866 F.2d 950 (7th Cir. 1989), 87-2388, Lowrance v. Hacker

Docket Nº:87-2388.
Citation:866 F.2d 950
Party Name:Thomas J. LOWRANCE, Plaintiff-Appellee, v. Stephen J. HACKER, Defendant-Appellant.
Case Date:January 26, 1989
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

Page 950

866 F.2d 950 (7th Cir. 1989)

Thomas J. LOWRANCE, Plaintiff-Appellee,

v.

Stephen J. HACKER, Defendant-Appellant.

No. 87-2388.

United States Court of Appeals, Seventh Circuit

January 26, 1989

Argued Sept. 7, 1988.

L. Andrew Brehm, Schuyler Roche & Zwirner, Chicago, Ill., for defendant-appellant.

Page 951

Morris W. Ellis, Ellis & Ellis, Chicago, Ill., for plaintiff-appellee.

Before WOOD, Jr., and COFFEY, Circuit Judges, and GRANT, Senior District Judge. [*]

HARLINGTON WOOD, Jr., Circuit Judge.

Plaintiff Thomas J. Lowrance brought this action against Stephen J. Hacker to collect monies allegedly owed by Hacker as a result of Hacker's commodity trading activities. Hacker raised the affirmative defense of accord and satisfaction, claiming that agreement was reached between the parties discharging any remaining debts. The district court found that Hacker failed to establish the defense of accord and satisfaction and awarded the plaintiff $39,309.30. Hacker appeals from that judgment.

Plaintiff Lowrance, a resident of Illinois, originally filed this action in the Circuit Court of Cook County, Illinois. Defendant Hacker, a resident of Florida, timely removed the case to federal district court under 28 U.S.C. Secs. 1441, 1446.

Lowrance was a licensed commodities trading advisor, engaged in clearing trades for customers involving commodity futures contracts bought and sold on the various commodity exchanges. Hacker was a heavy trader in the commodity futures market. From June to September, 1984, Hacker utilized Lowrance's services as a trading advisor. Lowrance brought this action as the assignee of Rosenthal & Co. ("Rosenthal"). Rosenthal was a commodities brokerage firm located in Chicago. Rosenthal acted as a clearinghouse for persons interested in trading commodity futures contracts. In February 1984, Hacker opened a customer account with Rosenthal. Hacker executed a limited power of attorney authorizing Lowrance to act as his agent in various trading transactions and Lowrance became Hacker's commodities trading advisor with respect to his Rosenthal account. Hacker agreed to indemnify any indebtedness arising from any trade or debit balance due thereon. All trading on Hacker's behalf was done through Lowrance.

During the period from June to September, 1984, Hacker actively traded in the futures markets. His trading was remarkably unsuccessful and during that time period, to cover losses and to meet margin requirements, Hacker deposited more than $500,000 into his Rosenthal account. Despite these deposits, Hacker's account had a debit balance of $52,309.30 at the end of all trading. Most of these losses were accumulated through trading that took place on September 13. On September 12, Hacker's account had a debit balance of approximately $17,000 and Hacker deposited $25,000 into his Rosenthal account on that date, giving him a credit balance of approximately $8,000. Losses taken on September 13 created a final debit balance of $52,309.30.

Pursuant to a contractual relationship between Lowrance and Rosenthal, Lowrance was required to pay Rosenthal the amount of any debit balance owed by one of his customers. Lowrance paid the $52,309.30 balance and received an assignment of all rights and remedies from Rosenthal. The district court found that on September 14, Lowrance informed Hacker by phone of the existence of a large debt in the approximate amount of $47,000. The amount later grew to $52,309.30 when Hacker's positions in another commodity were liquidated. Lowrance made numerous attempts to recover the debit balance from Hacker, who repeatedly refused to pay. On Sunday, November 4, Lowrance traveled to Hacker's residence near Orlando, Florida to discuss the situation in person. Hacker again refused to pay.

On February 21, 1985, Lowrance and Hacker discussed the $52,309.30 debt on the telephone. Hacker told Lowrance that a judgment in excess of $1,000,000 had just been entered against him in a proceeding

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brought by American Can Co. Hacker then offered to make a partial payment of the debt. Lowrance claims that Hacker promised to pay $14,000 and never told him the payment was intended to settle the entire debt. Hacker claims that he offered $13,000 in satisfaction of the outstanding debt.

It is undisputed that on that same day Hacker sent Lowrance a form letter of agreement, unexecuted by Hacker, along with a check for $13,000. The letter provided in part that "in lieu of conditions which exist and lack of remedies available to improve them, I have enclosed a check which we discussed as full and final payment by me to you, your successors and assigns, for any and all outstanding...

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