United States District Court, S.D. New York
February 11, 2014
NEW WORLD TRADING CO. LTD., Plaintiff,
2 FEET PRODUCTIONS, INC., Defendant. QUANZHOU HENGYU LIGHT INDUSTRIAL DEVELOPMENT CO., LTD., Plaintiff,
2 FEET PRODUCTIONS, INC., Defendant.
Michael J. Calvey, Esq., Michael J. Calvey, LLC, North Bergen, NJ, for Plaintiff.
Kyle C. McGovern, Esq., Diane B. Cavanaugh, Esq., Lyons McGovern, LLP, White Plains, NY, for Defendant.
MEMORANDUM OPINION AND ORDER
SHIRA A. SCHEINDLIN, District Judge.
New World Trading Co. Ltd. ("New World") brings this action against 2 Feet Productions, Inc. ("2 Feet") for breach of contract and fraud. On September 24, 2012, I granted defendant's motion to dismiss with respect to the fraud claim but not the breach of contract claim. 2 Feet now moves for summary judgment on New World's breach of contract claim. 2 Feet argues that New World lacks standing to sue because it was never a direct party to the agreement. For the following reasons, 2 Feet's motion is denied.
New World is a Chinese company "in the business of having shoes manufactured by factories in China and selling these shoes to wholesalers abroad. However, New World does not have an export license. Instead, New World contracts with Uptop, a trading company with an export license, to facilitate its transactions with foreign wholesalers.
In late 2009, Avshalomov of 2 Feet and Kim of New World visited several factories together "to determine which met the appropriate production standards." As a result of these meetings, 2 Feet placed numerous shoe orders with New World on purchase order forms listing 2 Feet as the "customer" and New World as the "vendor." 2 Feet made all deposits and payments to Uptop, which then paid the factories and New World for their services.
New World now claims that 2 Feet failed to pay the full amount due on several shipments of shoes despite accepting the goods. According to New World, 2 Feet paid only $1, 918, 446.85 out of the total $2, 776, 909.20 owed, leaving a remainder of $835, 462.35.
III. LEGAL STANDARD
Summary judgment is appropriate "only where, construing all the evidence in the light most favorable to the non-movant and drawing all reasonable inferences in that party's favor, there is no genuine issue as to any material fact and... the movant is entitled to judgment as a matter of law." "A genuine dispute exists if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. A fact is material if it might affect the outcome of the suit."
"The moving party bears the burden of establishing the absence of any genuine issue of material fact." To defeat a motion for summary judgment, the non-moving party must do more than simply show that there is some metaphysical doubt as to the material facts, '" and may not rely on conclusory allegations or unsubstantiated speculation.'" In deciding a motion for summary judgment, "[t]he role of the court is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried."
IV. APPLICABLE LAW
Under New York law, the elements of a breach of contract claim are: "(1) the existence of an agreement, (2) adequate performance of the contract by the plaintiff, (3) breach of contract by the defendant, and (4) damages." A claim for breach of contract must be supported by "evidence establsh[ing] that there was [a] meeting of the minds between the parties as to essential contract terms." Generally, "one party cannot sue another for breach of contract unless the two parties are in privity" or the "functional equivalent of privity.
2 Feet argues that New World lacks standing to bring this daim because it was not a party to any contract with 2 Feet. Instead, New World was 2 Feet's agent in its contractual relationship with Uptop. Because 2 Feet did not pay New World or receive the goods from New World directly, 2 Feet argues, New World must look to Uptop for payment of its "commissions."
However, New World argues that it had a direct contractual agreement with 2 Feet, and the record reveals persuasive evidence in support of that contention. 2 Feet admits that Avshalomov and Kim visited multiple factories together and that, "[a]s a result of [those] visits, and the representations of New World, 2 Feet placed numerous shoe orders." Furthermore, the purchase order forms between New World and 2 Feet are self-explanatory. They list 2 Feet as the "customer" and New World as the "vendor." They also identify the quantity and price of each shoe style ordered.
2 Feet's only argument against the existence of a contract is that 2 Feet did not pay New World or receive the goods from New World directly. However, whether the money and goods passed through Uptop instead of directly between the parties is irrelevant, as is the distinction between "agent" and "vendor." If 2 Feet agreed to pay New World, then the manner in which the funds and goods were transferred does not relieve 2 Feet of its obligation to pay.
Because there is substantial evidence that 2 Feet agreed to pay New World for the shoes, 2 Feet's motion must be denied. Whether the purchase order forms constitute an enforceable contract is a question of law that will be decided after the trial and after the parties have had a full opportunity to brief this legal issue.
For the foregoing reasons, 2 Feet's motion for summary judgment is denied. A final pretrial conference is scheduled for February 19, 2014 at 4:30 pm.