested.

Piper called Westlund, who testified that after two weeks of consideration and three or four telephone conversations, Ronwin expressed the desire to trade in the commodities market. Ronwin came in to sign the commodity account agreement and risk disclosure statement, which Westlund asked him to read or, at least, take with him to read at his leisure. Westlund explained the market requirements and trading limits in the gold futures market to Ronwin, and the volatility of the market. Westlund then suggested they not rush into the gold futures market, but wait until the time was right, and even then buy only one gold contract. It was never his intention that Ronwin trade in a large number of contracts.

When the price of Ronwin's original contract dropped, Westlund suggested that Ronwin either stay in and hope that the price would rise or sell out and take the loss, but Ronwin insisted upon "spreading his position." Ronwin suffered a later loss and Westlund suggested that they take the loss and get out of the market; however, Ronwin insisted upon staying in and trying to get his money back.

Ronwin began trading in the bond futures market. Westlund told Ronwin that he was becoming overexposed, but Ronwin refused to take a more conservative position because he was convinced that both markets would improve dramatically in the near future. Often, when Westlund was out to lunch, Ronwin would call and direct another broker in the office to buy or sell for him. Westlund would learn of the transaction only later that afternoon.

Ronwin knew exactly how much money he had in his money market account because Westlund had one of his assistants calculate what his balance was for him daily after Ronwin had informed him that his (Westlund's) secretary had given him an incorrect total one day. After Ronwin had suffered substantial losses in both markets, he asked Westlund to lend him enough money to allow him to continue trading on the exchange. Westlund responded that he did not have that much money and that, even if he had, his lending it to Ronwin would be illegal. Shortly thereafter Ronwin closed his accounts with Piper. After Ronwin had cross-examined Westlund, Piper rested.

The arbitrators denied Ronwin's claim. Ronwin then filed a pro se complaint in the circuit court of Cook County alleging that he was an actively practicing Iowa attorney, seeking to have the arbitrators' award vacated and the dispute re-tried by the court. Piper, the arbitrators and the N.Y.S.E. filed motions to strike and dismiss the complaint pursuant to sections 45 and 48 of the Illinois Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, pars. 45, 48), now sections 2-615 and 2-619 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, pars. 2-615, 2-619). After considering the memoranda submitted and oral arguments made by the respective parties, the circuit court granted defendants' motions to dismiss.

I

Ronwin first contends that the arbitrators' award should be vacated because Piper, through its agent, Robert Westlund, induced him to trade on the commodities market and then concealed the size and number of his losses in that market in violation of public policy of the United States and Illinois, which is "to substitute a philosophy of full disclosure for one of caveat emptor and to thereby protect the investing public against the sharp practices of promoters whether or not such practices meet the requirements of common-law fraud." (Norville v. Alton Bigtop Restaurant, Inc. (1974), 22 Ill. App.3d 273, 281, 317 N.E.2d 384.) Although not specifically mentioned as a ground upon which an arbitrator's award may be vacated in section 12(a) of the Uniform Arbitration Act (Ill. Rev. Stat. 1979, ch. 10, par. 112(a)), public policy in general has been recognized as an additional ground upon which an arbitrator's award may be vacated. Board of Trustees v. Cook County College Teachers Union, Local 1600 (1979), 74 Ill.2d 412, 386 N.E.2d 47.

• 1 Neither the judgment of the circuit court nor the arbitrators' award were accompanied by findings of fact. All controverted facts and issues therefore must be presumed as having been resolved in favor of the prevailing party. (Wood v. Price (1868), 46 Ill. 435; National Acceptance Co. of America v. Pintura Corp. (1981), 94 Ill. App.3d 703, 707, 418 N.E.2d 1114; Notzke v. Art Gallery, Inc. (1980), 84 Ill. App.3d 294, 299-300, 405 N.E.2d 839.) Among these presumptive findings are that Piper neither induced Ronwin to enter the commodity market nor concealed from him ...


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