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Fetter v. Schink

United States District Court, S.D. New York

October 1, 2012

John FETTER, Fetter & Henderson (Pty) Ltd., and Applied Technology Limited., Plaintiffs,
v.
Rosalie K. SCHINK, Defendant.

Page 400

Johnson & Associates, by: Bruce D. Johnson, for Plaintiffs John Fetter, Fetter & Henderson (Pty) Ltd., and Applied Technology Limited.

Page 401

Lathrop & Gage LLP, by: William Hansen, Thomas Curtin, for Defendant Rosalie K. Schink.

OPINION & ORDER

JOHN F. KEENAN, District Judge.

Currently before the Court are (1) Defendant Rosalie Schink's (" Schink" or " Defendant" ) motion for summary judgment and (2) cross motions to strike. For the reasons that follow, the motion for summary judgment is granted and the cross motions to strike are denied as moot.

I. Background

This is a breach of contract action, which was removed by Defendant from state court to this Court. Plaintiffs John Fetter, Fetter and Henderson Ltd., and Applied Technology Limited (collectively, " Plaintiffs" ) hold patents for single point watering caps for controlled addition of water to lead acid batteries. (Compl. ¶ 8). Defendant Schink is the widow of Robert Morris (" Morris" ), founder of Watermaster of America, Inc. (" Watermaster" ), a company that sold battery watering systems from its incorporation in 1984 until it filed for bankruptcy in 2007. (Def.'s Rule 56.1 Statement ¶ 5).

From 1986 through 2006, Plaintiffs delivered bulk packages of its watering caps to Watermaster, which Watermaster resold. (Compl. ¶ 8). Plaintiff Applied Technology Limited (" ATL" ) issued invoices. No written agreement was ever executed by the parties. (Def's Rule 56.1 Statement ¶¶ 24-25). According to Plaintiffs, the parties had an implied contract under which Watermaster would resell Plaintiffs' patented watering caps within a certain geographical territory, which comprised the United States, Canada, and Mexico. (Compl. ¶ 8).

Morris operated Watermaster out of his residence, which he shared with Schink. Schink worked for Watermaster in various capacities, without pay, during the 1980s, and started receiving compensation for her work during the 1990s. Schink married Morris in 2004 and became an officer of Watermaster one month before Morris's death, in 2005. ( Id. at ¶¶ 21-23).

Following Morris's death, Schink operated Watermaster out of their home for two years, but by June 2007 poor sales forced her to wind down the business. (Def's 56.1 Statement at ¶ 32). On June 22, 2007, ATL filed an action in New York State court against Watermaster for $611,130 in unpaid invoices. That action was removed to the Southern District and came before Judge Swain. Applied Tech. Ltd. v. Watermaster of America, 07 Civ. 6620. Watermaster filed for Chapter 7 bankruptcy on July 16, 2009, causing Judge Swain to stay the 2007 action. Ultimately, on January 19, 2012, Judge Swain dismissed the case upon the conclusion of the bankruptcy proceeding. Id.

Plaintiffs now bring the instant action against Schink, alleging that she is personally liable for Watermaster's $611,130 in unpaid invoices by virtue of the fact that she " entered into a joint venture" with the company. They raise six claims for relief: (1) breach of contract for unpaid invoices, (2) breach of contract for exceeding the geographical scope of the joint agreement by reselling bulk packages in Australia and Germany, (3) breach of contract for refusing to relinquish the geographic territory of North America, (4) breach of the implied covenant of good faith and fair dealing, (5) unjust enrichment, and (6) common law fraud. At oral argument, Plaintiffs withdrew their claim for unjust enrichment. (Tr. of Sept 6, 2012 at 13-14). The Court will only address the five remaining claims.

Because the relevant discovery was conducted in connection with the bankruptcy proceeding and the case before Judge Swain, ...


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