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GOSHEN LITHO, INC. v. KOHLS

May 12, 1983

GOSHEN LITHO, INC., Plaintiff, against JAMES KOHLS and FLYNT DISTRIBUTING COMPANY, INC., Defendants.


The opinion of the court was delivered by: HAIGHT

MEMORANDUM OPINION AND ORDER

HAIGHT, District Judge:

Plaintiff Goshen Litho, Inc. brings this diversity action to recover an outstanding $11,227.24 printing and shipping bill for services rendered to Boxing Publications,Inc. ("BPI"). Defendants are Flynt Distributing Company, Inc. ("Flynt"), a magazine and book distributor, and James Kohls, former executive vice-president of Flynt. The case is presently before the Court on defendants' motion, pursuant to Fed.R.Civ.P. 12(b)(6) and 56, for dismissal of the complaint or, in the alternative, for summary judgment, and plaintiff's cross motion for summary judgment. *fn1"

 FACTS

 In January of 1981, plaintiff entered into an agreement with BPI to print Boxing Digest, a periodical published by BPI. The magazine was to be distributed by defendant Flynt pursuant to an agreement with BPI granting Flynt the exclusive right to distribute BPI's publications.

 After printing but prior to shipping the February 1981 issue of the magazine, plaintiff asked BPI for a "publisher's assignment" to ensure the payment of plaintiff's bill. *fn2" Plaintiff admits it never received a written assignment from the publisher, but avers that during a telephone conversation between plaintiff and defendant James Kohls, who until recently served as defendant Flynt's Executive Vice President, Kohls promised that Flynt would pay the publisher's printing bill if plaintiff shipped the magazines. Plaintiff, relying on defendant Kohls' oral promise, shipped the goods to Flynt, who distributed the magazines and later failed to pay plaintiff. In April of 1982, BPI filed a petition of bankruptcy under Chapter 7 of the Bankruptcy Code.

 Plaintiff's complaint states three causes of action. The first alleges a breach of Kohls' oral promise to reimburse Goshen for the printing bill. The second sounds in fraudulent inducement in the making of a contract. The third claims the publisher's assignment covering the January issue is applicable to the February issue as well. Defendants move for summary judgment on each of plaintiff's claims.

 I.

 SUMMARY JUDGMENT

 Rule 56(c)of the Federal Rules of Civil Procedure allows summary judgment to be granted only where there is "no genuine issues as to any material fact," and a party is "entitled to a judgment as a matter of law." "Not only must there be no genuine issue as to the evidentiary facts, but there must also be no controversy as to the inferences to be drawn from them. . . ." In determining whether or not there is a genuine factual issue, "the court should resolve all ambiguities and draw all reasonable inferences against the moving party." Schwabenbauer v. Board of Education, 667 F.2d 305, 313 (2d Cir. 1981). With these standards in mind, I turn to defendants' motion for summary judgment on the three asserted causes of action.

 A. The Contract Claim

 Defendants contend and plaintiff concedes that the oral promise allegedly made by Mr. Kohls was a promise to pay for the debt of another and not a novation. Therefore, absent some note or memorandum, the oral promise is unenforceable under the New York Statute of Frauds. N.Y. Gen. Oblig. Law § 5-701(g)(2). In essence, defendants argue that, even assuming plaintiff can prove all the facts alleged, its contract claim is without merit.

 In Siegel Trading Co. Inc. v. Ungar, 422 F. Supp. 1064 (S.D.N.Y. 1976), the defendant, a former sales representative in plaintiff's commodities brokerage firm, was alleged to have orally agreed, as a condition of employment, to be liable for deficits in his customers' accounts. In denying defendant's motion for summary judgment, Judge Lasker stated:

 ". . . [S]ummary judgment on these facts would be inappropriate due to the possible application of the "main purpose" or "leading object" rule. See Calamari, The Suretyship Statute of Frauds, 27 Ford.L.Rev. 332, 343 (1958); 2 Corbin on Contrafts § 366 et seq. (1950). As Corbin explains, paraphrasing the holdings of Davis v. Patrick, 141 U.S. 479, 487-88, 12 S. Ct. ...


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