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BENDE & SONS v. CROWN REC.

September 21, 1982

BENDE AND SONS, INC., Plaintiff,
v.
CROWN RECREATION, INC., KIFFE PRODUCTS DIVISION, Defendant


McLaughlin, District Judge.


The opinion of the court was delivered by: MCLAUGHLIN

MEMORANDUM AND ORDER

McLAUGHLIN, District Judge:

 This is a breach of contract action involving the sale of 11,000 pairs of combat boots. The plaintiff, Bende and Sons, Inc., ("Bende"), is a New Jersey corporation that sells military supplies internationally. Kiffe Products ("Kiffe") is a division of the defendant Crown Recreation, Inc., a New York Corporation that sells camping equipment and military supplies.

 Bende contends that it had a contract to supply the Government of Ghana with 10,000 pairs of boots; that Kiffe agreed to manufacture the boots in Korea and to deliver them in Ghana; that Kiffe failed to deliver the boots on the agreed date; and that as a result of this failure Bende suffered $44,685 in damages when the Government of Ghana cancelled its resale contract. Kiffe responds that its non-delivery was excused by the derailment of the train transporting the boots; and Kiffe asserts that it satisfied its obligations under the Uniform Commercial Code by seasonably offering delivery of the boots at a later date.

 After a bench trial, I find that the non-delivery of the combat boots was not excused and that Bende is entitled to recover its lost profits of $44,685.

 FACTS

 In May, 1977, Bende agreed to sell the Government of Ghana 10,000 pairs of combat boots for $158,500. Under the terms of the agreement, delivery was to be "immediate" or "as soon as possible." In order to fill its order with Ghana, Bende, in turn, contacted Kiffe in late June and began negotiations. On or about July 11, 1977, Bende ordered 10,000 pairs of combat boots for $95,000 from Kiffe. In addition to specifying the size distribution, the July 11th purchase order described the boots as follows:

 
leather upper, lace-up front, black, with reinforced bottom sole, Korean made but all Korean markings removed from boots, in neutral boxes, in sizes.

 The purchase order further directed that Kiffe's supplier imprint "Bende, Clifton NJ USA" inside the boots. While no delivery date was set forth on the order, it is clear from the testimony at trial that the parties agreed that delivery would be made between 60 and 90 days from the date of a firm order. Transcript ("Tr."), Bende testimony at 81, Schulman testimony at 151. It is equally apparent that, although the July 11, 1977 purchase order did not mention the Ghana resale, Kiffe knew that Bende was going to resell the boots. Tr. at 175.

 The June negotiations also resulted in an agreement that, because Bende had an insufficient credit history with Kiffe, Bende would pay for the boots by obtaining an unconditional letter of credit.

 Bende obtained the letter of credit on or about July 22, 1977 and assigned the proceeds to Kiffe a few days later. The letter of credit was initially set to expire on October 14, 1977, but was subsequently extended to November 30, 1977. On or about July 26, 1977, Bende sent a second purchase order to Kiffe for an additional 1000 pairs of combat boots. The specifications in this second order concerning the markings on the boots and the packaging were identical to those in the first order.

 Kiffe placed the order for 11,000 pairs of boots with its Korean supplier on July 29, 1977. For reasons not necessary to detail here, the parties subsequently agreed that the requested Bende inscription would not appear on the boots.

 The boots were manufactured in Korea, placed in containers and then shipped by boat from Korea to the United States, arriving in Seattle on or about October 7, 1977. They were loaded on railroad cars for shipment to the East Coast. Unfortunately, the train transporting the boots derailed on November 9, 1977, and most of the boots were destroyed in the area of Omaha, Nebraska. As Kiffe itself conceded, the boots were destroyed while the risk of loss was still on Kiffe. The remains of the shipment were sent to a receiving warehouse operated by Pre-Con International located in Secaucus, New Jersey.

 Up to this point in the narrative the parties are much in agreement. There is, however, a stark disparity in the trial ...


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