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C.I.F. PRODUCTIONS v. BURLINGTON COAT FACTORY WARE

March 25, 1995

C.I.F. PRODUCTIONS, INC., Plaintiff, against BURLINGTON COAT FACTORY WAREHOUSE CORPORATION, a/k/a/ MODE CRAFT FASHIONS, Defendant.


The opinion of the court was delivered by: LEWIS A. KAPLAN

 KAPLAN, District Judge.

 This is an action for a balance allegedly due on goods sold and delivered. The case is before the Court on plaintiff's motion to amend the complaint to increase the amount demanded and for summary judgment. Defendant opposes plaintiff's motion for summary judgment and asserts that the undisputed facts warrant judgment in its favor.

 Facts

 Burlington claims that the deal between the parties was renegotiated in the fall of 1993 and that the original prices were reduced substantially in recognition of CIF's alleged inability to make timely deliveries. The arrangement allegedly was concluded between Burlington's Mr. Felbin and CIF's Mr. Meehan and confirmed by Meehan in a letter to Felbin. Felbin has submitted an affidavit claiming both that the modification occurred and that it was reflected in a letter to him from Meehan. Burlington, however, has been unable to produce the alleged letter. Meehan, for his part, denies both the modification and the letter.

 Discussion

 CIF contends that the claimed modification is barred by the statute of frauds in view of Burlington's inability to produce the alleged letter and, in consequence, that it is entitled to summary judgment. Burlington's response is twofold. First, it acknowledges that the statute of frauds requires proof of a writing confirming the alleged modification, but argues that the writing can be proved by parol. Second, it contends that the statute of frauds is satisfied independently by CIF's alleged retention without objection of revised purchase orders sent to it by Burlington and reflecting the modified prices.

 The modification alleged here is unenforceable absent a writing sufficient to satisfy the statute of frauds. N.Y. Unif. Comm. Code §§ 2-209 (McKinney 1994). Nevertheless, the statute of frauds does not preclude proof of the alleged modification here.

 Although the issue is not entirely free of doubt, it appears that New York law permits proof of the existence of a writing sufficient to satisfy the statute by parol evidence where the failure to produce the original is explained adequately. Van Boskerck v. Torbert, 184 F. 419, 420 (2d Cir. 1911); Webb & Knapp, Inc. v. United Cigar-Whelan Stores Corp., 276 App.Div. 583, 96 N.Y.S.2d 359 (1st Dept. 1950); Posner v. Rosenbaum, 240 App.Div. 543, 270 N.Y.S. 849, 851-53 (1st Dept. 1934); In re Bernard's Estate, 176 Misc. 132, 26 N.Y.S.2d 767, 769-70 (Surr. Ct. Bronx Co. 1941) (collecting cases); but see Matter of Talco Contractors, Inc. v. New York State Tax Commission, 140 A.D.2d 834, 835, 528 N.Y.S.2d 219, 220 (3d Dept. 1988) (existence of security agreement may not be proved by parol). Felbin's testimony that a confirmatory letter existed but has been misplaced, if otherwise admissible and if credited, therefore appears to be sufficient to satisfy the statute.

 We need not rely on this debatable proposition, however. Section 2-201(2) of the Uniform Commercial Code provides that the retention without written objection of a confirmatory writing satisfies the statute. N.Y. Unif. Comm. Code § 2-201(2) (McKinney 1994). Here it is undisputed that Burlington sent revised purchase orders containing the modified prices to CIF and that CIF retained them without written objection for more than the requisite ten days. While this in itself does not establish that the modification occurred, it is sufficient to deprive CIF of the statute of frauds defense. Id. Comment 3.

 Burlington would have us go one step further and grant summary judgment dismissing the complaint. It argues that CIF's retention of the revised purchase orders establishes the terms of the modified contract and that the parol evidence rule, id. § 2-202, precludes CIF from disputing the prices there set forth. We reject the argument for two reasons.

 First, as Comment 3 to Section 2-201 explicitly states, CIF's retention of the revised purchase orders solves Burlington's statute of frauds problem, but only its statute of frauds problem, with respect to the modification. "The burden of persuading the trier of fact that a [modification] was in fact made orally prior to the written confirmation is unaffected." Id. There is a genuine issue of fact as to whether a modification was made.

 Second, the UCC bars parol evidence only of terms at variance with those set forth in a writing "intended by the parties as a final expression of their agreement with respect to such terms . . . " Id. § 2-202. It is by no means clear that the revised purchase orders sent by Burlington to CIF were intended by both of the parties to be a final expression of their agreement as to price. E.g., B.N.E. Swedbank S.A. v. Banker, 794 F. Supp. 1291 (S.D.N.Y. 1992); Compania Sud-Americana de Vapores, S.A. v. IBJ Schroder Bank & Trust Co., 785 F. Supp. 411, 430-33 (S.D.N.Y. 1992). Among other things, the modified ...


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