The defendant, Bossa Yunsa, moves for summary judgment, dismissing the complaint and for an inquest with respect to the amount of damages to be awarded to the defendant on the counterclaims. The defendant has asserted counterclaims for breach of contract, goods sold and delivered, unjust enrichment and conversion. Plaintiff makes a cross motion for summary judgment asserting it is entitled to lost profits based upon the defendant's breach of contract, damages for breach of warranty of merchantability and damages for injury to plaintiff's reputation. Plaintiff further asserts the defendant's motion should be denied as untimely pursuant to the Order of Hon. Joan M. Kenney, dated, Janurary 17, 2007, which indicates all dispositive motions are to be completed on or before, September 16, 2007. The motion before the court was prepared on October 3, 2007 and initially returnable October 29, 2007. Defendant asserts the motion was minimally delayed because it sought to obtain affidavits from the client located in Turkey.

[*2]FACTS

The defendant, Bossa Yunsa, is a garment and fabric manufacturer located in Turkey. Defendant was contacted by the plaintiff regarding the manufacture of corduroy pants under the Landlubber label. A purchase order for two thousand (2,000) units at $12.40 was sent by the plaintiff on August 9, 2005, the parties had no formal contract. The plaintiff has indicated through it's officer, Steven Rosen, that it deemed the purchase order, communicated by e-mail, a form of contract. The plaintiff indicates it relied on the defendant to provide an additional one thousand (1000) pairs of denim jeans through a third party manufacturer, that were never delivered. Neither party has annexed the purchase order for the one thousand (1,000) pairs of jeans although there were references to quality and delivery of denim jeans in the exchanged e-mails annexed as exhibits to the motion and cross-motion papers. The defendant asserts plaintiff had approved samples but then mandated an independent inspector for the goods to approve the quality. The independent inspector approved the goods on September 25, 2005. The goods were shipped per plaintiff's instruction on September 30, 2005 and received on or about October 3, 2005. Plaintiff sold the goods to a third party entity, Loehman's, and the goods were delivered to that entity. On or about December 23, 2005, plaintiff sent an e-mail rejecting the goods and refusing to pay for them. Plaintiff asserts the goods were shipped late, in part because of defendant's improper placement of a "Made in America" label that would not be able to pass through customs, and the delay resulted in a discounted price resulting in loss of profits in the amount of $14,000.00. Plaintiff has also asserted the corduroy pants had latent defects in that the snaps fell off, belt loops ripped off and back pockets separated during use which resulted in customer complaints. Plaintiff asserts it's reputation has been damaged and seeks a declaration releasing it from it's obligations under the contract.

LEGAL ANALYSIS

In order to prevail on a motion for summary judgment, the proponent must make a prima facie showing of entitlement to judgment as a matter of law, through admissible evidence, eliminating all material issues of fact. Id.; Klein v. City of New York, 89 NY2d 833, 834-35 (1996); Ayotte v. Gervasio, 81 NY2d 1062, 1062 (1993), Alvarez v. Prospect Hospital, 68 NY2d 320, 324 (1986), Winegrad v. New York University Medical Center, 64 NY2d 851, 487 NYS2d 316 (1985), Zuckerman v. City of New York, 49 NY2d 557, 427NYS2d 595 (1980). Once the moving party has satisfied these standards, the burden shifts to the opponent to rebut that prima facie showing, by producing contrary evidence, in admissible form, sufficient to require a trial of material factual issues. Kaufman v Silver, 90 NY2d 204, 208 (*1997); Amatulli v Delhi Constr. Corp., 77 NY2d 525, 533-34 (1999); Iselin & Co. v Mann Judd Landau, 71 NY2d 420, 427 (1988). In determining the motion, the court must construe the evidence in the light most favorable to the non-moving party. (SSBS Realty Corp.v. Public Service Mut. Ins. Co., 253 AD2d 583, 584-85 (1st Dept. 1998); Martin v. Briggs, 235 AD2d 192, 196 (1st Dept. 1997)).

A motion for summary judgment can be determined by a reliance on facts appearing in the papers without regard to technical defects in the pleadings. It is proper to look beyond the defendant's answer and deny summary judgment based on true facts alleged in opposition to the [*3]motion which constitute a meritorious defense. See Deep Blue Ventures, Inc. v. Manfra, Tordella & Brookes, Inc., 6 Misc 3d 727, 791 NYS2d 298. In addition, a defense established by the opposition papers can be sufficient though unpleaded, to obtain a denial of summary judgment. Nassau Trust Co. v. Montrose Concrete Prods. Corp., 56 NY2d 175, 451 NYS2d 663, 436 NE2d 1265.

Excerpts from deposition transcripts when submitted as proof for a summary judgment motion, should result in denial of the motion because they, "compel credibilty determinations to be made. It is not the court's function on a motion for summary judgment to assess credibility, draw inferences, or make findings of facts." See, Qwerty Software, Inc. v. McKinsey & Co., Inc., 9 Misc 3d 1103 (A), 806 NYS2d 448 citing to Ferrante v. American Lung Assn., 90 NY2d 623, 687 NE2d 1308 and Sillman v. Twentieth-Century Fox Film Corp., 3 NY2d 395, 144 NE2d 387.

BREACH OF CONTRACT -

To establish a breach of contract claim, a party must allege, "(1) the existence of an

agreement, (2) performance of the agreement by one party, (3) breach by the other party, and (4)

damages." All of the elements must be plead to avoid dismissal of the claim. See Oppman v. IRMC Holdings, Inc., 14 Misc 3d 1219(A), 836 NYS2d 494, Noise in the Attic Productions, Inc. v. London Records, 10 AD3d 303 , 782 NYS2d 1 [N.Y.A.D., 1st Dept., 2004], Furia v. Furia, 116 AD2d 694 [2nd Dept., 1986] and Bonanni v. Straight Arrow Publishers, 133 AD2d 585, 520 NYS2d 7 [N.Y.A.D.,1st Dept., 1987]. Each of the parties in this action has alleged breach of contract and concedes the purchase order should be deemed the contract. Defendant alleges that it relied on the purchase order for two thousand pairs of corduroy pants (2,000) at $12.40 per pair, that delays in delivery were caused by plaintiff, including the plaintiff's request for an independent inspection of the goods which found the goods merchantable and the only breach was by the plaintiff in failing to pay for the goods. The plaintiff alleges the defendant has failed to perform by not shipping goods of merchantable quality and free of defects by August 21, 2005, per the agreement. Plaintiff further alleges that in reliance on the contract with the defendant it entered into a contract with another entity for the sale of the goods which required delivery by August 30, 2005, and the goods were not shipped until October 4, 2005, this delay forced them to reduce the price per pair of pants and caused damages to it's reputation and for lost profits.

SALE OF GOODS -

The Uniform Commercial Code (U.C.C.), governs the sale of goods in New York. Upon receipt of non-conforming goods the buyer has the option of rejecting the goods ; (U.CC.§ 2-601,§ 2-602) accepting the goods but later revoking the acceptance (U.C.C. [*4]§2-608, §2-711); or accepting the goods and seeking damages for breach of warranty or contract (U.C.C.§ 2-607,§ 2-714). Upon acceptance of the goods the buyer must pay for them pursuant to U.C.C.§ 2-607[1] and is precluded from rejecting them pursuant to U.C.C. §2-607[2]. A mere complaint about the goods indicates a request for cure and does not constitute a clear act of rejection. The buyer's use of the goods has been deemed acceptance, however, acceptance does not impair any other remedy for non-conformity. Under UCC Article 2, a buyer may cross-claim for damages but also seek dimunition or extinction of the purchase price. See Hooper Handling, Inc. v. Jonmark Corporation, 267 AD2d 1075, 701 NYS2d 577 [4th Dept., 1999] , Sears, Roebuck & Co. v. Galloway, 195 AD2d 825, 600 NYS2d 773 [3rd Dept., 1993], Maggio Importato v. Cimitron, Inc., 189 AD2d 654, 592 NYS2d 325, [1st Dept. 1993], lv. denied 82 NY2d 652, rearg denied 82 NY2d 803, and Shahi Export House v. Mervyn's, Inc. 10 Misc 2d 1076(A), 814 NYS2d 892.

ACCEPTANCE OF GOODS -

Pursuant to U.C.C. §2-606[1], acceptance of goods takes place after the buyer has informed

the seller the goods conform; or the buyer advises the seller that regardless of the lack of conformity the goods will be retained. Acceptance pursuant to U.C.C. §2-606[1] can also occur when the buyer has had a reasonable opportunity to inspect the goods and fails to reject them; or if the buyer acts in a manner that is inconsistent with the sellers ownership. B. Milligan Contracting Inc. V. Andrew R. Mancini, 174 AD2d 136, 578 NYS2d 931 [3rd Dept. 1992]. Acceptance of goods may be revoked pursuant to UCC 2-607 [2] and 2-608 upon a reasonable assumption the nonconformity would be cured which does not occur. The revocation would have to occur within a reasonable time after discovery of the breach. See, Wilson Trading Corp. v. David Ferguson, Ltd., 23 NY2d 398, 244 NE2d 685, 297 NYS2d 108 [1968], Hooper Handling, Inc. v. Jonmark Corporation, 267 AD2d 1075, supra .

In Wilson Trading Corp. v. David Ferguson, Ltd., 244 NE2d 685, supra , the plaintiff was a manufacturer of yarn. The defendant buyer, after the yarn was delivered, had it cut and knitted into sweaters, then washed the finished product. During the washing the defendant discovered the color of the yarn had "shaded" or changed the variations of the color within each piece and piece to piece. The defendant asserted it notified the plaintiff immediately of the breach at the earliest possible moment the defect could have been discovered during the manufacturing process. The Court found the defendant's affidavits were sufficient to create a question of fact as to whether the notice of the "latent defects alleged was given within a reasonable time."Wilson Trading Corp. v. David Ferguson, Ltd., 244 NE2d 685, supra at 685. Timely notification pursuant to UCC 2-607 is, "governed by reasonableness and is a question of fact." Cliffstar Corporation v. Elmar Industries Inc., 254 AD2d 723, 678 NYS2d 222, [4th Dept.,1998] quoting Cuba Cheese v. Aurora Val. Meats, 113 AD2d 1012. To satisfy the requirement of UCC 2-607, the notice given by the [*5]buyer does not need to include a claim for damages or threat of future litigation. Complaints and requests for service are sufficient to preserve a buyer's right to sue. Cliffstar Corporation v. Elmar Industries Inc., 254 AD2d 723, supra .

CURE -

A seller pursuant to U.C.C. § 2-508, is permitted to cure an initial tender that is improper when the time to perform has not yet expired by timely notifying the buyer of the intent to cure

and then curing prior to delivery. A seller may also cure pursuant to U.C.C. § 2-508 after the time for performance has expired under circumstances where the seller had reason to believe the tender though non-conforming would still be accepted, if he timely notifies the buyer and then attempts to tender goods that are conforming. It has been held that a buyer may not unreasonably refuse the seller it's right to cure. A breach of warranty action premised on defect may, under those circumstances, not be maintained. See Uchitel v. F. R. Tripler & Company, 107 Misc 2d 310, 434 NYS2d 77 [1st Dept., 1980].

REJECTION -

Pursuant to U.C.C. § 2-601, a buyer of goods may reject them if they fail in any way to conform to the terms of the contract. The rejection must occur within a reasonable time after delivery or tender and the buyer is required to, "seasonably notify the seller." Matrix International Textiles, Inc. v. Jolie Intimates, Inc., 7 Misc 3d 1019(A), 801 NYS2d 236, (N.Y.City Civ. Ct., 2005) In rejecting the goods the buyer cannot merely request a cure, it must perform a "clear and unequivocal act."Hooper Handling, Inc. v. Jonmark Corporation, 267 AD2d 1075, supra .

BREACH OF WARRANTY -

A buyer may defeat or diminish the seller's action for goods sold and delivered by asserting a valid counterclaim for breach of the underlying sales agreement. Counterclaims for breach of warranty and breach of contract raise such an issue regarding the nonconformity of goods which if established could diminish or negate a seller's recovery (See UCC §2-607, §2-714,§ 2-717). Hooper Handling, Inc. v. Jonmark Corporation, 267 AD2d 1075, supra , citing Created Gemstones v. Union Carbide Corp., 47 NY2d 250, 417N.Y.S. 2d 905 [1979] and Flick Lbr. Co. v. Breton Indus., 223 AD2d 779,636 NYS2d 169 [N.Y.A.D. 3rd Dept. 1996].

In Hooper Handling, Inc. v. Jonmark Corporation, 267 AD2d 1075, supra , the defendant was a liquor store which attempted to purchase shelving and mezzanine construction for its retail store. The defendant during installation expressed concern regarding the swaying and instability of the shelving and hired an engineering firm to [*6]examine the design specifications and the system itself. The engineer "opined" that the floor joists and connections were over stressed on the mezzanine and that the shelving was unstable. The defendant subsequent to the report disassembled the shelves, notified the plaintiff and refused to pay for the goods. The Court determined the defendant could revoke it's acceptance based upon, "the reasonable assumption that the nonconformity would be cured but was not," and citing U.C.C. §2-608 indicated revocation had to, "occur within a reasonable time," furthermore whether notice is provided within a reasonable time is an issue of fact. Hooper Handling, Inc. v. Jonmark Corporation, 267 AD2d 1075 at 1076.

In a case similar to the one currently before the Court, the plaintiff was a manufacturer of

apparel in India, samples were submitted to an independent entity for evaluation of wrinkle resistence, the defendant issued an override of lower resistence on white shirts and on one color, "rum cake," and indicated it was unaware that all the other nonwhite shirts failed the test until after shipment. The Court found summary judgement to the plaintiff would be premature because there was no basis to conclude the defendant acted in bad faith or unreasonably in deciding the results of the inspection were unacceptable, furthermore the defendant's assertions concerning breach of warranty raised a significant issue regarding nonconformity of goods which if established could, "significantly, diminish, or negate recovery." The court further found the defendant's motion for summary judgment should be denied because there was a triable issue of fact as to whether there was a waiver of the wrinkle resistence provision of the contract. Shahi Export House v. Mervyn's Inc..10 Misc 3d 1076(A), 814 NYS2d 892 [NY Sup.,2006].

UNJUST ENRICHMENT -

A cause of action for unjust enrichment is stated when a party asserts that a benefit was bestowed upon another party which obtained such benefit without adequately compensating them. Sergeants Benevolent Assn. Annuity Fund v. Renck, 19 AD3d 107 [1st Dept. 2005] The existence of a written contract governing the subject matter in dispute precludes recovery on a theory of unjust enrichment, for events which stem from it. Unjust enrichment applies only when there is not an express written agreement between the parties, it imposes a legal obligation where one is not already expressed. Clark-Fitzpatrick, Inc. v. L. I. R.R. Co., 70 NY2d 382, 516 N.E.2d190, 521 NYS2d 653 [1987], Volt Delta Resources, LLC v. Soleo Communications, Inc. 11 Misc 3d 1071(A), supra , citing to, De La Cruz v. Caddell Dry Dock & Repair Co., Inc., 22 AD3d 404 [N.Y.A.D.1st Dept. 2005], West End Interiors, Ltd. v. Aim Constr. & Contr. Corp., 286 AD2d 250 [N.Y.A.D.1st Dept. 2001], and Unisys Corp. v. Hercules Inc., 224 AD2d 365 [N.Y.A.D.1st Dept. 1996]. It has been deemed impermissible to seek damages for unjust enrichment where, "the suing party has fully performed on a valid written agreement, the existence of which is undisputed, and the scope of which clearly covers the dispute between the parties." Clark-Fitzpatrick, Inc. v. L. I. R.R. Co., 70 NY2d 382, supra at 389, citing to Soviero Bros. Contr. Corp. v. City of [*7]New York, 286 AD 435 affd.2 NY2d 924, 12 Williston, Contracts § 1459, at 69 [3rd ed]; 22 NY Jur. 2d § 465 at 410.The only exception to this rule is when there is a bona fide dispute between the parties that is not covered by a provision in the express contract, then a party may sue for both breach of contract and in quantum meruit. Joseph Sternberg Inc. v. Walber 36th Street Associates, 187 AD2d 225, 594 NYS2d 144 [N.Y.A.D. 1993]. In this case the defendant is asserting that it fully performed pursuant to the purchase order which both parties had deemed a contract, and the plaintiff has not compensated the defendant for the amount justly due after keeping the goods and selling them to a third party. The defendant has not demonstrated that this claim was not within the scope of the purchase order.

CONVERSION -

Conversion is defined as the, "unauthorized assumption and exercise of the right of ownership over goods belonging to another to the exclusion of the owner's rights." See Volt Delta Resources, LLC v. Soleo Communications, Inc. 11 Misc 3d 1071(A), 816 NYS2d 702, 2006 WL 800791 citing to Vigilant Ins. Co. of Am. v. Housing Auth. of City of El Paso, Texas, 87 NY2d 36, 44 [1995], quoting Employers' Fire Ins. Co. v. Cotten, 245 NY 102 [1927]; and Peters Griffin Woodward, Inc. v. WCSC, Inc., 88 AD2d 883 [N.Y.A.D., 1st Dept. 1982]. A claim for conversion can not be a mere restatement of a cause of action for breach of contract, but must instead assert independent facts that give rise to tort liability. Volt Delta Resources, LLC v. Soleo Communications, Inc. 11 Misc 3d 1071(A), supra , citing to Fesseha v. TD Waterhouse Investor Servs., Inc., 305 AD2d 268, [1st Dept.2003] . In order to maintain a cause of action for conversion the party must allege there was a demand for the return of property and it was refused, not merely, "conclusory allegations." Agawam Trading Corp. v. Mayer Malbin Co., 37 AD2d 946, 325 NYS2d 757 [N.Y.A.D., 1st Dept. 1971] and Apex Ribbon Co. v. Knitwear Supplies, Inc., 22 AD2d 766, 253 NYS2d 643 [N.Y.A.D., 1st Dept. 1964] The defendant is alleging that in retaining the goods sold and failing to pay for them plaintiff has converted the goods. The defendant has not provided proof it demanded a return of the goods or attempted to cure any alleged defects when it failed to obtain payment from the plaintiff.

CONCLUSION

DEFENDANT'S MOTION -



The court finds that the parties concede the Purchase Order was a contract and the

defendant is seeking damages pursuant to performance under that contract, therefore the third counterclaim for unjust enrichment fails and will be severed and dismissed. The Court finds the defendant has not established a tort claim for conversion that is separate and apart from the claim for breach of contract, there is no indication in the motion papers [*8]defendant demanded the plaintiff return the goods upon failure to pay for them, therefore, the fourth counterclaim will also be severed and dismissed. As for the defendant's counterclaim for breach of contract, the Court finds that plaintiff's acceptance of the goods would entitle the defendant to damages for the contract price, however, an award of summary judgment is premature in this action. The plaintiff raises an issue of fact as to whether the goods delivered were in nonconformity of the terms of the contract and that there was breach of warranty of merchantability and fitness for a particular purpose which if established could diminish or negate the defendant's recovery. There are factual issues concerning whether the defects alleged by the plaintiff were discoverable during earlier inspection and whether notice of the defects were given within a reasonable time after they were or should have been discovered. The excerpts from the plaintiff's officer, Steven Rosen's deposition, are insufficient for the defendant to meet it's burden of proof.

PLAINTIFF'S CROSS-MOTION -

Plaintiff's cross motion asserts it is entitled to lost profits based upon the defendant's breach of contract, damages for breach of warranty of merchantability and damages for injury to plaintiff's reputation. It argues the remedy should be release of it's obligations under the contract. This Court finds from the documentary evidence provided by the plaintiff there remains triable issues of fact as to whether the pants delivered by the defendant were nonconforming. The affidavit provided by principal Steve Rosen indicates complaints from the retailer and customers. The letter annexed as "Exhibit F" to the motion papers is not a good copy and it is unsigned, there was no correspondence or affidavit annexed to the papers from the retailer. There is however the e-mail dated December 23, 2005 putting the defendant on notice of the defects, however, there also remains the issue of whether the plaintiff reasonably and

timely advised the defendant of the nonconformity and whether an opportunity to cure the defect was provided postdelivery of the goods.

Accordingly, the defendant's motion for summary judgment is denied, the defendant's counterclaims for conversion and for unjust enrichment are severed and dismissed. The plaintiff's cross-motion for summary judgment based upon the defendant's breach of contract, damages for breach of warranty of merchantability and damages for injury to plaintiff's reputation is also denied, as there remain issues of fact.

The foregoing shall constitute the Decision and Order of the Court.

Dated: January 14, 2008

Manuel J. Mendez

Judge, Civil Court