Prestwick Capital Management, Ltd. v. Peregrine Financial Group, Inc.
727 F.3d 646
7th Cir.2013Background
- Prestwick sued Peregrine and Acuvest entities under the CEA for pool fraud, fiduciary breach, and guarantor liability; district court granted summary judgment for PFG in 2011.
- PFG guaranteed Acuvest’s IB obligations via 2004 Guarantee; 2006 IIB Agreement superseded prior contracts and changed guaranteeing structure.
- NFA/CFTC records show the guarantee with Acuvest terminated on August 24, 2006; between 2006 and 2008 Acuvest was not guaranteed.
- In 2007 Prestwick alleges Acuvest (via Grey) mismanaged Maxie trading pool funds, causing significant losses and misappropriation of Prestwick’s $7M investment.
- Prestwick argues the 2006 IIB Agreement did not terminate the 2004 Guarantee for existing accounts; district court held termination effective and applicable to 2007 conduct.
- Prestwick appeals, arguing termination was improper and equitable estoppel should bar PFG from denying the guarantee; court affirms district court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did termination of the 2004 guarantee also terminate protection for existing accounts? | Prestwick argues 2006 IIB did not nullify pre-existing guarantee. | PFG contends termination via 2006 IIB foreclosed ongoing guarantee for later asserts. | Yes; termination applies to existing accounts; no continued guarantee. |
| Is PFG quietly estopped from asserting termination of the 2004 Guarantee? | Prestwick seeks equitable estoppel based on PFG conduct/reliance. | PFG argues no misrepresentation and no reliance basis under Illinois law. | No equitable estoppel; insufficient evidence of actionable misrepresentation or reliance. |
Key Cases Cited
- Anderson v. Liberty Lobby, Inc., 477 F. Supp. 2d 1 (S.D. Ind. 1986) (summary judgment standards and material facts)
- Celotex Corp. v. Catrett, 477 U.S. 317 (Supreme Court 1986) (summary judgment standard under Rule 56)
- Cunningham v. Waters Tan & Co., 65 F.3d 1351 (7th Cir. 1995) (termination clauses and post-termination liability)
- Ambrosino v. Rodman & Renshaw, Inc., 972 F.2d 776 (7th Cir. 1992) (contract interpretation and written terms control)
- PPM Fin., Inc. v. Norandal USA, Inc., 392 F.3d 889 (7th Cir. 2004) (not rewriting contracts to appease unhappy parties)
- Leibovitch v. Islamic Republic of Iran, 697 F.3d 561 (7th Cir. 2012) (policy vs. congressional intent in statutory interpretation)