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United States District Court, S.D. New York

January 10, 2005.


The opinion of the court was delivered by: HAROLD BAER, JR., District Judge


Sun Chemical Corp. ("Sun"), an ink supply company, entered into a requirements contract with the related entities of Excelsior Packaging Group, Inc. and Excelsior Packaging West, LLC (collectively, "Excelsior"). When Excelsior failed to make payments for quantities of ink it purchased, Sun filed suit for breach of contract, conversion/replevin, and unjust enrichment and sought damages, pre-judgment interest, attorneys' fees, costs, and replevin of an ink processing machine in Excelsior's Yonkers facility. Present before the Court is Sun's motion for summary judgment pursuant to Federal Rule of Civil Procedure ("Fed.R.Civ.P.") 56. Following oral argument on the motion on January 7, 2005, I granted Sun's motion with respect to liability and scheduled an inquest for February 8, 2005. I write here to briefly set forth the pertinent facts and the basis for my ruling.


  A. The Agreement*fn1

  On May 30, 2003, Sun and Excelsior entered into a contract, the In-Plant Supply Agreement ("the Agreement"), under which Excelsior agreed to purchase 90% of its printing ink and related products requirements for its Yonkers and Vancouver facilities from Sun for a term of three years (beginning on April 16, 2003). Agreement ¶¶ 3, 5. The Agreement provided that Sun would send an invoice to Excelsior each month for the "consignment ink or materials opened and prepared for use by Excelsior." Id. ¶ 4A. "[T]itle to the[se] containers of ink remained with Sun Chemical, and they were only charged to Excelsior once they were opened." Tr.*fn2 at 3:3-5; Agreement ¶ 6. It was agreed that Excelsior would be billed for consignment items "based on a physical inventory . . . each month." Agreement ¶ 4A. In addition, Excelsior would be billed for "unopened consignment items not used after 90 days. . . ." Id. Non-consignment items — that is, "[t]hose inks that were special order[s] that weren't part of the regular inventory [—] . . . were billed after they were delivered and were not based on whether the container was opened or not." Tr. at 3:35-4:3. Excelsior agreed to pay all invoices in full within 30 days. Agreement ¶ 4A. Interest on overdue amounts was agreed to accrue at the lesser of 1% per month or the maximum rate legally permissible. Id.

  In turn, Sun agreed to provide high quality products, as well as an on-site ink technician at each of Excelsior's two facilities. Id. ¶¶ 3, 1. The ink technician would serve a variety of functions, including, inter alia: ink room management, inventory control, color matching and ink blending, ink ordering, quality assurance, technical support, record keeping, and training. Id. ¶¶ 1, 2A-S. Sun also agreed to provide Excelsior with a monetary business incentive, the first payment of which was $200,000 to be paid upon execution of the contract. Id. ¶ 4B, App. B. This payment would "be amortized over the life of the contract." Id. App. B. In the event that "the contract is terminated prior to the term, the unamortized portion [would] become? payable within 30 days of termination." Id. Finally, Sun agreed to contribute $3,000 per month (up to a maximum of $100,000 over the term of the contact) towards the purchase or lease of ink dispensing equipment at Excelsior's Vancouver facility. Id. ¶ 7. At the Yonkers facility, Sun was to upgrade and maintain the existing equipment. Id. In the event of early termination, the Agreement provided that Sun "will remove the dispensing equipment" from the Yonkers facility. Id. Excelsior further agreed that it would "sign a UCC financing statement noting Sun['s] . . . continuing interest in all equipment, and . . . keep a notice stating (Property of Sun . . .) on the equipment? at all times." Id. However, the parties agreed that upon completion of the three year contract, "Sun will transfer ownership/title of the dispenser to Excelsior." Id.

  As for remedies in the event of a breach, Sun and Excelsior agreed that "[u]pon the occurrence of a material default, other than the payment of invoices . . ., by either party, the non-defaulting party shall notify the defaulting party in writing . . . and shall set forth with reasonable specificity the nature of the default." Id. ¶ 14C. The appropriate form of official notice was designated as certified mail, return receipt requested to individuals specified in paragraph 23 of the Agreement. After official notice, the defaulting party would have 60 days to cure the default. Should the default not be cured, the non-defaulting party would the have the right to terminate the Agreement, provided it did so in writing. With respect to a default in payment, the Agreement set out that in the event that Excelsior failed to correct a default in payment within 10 days, Sun would have "the right to 1) place Excelsior on COD; 2) terminate the Agreement; 3) withdraw the in-plant technicians from Excelsior's facilities; 4) remove Product inventory from Excelsior's facilities; and/or 5) exercise any and all other [legal] rights. . . ." Id. ¶ 14A. The parties agreed that New Jersey law would govern any dispute arising out of the Agreement. Id. ¶ 28.

  Finally, the Agreement contained a merger clause which provided that "the foregoing represents the entire understanding of the parties relating to the subject matter hereof, superceding all other understandings, written or oral, relating thereto." Id. ¶ 27. This clause also set out that "[s]hipments made by Sun . . . shall also be made in accordance with Sun['s] . . . standard general conditions," which "are printed on the back of Sun['s] . . . invoices. Id.

  B. Excelsior's Default

  It is undisputed that Excelsior failed to pay invoices within the 30 days provided for by the Agreement. In fact, Excelsior did not pay any invoices in a timely manner from April 2003 to April 2004. Sekowski Decl. ¶ 3; Gallagher Decl ¶ 6. According to Ronnie Shemesh, the CFO, CEO, and owner of Excelsior, "the invoices were fraudulent and not appropriate and over-billed and did not warrant payment because services were not rendered as per the in-plant supply agreement." Shemesh Dep. at 279:25-280:4. On February 16, 2004, Sun gave written notice of Excelsior's default. Mallon Decl., Ex. F ("Since our meeting of January 8th, where you had committed to activity on the? [outstanding] balances, repeated efforts to contact you have gone unanswered, and no payment activity has ensued."). Thereafter, Sun informed Excelsior by letter dated March 1, 2004 that it would terminate the Agreement with respect to Excelsior's Vancouver facility, remove the ink technician and consignment inventory at the Yonkers facility, and require that all future ink orders by paid C.O.D. Id., Ex. G. Finally, on March 25, 2004, Sun's senior corporate attorney informed Excelsior in writing that unless it paid the full outstanding balance of $486,942.67 from the two facilities, Sun would pursue legal remedies to recover the amounts due, its ink dispensing equipment, the unamortized portion of the $200,000 business incentive payment, and the costs of litigation. Id., Ex. H at 1. Excelsior did not respond and this lawsuit ensued.

  For his part, Shemesh, claims that Sun had a history of improper billing practices with Excelsior and owed Excelsior some $3-4 million for overcharges. E.g., Shemesh Decl. at 25-29. Nonetheless, after he purchased Excelsior from its previous owners, he agreed to renew the ink supply contract with Sun. Id. at 68:19-69:12. When questioned about his willingness to enter into a contract with a company he believed had committed substantial fraud, Shemesh asserted that it was very difficult and costly to change ink suppliers. Id. at 31:17-22, 69:8-10, 204:25-205:3. In response to Sun's allegations in this matter, Shemesh contends that Sun too was in breach of the Agreement one month after it was executed. According to Shemesh, Sun's invoices were inflated, id. at 202:14-23, and failed to, inter alia, upgrade and service the ink dispensing equipment, provide an ink technician and technical support, provide ink systems that could print with regularity, and contribute $3,000 per month to the Vancouver equipment, e.g., id. at 268:13-25, 277:2-11. As a result, Excelsior could not achieve the print quality or efficiency promised. Id. at 278:6-14. Shemesh asserts that he made numerous verbal complaints about Sun's purported over-billing and breaches and was informed by "management" that Sun was taking care of these issues. E.g., id. at 278:23-25. At no time did he provide written notice of Sun's purported breach pursuant to the terms of the Agreement. Id. at 221:19-222-21; 254:19-255:12; 278:15-21.


  A. Standard of Review

  Pursuant to Fed.R.Civ.P. 56(c), a district court must grant summary judgment if the evidence demonstrates that "there is no genuine issue as to any material fact and [that] the moving party is entitled to judgment as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). "Summary judgment is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to `secure the just, speedy and inexpensive determination of every action.'" Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986) (quoting Fed.R.Civ.P. 1).

  To determine whether there is a genuine issue of material fact, the Court must resolve all ambiguities and draw all inferences against the moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962) (per curiam); Donahue v. Windsor Locks Bd. of Fire Comm'rs, 834 F.2d 54, 57 (2d Cir. 1987). However, the mere existence of disputed factual issues is insufficient to defeat a motion for summary judgment. Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11-12 (2d Cir. 1986). The disputed issues of fact must be "material to the outcome of the litigation," id. at 11, and must be backed by evidence that would allow "a rational trier of fact to find for the non-moving party," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The non-movant "must do more than simply show that there is some metaphysical doubt as to the material facts." Id. With respect to materiality, "substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson, 477 U.S. at 248.

  B. Choice of Law

  Here, as noted, paragraph 28 of the Agreement, entitled "Governing Law" (all caps removed), provides that "[t]his Agreement is to be construed and the respective rights of Sun . . . and Excelsior are to be determined according to the laws of the State of New Jersey, without reference to choice of law provisions." It is firmly established under New York law, that where a case involves a contract with a clear choice-of-law provision, "[a]bsent fraud or violation of public policy, a court is to apply the law selected in the contract as long as the state selected has sufficient contacts with the transaction." Hartford Fire Ins. Co. v. Orient Overseas Containers Lines (UK) Ltd., 230 F.3d 549, 556 (2d Cir. 2000); Cargill, Inc. v. Charles Kowsky Res., Inc., 949 F.2d 51, 55 (2d Cir. 1991) ("New York courts generally defer to the choice of law made by the parties to a contract."). Moreover, the "parties' intention . . . [is] to be given heavy weight in determining which jurisdiction has the most significant contacts." Mechanic v. Princeton Ski Shop, Inc., No. 91 Civ. 6740, 1992 WL 397576, at *3 (S.D.N.Y. Dec. 30, 1992). Given that Sun has its principal place of business in New Jersey and the parties have agreed that their rights under the Agreement are to be governed by New Jersey law, the Court will apply New Jersey law to this dispute.

  C. Breach of Contract

  Under New Jersey law, a breach of contract claim requires that: (1) a valid contract existed between the parties; (2) breach of the contract; (3) performance by the non-breaching party; and (4) damages as a result. Video Pipeline, Inc. v. Buena Vista Home Entm't, Inc., 275 F. Supp. 2d 543, 566 (D.N.J. 2003). It is undisputed that the Agreement is a valid contract. Moreover, Excelsior has all-but conceded that it breached the Agreement. Excelsior acknowledged that it did not make payments on Sun's invoices within the contractually required 30-day period, although it contends that it was not required to do so because Sun itself was in breach of the Agreement, something that will be discussed in greater detail below. Excelsior did not, however, comply with the notice and cure provisions of the Agreement, the previously agreed-upon method of addressing defective performance. It is also evident — Excelsior's arguments to the contrary notwithstanding — that Sun delivered the ink and other products for which it invoiced Excelsior. Excelsior's failure to make payment triggered consequences set out in the Agreement, such as refund of the unamortized portion of the business incentive payment and forfeit of the ink dispensing equipment, and authorized Sun to terminate the agreement.

  By way of defense, Excelsior raises a number of arguments. First, Excelsior contends that it is not liable because Sun also breached the agreement. Excelsior, however, admits that it did not provide Sun with written notice of the default as required by ¶ 14C of the Agreement. Moreover, not all of Excelsior's contentions are borne out by the evidence. For example, Steven Neal, who at the time in question was a technical sales representative for Sun, testified — and his testimony was uncontradicted — that he received no complaints from Shemesh about the ink technician or the technical support. Neal Dep. at 47:15-48:4, 49:23-50:12, 77:15-19, 81:18-22, 82:7-10. Under the Agreement, Excelsior, following a breach, was required to provide written notice and after 60 days, terminate the agreement. Shemesh apparently failed to comprehend this requirement. At deposition, when asked whether he provided Sun with written notice of it alleged failure to lease ink dispensing equipment for Excelsior's Vancouver facility, he testified, "For what purpose? . . . I guess what you're saying is that I should on a daily basis read the agreement and baby-sit them to make sure that on each and every day they complied with the myriad of obligations [under] the agreement?" Shemesh Dep. at 254:22, 255:3-7. Although the notice and cure provision apparently pained Shemesh, this was what he himself agreed to. To the extent that Excelsior contends Sun's ink was deficient, e.g., id. at 278:9-14, the Agreement provided that Excelsior's "sole remedy for defective Products or equipment shall be replacement . . . or, a Sun['s] . . . option, return of the purchase price. . . ." Agreement ¶ 13. Thus, on this score, Excelsior's sole remedy was to notify Sun of its alleged breach of its agreement to provide high quality ink and permit Sun to either replace the product or issue a refund. Nowhere does the Agreement permit Excelsior to unilaterally deduct or refuse payment for allegedly deficient ink or other shortcomings.

  Second, Excelsior contends that Sun has failed to prove that Excelsior received and consumed the ink for which it was billed. This argument is contradicted by the testimony of both Shemesh and Neal and misapprehends the agreed-upon method of billing. As noted, the Agreement provides that "Excelsior will be invoiced monthly for consignment ink or materials opened and prepared for use by Excelsior. Consumption shall be based on a physical inventory conducted by the Ink Technician at closing time each month." Agreement ¶ 4A. Further, all "unopened consignment items not used after 90 days will be billed." Id. Shemesh acknowledged at his deposition that Excelsior received ink from Sun until the time Sun terminated the Agreement, e.g., Shemesh Dep. at 202:24-203:8, 204:7-205:7, something that was confirmed by Neal, Neal Dep. at 124:6-11. At deposition, Neal testified that at the end of each month he (or someone working at the Excelsior facility) would inventory the open drums of ink and bill Excelsior accordingly. Neal Dep. at 29:20-30:3. Jose Mendez, Excelsior's ink room manager, would review the levels of ink with Sun's employee at the Excelsior facility and place additional ink orders. Id. at 30:11-24. Thus, employees of both Sun and Excelsior made decisions about the amount of ink used and to be shipped to Excelsior. Id. at 31:2-6. Indeed, according to Neal, no one at Excelsior ever disagreed with the amount of ink delivered insofar as its correspondence with the amount billed on the invoice. Id. at 124:6-11. There is no serious question that Excelsior received and used the ink. Excelsior's arguments to the contrary are belied by its alternative arguments, such as its assertion that Sun's failure to upgrade and service the ink dispensing machine reduced productivity and resulted in inferior print quality. Surely, there could be no inefficiency or quality issues if there was no ink.

  Third, Excelsior contests the amounts listed in the invoices. For example, Excelsior contests the final invoice (No. 1111073825) in the amount of $13,881.27. With its reply papers, Sun produced a declaration from Stewart Gallagher ("Gallagher"), who is responsible for overseeing Sun's western branches and operations. Gallagher explained that following a complaint from Excelsior's Vancouver facility, Sun conducted an audit of all billing going as far back as 2002. Gallagher Decl. ¶ 3. As a result, Sun a credit was entered in the amount of $22,708.55 and a corrected invoice was issued in the amount of $13,881.27 (No. 1111073825). Id. Other than this one instance, which prompted an audit, Excelsior did not provide and Sun did not receive written notice of any billing error. Shemesh Dep. at 164:12-16; see also id. at 221:14-222:21

  Fourth, Excelsior argues that the invoices include the cost of technical services and equipment, which Excelsior contends it never received. At his deposition, Neal testified that he received no complaints regarding the performance of the Yonkers site ink technician or technical support, despite the fact that he was questioned repeatedly about this. Neal Dep. at 47:15-48:4, 49:23-50:12, 77:15-19, 81:18-22, 82:7-10. However, Neal admitted that Sun did not upgrade the ink dispensing equipment and only provided daily maintenance on it from May 2003 through the end of the year. Neal Dep. at 55:8-17. But he also testified that Sun did get quotes for the cost of upgrading the machinery, id. at 54:13-19, and did upgrade the computer, id. at 56:2-8. And, as Sun noted at oral argument, "[t]here was not a specific time frame for completing those upgrades." Tr. at 5:15-16. Sun may well have been deterred from making significant expenditures when "Excelsior was already behind in payments from the first month." Id. at 5:17-18. Further, Excelsior did not adhere to the agreed-upon procedure for notifying Sun of its alleged default to provide it with an opportunity to correct the problem. Any deduction of an amount from the invoices would be tantamount to awarding it damages on a counterclaim, which Excelsior did not timely file. In any event, the far better course, as I already informed the parties, is to determine the precise amount of damages at an inquest.

  Finally, according to Shemesh, Excelsior never received the $200,000 business incentive payment promised under the Agreement. Sun counters that this payment was issued in the form of a credit to Excelsior's account. At deposition, Shemesh acknowledged that Excelsior was given a $200,000 credit, but he asserted that this was not the business incentive payment, but rather, it represented partial compensation for the $3-4 million he believed Sun owed Excelsior due to its improper billing practices earlier in the business relationship. Shemesh Dep. at 57:7-9. According to Shemesh:

He had authority for two hundred fifty thousand dollars. Two hundred of it was given in the form of a credit . . . Fifty thousand I believe he . . . would earmark . . . within the agreement for an upgrade. Beyond that he would need to secure funds from unusual sources . . . he had some fungible funds . . . and that's where the three fifty came from a total sum of five hundred and fifty thousand dollars and in the negotiation I asked for five fifty. He is only agreeing to two hundred, therefore, three fifty is the residual that was somewhat oral.
Shemesh Dep. at 59:11-25.

  It appears that Shemesh believed that Sun agreed to pay Excelsior $250K, as documented in the Agreement ¶ 4B, App. B, and that Sun further committed orally to provide the additional $350K that Shemesh required. This, however, is at odds with the merger clause in ¶ 27 of the Agreement, Further, Sun's Lea Sekowski ("Sekowski"), the credit department supervisor, declared that after Shemesh signed the Agreement, "[Shemesh] unilaterally deducted $200,000 from invoices that were outstanding at the time." Sekowski Decl. ¶ 9. This was, in essence, a de facto payment of the business incentive dollars, something that is confirmed by correspondence from Sun's regional manager to Shemesh. Id., Ex. 4. Sekowski further declared that "Sun ? did not, at any time, agree to give `partial compensation' to Excelsior for any alleged `improper billing practices as Mr. Shemesh claims. . . ." Id. ¶ 10. Further, there is no documentation to support that there was any such agreement at the time Shemesh purchased Excelsior or that Sun agreed to pay any money to the defendant. When we add to this that Shemesh consulted for Excelsior as early as 1999 and thus was obviously knowledgeable about the Sun-Excelsior relationship, Shemesh's claim is both incredible and legally deficient. In sum, there are no material issues of fact with respect to Excelsior's liability on Sun's breach of contract claims for the amounts due on the unpaid invoices and the return of the unamortized portion of the business incentive payment.

  D. Replevin

  Excelsior argues that it should not have to forfeit the ink dispensing equipment when Sun failed to abide by its commitment to upgrade and service the machinery. Nonetheless, the parties previously agreed that in the event of early termination — with no reference to the reason for such termination or the performance of either party — Excelsior would forfeit the equipment to Sun. Excelsior's arguments to the contrary are simply untenable in light of the clear contractual language. For example, Shemesh testified that he previously refused to return the ink dispensing equipment to Sun because "it's disputed that it belongs to Sun . . . the equipment was fully depreciated and should have remained in the possession of Excelsior." Shemesh Dep. at 262:16-20. As for the basis of Excelsior's claim to the equipment, Shemesh explained, "[m]y definition, okay, my interpretation . . . that the equipment belonged to Excelsior." Id. at 263:13-15. Unfortunately, it is not Shemesh's definition that governs here; the parties are bound by their prior contractual agreement. Under New Jersey law, as elsewhere, "the parties are entitled under the provisions of the contract to that which they bargained to receive." Traurig v. Levin, 142 A. 48, 49 (N.J. Err. & App. 1928). Here, the contractual language could not be clearer. The equipment was "Property of Sun . . ." and secured by a UCC financing statement. Agreement ¶ 7. Ownership of the equipment would only vest in Excelsior upon completion of the three-year contract. There is no material issue of fact to obscure the obvious: Sun is entitled to return of the equipment or an appropriate amount of damages.

  E. Attorneys' Fees & Costs

  Although "New Jersey has a strong policy disfavoring shifting of attorneys' fees . . . a party may agree by contract to pay attorneys' fees." N. Bergen Rex Transp., Inc. v. Trailer Leasing Co., a Div. of Keller Sys., Inc., 158 N.J. 561, 569 (1999). Here, Sun seeks an award of attorneys' fees and costs based on the fact that its invoices, which indicated the transactions documented therein were "subject to all terms and conditions appearing both on the face and on the backer hereof," provide, inter alia, that the "[c]ustomer shall also reimburse Sun for any costs and expenses, including attorney fees, incident to the collection of any delinquent account." Mallon Decl., Ex. B, C. Sun believes that this language entitles it to collect attorneys' fees and costs. The Agreement has no provision regarding attorneys' fees or costs. However, the merger clause in ¶ 27 appears to authorize such an award. The second portion of ¶ 27 provides, in pertinent part, that:

Shipments made by Sun Chemical shall also be made in accordance with Sun['s] . . . standard general conditions. These conditions are printed on the back of Sun['s] invoices. These terms and conditions shall apply to all orders and sales unless they are in conflict with a specific term of this Agreement, in which case the Agreement shall control.
As there is no specific provision in the Agreement to contradict the liability for attorneys' fees and costs and Sun incurred these amounts in the collection of a delinquent debt, an award of attorneys' fees and costs is required.

  F. Pre-Judgment Interest

  Under New Jersey law, "[i]t is settled that prejudgment interest may be awarded on contract claims." Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464, 478 (1988). As Sun acknowledges, an award of pre-judgment interest is generally subject to equitable principles to be exercised in the Court's discretion. E.g., Bak-A-Lum Corp. of Am. v. Alcoa Bldg. Prods., Inc., 69 N.J. 123, 131 (1976) ("Interest . . . run[s] . . . in accordance with principles of equity.") (internal quotation mark and citation omitted); George H. Swatek, Inc. v. N. Star Graphics, Inc., 246 N.J. Super. 281, 288 (N.J.Super. A.D. 1991) (prejudgment interest can be awarded whether either liquidated or unliquidated damages are recovered and the equities are in the injured party's favor."). As one court observed, "prejudgment interest has been regarded by [New Jersey] courts as compensatory — to indemnify the plaintiff for the loss of what the monies due him would presumably have earned if payment had not been refused." A.J. Tenwood Assoc. v. Orange Senior Citizens Housing Co., 200 N.J. Super. 515, 525 (N.J.Super. A.D. 1985). "The basic consideration is that the defendant has had the use, and the plaintiff has not, of the amount in question; and the interest factor simply covers the value of the sum awarded for the prejudgment period during which the defendant had the benefit of monies to which the plaintiff is found to have been earlier entitled." Id. at 525-26.

  Here, the parties contractually agreed that in the even of a default in payment, Excelsior would pay Sun interest on the sums due. Agreement ¶ 4A (providing that interest would accrue in the lesser amount of 1% per month or the maximum allowed by law). Excelsior must therefore pay such interest. As the New Jersey Supreme Court held, a party that has contractually agreed to pay pre-judgment interest "must be required to comply with its contractual obligations." Van Note-Harvey Assoc., P.C. v. Township of E. Hanover, 175 N.J. 535, 542 (2003); see also Alliance Elec., Inc. v. Atlantic City Bd. of Educ., No. A-633-01T2, 2004 WL 583211, at *17-18 (N.J.Super. A.D. March 2, 2004) (affirming an award of pre-judgment interest because, inter alia, the contract provided for the imposition of pre-judgment interest). Thus, the contractual language requires an award. Moreover, the equities in this case are not as one-sided as Excelsior would have us believe. It is undisputed that Excelsior failed to pay any invoices since it entered into the Agreement in May 2003 and it has enjoyed the benefit of that money since that time. And while Excelsior may have had legitimate gripes with Sun's performance, at no time did it adhere to the agreed upon protocol to resolve those issues. Instead, Excelsior seems to believe that Sun's partial performance entitled it to forgo payment and avoid all detrimental consequences of its own breach.


  For the foregoing reasons, Sun's motion for summary judgment is granted with respect to liability. The Court will hold an inquest on February 8, 2005 at 10:00 AM to determine the amount of (1) damages (each item of proposed damage is to be identified and analyzed); (2) pre-judgment interest (identify and support starting date); (3) attorneys' fees (time sheets and affidavits required); and (4) costs (to be supported in concert with what courts have allowed and for which the Federal and Local Rules provide). The parties' submissions with respect to the inquest are to be exchanged between the parties and delivered to Chambers on or before February 2, 2005. The Clerk of the Court is instructed to close this motion.


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