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Stotler and Co. v. Able

decided: February 23, 1989.

STOTLER AND COMPANY, PLAINTIFF-APPELLANT, CROSS-APPELLEE,
v.
WILLIAM J. ABLE, DEFENDANT-APPELLEE, CROSS-APPELLANT



Appeal from the United States District Court for the Northern District of Illinois. No. 87 C 5709-Ilana D. Rovner, Judge.

Cummings, Flaum, and Kanne, Circuit Judges.

Author: Kanne

KANNE, Circuit Judge

Stotler and Company, a futures commission merchant, brought an action in the district court to recover an alleged deficit in William J. Able's discretionary trading account. Stotler received a writ of attachment, freezing Able's assets at J. F. Dalton Associates' commodities futures trading house. The district court later dismissed the action and vacated the writ of attachment. However, because of confusion surrounding the events leading up to the dismissal and occurring immediately thereafter, Dalton failed to release the funds before Stotler filed another suit and received another writ of attachment.

Able filed a motion to enforce the district court's order dismissing the suit and vacating the original writ of attachment and to hold certain persons in contempt. The district court denied Able's motion, as well as Stotler's oral motion for sanctions against Able for filing the enforcement/contempt motion. Both parties appeal their adverse rulings. We affirm.

I. BACKGROUND

The following facts are taken from Judge Rovner's findings of fact which were entered on July 21, 1987. The parties do not contest her findings but instead challenge her legal conclusions which we will discuss below.

The plaintiff, Stotler and Company, is a futures commission merchant and an Illinois corporation. The defendant, William J. Able, is a California citizen. Able opened a discretionary trading account with Stotler through Stotler's introducing broker, Saratoga Futures, Inc., a California corporation. The intervening plaintiff, J. F. Dalton Associates of Chicago, is one of several commodities futures trading houses at which Able had placed assets.

On August 15, 1986, Stotler filed an original action in the United States District Court for the Northern District of Illinois, concerning an alleged deficit in Able's trading account. On June 17, 1987, Judge Getzendanner granted Stotler's motion for an order of attachment, freezing Able's assets at several commodities futures trading houses, including Dalton.

Approximately one week later, upon Able's motion, Judge Getzendanner dismissed Stotler's suit, determining that Stotler had failed to join Saratoga whom Judge Getzendanner deemed to be an indispensable party to the action. Consequently, the writ of attachment was dissolved. The attorneys for Able and Stotler immediately telephoned Mr. Kimmelman, an upper level supervisor at Dalton, and informed him that Judge Getzendanner had dismissed the suit against Able in its entirety and that the writ of attachment had been vacated. Subsequently, Stotler's attorney sent a letter to Mr. Kimmelman confirming the district court's order. After Mr. Kimmelman spoke with the attorneys and actually received written confirmation that the funds could be released, Dalton released Able's assets.

On Wednesday, June 24, 1987--the day following Judge Getzendanner's dismissal of the first action--Stotler filed a new complaint in the Circuit Court of Cook County, Illinois. The next day, June 25, 1987, Stotler obtained an ex parte writ of attachment in the state court action, again freezing Able's assets at Dalton.

On Friday, June 26, 1987, Able removed the state court action to the United States District Court for the Northern District of Illinois. On the same day, Able filed an emergency motion to quash the writ of attachment issued by the state court. Later that Friday afternoon, Judge Rovner heard that motion and, ruling from the bench, held: (1) that the action was properly removed from the Circuit Court of Cook County; (2) that Stotler was collaterally estopped to relitigate the issue of whether Saratoga was an indispensable party; and (3) that, pursuant to Judge Getzendanner's holding in the earlier action, Saratoga was indeed an indispensable party and that the present court action likewise had to be dismissed for failure to join Saratoga. Thereafter, Judge Rovner dismissed the action and vacated the state court's writ of attachment. The judgment, in the form of a minute order,*fn1 was filed and notices were mailed that same afternoon. However, the order was not docketed until four days later on Tuesday, June 30, 1987.

At the close of the Friday afternoon hearing, Judge Rovner ordered counsel for Stotler to join counsel for Able in making a telephone call to Dalton's offices to inform it that the state court writ of attachment had been vacated by the district court. Immediately, Mr. Goldberg, an attorney for Able, and Mr. Kolter, an attorney for Stotler, telephoned Dalton's offices. They spoke with Mr. Collins, the operations manager for Dalton, informing him of what had transpired and explaining that the writ of attachment was no longer in effect. Mr. Collins had experienced no previous contact with either of the attorneys and did not know whether they were who they purported to be.

Mr. Collins telephoned his superior, Mr. Kimmelman, who was home ill. Mr. Kimmelman informed Mr. Collins that he should obtain in writing proof that the writ of attachment was no longer effective. Apparently, Mr. Kimmelman's instructions reflected the procedures followed when Judge Getzendanner vacated the earlier writ of attachment.

Later that same Friday afternoon, Mr. Collins received a call from Leslie Hayes, an associate of Able's. Ms. Hayes asked Mr. Collins to release Able's funds. Mr. Collins informed Ms. Hayes that he would not release the funds until he had written confirmation that the writ of attachment had been vacated.

Ms. Hayes then contacted Mr. Goldberg, one of Able's attorneys. Mr. Goldberg subsequently called the offices of Dalton again and spoke with Mr. Van Booren. Mr. Van Booren informed Mr. Goldberg that he did not have authority to release the funds and that such actions were outside his area of responsibility. Mr. Goldberg informed Mr. Van Booren that a copy of the district court's judgment dismissing the action and vacating the writ of attachment would be delivered to Dalton's offices as soon as possible.

Late that same day, Able's attorneys obtained two copies of Judge Rovner's written judgment and instructed a messenger to deliver one of the copies to Mr. Collins at Dalton's offices. Mr. Collins read the minute order. Apparently, Mr. Collins did not understand its contents or its implications, perhaps in part because the judgment did not mention Dalton by name and also because he was unfamiliar with such legal maneuvering. Mr. Collins informed the messenger that he personally could not release the funds. When contacted later by Mr. Goldberg, he reiterated that statement.

After this development, Mr. Collins attempted to contact Mr. Kimmelman again, but was unable to reach him. He left a copy of the judgment on Mr. Kimmelman's desk for him to see upon his return to the office on Monday morning. Mr. Collins did not attempt to contact Mr. Kimmelman again during the weekend.

Mr. Kimmelman arrived at his office on Monday morning between 6:15 a.m. and 6:30 a.m. After examining the minute order, Mr. Kimmelman apparently did not understand why the writ of attachment had been issued by a state court, yet the minute order indicated that it was vacated by the United States District Court for the Northern District of Illinois. Mr. Kimmelman determined that ...


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