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SEVEN STAR SHOE CO. v. STRICTLY GOODIES

January 10, 1986

SEVEN STAR SHOE COMPANY, INC., Plaintiff, against STRICTLY GOODIES, INC., GOOD TIMES INDUSTRIES, INC., RONALD W. GOOTKIN, ROBERT Y. GREENBERG and ERNEST WILLIAMS, Defendants


The opinion of the court was delivered by: SWEET

SWEET, D.J.

Plaintiff Seven Star Shoe Company, Inc. ("Seven Star") brought this action for breach of contract and interference with contractual relations against defendants Good Times Industries, Inc. ("Good Times"), Strictly Goodies, Inc. ("Strictly Goodies") and several officers of both companies. Good Times moved to dismiss Seven Star's original claim for breach of contract pursuant to Rule 12(b)(6) Fed.R.Civ.P. because it was barred by the statute of frauds. By opinion of May 24, 1985, this motion was granted, Seven Star Shoe Company v. Strictly Goodies Inc. et al., No. 83 Civ. 2904 (May 24, 1985 S.D.N.Y.) and Seven Star filed a second amended complaint on October 7, 1985 repleading its contract claim under a quantum meruit theory. Good Times now moves for an order dismissing this first claim of the second amended complaint under Rule 12(b)(6) Fed.R.Civ.P. as barred by the statute of frauds and for failure to state a claim under New York law. For the reasons set forth below, the motion is granted.

 Facts

 The relevant allegations set forth in Seven Star's second amended complaint do not differ substantially from those set forth in the previous complaints. Seven Star, a New York corporation, manufacturers and distributes footwear. Good Times, a California corporation, is also engaged in the manufacture and sale of footwear. In November of 1982, officers of both corporations met in new York to discuss Seven Star's "pie" sneaker. According to Seven Star, in whose favor these facts must be construed, Seven Star and Good Times entered into an oral agreement whereby Good Times agreed to pay Seven Star $1.00 for every pair of sneakers sold "in consideration of [Seven Star] supplying advice, guidance, and counsel to defendants relating to sources of supply, distribution, marketing, and other data needed to allow and permit defendants to enter into the sneaker business with a lower priced version of [Seven Star's] 'Pie' sneaker, thereby enabling defendants to reduce the risk of loss in entering such field." (Amended Complaint P 14). In his affidavit in opposition to Good Times' present motion, Larry Silverstein ("Silverstein"), Seven Star's president, claims that during this meeting he instructed defendants' officers on the marketing, sources of supply and the location of market opportunity for their lower cost "pie" sneaker and anticipated compensation for such services. (Affidavit in Opposition P 10). According to Silverstein, the defendants promised to mail him a written contract detailing his compensation for this undertaking, but never forwarded such a written expression of this agreement.

 Discussion

 Good times contends that the first cause of action in Seven Star's second amended complaint is barred by the statute of frauds, that it is a reptition of the previously barred contract claim, and that it fails to state a claim in quantum meruit under New York law. Seven Star contends that its repleaded contract claim properly alleges that Good Times was unjustly enriched by the value of Seven Star's services, and that Seven Star is entitled to recover the reasonable value of these services under a theory of quantum meruit.

 Seven Star's amended complaint articulates its quantum meruit theory of recovery with the following paragraphs:

 17. That the aforementioned contract was and is void under the

 provisions of section 5-701 of the General Obligations Law, in that

 performance of said contract by its terms was not to be performed

 within one year from the making thereof.

 18. To date, defendants have failed to pay to plaintiff the agreed

 upon price for work, labor and services rendered.

 19. Upon information and belief, the services so ...


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