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BOSCOV'S DEPT. STORES v. AKS INTERNATIONAL AA CORP.

February 4, 2004.

BOSCOV'S DEPARTMENT STORES, LLC, Plaintiff, -v- AKS INTERNATIONAL AA CORP. and KALMAN STROBEL, Defendants


The opinion of the court was delivered by: GABRIEL GORENSTEIN, Magistrate Judge

OPINION AND ORDER

Plaintiff BOSCOV'S Department Stores, LLC ("Boscov's") brought this action against AKS International AA Corp. ("AKS") and its sole shareholder and president, Kalman Strobel, to recover an alleged overpayment of $198,868.00 for repaired jewelry. The defendants subsequently interposed counterclaims based on agreements relating to other jewelry transactions. The parties have consented to disposition of this matter by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c).

BOSCOV'S has now moved for summary judgment pursuant to Fed.R.Civ.P. 56 with respect to its breach of contract claim in the amount of $198,868.00 and with respect to the counterclaims asserted by AKS and Strobel. See Notice of Motion, filed October 20, 2003. Strobel has cross-moved for summary judgment against BOSCOV'S to dismiss the complaint against him personally. See Notice of Cross-Motion, filed November 14, 2003. For the reasons stated below, BOSCOV'S motion for summary judgment on its breach of contract claim against AKS is granted, BOSCOV'S motion for summary judgment dismissing the counterclaims is denied, Page 2 and Strobel's cross-motion for summary judgment dismissing the claims against him personally is granted.

 I. BACKGROUND

  This Court has already decided a motion and cross-motion for summary judgment relating to Strobel's personal liability, Boscov's Dep't Stores. LLC v. AKS Int'l AA Corp., 2003 WL 21576405 (S.D.N.Y. July 11, 2003), familiarity with which is assumed. In that decision, summary judgment was granted in favor of Boscov's solely on the issue of whether the promise by Strobel to answer for the debt of AKS was enforceable despite the Statute of Frauds. Id. at *6. Summary judgment was denied in all other respects, including on the ultimate question of Strobel's liability inasmuch as it was unclear from the record whether the conditions Strobel placed on his promise had been met. Id.

  Three issues have been raised in the instant motions: (1) on Boscov's motion, whether AKS is liable for the amount of Boscov's overpayment; (2) on Strobel's cross-motion, whether the conditions placed on Strobel's promise have been met, which would render Strobel personally liable for the amount of overpayment; and (3) on Boscov's motion, whether Boscov's is liable on the defendants' counterclaims. Each is discussed separately.

 II. APPLICABLE LEGAL PRINCIPLES

  Summary judgment may not be granted unless "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c): see Celotex Corp. v. Catrett. 477 U.S. 317, 322-23 (1986). A material issue is a "dispute [] over facts that might affect the outcome of the suit under the Page 3 governing law." Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 248 (1986). A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. Thus, "`[a] reasonably disputed, legally essential issue is both genuine and material'" and precludes a finding of summary judgment. McPherson v. Coombe. 174 F.3d 276, 280 (2d Cir. 1999) (quoting Graham v. Henderson. 89 F.3d 75, 79 (2d Cir. 1996)).

  When determining whether a genuine issue of material fact exists, courts must resolve all ambiguities and draw all factual inferences in favor of the nonmoving party. See, e.g., Savino v. City of New York. 331 F.3d 63, 71 (2d Cir. 2003) (citing Anderson. 477 U.S. at 255); McPherson. 174 F.3d at 280. Nonetheless, "mere speculation and conjecture is insufficient to preclude the granting of the motion." Harlen Assocs. v. Incorporated Vill. of Mineola, 273 F.3d 494, 499 (2d Cir. 2001) (citing Western World Ins. Co. v. Stack Oil. Inc., 922 F.2d 118, 121 (2d Cir. 1990)).

 III. AKS'S LIABILITY FOR THE OVERPAYMENT

  Paragraph 11 of the Complaint alleged that "Boscov's, in error, overpaid AKS by the approximate amount of $198,868.00 for the repair services provided by AKS." Complaint, filed February 21, 2001 ("Complaint") (annexed as Ex. A to Defendants' Rule 56.1 Statement of Material Facts, filed November 14, 2003 ("Def. 56.1")), ¶ 11. Boscov's motion for summary judgment on its claim for breach of contract against AKS is based on its assertion that "Defendants have admitted that Boscov's overpaid AKS $198,868.00." Plaintiff's Statement of Undisputed Material Facts, filed October 20, 2003 ("PL 56.1"), ¶ 7.

  Boscov's is correct that AKS has admitted the allegation in paragraph 11 of the Complaint. In fact, it did so in two distinct ways. First, in the Answer, AKS denied the Page 4 allegations of a number of paragraphs in the Complaint but did not deny the allegations contained in paragraph 11. See Answer with Affirmative Defenses and Counterclaims, dated February 11, 2002 ("Answer") (annexed as Ex. B to Def. 56.1), ¶ 1. Pursuant to Fed.R.Civ.P. 8(d), "[a]verments in a pleading to which a responsive pleading is required . . . are admitted when not denied in the responsive pleading." Defendants now attempt to avoid this conclusion by stating, "Strobel only admitted paragraphs 11 and 16 of the complaint." Def. 56.1 ¶ 10. Insofar as this statement is intended to mean that AKS did not admit paragraph 11, the argument is rejected. The Answer states unequivocally that it was being submitted on behalf of both Strobel and AKS. See Answer at 2.

  Second, AKS admitted the fact of Boscov's overpayment through its failure to controvert Boscov's contention on this point, see PL 56.1 ¶ 7, in AKS's counterstatement required under Local Civil Rule 56.1. See Def. 56.1. Local Civil Rule 56.1(c) provides that "[a]ll material facts set forth in the statement required to be served by the moving party will be deemed to be admitted unless controverted by the statement required to be served by the opposing party."

  Thus, Boscov's is entitled to summary judgment on the issue of whether it overpaid AKS in the amount of $198,868.00 as there is no "genuine issue for ...


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