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FIRST SEC. MORTG. CO. v. GOLDMARK PLASTICS COMPOUN

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK


September 20, 1994

FIRST SECURITY MORTGAGE COMPANY, Plaintiff,
v.
GOLDMARK PLASTICS COMPOUNDS, INC., Defendant.

Spatt

The opinion of the court was delivered by: ARTHUR D. SPATT

MEMORANDUM DECISION AND ORDER

Spatt, District Judge.

 Although the plaintiff First Security Mortgage Company ("plaintiff" or "First Security") is the nominal party bringing this law suit, in essence this case is a dispute concerning the amount of a setoff to the defendant with regard to its claims of breach of warranty in connection with the sale of certain plastic product. The two companies involved are Goodson Polymers, Inc. ("Goodson"), a Utah corporation, the manufacturer and seller, and the defendant Goldmark Plastics Compounds, Inc., ("defendant" or "Goldmark") the buyer of the polystyrene plastic.

 I. UNCONTESTED FACTS AND PRETRIAL STIPULATIONS

 Many of the facts in this case are not disputed. Among the uncontested facts as set forth in Schedule C of the pre-trial order are the following:

 1. The plaintiff First Security is a Utah corporation with its principal place of business in Salt Lake County, State of Utah.

 2. First Security is the successor-in-interest of the claims asserted in this action by Goodson against Goldmark for plastic goods sold and delivered, by means of an assignment dated June 13, 1991, from First Security Bank of Utah, N.A. ("FSB") to First Security.

 3. Goodson is a Utah corporation that had its principal place of business in Salt Lake City, Utah and was in the business of manufacturing, polystyrene.

 The Goodson-FSB Loan Relationship

 4. On or about November 22, 1988, Goodson executed a Revolving Commercial Credit Note in favor of FSB in the amount of $ 6,000,000.00.

 5. On or about May 1, 1989, but effective as of November 22, 1988, Goodson executed an Amended and Restated Term Commercial Credit Note in favor of FSB in the principal amount of $ 9,500,000.00.

 6. On or about November 22, 1988, Goodson executed a Security Agreement covering receivables, inventory and equipment in favor of FSB. Pursuant to the provisions of the Security Agreement, Goods on granted to FSB a security interest in all of its accounts receivable and other rights to payment along with all proceeds therefrom to secure the repayment of all obligations owed by Goodson to FSB.

 7. Goodson defaulted on its repayment obligations to FSB. Based on the default, FSB obtained a judgment against Goodson in the amount of $ 11,484,475.98.

 Goodson-Goldmark Relationship

 (Unpaid Shipments)

 8. Defendant Goldmark is a broker of general purpose polystyrene. As a broker, Goldmark purchased polystyrene from manufacturers such as Goodson, and then resold the polystyrene to end-users. 9. From March 1990 to July 1990, Goodson sold and delivered to Goldmark, and Goldmark accepted shipments of general purpose polystyrene under the following invoices ("Invoices") at issue in this litigation: Goodson Invoice Date Goodson Invoice Number Amount March 23, 1990 9426, 9426-C $ 19,138.40 April 16, 1990 9481 $ 79,350.00 April 20, 1990 9491 $ 21,012.80 June 8, 1990 9409-A $ 124.20 June 8, 1990 9557 $ 77,787.00 June 8, 1990 9558-A $ 78,002.00 June 20, 1990 9565 $ 17,640.00 June 20, 1990 9566 $ 17,016.00 June 25, 1990 9568 $ 17,974.00 July 16, 1990 9570 $ 14,458.56 TOTAL $ 342,502.96

19940920

© 1992-2004 VersusLaw Inc.



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