User is getting a RESOLVER.RST.AuthRequired e-mail bounce from a customer

I've been looking all over the Internet for a solution to this issue but it seems none of the solutions fit my symptoms. I am unable to get any e-mail to a customer. His server keeps responding with this:

< #5.7.1 smtp;550 5.7.1 RESOLVER.RST.AuthRequired; authentication required>.

and this:

Your message wasn't delivered due to a permission or security issue.
It may have been rejected by a moderator, the address may only accept
e-mail from certain senders, or another restriction may be preventing
delivery.

I also noticed later in the email this:

Authentication-Results: symauth.service.identifier
Received: from xxxxxxx.xxxxxxxxxx.xxx (xxxxx.xxxxxxxxxx.xxx [yy.yyy.yyy.yyy])   
(using TLS with cipher AES256-SHA (256/256 bits)) (Client did not present a certificate)

I'm running an off internet Exchange 2010 server. Exchange is forwarding email through a Sendmail 8.14 server connected to the internet. Could this be a misconfiguration at my recipient's mail server or could it be on my end?? We're not using distributions lists. My user is having no problems sending or receiving mail from anyone else, including receiving from this recipient. The "Require that all senders are authenticated" is NOT checked. I'm at my witts end here. Any help would be appreciated.

EDIT: After doing some more research I noticed this little entry in my sendmail logs.

Oct 2 10:48:50 stc-mailrelay sendmail[28195]: ruleset=check_relay,
arg1=[74.117.209.97], arg2=127.0.0.2, relay=edely.net [74.117.209.97]
(may be forged), reject=550 5.7.1 Mail from 74.117.209.97 refused –
see http:/www.spamhaus.org/query/bl?ip=74.117.209.97

That IP is not owned by myself nor the recipient. I am assuming it is a relay somewhere between us and the recipient? Also, I've just learned that it is only one user at the recipient company who is bouncing all user's email from mine. Other users at the recipient company are able to receive email from us.