Muriel Siebert & Co. v. Wilt

Appellate Division of the Supreme Court of New York

Muriel Siebert & Co. v. Wilt

158 A.D.2d 343, 551 N.Y.S.2d 32, 1990 N.Y. App. Div. LEXIS 1381

CourtAppellate Division of the Supreme Court of the State of New York

DecidedFebruary 13, 1990

StatusPublished

This text of 158 A.D.2d 343 (Muriel Siebert & Co. v. Wilt) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Muriel Siebert & Co. v. Wilt, 158 A.D.2d 343, 551 N.Y.S.2d 32, 1990 N.Y. App. Div. LEXIS 1381 (N.Y. Ct. App. 1990).

Pincite

Opinion

Defendant is a customer of plaintiffs discount securities brokerage firm which carries out orders by buying and selling stocks at the request of customers. At the close of business on October 19, 1987 (Black Monday), defendant’s account had a debit (negative) balance of $500,217.17. As a defense to this action by the brokerage firm for a recovery of this balance, defendant asserts that, had the telephone lines been open, he would have engaged in transactions which would have avoided the resulting debit balance. Defendant alleges that the brokerage’s failure to provide open telephone lines constitutes a breach of fiduciary duty, negligence and breach of contract.

We find no merit as a matter of law to defendant’s asserted defense. We agree with Justice Shainswit’s observation that: "Plainly, the defense here, if allowed, would open floodgates that would make it impossible for any securities broker to collect a debit balance. If a customer could simply announce that, if the phone had not been busy, he would have engaged in a transaction that would have made, rather than lost, money, the perfect protection against margin calls would have been found.” Concur—Kupferman, J. P., Milonas, Asch, Wallach and Rubin, JJ.

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Defendant is a customer of plaintiffs discount securities brokerage firm which carries out orders by buying and selling stocks at the request of customers. At the close of business on October 19, 1987 (Black Monday), defendant’s account had a debit (negative) balance of $500,217.17. As a defense to this action by the brokerage firm for a recovery of this balance, defendant asserts that, had the telephone lines been open, he would have engaged in transactions which would have avoided the resulting debit balance. Defendant alleges that the brokerage’s failure to provide open telephone lines constitutes a breach of fiduciary duty, negligence and breach of contract.

We find no merit as a matter of law to defendant’s asserted defense. We agree with Justice Shainswit’s observation that: "Plainly, the defense here, if allowed, would open floodgates that would make it impossible for any securities broker to collect a debit balance. If a customer could simply announce that, if the phone had not been busy, he would have engaged in a transaction that would have made, rather than lost, money, the perfect protection against margin calls would have been found.” Concur—Kupferman, J. P., Milonas, Asch, Wallach and Rubin, JJ.

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Bluebook (online)

158 A.D.2d 343, 551 N.Y.S.2d 32, 1990 N.Y. App. Div. LEXIS 1381, Counsel Stack Legal Research, https://law.counselstack.com/opinion/muriel-siebert-co-v-wilt-nyappdiv-1990.