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October 13, 1999


The opinion of the court was delivered by: Arcara, District Judge.


The above-referenced case was referred to Magistrate Judge Leslie G. Foschio pursuant to 28 U.S.C. § 636(b)(1)(B), on February 10, 1999. On September 17, 1999, Magistrate Judge Foschio filed a Report and Recommendation, recommending that defendants' motion to dismiss should be granted in part and denied in part.

The Court has carefully reviewed the Report and Recommendation, the record in this case, and the pleadings and materials submitted by the parties. No objections having been timely filed, it is hereby

ORDERED, that pursuant to 28 U.S.C. § 636(b)(1), and for the reasons set forth in Magistrate Judge Foschio's Report and Recommendation, defendants' motion to dismiss is granted in part and denied in part. The case is referred back to Magistrate Judge Foschio for further proceedings.



FOSCHIO, United States Magistrate Judge.


This case was referred to the undersigned on February 10, 1999 by the Hon. Richard J. Arcara for report and recommendation on all dispositive motions. The matter is presently before the court on Defendants' motion to dismiss filed February 1, 1999 (Docket Item No. 5).


Plaintiff, Patricia Kirkpatrick, d/b/a Wee Golf/Anything's Possible ("Plaintiff'), commenced this contract action on January 24, 1999 against Defendants The Rays Group,*fn1 James Stark, d/b/a Stark Concepts, Rays & Associates Ltd., and Rays Group. Plaintiff asserts five causes of action including violation of the Uniform Commercial Code, breach of contract, tortious interference with contractual relations, unjust enrichment and fraud.

On February 1, 1999 Defendants moved to dismiss the complaint as against all Defendants for improper venue, as against Defendants James Stark, Rays & Associates Ltd., and Rays Group for failure to state a claim, and as against Defendants Rays & Associates and Rays Group for lack of personal jurisdiction. In support of the motion, Defendants filed a Memorandum of Law in Support of Defendants' Motion to Dismiss the Complaint (Docket Item No. 6) ("Defendants' Memorandum"), and the Affidavit of James Stark (attached to Docket Item No. 5) ("Stark Affidavit"). In opposition to the motion to dismiss, Plaintiff filed on March 19, 1999 a Memorandum of Law in Opposition to Defendants' Motion to Dismiss (Docket Item No. 10) ("Plaintiff's Memorandum") and the Affidavit of Patricia Kirkpatrick (Docket Item No. 11) ("Kirkpatrick Affidavit"). In reply, Defendants filed, on April 6, 1999, a Reply Memorandum of Law in Support of Defendants' Motion to Dismiss the Complaint (Docket Item No. 13) ("Defendants' Reply") and the Reply Affidavit of James Stark in Further Support of Motion to Dismiss (Docket Item No. 14) ("Stark Reply Affidavit"). Oral argument was deemed unnecessary.

Based on the following, Defendants' motion to dismiss should be GRANTED in part and DENIED in part.


Plaintiff Patricia Kirkpatrick, d/b/a Wee Golf, a division of Anything's Possible ("Wee Golf"), is President of Wee Golf. Wee Golf's place of business located at 5177 Homestead Place, Lewiston, New York. Peggy Beakes, Vice President of Wee Golf, works out of an office located at 870 Fawn Grove Road in Fawn Grove, Pennsylvania. Beakes prepares purchase orders for Wee Golf and sometimes receives shipments of ordered merchandise. Beakes is compensated by Plaintiff for such services, but has no investment or ownership interest in Wee Golf.

Plaintiff sells and distributes traditional golf apparel and accessories for children and juniors, wholesale, to golf pro shops and resorts throughout the United States and, on a retail basis through advertisements placed in print publications, as well as over the Internet. Plaintiff considers Wee Golf to be the leading supplier of children's golf wear and that it is the first company in the United States to offer a complete line of golf apparel and accessories for children ages 2 to 7.

Defendant Rays Apparel, Inc. ("Rays Apparel, Inc."), a California corporation in the business of manufacturing and selling apparel, maintains its principal office in Costa Mesa California and another office and showroom at 485 Seventh Street in the New York City "garment district." Defendant James Stark ("Stark"), both a shareholder and President of Rays Apparel, resides in Laguna Hills, California. Prior to creating Rays Apparel, Stark conducted business with his wife under the name "Stark Concepts." Stark's brother, Bill Starks, is Vice President of Sales for Rays Apparel. Lisa Dibsie is a sales representative for Rays Apparel, Inc. and works out of its New York City office. Rays & Associates Ltd., ("Rays & Associates") is a business entity located in the Cayman Islands, and Rays Group ("Rays Group"), is a business entity located in Hong Kong.

Rays Apparel, Inc. manufactures children's and men's sportswear which it sells wholesale either under one of its own registered trademarks or on a "private label" basis. Rays Apparel's sales force is headquartered in its New York City office. Its merchandise is manufactured either in Southern California through Rays Apparel's own production division or is subcontracted to other companies located in the Far East.

Rays Apparel, Inc. included several lines of children's golf-related apparel, i.e., shorts, polo shorts, sweaters and vests, among its clothing lines before Plaintiff sought to conduct business with it. Those clothing lines were sold by Rays Apparel, Inc. primarily under the brand name Uh! Oh, separated by colors and styles into various "collections" referred to as "Caddy Shack," "Tin Cup," "Milano," "Tuscany" and "St. Andrews."

Plaintiff first met Stark in the Fall of 1996 at Rays Apparel's booth at an industry trade show, International Kids Fashion Show, held at the Jacob Javits Center in New York City. At that time, Plaintiff informed Stark of her company's business and indicated her intention to expand into the "green grass" business which is understood in the apparel industry as referring to golf country clubs, pro shops and resorts. As there were no present plans for Rays Apparel, Inc. to expand into that market, Plaintiff was not considered a direct competitor and Stark agreed to consider selling to her. Plaintiff placed her first order with Rays Apparel, Inc. in February, 1997.

On October 24, 1997, Plaintiff ordered merchandise from Rays Apparel, Inc. ("Purchase Order No. WG11011") which she intended to sell as part of Wee Golf's summer 1998 collection.*fn3 Included in that order of children's golf apparel referred to by Rays Apparel, Inc. as the "Milano Collection," were 600 green knit vests which were to be manufactured and sold to Plaintiff without Rays Apparel, Inc. Uh!Oh labels or the crests which were usually embroidered on the left chest. It was Plaintiff's intention that the labels of her customers would be placed in the garments. The total amount of that order was $33,114. January 25, 1998 was the stated delivery date on the purchase order and February 25, 1998 was the stated cancel date. The goods were to be shipped to Beakes in Pennsylvania, although the bill for those goods was to be sent to Plaintiff in Lewiston, New York.

Shortly after placing the order, Plaintiff was informed of a shortage in the turquoise jacquard polo shirts which were among the items listed in Purchase Order No. WG11011. On November 3, 1997, Plaintiff agreed to the substitution of a different turquoise jacquard polo shirt for the ones originally ordered. Relying on the purchase order, Plaintiff accepted orders from customers and incurred expenses by attending trade shows where the Milano apparel line was promoted as well as by advertising the line.

On January 27, 1998, Plaintiff placed another order with Rays Apparel, Inc. ("Purchase Order No. WG8180"), which she intended to sell as part of her spring and summer collection. Included in that purchase order was children's golf apparel carried in Rays Apparel's St. Andrews and Tuscany collections. The total amount of that order was $85,929 and the stated "delivery window" was May 25 to June 25, 1998.

Plaintiff was informed on February 26, 1998, the day after the cancel date for Purchase Order No. WG11011, that there was a shortage in the turquoise jacquard polo shirts which had been substituted on November 3, 1998 for the original polo shirts Plaintiff ordered. Plaintiff then canceled the entire order for jacquard polo shirts.

On March 2, 1998, Lisa Dibsie informed Plaintiff through a proposed revision to Purchase Order No. WG11011 sent to Peggy Beakes of another problem, specifically, that of the 330 solid periwinkle polo shirts ordered, only 36 were available for shipment. Dibsie requested Beakes respond as to whether Plaintiff would accept shipment of Purchase Order No. WG11011 as revised.

Thereafter, on March 4, 1998, Beakes sent Dibsie a revised Purchase Order No. WG11011 in which fewer quantities of the same goods contained in the original Purchase Order No. WG11011, except for the turquoise jacquard polo shirts which had been canceled, were ordered.*fn4 For example, only 66 of the original 600 green knit vests originally ordered and only 36 of the 330 periwinkle polo shirts originally ordered were requested. The total amount of goods orders per Purchase Order No. WG11011 as revised by Plaintiff was $10,130. According to Plaintiff, the reduction in the order was attributed to her need to "balance" the collection. Beakes also submitted an additional order for walnut linen and cotton shorts of the Milano collection, Purchase Order No. WG8197, which totaled $1,473.60.

Intending to expedite shipment of Purchase Orders Nos. WG11011 and WG8197, the Milano collection items, Plaintiff, in a letter to Dibsie, dated March 4, 1998, offered to send payment in the form of a check to cover both those orders. Plaintiff also requested confirmation as to when the Milano collection would be ready for shipment as well as whether any problems were anticipated with the St. Andrews and Tuscany collections, from which the items contained in Purchase Order No. WG8180 were ordered. In that letter, Dibsie was also advised that Plaintiff's ability to fill customer orders depended on timely receipt of the goods ordered from Rays Apparel, Inc. and that Plaintiff had expended significant funds to promote the line.

Plaintiff maintains that Stark's brother, Bill Stark, called her on March 4, 1998 and attempted to persuade her to convince her customers to accept shipments for merchandise other than what Plaintiff had ordered from the Milano collection. On March 5, 1998, Bill Stark again telephone Plaintiff and advised her that although the solid polo shirts that matched the green vests Plaintiff had ordered were not available, Plaintiff should accept the original number of green vests, i.e., 600 as Plaintiff had originally, ordered as her customers "would figure out other ways to put an outfit together." Complaint, ΒΆ 111. According to Plaintiff, Bill Stark also stated that because the green vest had been "special ordered," as they were manufactured without the embroidered crest on the left chest, Plaintiff was required to take all of them. Plaintiff responded that ...

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