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Dayton Superior Corp. v. SPA Steel Products

September 23, 2010


The opinion of the court was delivered by: Scullin, Senior Judge



On July 16, 2008, Plaintiff filed this breach-of-contract action to recover money owed for goods that it had sold and delivered to Defendant prior to June 1, 2008. See Complaint at ¶ 1. On December 12, 2008, Defendant filed its answer, in which it asserted two affirmative defenses and alleged counterclaims for antitrust violations, common law unfair competition, and product defects. See generally Answer.

Currently pending before the Court are Plaintiff's motion for summary judgment on its breach-of-contract claim, its motion to strike Defendant's affirmative defenses, and its motion to dismiss Defendant's counterclaims.


Plaintiff, a corporation organized under Delaware law, is a manufacturer and distributor of construction supplies, with its principal place of business in Dayton, Ohio.

Defendant is a manufacturing and construction materials distributor located in Malta, New York. Defendant provides fabricators in three states with steel supply and reinforcing steel fabrication and provides other materials to construction contractors. Defendant distributes products from more than 200 vendors throughout the Northeast, including those that Plaintiff manufactures.

Defendant has been Plaintiff's customer for several years. Defendant, like Plaintiff's other customers, submits purchase orders to Plaintiff; and, upon receiving the purchase order, Plaintiff sends Defendant an order acknowledgment, ships the product to Defendant, and, thereafter, sends an invoice to Defendant for the products shipped.

From May 23, 2006, to October 25, 2007, Defendant submitted purchase orders to Plaintiff; and, upon receipt of those purchase orders, Plaintiff provided order acknowledgments to Defendant, shipped it the products requested, and invoiced Defendant for the amount owed for the order. See Plaintiff's Statement of Material Facts at ¶ 7.*fn2 Defendant accepted delivery of the goods that Plaintiff shipped and at no time attempted to revoke acceptance or return those goods. See id. Plaintiff claims that Defendant owes it $1,181,847.45, exclusive of interest, for goods that it ordered and accepted. See id. at ¶ 9. Moreover, Plaintiff asserts that, in accordance with the terms and conditions provided on each purchase order between the parties, finance charges accrue on amounts unpaid for more than thirty (30) days at a rate of 1.5% per month. See id. at ¶ 10. Therefore, as of January 26, 2010, Plaintiff claims that Defendant owed it an additional $443,510.45 in finance charges. See id. at ¶ 11.

In its answer to Plaintiff's complaint, Defendant asserts several counterclaims. First, Defendant asserts that Plaintiff violated the Robinson-Patman Act ("RPA"), 15 U.S.C. §§ 13, 13a, by offering products to Defendant's competitors at discounted rates. In its second counterclaim, Defendant asserts that Plaintiff intentionally and recklessly engaged in unfair competition through its practice of discriminatory pricing, rebates, incentives, discounts and allowances, which Plaintiff offered to Defendant's competitors, but not to Defendant. As to its third counterclaim, Defendant alleges that Plaintiff intentionally and recklessly sold it defective products.

Finally, as noted, Defendant also asserts two affirmative defenses in its answer: failure to state a claim for which relief can be granted and unclean hands.


A. Plaintiff's Motion for Summary Judgment

1. Summary Judgment Standard

A court may grant a motion for summary judgment only if the court determines that there is no genuine issue of material fact to be tried and that the facts as to which there is no such issue warrant judgment for the movant as a matter of law. See Chambers v. TRM Copy Ctrs. Corp., 43 F.3d 29, 36 (2d Cir. 1994) (citations omitted). When analyzing a summary judgment motion, the court "'cannot try issues of fact; it can only determine whether there are issues to be tried.'" Id. at 36-37 (quotation and other citation omitted). Moreover, it is well-settled that a party opposing a motion for summary judgment may not simply rely on the assertions in its pleading. See Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (quoting Fed. R. Civ. P. 56(c), (e)).

In assessing the record to determine whether any such issues of material fact exist, the court is required to resolve all ambiguities and draw all reasonable inferences in favor of the nonmoving party. See Chambers, 43 F.3d at 36 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513-14, 91 L.Ed. 2d 202 (1986)) (other citations omitted). Where the non-movant either does not respond to the motion or fails to dispute the movant's statement of material facts, the court may not rely solely on the moving party's Rule 56.1 statement; rather, the court must be satisfied that the citations to evidence in the record support the movant's assertions. See Giannullo v. City of N.Y., 322 F.3d 139, 143 n.5 (2d Cir. 2003) (holding that not verifying in the record the assertions in the motion for summary judgment "would derogate the truth-finding functions of the judicial process by substituting convenience for facts").

2. Action for Price Pursuant to N.Y. U.C.C. § 2-709

A contract for the sale of goods under the New York Uniform Commercial Code ("UCC") is created upon the submission of a purchase order and subsequent acknowledgment and shipment of the ordered goods. See N.Y. U.C.C. Law § 2-204(1) (providing that "[a] contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract"). Section 2-709 of New York's Uniform Commercial Code sets forth the circumstances in which an aggrieved seller may recover damages for the price of goods contracted for sale. See N.Y. U.C.C. Law § 2-709(1)(a). In order to recover on an action for price pursuant to section 2-709, a plaintiff must establish that "1) [it] had a contract; 2) the buyer failed to pay the purchase price; and 3) the buyer accepted the goods." Weil v. Murray, 161 F. Supp. 2d 250, 254-55 (S.D.N.Y. 2001) (citing Hyosung America, Inc. v. Sumagh Textile Co., 137 F.3d 75, 79 n.1 (2d Cir. 1998)).

A seller's right to the price arises only upon the buyer's "acceptance" of the goods. See Orbis Co., Inc. v. Rivera, 140 A.D.2d 679, 680 (2d Dep't 1988) (citations omitted); see also Integrated Circuits Unlimited v. E.F. Johnson Co., 875 F.2d 1040, 1042 (2d Cir. 1989). Even if the goods are non-conforming, the seller is entitled to the "price" as long as the buyer accepts the goods. See N.Y. U.C.C. Law § 2-607(1); see also Cayuga Press of Ithaca, Inc. v. Lithografiks, Inc., 211 A.D.2d 908, 910 (3d Dep't 1995) (citations omitted); United States ex rel. Saunders Concrete Co., Inc. v. Tri-State Design Constr. Co., 899 F. Supp. 916, 923 (N.D.N.Y. 1995). A buyer, however, may avoid "acceptance" by rejecting the goods within a reasonable time after receipt. See N.Y. U.C.C. Law § 2-602(1); Saunders Concrete Co., 899 F. Supp. at 923.

In the present matter, Plaintiff has established all of the elements of an action for price pursuant to section 2-709. Plaintiff has established that Defendant was its customer and that Plaintiff approved Defendant to purchase products on credit. See Affidavit of Paul Fisher sworn to January 27, 2010 ("Fisher Aff."), at ¶ 4. Moreover, Plaintiff has provided uncontroverted allegations that it sold products to Defendant under two separate accounts and that, between May 2006 and October 2007, Defendant submitted purchase orders to Plaintiff for products. See id. Defendant does not contest that Plaintiff shipped these products and that Defendant accepted them; nor does Defendant contest that it has not yet paid Plaintiff for these products. See id. at ¶¶ 4-5 and Exhibit "1" annexed thereto.*fn3 Finally, Plaintiff has provided invoices for the goods that Defendant ordered and that it delivered to Defendant, along with the statements of account that Plaintiff sent to Defendant on a monthly basis showing the amounts due and owing, as well as the finance charges that were accruing on past due balances. See id. at ¶¶ 7-8.

Defendant does not contest that a contract existed for the sale of goods, nor could it. See M. Slavin & Sons Ltd. v. Glatt Gourmet Cuisine, Inc., 23 Misc. 3d 18, 19 (N.Y. App. Term 2009) (holding that a dated invoice reflecting, among other things, the identities of the buyer and seller, a description of the goods, the amount of the goods, the price of the goods, and the payment terms constitutes a valid and enforceable contract under the U.C.C., and that the invoice constituted a writing in confirmation of a contract for the sale of goods in satisfaction of the Statute of Frauds); see also Abeles, Inc. v. Creekstone Farms Premium Beef, LLC, No. 06-CV-3893, 2010 WL 446042, *9 (E.D.N.Y. Feb. 1, 2010). Moreover, Defendant does not claim that it did not accept the goods sent in response to the purchase orders, and Defendant's conduct would make such an assertion untenable. See Shokai Far East Ltd. v. Energy Conservation Sys., Inc., 628 F. Supp. 1462, 1466 (S.D.N.Y. 1986) (holding that the defendant accepted the goods after use); Cliffstar Corp. v. Cape Cod Biolab Corp., 37 A.D.3d 1073, 1074-75 (4th Dep't 2007) (holding that the defendant's attempted rejection of the goods one year after delivery and five months after commencement of the action was insufficient as a matter of law (citations omitted)); S & H Bldg. Material Corp. v. Riven, 176 A.D.2d 715, 717 (2d Dep't 1991) (holding that claiming that materials delivered were defective for the first time in the answer, eight and a half months after the last delivery of materials, was not a timely revocation (citations omitted)).

In Carl Zeiss, Inc. v. Micro Med Instruments, Inc., 186 A.D.2d 778 (2d Dep't 1992), the court granted summary judgment on facts nearly identical to those present here. The plaintiff commenced the action to recover $426,334.25 for goods sold and delivered to the defendant. See id. at 779. The defendant raised several counterclaims and affirmative defenses alleging, among other things, a claim for unpaid commissions and a claim for damages relating to inventory that the plaintiff was allegedly obligated to repurchase, which would have offset the amount that the defendant owed. The defendant did not, however, "dispute the price of the goods, that they were ordered by the defendant from the plaintiff, that they were delivered to the defendant without objection, and that the defendant never remitted payment." Id. Granting the plaintiff's motion for summary judgment, the court held that "[t]he mere assertion of counterclaims does not prevent the granting of summary judgment on the complaint when, as here, the counterclaims are sufficiently separable from the plaintiff's causes of action[.]" Id. at 779-80 (citations omitted).

As in Carl Zeiss, Inc., Defendant has not disputed the price of the goods, that it ordered these goods from Plaintiff, that Plaintiff delivered the goods it ordered, that it did not object to the goods Plaintiff delivered, or that it failed to remit payment for the accepted goods. See id.; see also Sunbeam Corp. v. Morris Distrib. Co., Inc., 55 A.D.2d 722, 723 (3d Dep't 1976) (granting summary judgment even though the defendant's counterclaims bore some relation to the plaintiff's action for goods sold and delivered); Fleet Bank v. Pine Knoll Corp., 290 A.D.2d 792, 794 (3d Dep't 2002) (citations omitted).

Accordingly, the Court grants Plaintiff's motion for summary judgment on its complaint. For the reasons stated below, however, the Court will not enter a final judgment with regard to Plaintiff's claim at this time.

3. Entry of a final judgment with regard to Plaintiff's claim pursuant to Rule 54(b) of the Federal Rules of Civil Procedure Rule 54(b) provides that "[w]hen an action presents more than one claim for relief -- whether as a claim, counterclaim, cross-claim, or third-party claim -- . . . the court may direct entry of a final judgment as to one or more, but fewer than all, claims . . . only if the court expressly determines that there is no just reason for delay." Fed. R. Civ. P. 54(b). The Supreme Court has outlined a two-prong analysis for determining whether a court should certify a judgment under Rule 54(b): first, the court must determine whether the judgment is final and, second, whether there is any just reason to delay entry of judgment. See Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 7-8 (1980). Although a decision to certify a judgment under Rule 54(b) is committed to the sound discretion of the district court, "Rule 54(b) certifications 'must be reserved for the unusual case in which the costs and risks of multiplying the number of proceedings and of overcrowding the appellate docket are outbalanced by pressing needs of the litigants for an early and separate judgment as to some claims or parties.'" Ebrahimi v. City of Huntsville Bd. of Educ., 114 F.3d 162, 166 (11th Cir. 1997) (quoting Morrison-Knudsen Co. v. Archer, 655 F.2d 962, 965 (9th Cir. 1981) (Kennedy, J.)).

As to the first prong of the analysis, the judgment at issue "must be a 'judgment' in the sense that it is a decision upon a cognizable claim for relief, and it must be 'final' in the sense that it is 'an ultimate disposition of an individual claim entered in the course of a multiple claims action.'" Curtiss-Wright Corp., 446 U.S. ...

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