The opinion of the court was delivered by: BUCKLO
On January 19, 1996, Mr. Madero filed his amended complaint alleging that he opened a commodities account with defendant Refco in January, 1993.
Defendant Scott was the broker on the account. Mr. Madero claims in his complaint that defendants violated the Commodity Exchange Act, 7 U.S.C. § 1, et seq. ("CEA"), and Illinois law by causing Mr. Madero's commodities account to suffer losses. Defendants filed a motion for summary judgment on the grounds that the one-year limitations period in paragraph 18 of the Customer Agreement between Refco and Mr. Madero bars Mr. Madero's lawsuit. For the reasons discussed below, defendants' motion is granted in part and denied in part.
Whether the Contractual Limitations Period Applies to Mr. Madero's CEA Claims
Defendants contend that the parties were able to contractually alter the two-year statute of limitations contained in the CEA. See 7 U.S.C. § 25(c). I disagree. The general federal policy toward limitation of actions clauses is, as stated by the Supreme Court, that
in the absence of a controlling statute to the contrary, a provision in a contract may validly limit, between the parties, the time for bringing an action on such contract to a period less than that prescribed in the general statute of limitations ... .
Taylor v. Western and Southern Life Insurance Company, 966 F.2d 1188, 1204 (7th Cir. 1992) (quoting Order of United Commercial Travelers of America v. Wolfe, 331 U.S. 586, 608, 91 L. Ed. 1687, 67 S. Ct. 1355 (1947) (emphasis added). The Seventh Circuit has forcefully suggested that because Congress provided in the CEA an express statute of limitations applicable to causes of action accruing after January 11, 1983, there is a strong public policy in favor of that particular limitations period. Cange v. Stotler and Company, Inc., 826 F.2d 581, 584 (7th Cir. 1987) (" Cange I"). Permitting the parties to contract for a shorter limitations period would, therefore, be contrary to public policy. See id.; see also Taylor, 966 F.2d at 1205 (stating that in Cange I, court held that one-year contractual limitations clause applied to CEA cause of action accruing before January 11, 1983 in light of lack of stated policy indicating that one-year limitations period was inappropriate). Defendants do not argue that Mr. Madero's cause of action under the CEA would be barred by that statute's two-year limitations period. Accordingly, defendants are not entitled to summary judgment on Mr. Madero's CEA claims.
Whether the Contractual Limitations Period Applies to Mr. Madero's Illinois Claims
Defendants also contend that the parties were able to contractually alter the statute of limitations applicable to Mr. Madero's Illinois law claims. I agree. See International Business Lists, Ltd. v. American Telephone & Telegraph Company, 878 F. Supp. 102, 105 (N.D. Ill. 1994) (applying Illinois law) ("Parties to a contract may agree to be bound by a shorter limitations period than that embodied in a statute of limitations, as long as the period they choose is reasonable.").
Under Illinois law, "when a defendant raises the affirmative defense of the statute of limitations, the burden is on the plaintiff to prove that the claim has been filed within the limitations period." Weger v. Shell Oil Company, 966 F.2d 216, 218 (7th Cir. 1992). Mr. Madero argues that the one-year contractual limitations period in paragraph 18 does not apply to his claims because he did not agree to it. Mr. Madero asserts that the faxed copy of the Customer Agreement that he signed in January, 1993 consisted of only two pages containing paragraphs 1 through 5, 25, and 26. He makes this assertion in spite of the fact that paragraph 5 ended in mid-sentence and paragraphs 6 through 24 were missing.
At any rate, it is undisputed that Mr. Madero signed another Customer Agreement in March, 1993 that contained paragraph 18. He contends, however, that defendants gave him only the signature page to sign. It is undisputed, however, that paragraph 18 was on the reverse side of the signature page. Thus when he signed the second Customer Agreement, Mr. Madero actually had the relevant clause before him because it was on the same sheet of paper as the signature block. That Mr. Madero may have failed to read paragraph 18 before signing the Customer Agreement cannot relieve him from being bound by that paragraph. See State Bank of Geneva v. Sorenson, 167 Ill. App. 3d 674, 521 N.E.2d 587, 592, 118 Ill. Dec. 305 (2nd Dist. 1988) (stating that party who has opportunity to read contract before signing, but signs before reading, is bound by contract).
Mr. Madero argues that even if defendants gave him a copy of the Customer Agreement at the time he signed it, but he failed to read it, he still would not be bound by the one-year limitations period. He bases this argument on his contention that the Customer Agreement was a form contract and the limitations provision was boilerplate. The three cases that Mr. Madero cites, however, do not indicate that the limitations provision would not be enforceable against him even if it were boilerplate in a form contract. The courts in two of the cases mentioned the issue of form contracts with forum selection clauses. Neither court, however, held that such a clause cannot be enforceable. See Karlberg European Tanspa, Inc. v. JK-Josef Kratz, 618 F. Supp. 344, 348 (N.D. Ill. 1985) (noting in dicta that other courts have recognized "a qualitative difference between form contracts and freely negotiated contracts specifically tailored by the parties to address their concerns"); G.H. Miller & Co. v. Hanes, 566 F. Supp. 305, 308 (N.D. Ill. 1983) (stating that clauses that "purported to be forum selection provisions" were boilerplate and therefore one of a number of factors to be considered in deciding a motion for a change of venue). In the third case, the court held that a party was not bound by a forum selection clause constituting "obscure and tardy boilerplate." Purac, Inc. v. Trafpak Services, 694 F. Supp. 476, 477 (N.D. Ill. 1988). There is no indication that the limitations clause in the Customer Agreement was either "obscure" or "tardy."
Mr. Madero argues that as fiduciaries, defendants owed him "a duty of good faith, loyalty, and honesty)" in regard to any "modifications" to the contract that he signed in March, 1993. However, defendants did not conceal that the March, 1993 Customer Agreement contained a limitations clause -- Mr. Madero had the opportunity to read paragraph 18 before signing that Customer Agreement but chose not to do so.
Mr. Madero additionally argues that the purported addition of paragraph 18 to the second Customer Agreement that he signed constituted a contract modification. Mr. Madero maintains that because he "did not accept the contract modification and did not receive any additional consideration for such modification[,] ... the modification cannot be enforced against him." Nevertheless, "the Illinois Supreme Court has stated that a contract modification that has been executed by the parties will not be disturbed by the court, even in the absence of consideration." Robson v. Robson, 514 F. Supp. 99, 104 (N.D. Ill. 1981), affirmed, 681 F.2d 820 (7th Cir. 1982). See also Corrugated Metals, Inc. v. Industrial Commission, 184 Ill. App. 3d 549, 540 N.E.2d 479, 484, 132 Ill. Dec. 739 (1st Dist. 1989). By signing the second Customer Agreement containing paragraph 18, Mr. Madero executed any modification embodied in that agreement.
Mr. Madero next argues that defendants are equitably estopped from asserting the contractual limitations period as a defense. He maintains that defendants withheld its customer agreement from him and misled him as to the transactions that took place in his account. Mr. Madero does not explain, and I cannot discern, how these actions constitute the equivalent of promises to pay a claim, such as the ones that have served as grounds for finding that the defendant induced the plaintiff to forbear suit within the applicable limitations period in the cases he cites. See Cange I, 826 F.2d at ...