The opinion of the court was delivered by: HOLDERMAN
JAMES F. HOLDERMAN, UNITED STATES DISTRICT JUDGE
Plaintiff Stotler and Company ("Stotler") filed a one-count complaint against Mike Khabushani on September 17, 1987 alleging that Mr. Khabushani breached his contract with Stotler. Mr. Khabushani answered and counterclaimed on November 13, 1987. Stotler filed an amended complaint on May 11, 1988, alleging breach of contract and, in a second count, common law fraud. Pending before the court is Stotler's motion for summary judgment.
On July 14, 1987 Stotler and Mr. Khabushani entered into a written brokerage contract. Mr. Khabushani opened a trading account pursuant to this contract on August 18, 1987 with a check for $ 40,000.00. Mr. Richard Ullmer, one of Stotler's investment brokers, thereafter began trading in commodity futures contracts on behalf of Mr. Khabushani's account. At some point, Mr. Khabushani's check was returned for insufficient funds; on August 24, 1987 Stotler deducted $ 40,000.00 from Mr. Khabushani's account to cover the amount of the bounced $ 40,000.00 check. This debit left a credit balance of $ 4,671.55 in the account.
On September 15, 1987 Mr. Khabushani authorized Stotler to purchase certain treasury bond contracts and S & P futures contracts on his behalf. That day, the contract price for these investments declined dramatically. On September 15, 1987 Mr. Ullmer informed Mr. Khabushani that he must cover the margin in order to keep his position. (Plaintiff's Statement of Uncontested Facts, para. 12; Khabushani Declaration, para. 12; Defendant's Exhibit A). Mr. Khabushani did not supply the necessary margin. Consequently, Stotler liquidated Mr. Khabushani's account on September 16, 1988 resulting in a debit balance of $ 111,367.55. Stotler seeks recovery of this amount. Mr. Khabushani's counterclaim seeks $ 250,000.00 from Stotler to cover the profit he would have made on his investment if Stotler had not liquidated his account.
Summary judgment is appropriate only if the parties' evidentiary materials show that there is no genuine dispute over facts that might affect the outcome of the lawsuit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). A court must enter summary judgment if, after adequate time for discovery and upon motion, a party fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which the party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986). In making such a showing, there must be sufficient evidence favoring the nonmoving party for a reasonable jury to return a verdict for that party. Anderson, 106 S. Ct. at 2510.
The Customer's Agreement between Stotler and Mr. Khabushani provided as follows:
(Plaintiff Exhibit 1, para. 7). This provision clearly authorizes Stotler to close out a customer's position without notice when the account does not contain the amount of requisite margin. Mr. Khabushani concedes that Stotler notified him of the margin requirement on September 15, 1987. (Khabushani Dec. para. 12). Therefore, Stotler did not breach the terms of the contract by liquidating Mr. Khabushani's positions on September 16, 1987 when Mr. Khabushani failed to cover the margin.
Mr. Khabushani asserts that Mr. Ullmer orally modified the contract by limiting his trading activities to "day trading." (Khabushani Dec. para. 10). Using a "day trading" technique, an investor enters and exits a trading market on the same day and does not keep any open positions while the market is closed overnight. Mr. Ullmer explained to Mr. Khabushani that this type of trading did not require meeting any margin calls, but only covering any losses that might occur by the end of the day. (Khabushani Dec. para. 10).
Mr. Ullmer's oral agreement to use a "day trading" method for Khabushani's trades did not, however, modify the terms of the written agreement ...