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Fossil Industries, Inc. v. Onyx Specialty Papers, Inc.

United States District Court, E.D. New York

November 5, 2014

FOSSIL INDUSTRIES, INC., Plaintiff,
v.
ONYX SPECIALTY PAPERS, INC. and MEADWESTVACO CORPORATION, Defendants.

Raymond A. Gusto, Esq., West Bay Shore, NY, Attorney for the Plaintiff.

Kenneth A. Novikoff, Esq., Scott Green, Esq., Of Counsel, Rivkin Radler, LLP, Uniondale, NY, Attorneys for the Defendants.

DECISION AND ORDER

ARTHUR D. SPATT, District Judge.

On May 18, 2012, the Plaintiff Fossil Industries, Inc. (the "Plaintiff" or "Fossil") commenced this action for monetary damages occasioned by the delivery of allegedly defective products in breach of a contract between the parties.

Presently pending before the Court is a motion by the Defendants Onyx Specialty Papers, Inc. ("Onyx") and Meadwestvaco Corporation ("Mead")(collectively the "Defendants") pursuant to Federal Rule of Civil Procedure ("Fed. R. Civ. P.") 41(b) to dismiss the complaint due to Fossil's alleged failure to comply with its discovery obligations, and/or pursuant to Fed.R.Civ.P. 37(b), for sanctions and costs based on that alleged conduct.

For the following reasons, the motion is granted in part and denied in part.

I. BACKGROUND

A. General Allegations

Unless otherwise stated, the following facts are drawn from the complaint.

Fossil is a manufacturer of custom signs and graphics.

Beginning in or about August 2001, and continuing through August 2009, Fossil successfully utilized paper produced by Mead for its production of signs and graphics.

In September 2009, Fossil placed an order for the style of off-white paper manufactured by Mead that Fossil used in the past with success. However, Mead presented a newly-created alternative paper that was whiter than the paper originally ordered by Fossil and which Mead represented would be perfectly suited for Fossil's manufacturing needs.

Fossil requested a sample of the new paper to determine how well its signs would print. Mead informed Fossil that the paper was unavailable because it was only manufactured when ordered, but that samples of the same paper in color version would indicate how well the paper would print. Based upon this testing and Fossil's longstanding prior relationship with Mead, Fossil was allegedly induced to purchase the new paper for the sum of approximately $9, 157.75 and to use it in its manufacturing process.

Thereafter, Onyx purchased Mead, and, in or about October 2009, Fossil purchased approximately $25, 500.65 worth of this new paper from Onyx.

However, beginning in May 2010, Fossil's customers began to complain of product failures. Specifically, the top layers of the panels used to create signs would apparently peel off. As a result, the colors of the signs would fade and wash out. The paper sold to Fossil was also allegedly not in accordance with certain representations previously made by Mead.

Ultimately, Fossil has been forced to replace the products sold to its customers at its own expense. Fossil has demanded a refund of the purchase price of the defective paper, as well as indemnification for any potential ...


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