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TRADAX ENERGY, INC. v. CEDAR PETROCHEMICALS

April 27, 2004.

TRADAX ENERGY, INC., Plaintiff, -against- CEDAR PETROCHEMICALS, INC., Defendant


The opinion of the court was delivered by: VICTOR MARRERO, District Judge

DECISION AND ORDER

In this contract dispute, one commodities trader, defendant Cedar Petrochemicals, Inc. ("Cedar"), failed to deliver a certain shipment of methanol to another commodities trader, plaintiff Tradax Energy, Inc. ("Tradax"). Primarily at issue in the parties' cross motions for summary judgment is whether there is a genuine issue of fact to suggest that Tradax had repudiated the contract, thereby relieving Cedar's obligation to deliver the methanol. The Court concludes that, as a matter of law, Tradax did not repudiate. Cedar's motion is therefore denied.

Tradax's motion is granted only in part, however, because certain documents necessary to proving Tradax's damages are not admissible. Because that evidence suffers from a relatively technical defect, the Court will permit Tradax to supplement its submissions. I. BACKGROUND*fn1

  In September 2002, Tradax contracted to purchase 10,000 barrels of methanol from Cedar, to be delivered to Houston, Texas, on a specific date sometime in January 2003, which Tradax would later specify, upon at least five days' notice. Cedar refused to deliver the methanol, which Tradax ultimately obtained from another source. By its summary judgment motion, Tradax seeks to recover from Cedar $184,380, an amount equal to the difference in the contract price and the price Tradax asserts it actually paid for the methanol. Cedar's cross motion asserts that Tradax repudiated the contract in a December 2002 phone call, and Cedar seeks judgment in its favor. The legal effect of that phone call is the central issue to both motions.

  In the phone call at issue, which occurred sometime in December 2002, Tradax president Walter Huybregts ("Huybregts") spoke with Cedar bookkeeper Linda Plevrites ("Plevrites") regarding a certain Texas state tax form. Plevrites's account of the phone call, which Huybregts disputes, is as follows:
Q: This one telephone call that you had, who called who? A: The phone rang, I answered. It was Tradax. Q: Who at Tradax was on the phone?
A: I don't recall. He probably said his name, I don't recall.
Q: It was a man? A: It was a man.
Q: And what exactly was said in this conversation — maybe — first of all, how long was the conversation you had?
A: Oh, three minutes.
Q: And what, to the best of your memory, exactly was said in that conversation?
A: Well, I can't tell you exactly, but this man asked for our Texas sales certificate, or whatever it's called, the certificate relating to sales tax. And I told him we didn't have it yet to give to him. And he was very annoyed because they needed it and I knew that we were going to get it, we hoped soon, but I had no idea. And, you know, he — urging me to get on the ball and et cetera, and said that if we didn't get it — if we didn't get it to them, then they wouldn't pay us.
Q: Did he use those words?
A: Um-hmmm.
Q: And did you tell him you would get it to him?
A: Yeah.
Q: Do you remember anything else about the conversation?
A: No. He wanted that certificate and I knew we could get it to him at some point and told him so.
Q: Did the person at Tradax say he was cancelling the contract — any contract? A: No.
Q: Did he say he was repudiating any contract?
A: No.
Q: Do you know at any time, in connection with any contract Tradax and Cedar had, whether Tradax refused to pay on a contract?
A: I'm not aware of any — anything related to that.
(Huybregts Decl. Ex. 16, at 25-27)
  Plevrites immediately informed her supervisors of the conversation, and Cedar asserts it then considered the contract cancelled. However, Cedar never alerted Tradax that it (Cedar) considered the contract cancelled until after Tradax e-mailed Cedar on January 7, 2003, to specify a delivery date of January 13. On the same day as Tradax's email, Cedar's president sent Tradax a letter indicating, for the first time, that Cedar considered the contract to have been cancelled:
When you called our office the first time and advised that you were not going to pay us for this transaction unless we had a tax exemption certificate, which we did not have, we viewed your refusal to pay as an anticipatory breach of the contract.
(Huybregts Decl. Ex. 13)

  The sales tax certificate referenced in the phone call and Cedar's letter does not directly relate to the contract at issue here. Under Texas law, a seller may avoid charging a buyer the otherwise applicable state sales tax if the buyer furnishes the seller with a Texas Resale Certificate, which states that the items purchased are for resale. Tradax had previously sold commodities to Cedar (the reverse of the transaction at issue here), and Tradax wanted Cedar to fill out a Texas Resale Certificate to reflect that Tradax acted lawfully in not charging Cedar sales tax for those transactions.

  After her conversation with Huybregts, Plevrites filled out the one-page Texas Resale Certificate form for Tradax and dated it December 15, 2002. For reasons which are unclear, Plevrites never obtained the required signature from the proper Cedar official, nor did she mail the form to Tradax.

  II. SUMMARY JUDGMENT STANDARD

  The Court may grant summary judgment only "if 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). The Court must first look to the substantive law of the action to determine which facts are material; "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Even if the parties dispute material facts, summary judgment will be granted unless the dispute is "genuine," i.e., "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Id. at 249.

  Where the moving party would bear the burden of persuasion at trial, that party must first make a prima facie case by "support[ing] its motion with credible evidence . . . that would entitle it to a directed verdict if not controverted at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 331 (1986). Where the non-moving party would bear the burden of persuasion at trial, the moving party can make its prima facie case by either "submit[ting] affirmative evidence that negates an essential element of the nonmoving party's claim" or "demonstrat[ing] to the Court that the nonmoving party's evidence is insufficient to establish an essential element" of the claim. Id.

  After such a prima facie showing, the non-moving party must respond with "specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). To this end, "[t]he non-moving party may not rely on mere conclusory allegations nor speculation, but instead must offer some hard evidence showing that its version of the events is not wholly fanciful." D'Amico. v. City of New York, 132 F.3d 145, 149 (2d Cir. 1998). In other words, "[w]hen the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

  Throughout this inquiry, the Court must view the evidence in the light most favorable to the non-moving party and must draw all inferences in favor of that party. See Hanson v. McCaw Cellular ...


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