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Rosenthal-Collins Group, L.P. v. Reiff

March 30, 2001

ROSENTHAL-COLLINS GROUP, L.P., LEHIGH VALLEY FUTURES, INC., AND GREGORY DEUTCH, PLAINTIFFS-APPELLEES,
v.
J. DONALD REIFF, DEFENDANT-APPELLANT.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. No. 97 CH 11264 HONORABLE AARON JAFFE, JUDGE PRESIDING.

The opinion of the court was delivered by: Presiding Justice Campbell

Defendant J. Donald Reiff appeals an order of the circuit court of Cook County vacating an arbitration award on the motion of plaintiffs Rosenthal-Collins Group, L.P., Lehigh Valley Futures, Inc., and Gregory Deutch.

The record on appeal discloses the following facts. In June 1996, Reiff filed an arbitration claim with the National Futures Association (NFA) against the plaintiffs and Quantum Financial Services. *fn1 Rieff alleged that unauthorized trades were made on a futures trading account he had opened with Lehigh Valley Futures, Inc.

The record contains a letter dated October 1, 1996, from Susan D. Wehrle, a NFA Case Administrator, to counsel for the parties. Wehrle wrote in part that the NFA had considered information provided by the parties about the location of the hearing. The letter also stated that the NFA had yet to select a panel, but did not intend to honor the forum selection clause and planned to select arbitrators from the New York City area.

An arbitration hearing was held in New York City before a three-member panel on August 12 and 13, 1997.

The panel issued an award in favor of Reiff against Rosenthal-Collins Group, L.P. in the amount of $88,581, against Lehigh Valley Futures, Inc. in the amount of $66,898, and against Deutch in the amount of $88,581. The record contains three copies of the award. The copy signed by Gerald Asken was dated August 15, 1997. The copy signed by Theodore Kadin was dated August 16, 1997. The copy signed by William McCormick was dated August 19, 1997. The service date for the award was August 25, 1997.

The record contains a letter dated August 28, 1997, from Reiff's counsel to Wehrle at the NFA. This letter purported to memorialize a telephone conversation between Reiff's counsel and Wehrle, in which counsel told Wehrle that he had just learned that Reiff had sent two envelopes to Gerald Asken. Reiff's counsel wrote that the envelopes contained materials intended to rebut a claim made at the hearing that Reiff was a convicted drug dealer. Reiff's counsel wrote that he understood that Asken was out of the country and that Wehrle had instructed Asken's law firm to return the envelopes unopened.

The record contains a letter dated August 29, 1997, from Wehrle to Reiff's counsel stating that she had contacted Asken's firm and that the materials would be returned. Wehrle also wrote that Asken was out of the country and had no knowledge of the situation. Wehrle further wrote that "although the NFA had not served the Award, the Panel had already made its decision before Mr. Reiff sent the packages." Wehrle wrote that the panel had not been prejudiced by Reiff's action.

The August 28 and 29 letters contain notations that copies were to be sent to plaintiffs' counsel. Plaintiffs' brief states that copies were sent to them.

On September 9, 1997, the Rosenthal-Collins Group filed a petition to vacate the award, alleging that the arbitrators exceeded their authority and that the award was procured by undue means through ex parte contact, i.e., the materials sent to Asken by Rieff. On September 11, 1997, Lehigh Valley Futures and Gregory Deutch moved to intervene, making the same allegations. On December 5, 1997, plaintiffs filed an amended consolidated complaint to vacate the award.

On February 17, 1998, the trial court entered an order stating that the matter would be heard as a motion, but permitting limited discovery in the matter. The record contains an affidavit by Cynthia Cain, the NFA's Director of Arbitration. Cain's duties included maintenance of the NFA's arbitration records and files. In the affidavit, Cain states that she is familiar with the Rieff case. The Cain affidavit states that the panel in this matter rendered its decision on August 13, 1997, and asked the NFA to prepare the award form. The Cain affidavit states that the NFA received the award form signed by Asken on August 19, 1997. The NFA received the other two copies on August 25, 1997. The Cain affidavit also states that Asken's office told the NFA that Rieff's letters were received on August 21, 1997, when Asken was out of town.

The record also contains Rieff's affidavit. Rieff stated that he sent two letters to Asken: one on August 19, 1997 by certified mail, the other by regular mail a few days later. Rieff denied sending any letters to the other arbitrators. Rieff also denied having any verbal communication with the arbitrators after the hearing.

The record contains a copy of a letter dated August 24, 1996, from Rieff to "Atty Asken and Ari." This letter appears to address allegations made against Rieff by counsel for the Rosenthal-Collins Group. Rieff wrote that he "still consider[ed] [himself] under oath."

The record contains a copy of a Domestic Return Receipt for certified mail addressed to Asken, showing a delivery date of August 21, 1997. The record contains a copy of a letter dated August 25, 1997, from Rieff to "Atty Asken and Committee." The letter purports to address allegations made against Rieff and concludes with the phrase "Thanking you in advance." This letter is stamped as received on August 21, 1997 and ...


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