Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Factory Associates & Exporters, Inc. v. Lehigh Safety Shoe Co. LLC

February 1, 2008


The opinion of the court was delivered by: Thomas J. McAVOY, Senior United States District Judge



Plaintiff Factory Associates & Exporters, Inc. ("Plaintiff" or "Factory Associates") commenced this action originally asserting claims sounding in breach of contract (First and Fourth Causes of Action), fraudulent misrepresentation (Second and Fifth Causes of Action), and unjust enrichment (Third and Sixth Causes of Action). See Compl., dkt. # 1. Defendant Lehigh Safety Shoe Co. LLC ("Defendant" or "Lehigh") answered and asserted counterclaims sounding in failure to pay on an account stated (First Counterclaim), breach of contract (Second Counterclaim), and unjust enrichment (Third Counterclaim). See Ans. & Counterclaim, dkt. # 18. By Decision and Order dated June 26, 2007, the Court granted Defendants' motion for summary judgment by dismissing all claims asserted in the original Complaint and Amended Complaint, except for the claim premised upon a breach of the implied warranty of fitness for a particular purpose. This matter proceeded to a two day bench trial before the Court that began on November 26, 2007 and ended on November 27, 2007. The parties were afforded until January 25, 2008 to submit post trial briefs. The following constitutes the Court's findings of fact and conclusions of law.


Plaintiff was a safety shoe distributor for Defendant. Plaintiff purchased the shoes from Defendant and resold them through Plaintiff's Nigerian agent and distributor, Jkpeez Impex Limited Co. ("Jkpeez"). Jkpeez primarily sold the shoes to Shell Petroleum Development Company ("Shell") in Nigeria.

Prior to 2002, Plaintiff had purchased Defendant's model 1628 and 1636 safety shoes. The model 1628 and 1636 shoes were well-received in Nigeria. In late 2000, Defendant advised Plaintiff that the model 1628 and 1636 shoes were being replaced by models 5628 and 5636 respectively. Thus, by 2002, large quantities of models 1628 and 1636 were no longer available. The model 1628 and 1636 shoes were manufactured in the United States, whereas the models 5628 and 5636 were manufactured in China. Defendant represented to Plaintiff and Shell that the new models were fit for use as safety shoes in Nigeria. See Pl.'s Exs. 7, 8 (letters from Defendant to Shell in Nigeria stating "we recommend this shoe as meeting all your requirements."); Pl.'s Ex. 13 (letter from Defendant to Plaintiff stating that "Lehigh's style # 5628 does meet and exceed the specification criteria outlined in this bid.").

As of 2002, Jkpeez had a "blanket" contract with Shell for the sale of safety shoes. Under this contract, Jkpeez was required to have a certain quantity of shoes available for Shell to purchase. Shell expressed a concern that Jkpeez did not have a sufficient quantity of safety shoes in stock. Tr. at 76. Shell wanted more shoes to be available in Jkpeez's warehouse. Id.

In early 2002, Plaintiff's principal, Frank D'Abramo, approached Defendant's sales representative, Greg Andrake, to discuss a proposal for increasing the quantities of safety shoes available in Jkpeez's warehouse in Nigeria. During these discussions, it was expressed that Jkpeez needed to increase its inventory to respond quickly to customer (i.e. Shell's) demands. The parties to the meeting expected orders of approximately 5,000 pairs of shoes ever three to four months, resulting in annual sales of 15-20,000 pairs of shoes. Tr. at 272. It was Defendant's understanding that there would a turnover of shoes maintained in Jkpeez's warehouse every four to five months. Tr. at 78, 128, 130, 132, 273, 276, 281; Def. Ex. 8 (referencing a "4 month lead time").

In early 2002, Plaintiff placed an order with Defendant for a total of 8,214 shoes (comprised of both model 5628 and 5636 shoes) at a price of $45 per pair.*fn1 See Pl.'s Exs. 22, 24. It was understood that approximately one-thousand pairs of shoes from this order would be used to fulfill existing orders and the remaining one-half would be used for inventory in the Jkpeez warehouse. Tr. at 73, 76, 267-68. There was no forecast of how long these shoes would remain in inventory, id. at 73-74, 126, but, as noted, the parties anticipated inventory turnover roughly three times per year. Tr. at 78, 128, 130, 132, 273, 276, 281; Def. Ex. 8. The shoes ordered under the January 2002 contract arrived in Nigeria in June 2002. Plaintiff paid Defendant for the shoes at the price of $39.75 per pair; not $45.00.*fn2 Tr. at 103.

At some point in 2002, it was learned that the blanket contract with Shell was ending. Tr. at 40. Shell was, therefore, re-bidding on safety shoes. Id. Because of the increased competition in the safety shoe market, by letter dated July 23, 2002, Defendant agreed to lower the price of its shoes to $39.75 per pair "beginning with the new award from Shell."*fn3 Pl.'s Ex. 72. Defendant also agreed that, "[a]t such time as the [Shell] contract is awarded. . . [w]e will allow a 50% credit of the difference in price between the price billed ($45.00) and the new contract price ($39.50), which is $2.75 per pair." Def. Ex. 14. Through this June 2, 2003 letter, Defendant was offering to retroactively reduce the price of the shoes ordered in January 2002 by $2.75 per pair once the new Shell contract was awarded. See Tr. at 319. Shell did not purchase any additional shoes and Shell did not award Jkpeez another contract for safety shoes. Because Shell had not awarded a new contract to Jkpeez, in June 2003, Defendant sent Plaintiff a letter demanding payment in the amount of $43,123.36. Def. Ex. 14.

In October or November 2003, Plaintiff learned of complaints concerning the soles of the shoes. Specifically, the soles were peeling off and crumbling. In or about early 2004, Plaintiff contacted Defendant about the problem with the shoes. At Defendant's request, Plaintiff provided Defendant with samples of the claimed defective shoes. The samples were provided to Defendant in May 2004.

By letter dated June 18, 2004, Andrake sent a letter stating that Defendant was unable to determine the cause for any defect. Defendant also asked for additional sample shoes. By letter dated September 22, 2004, Defendant wrote to Plaintiff stating that it was unsure what caused the decomposition to the soles of the shoes. The September 22 letter also stated that "something has changed in the composition or properties of the outsole because of the manner in which the shoes were stored and/or the length of time stored. . . . The factory advises that polyurethane outsoles subjected to non-use and/or storage in a hot, moist environment for a long period may decompose over time. This appears to be the base in the samples that were submitted, i.e., the shoes are over two (2) years old. . . .

[T]he factory has advised that there is no basis for a claim against them." Pl.'s Ex. 35. Through this letter, Defendant further advised Plaintiff that the shoes were outside the one year warranty period. Id.

Plaintiff then commenced this action seeking to recover for what it claims are defective shoes. Plaintiff asserts that the polyester polyurethane soles used in the new model shoes deteriorated from hydrolytic attack (otherwise know as hydrolysis or moisture attack), which is purportedly a known condition within the footwear industry whereby polyurethane material degrades when exposed to heat and humidity (such as is found in Nigeria). Plaintiff further contends that Defendant knew or should have known that: (1) hydrolytic attack begins at time of manufacture and can cause a polyester polyurethane sole to decompose within weeks or months depending on actual temperature and ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.