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JEWELL-RUNG AGENCY, INC. v. HADDAD ORG.

February 19, 1993

JEWELL-RUNG AGENCY, INC., Plaintiff,
v.
THE HADDAD ORGANIZATION, LTD., Defendant.



The opinion of the court was delivered by: ROBERT P. PATTERSON, JR.

 ROBERT P. PATTERSON, JR., U.S.D.J.

 Plaintiff Jewell-Rung Agency, Inc. ("Jewell-Rung"), seeks damages in excess of $ 350,000 for the defendant's alleged breach of contract. Defendant The Haddad Organization, Ltd. ("Haddad"), moves for summary judgment on the issue of damages and to strike portions of the affidavits of Donald Jewell and Leo McGinity, submitted by Plaintiff in opposition to summary judgment, on the ground that they do not comply with Fed. R. Civ. P. 56(e). Plaintiff cross-moves based on Rule 56(e) for an order striking portions of the affidavit of Neal Robson, submitted in support of Defendant's motion for summary judgment. For the reasons set forth below, Plaintiff's motion to strike is denied, Defendant's motion to strike is granted in part and denied in part, and Defendant's motion for summary judgment is denied.

 Also before the Court and addressed in the final section of this Opinion and Order is a discovery dispute as to the propriety of defense counsel's representation of a non-party witness, James Baum, in a deposition pertaining to this action.

 BACKGROUND

 Jewell-Rung is a Canadian corporation engaged in the business of importing and selling men's clothing at wholesale. Haddad is a New York corporation that manufactures men's outerwear sold under the "Lakeland" label.

 In 1990, Jewell-Rung ordered samples of Lakeland men's outerwear from Haddad so that it might seek orders for this clothing from Canadian retailers. Haddad supplied Jewell-Rung with the ordered samples, which Jewell-Rung used to obtain orders from customers in Canada.

 In January of 1991, Jewell-Rung placed an initial purchase order with Haddad for 2,325 garments of Lakeland men's outerwear, having a total listed price of approximately $ 250,000 in American currency, for the Fall 1991 season. By February 1991, Plaintiff had taken orders for 372 of these garments at a wholesale price of $ 107,506 in Canadian currency.

 For the purposes of this summary judgment motion only, Defendant Haddad concedes that its acceptance of Jewell-Rung's January 1991 purchase order created a binding contract and that Haddad's agreement with Olympic constituted a breach of that contract. The defendant seeks summary judgment with respect to damages on three grounds: (1) Plaintiff's failure to mitigate damages bars any recovery; (2) Plaintiff's refusal to cover prohibits recovery of consequential damages; and (3) alternatively, any recovery by Plaintiff of lost profits must be limited to the profits derived from the orders already placed by Plaintiff's customers at the time of Defendant's breach of contract.

 DISCUSSION

 I. MOTIONS TO STRIKE

 Each party moves to strike portions of the other's affidavits for failure to satisfy the requirements of Fed. R. Civ. P. 56(e). Rule 56(e) provides that affidavits submitted in support of or opposition to a motion for summary judgment "shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." A party may move to strike parts of an affidavit that do not comply with Rule 56(e). See Sellers v. M.C. Floor Crafters, Inc., 842 F.2d 639, 643 (2d Cir. 1988).

 Haddad asks the Court to strike certain portions of the Affidavit of Donald Jewell, dated Sept. 11, 1992 ("Jewell Aff."), and the Opposing Affidavit of Leo F. McGinity, Jr., dated Sept. 9, 1992 ("McGinity Aff.") In particular, Haddad contends that portions of these affidavits are not based on the personal knowledge of the affiant, constitute inadmissible hearsay, or amount to legal conclusions, to which the affiant is not competent to testify. In considering Haddad's motion for summary judgment, the Court will disregard portions of the Jewell and McGinity Affidavits that constitute inadmissible hearsay, lack a basis in personal knowledge, or are argumentative or conclusory.

 Plaintiff moves to strike certain statements from the Affidavit of Neal Robson, dated June 30, 1992 ("Robson Aff."), on the ground that these statements are inadmissible hearsay. All statements challenged by Plaintiff are non-hearsay either because they are offered not for their truth but to show that they were in fact made, see Robson Aff. at PP 3, 5 (first and third sentences), or because they are ...


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