Larry Fabian was hired in 2001 by Cantor Fitzgerald to be a broker at the Chicago Mercantile Exchange. In 2007, he was transferred to BGC, which was a spinoff company of Cantor Fitzgerald.
In 2008, Fabian was named as a partner of “Founding Partner No. 69.” According to Fabian, he earned 100,393 “founding partner units” which could later be converted into common stock of the company.
On March 27, 2009, Fabian quit working for BGC to work for another securities firm. Shortly after leaving BGC, Fabian initiated arbitration before the Chicago Mercantile Exchange where he received $121,758 in commissions that he was owed from Cantor Fitzgerald. This did not include any reimbursement for his “founding partner units.”
Fabian was informed by BGC that having left its employment and going to work for a competitor, he had forfeited all but 3,181 “founding partner units,” which had been sold and “applied toward the unfunded balance of his trading account.” Fabian claimed that BGC owed him in excess of $860,000 for his stock. Fabian filed suit against BGC seeking restitution.
BGC responded by saying that the agreement with Fabian mandated that any lawsuits be tried exclusively in Delaware were to be decided by applying Delaware law. Fabian replied to this by claiming that the forum-selection provision of the contract violated Illinois public policy, and he noted that he had been deprived of the opportunity to negotiate those provisions of his contract.
The Cook County Circuit Court judge where his lawsuit was filed determined that the forum-selection clause was enforceable and that Fabian had not established that the clause was “so seriously inconvenient that he would be deprived his day in court or that the location of the parties or witnesses weighed in favor of either forum.” Fabian’s case was dismissed with prejudice by the Cook County judge.
Fabian moved the court for clarification, requesting that the judge clarify which parts were dismissed with prejudice and to confirm that the court did not reach the merits of BGC’s motion to dismiss his case.
The Circuit Court did clarify and explained that Fabian’s lawsuit under the Illinois Wage Payment and Collection Act was dismissed with prejudice, but the remaining claims were dismissed with prejudice only as to refiling in Illinois and acknowledged that it had not reached the merits of the claim for dismissal under choice of law. Fabian immediately appealed the decision regarding the dismissal with prejudice to the Illinois Appellate Court.
The appeals panel that examined the case found that there were two issues: forum selection and choice of law that could be separated, and that while the forum selection clause had been ruled on, the Circuit Court had never determined the choice of law issue.
The appellate court noted that dismissal with prejudice was appropriate only if the court has already determined that Illinois was being applied in the case and the Circuit Court openly stated that it never reached the merits of the choice of law clause of the contract.
The appellate court therefore remanded the case back to the Circuit Court instructing the judge to rule on the choice of law issue. If the Circuit Court finds that Delaware law is applicable, the claim is properly barred with prejudice. If not, then only a dismissal without prejudice would be the appropriate order. The Illinois Appellate Court reversed and remanded the case to the Circuit Court for further disposition in accordance with this decision.
Larry D. Fabian v. BGC Holdings, LP, et al., 2014 IL App (1st) 141576 (Dec. 26, 2014).
Robert Kreisman of Kreisman Law Offices has been handling commercial litigation, business disputes, contract actions, jury trials and bench trials for individuals, families and businesses for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Chicago Heights, Blue Island, Alsip, Worth, Crestwood, Park Forest, Forest Park, Willowbrook, Darien, St. Charles, Highland Park, Homewood, Highwood, Evergreen Park, Elk Grove Village, Chicago (Edgewater, Edgebrook, Edison Park, Englewood, Forest Glen, Garfield Park, Prairie District, Near South Side, McKinley Park, Lincoln Square, Roscoe Village, South Loop, South Chicago, Wrigleyville, Austin, Craigin, DePaul University area), Berwyn, Cicero and Chicago Ridge, Ill.
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