Tamari v. Bache & Co.

565 F.2d 1194
CourtCourt of Appeals for the Seventh Circuit
DecidedOctober 19, 1977
DocketNo. 76-1728
StatusPublished
Cited by20 cases

This text of 565 F.2d 1194 (Tamari v. Bache & Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tamari v. Bache & Co., 565 F.2d 1194 (7th Cir. 1977).

Opinions

HARLINGTON WOOD, Jr., Circuit Judge.

This is the second in a series of four cases growing out of the same transactions brought by plaintiffs, a Lebanese partnership and its partners (hereinafter “Ta-mari”), principally against Bache & Co., Incorporated, a Delaware corporation, now Bache Halsey Stuart, Inc. (hereinafter “Bache”), in an effort to obtain declaratory relief for alleged fraud in violation of the Commodity Exchange Act, 7 U.S.C. § 1, et seq.1 Service was not secured upon Bache & Co. (Lebanon) S.A.L., a Lebanese corporation.

The present or second case is an appeal from the order of the district court entered on May 19, 1976, dismissing plaintiff’s one count complaint on the ground that the [1197]*1197complaint failed to state a claim upon which relief could be granted. The complaint seeking declaratory and injunctive relief under the Commodity Exchange Act, as amended, 7 U.S.C. § 1, et seq., and 28 U.S.C. § 2201, prayed for the termination of the arbitration proceeding then in progress between Tamari and Bache being conducted by the Chicago Board of Trade (hereinafter CBOT). The complaint alleged in general the existence of a dispute between Tamari and Bache, Tamari’s establishment of commodity futures trading accounts with Bache, trading in those accounts and monies paid and allegedly owing to Tamari as a result of the trading. The grounds alleged for the relief sought were summarized by Tamari as follows: Tamari’s agreement to participate in arbitration was induced by fraud and coercion which rendered the arbitration agreement invalid; Section 5a(ll) of the Commodity Exchange Act, 7 U.S.C. § 7a(ll), which became effective on April 21, 1975, applied and operated to bar arbitration; and there were infirmities which arose out of the arbitration proceedings themselves. We do not, however, read Ta-mari’s complaint as alleging that the “agreement” to ¡ arbitrate contained in the original total agreement was specifically induced by fraud and coercion as distinguished from the contract generally. What is alleged in addition to fraud relating to the total agreement generally is that the “submission” of the dispute to arbitration was caused by fraud; that Tamari did not “voluntarily submit” to the jurisdiction of the CBOT; and that “participation” in the arbitration was coerced. These conclusion-ary and general allegations read together appear to us to refer primarily to events occurring after the original agreements containing the arbitration clauses were entered into.

Preceding the district court’s order of dismissal the court entered on April 21, 1976, what was captioned a “Preliminary Opinion.” In that opinion the court concluded that Tamari and Bache had entered into a valid arbitration agreement covering the underlying dispute; that the Federal Arbitration Act applied and that under Sections 3 and 4 of that Act, 9 U.S.C. §§ 3-4,2 the case should be stayed as to [1198]*1198Bache (Lebanon), dismissed as to Bache and CBOT, and Tamari ordered to arbitrate; that Section 5a(il) of the Commodity Exchange Act, 7 U.S.C. § 7a(ll), did not apply to the case, since the savings provision of that Act, 7 U.S.C. § 4a, note,3 precluded its application; and that Tamari’s other claims were premature and could only be raised after completion of arbitration pursuant to Section 10 of the Federal Arbitration Act, 9 U.S.C. § 10.4 That preliminary opinion was entered jointly in both the first case and in this case. Against that background the district court’s subsequent sua sponte dismissal of the complaint in this case upon the ground that it failed to state a claim upon which relief could be granted must be interpreted. Plaintiff argues that the factual assumptions made by the court in the preliminary opinion, principally that there was a valid agreement to arbitrate, denote the dismissal a grant of summary judgment under Rule 56 of the Federal Rules of Civil Procedure. Plaintiff’s position is that certain material factual assumptions made by the court have no proper foundation in the record and are in dispute. Therefore, plaintiff argues the court’s subsequent order was the improper entry of summary judgment. Were we to view the order as granting summary judgment we would agree with plaintiffs, but we perceive the order instead to be a dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure which provides for dismissal upon motion for failure to state a claim upon which relief can be granted, the exact language used by the court in its dismissal order. The defendants had filed no motions seeking relief in either form. The court was not however precluded, although it generally may be considered hazardous, from entering the order of dismissal on its own motion provided that sufficient basis for the court’s action was otherwise apparent from the plaintiff’s pleadings. For the purpose of testing the [1199]*1199trial court’s action, well pleaded allegations of the complaint are to be taken as admitted, but mere unsupported conclusions of fact or mixed fact and law are not admitted. Hess v. Petrillo, 259 F.2d 735 (7th Cir. 1958), cert. denied, 359 U.S. 954, 79 S.Ct. 743, 3 L.Ed.2d 761; Homan Manufacturing Co. v. Russo, 233 F.2d 547 (7th Cir. 1956). Since the relief sought was declaratory, that becomes another critical ingredient to be considered in judging the propriety of the dismissal. It has long been established that the grant of declaratory relief is discretionary. The appellate court may substitute its own judgment for that of the trial court if the trial court’s exercise of that discretion is considered erroneous. Brillhart v. Excess Ins. Co., 316 U.S. 491, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942); Sears, Roebuck & Co. v. American Mutual Liability Ins. Co., 372 F.2d 435 (7th Cir. 1967); Cunningham Brothers Inc. v. Bail, 407 F.2d 1165 (7th Cir. 1969), cert. denied, 395 U.S. 959, 89 S.Ct. 2100, 23 L.Ed.2d 745.

The specific issues argued by Tamari are these:

1) What is the effect, if any, of Sec. 5a(ll) of the Commodity Exchange Act, 7 U.S.C. § 7a

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Ungerland v. MORGAN STANLEY AND CO., INC.
35 A.3d 1095 (Connecticut Superior Court, 2010)
Moscatiello v. Hilliard
939 A.2d 325 (Supreme Court of Pennsylvania, 2007)
Essex Group, Inc. v. Cobra Wire & Cable, Inc.
100 F. Supp. 2d 912 (N.D. Indiana, 2000)
Eli's Chicago Finest, Inc. v. Cheesecake Factory, Inc.
23 F. Supp. 2d 906 (N.D. Illinois, 1998)
United States v. Islip
18 F. Supp. 2d 1047 (Court of International Trade, 1998)
Resource Asset v. Continental Stock Transfer
896 F. Supp. 782 (N.D. Illinois, 1995)
Chicago Linen Exchange v. Adler
888 F. Supp. 92 (C.D. Illinois, 1995)
William Joyce v. Mary Ann Joyce
975 F.2d 379 (Seventh Circuit, 1992)
Cook Chocolate Co. v. Salomon, Inc.
684 F. Supp. 1177 (S.D. New York, 1988)
Biggus v. Southmark Management Corp.
582 F. Supp. 883 (N.D. Illinois, 1984)
Lawrence A. Salibra, II v. Supreme Court of Ohio
730 F.2d 1059 (Sixth Circuit, 1984)
Hagstrom v. Breutman
572 F. Supp. 692 (N.D. Illinois, 1983)
George Corey, Trust Fund v. New York Stock Exchange
691 F.2d 1205 (Sixth Circuit, 1982)
Tamari v. Bache Halsey Stuart Inc.
619 F.2d 1196 (Seventh Circuit, 1980)
Hill v. Liberty Mutual Insurance
453 F. Supp. 1342 (E.D. Virginia, 1978)
Tamari v. Bache & Co. Lebanon)
565 F.2d 1194 (Seventh Circuit, 1977)

Cite This Page — Counsel Stack

Bluebook (online)
565 F.2d 1194, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tamari-v-bache-co-ca7-1977.