Street v. J.C. Bradford & Co.

Decision Date25 May 1990
Docket NumberNo. 87-5673,87-5673
Citation886 F.2d 1472
CourtU.S. Court of Appeals — Sixth Circuit
PartiesFed. Sec. L. Rep. P 94,768 Phil A. STREET and Clyde H. Street, Plaintiffs-Appellants, v. J.C. BRADFORD & COMPANY, et al., Defendants-Appellees.

Vincent A. Sikora argued, Richard W. Pectol and Associates, Johnson City, Tenn., Richard W. Pectol, for plaintiffs-appellants.

Ed W. Williams, III, Johnson City, Tenn., Frank A. Johnstone argued, Katherine W. Singleton, Wilson, Worley, Gamble & Ward, Kingsport, Tenn., for defendants-appellees.

Before MILBURN, Circuit Judge; CELEBREZZE, Senior Circuit Judge; and BERTELSMAN, District Judge. *

BERTELSMAN, District Judge.


This is a securities/commodities fraud action, originally brought in the United States District Court for the Eastern District of Tennessee. It alleges a broker's violations of the Commodity Exchange Act, 7 U.S.C. Secs. 6, 6a, 6c, 6d, 6o and 25; the Securities Act of 1933, 15 U.S.C. Secs. 77l and 77q; the Securities Exchange Act of 1934, Sec. 78(b), 17 C.F.R. Secs. 240.10b-5 and 240.17a-3; and the Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. Secs. 1962 and 1964; 1 and several pendent state claims. Appellants (plaintiffs in the court below) challenge on appeal the district court's summary judgment orders dismissing all of plaintiffs' claims and upholding defendants' counterclaim for a deficiency balance due on plaintiffs' account.

In the interests of brevity, the appellees are referred to collectively to include J.C. Bradford & Co., the commodities exchange brokerage firm; Ken Graybeal, a local securities broker authorized only to accept and transmit commodities trades to a commodities broker in another of the firm's offices; Robert McCrackin, Douglas O. Kitchens, and Ray Richardson, all commodities brokers in the J.C. Bradford organization alleged to have advised appellants or transacted trades for them. Graybeal was the main point of contact between appellants and the firm.


The facts are greatly summarized for the purposes of this opinion. Of course, as the law requires, all disputed facts and inferences are resolved most favorably to appellants.

Plaintiffs complain about events which can be chronologically divided into three periods: (1) fraudulent representation made to Phil Street at the time his silver commodities account was opened in January of 1982; (2) failure to complete orders to sell short on February 25, 1983; and (3) after execution of a release on March 2, 1983, the conduct of unauthorized trading on Phil Street's commodities account and the making of fraudulent representations regarding the defendants' ability to recoup losses suffered on February 25, 1983.

Phil Street 2 testified that, when he opened his account, defendants represented to him that all commodity trade orders could be filled within four to four and one-half minutes of being placed. 3 Moreover, he claims he was told that the maximum amount that a silver securities contract could drop in a given day was 50 cents per ounce. Therefore, the Streets were under the impression that they could readily stop their losses if the market started to drop. On February 25, 1983, however, the silver futures market suffered a severe letdown. Plaintiffs allege that orders to make certain trades on Phil Street's account were not filled and that the Streets suffered major losses, in violation of defendants' earlier representations and fiduciary duties towards plaintiffs.

The severe drop in the market resulted in a loss in Street's account of approximately The parties met at the local airport on March 1, 1983. They rehashed their positions for four hours. According to the Streets' testimony, the defendants promised that if Clyde Street would mortgage his farm and raise the money to meet the margin calls, the defendants would credit the Street account with $50,000. The Streets are adamant that no mention was made of a release at this meeting.

$200,000. The defendants demanded that these losses be made good, issued appropriate margin calls, and threatened to sell Phil Street out and "close his business" if the margin calls were not met. The Streets countered by pointing out that Clyde Street's orders to sell short had not been filled, in violation of the representations that orders could be filled in four and one-half minutes.

According to Phil Street, he was unwilling to give up most of his leverage by paying the defendants any money, but on the way back to town from the meeting, Graybeal pleaded with him for the sake of old friendship to save Graybeal's job by inducing Clyde Street to raise the money. According to Street, Graybeal promised to make up the losses by continuing trading. Phil Street testified that Graybeal, invoking friendship, specifically promised: "Get your dad to cover this thing and I'll make it up. We'll make it up. There will be no problem." R.586. Phil Street did not regard this as mere puffing, but interpreted it as a promise to use special efforts and even inside information 4 to recoup the losses. Phil Street persuaded his father to raise more than $150,000 to pay to the defendants as a result of Graybeal's appeal to friendship, lamentations that he would lose his job, and promise that all losses would be made up.

On March 2, Phil Street happened to be in the defendants' local office. This was when the release was drafted and signed. Phil Street described the circumstances thus:

"Now that situation there, if you'd like for me to elaborate on it was a situation my father knew nothing about. Again it was a bad situation. We were dealing in my account.... After we had--I had talked my father into agreeing to mortgage his farm and get the money to get the account up to date, I walked into J.C. Bradford one day. As I said I was not there every day, but I did go down that day, and when I went in Kent said, 'Phil, come back here. Mr. Kitchen wants to talk to you.' And so I got on the telephone with Mr. Kitchen,.... He said 'I'm going to dictate a form there to one of Ken's secretaries and you need to sign it.' And I said 'Well, I don't care to sign anything,' at that time, you know, 'I've signed enough things I think and I don't need to sign anything else.' And so Mr. Kitchen just informed me right quickly that if I expected to do any more business with J.C. Bradford, that I actually had to sign the form, had no choice in that matter. So here I was in a position where I had talked my father into mortgaging his property with no way of, no means of ever really paying it back off and he's saying that I can not do any business with Mr. Graybeal which I had hoped and believed would be a way of paying the mortgage off, if I did not sign that form. I had no choice."

R. 594-95 (emphasis added).

Plaintiffs testify that, after execution of the release, a number of unauthorized transactions occurred and fraudulent limitations were placed upon their commodities account. Thus, they contend, defendants did not fulfill their representation that they would work with them in good faith to make up the losses. Ultimately, all accounts of the plaintiffs were liquidated to their substantial loss. Plaintiffs also assert that the release is void or voidable because it was executed under duress and that it is thus ineffective to bar their claims.

The trial court granted summary judgment in three orders. The first order upheld the release as a matter of law against plaintiffs' claims of fraud and duress. The second order dismissed plaintiffs' claims that the defendants had conducted unauthorized transactions in plaintiffs' account after the release. The third granted defendants summary judgment on their counterclaim concerning certain balances arising out of the transactions.

The "New Era" in Summary Judgments

In support of the trial court's decision to grant them summary judgment, the defendants point to three 1986 Supreme Court opinions as effecting a decided change in summary judgment practice: Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); and Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Scholars and courts are in agreement that a "new era" in summary judgments dawned by virtue of the Court's opinions in these cases. 5 This court has recognized the dramatic change brought about by these opinions, 6 as have other courts. 7

On the whole, these decisions reflect a salutary return to the original purpose of summary judgments. Over the years, decisions requiring denial of summary judgment if there was even a suggestion of an issue of fact had tended to emasculate summary judgment as an effective procedural device. 8

The first of the recent Supreme Court decisions which changed summary judgment law was Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Liberty Lobby was a libel action against the columnist Jack Anderson and certain others working with him. 106 S.Ct. at 2508. The defendants had referred to the plaintiff organization and some of its leaders as "Neo-Nazis," anti-Semites, racists and fascists. Id. According to the then-existing First Amendment libel doctrine, plaintiffs, as public figures, could not recover unless they could prove by clear and convincing evidence that Anderson had published calculated falsehoods or had written his article with reckless disregard for the truth. Id.; see New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964). After an appropriate time for discovery, the defendants moved for summary judgment on In support of the motion for summary judgment, the defendants had filed an extensive affidavit by one of their author-investigators detailing his sources. Id. at 2508-09. In...

To continue reading

Request your trial
4628 cases
  • In re Brumbaugh
    • United States
    • U.S. Bankruptcy Court — Southern District of West Virginia
    • August 27, 2001
    ...of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479 (6th Cir.1989). Once the moving party satisfies its burden, the nonmoving party must set forth specific facts showing that there is......
  • Renneker v. Wyman (In re Wyman), Case No. 19-31851
    • United States
    • U.S. Bankruptcy Court — Southern District of Ohio
    • March 15, 2021
    ...judgment." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Street v. J.C. Bradford & Co. , 886 F.2d 1472, 1477 (6th Cir. 1989). Judy failed to submit any evidence that she provided reasonably equivalent value to Carroll in exchange for the transf......
  • Patrizi v. Huff
    • United States
    • U.S. District Court — Northern District of Ohio
    • September 26, 2011
    ...sufficient evidence at trial to withstand a motion for judgment as a matter of law pursuant to Fed.R.Civ.P. 50. Street v. J.C. Bradford & Co., 886 F.2d 1472, 1478 (6th Cir.1989). Once the burden of production has shifted, the party opposing summary judgment cannot rest on its pleadings or m......
  • Shonac Corp. v. AMKO Intern., Inc.
    • United States
    • U.S. District Court — Southern District of Ohio
    • March 21, 1991
    ...effected "a decided change in summary judgment practice," ushering in a "new era" in summary judgments. Street v. J.C. Bradford & Co., 886 F.2d 1472, 1476 (6th Cir.1989). The court in Street identified a number of important principles applicable in new era summary judgment practice. For exa......
  • Request a trial to view additional results
2 books & journal articles
  • Private Antitrust Suits
    • United States
    • ABA Antitrust Library Antitrust Law Developments (Ninth Edition) - Volume I
    • February 2, 2022
    ...including claims of price fixing and other conspiracies under Section 1, 1395 claims of monopolization and attempt or conspiracy 886 F.2d 1472, 1480 n.21 (6th Cir. 1989). But see Anderson News v. American Media, 899 F.3d 87, 98 (2d Cir. 2018) (“to raise a genuine issue of material fact as t......
  • Table of Cases
    • United States
    • ABA Antitrust Library Antitrust Law Developments (Ninth Edition) - Volume II
    • February 2, 2022
    ...2007), 1366 Strawflower Elecs. v. Radioshack Corp., 2005 U.S. Dist. LEXIS 45205 (N.D. Cal. 2005), 182 Street v. J.C. Bradford & Co., 886 F.2d 1472 (6th Cir. 1989), 1000 St. Regis Paper Co. v. United States, 368 U.S. 208 (1961), 720, 723 Strobl v. New York Mercantile Exch., 768 F.2d 22 (2d C......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT