[*1]
Creative Interiors, Inc. v Epelbaum
2009 NY Slip Op 51680(U) [24 Misc 3d 1231(A)]
Decided on July 30, 2009
Supreme Court, Richmond County
Maltese, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on July 30, 2009
Supreme Court, Richmond County


Creative Interiors, Inc., Plaintiff

against

Marina Epelbaum a/k/a MARINA GRINBERG, and YURI GRINBERG, Defendants




103229/05



Plaintiff was represented by Robert J. Renna, Esq.

Defendants were represented by Albert Rudgayzer, Esq.

Joseph J. Maltese, J.



After a bench trial, this Court finds as follows:

Facts

The plaintiff, Creative Interiors contracted to deliver to the defendants, Marina and Yuri Grinberg (collectively "the Grinbergs"), 28 made-to-order "finished" doors for a total of $28,000. In November 2002, the Grinbergs paid a deposit of $15,000 for the order. Weeks later, the doors were delivered and the Grinbergs paid an additional $13,000 to complete the transaction. The doors were inspected within a day or two and were found by the Grinbergs to be deficient in the quality of their finish, and in addition some attachments were broken or defective. The Grinbergs complained to Creative Interiors, which acknowledged the deficiencies. After several weeks, the Grinbergs' complaints remained unresolved and they requested return of their money.

On March 23, 2003, Yuri Grinberg signed a receipt for a refund from Creative Interiors that the parties have agreed was $24,000. It is undisputed that the Grinbergs kept all of the doors, and used approximately 24 of the 28 doors in the construction of their home. [*2]

According to Creative Interiors, when the $24,000 was offered, the Grinbergs were supposed to return the doors to Creative Interiors. Creative Interiors asserts that the remaining $4,000 of the original $28,000 would have been paid to the Grinbergs when all the doors were collected from them. However, the Grinbergs allege that it was their understanding that they could keep all of the doors, and pay only $4,000 for them because the doors were of deficient quality. The Grinbergs also claim that a new oral contract was made between themselves and Creative Interiors authorizing these transactions which would have modified or supplanted their previously written contract with Creative Interiors.

Discussion

There is no dispute regarding the original contract. It is also undisputed that the Grinbergs kept all the doors delivered to them.

Keeping Goods Despite an Assertion of Rejection Constitutes Acceptance of Goods

Upon delivery, "if the goods ... fail in any respect to conform to the contract, the buyer may (a) reject the whole; or (b) accept the whole; or (c) accept any commercial unit or units and reject the rest."[FN1] The buyer must either accept or reject the goods.[FN2] The buyer may not keep the goods while asserting rejection of the goods without an agreement with the seller. "Acceptance of goods occurs when the buyer ... (c) does any act inconsistent with the seller's ownership..."[FN3]

The Grinbergs represented to Creative Interiors that they were rejecting the doors for non-conformity. However, approximately 24 of those same doors were used by the Grinbergs, and the others were sequestered. Creative Interiors was refused access to the doors, and the Grinbergs thereby exercised dominion over them. Once the doors were used, they were goods that were accepted by the Grinbergs.[FN4] As a consequence of acceptance, "[t]he buyer must pay at the contract rate for any goods accepted."[FN5] "[T]he fact the goods were allegedly nonconforming is not a meritorious defense. When the goods at issue are received and accepted by the buyer, as here, the seller is entitled to recover the contract price for such goods, even if the goods are [*3]defective."[FN6] Any "claim for damages for defective items is separate and apart from its indebtedness for the purchase price."[FN7]

Failure to Conform with the Statute of Frauds

As to an allegedly new agreement, the Grinbergs' claim may be evaluated either as a modification of the existing contract with Creative Interiors; or as a new contract. As regards modification of an existing stature, UCC § 2-209 states "The requirements of the statute of frauds section of this Article (Section 2-201) must be satisfied if the contract as modified is within its provisions."[FN8] A valid contract that is undisputed may be valid without a writing "with respect to goods for which payment has been made and accepted or which have been received and accepted.."[FN9] A disputed contract for an amount more than $500 must comply with the Statute of Frauds which requires that the contract must be memorialized in a writing; the contract must bear a signature of the party against whom enforcement is sought, or a signature of that party's agent; and the contract is valid only for the number of items specified.[FN10] No writing is presented by the Grinbergs for the contract they claim was either modified or created de novo.

Any modification of the original contract between Creative Interiors and the Grinbergs must independently conform to the nature of the contract it represents.[FN11] Under the Statute of Frauds, "a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker."[FN12] "A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party."[FN13] Here, the Grinbergs offer no writing. [*4]

The Grinbergs presented evidence including an order placed by "Yura" [accepted as meaning Yuri Grinberg], and dated December 13, 2002. This document is labeled "Invoice" and states "THE CONTRACT CONTAINS THE ENTIRE AGREEMENT BETWEEN PARTIES AND MAY NOT BE VARIED EXCEPT WITH SELLER'S WRITTEN CONSENT."[FN14] The signature appears within the space delineated as customer's signature.[FN15] Apparently, Mark Kanedsky was acting as the Grinberg's agent, and Yuri Grinberg was said to be present when he signed the document.[FN16] Hence, the Grinbergs are on notice that changes to the agreement require the written consent of the seller. The original contract represented an integrated "final expression of their agreement with respect to such terms as are included therein."[FN17] Such a contract may not be modified by evidence of a contemporaneous oral agreement.[FN18]

The Appellate Division, Second Department has declined to permit alterations of a contract when a contract would require a writing underUCC § 2-201, and no writing is presented. To permit a variance, there must be an "undisputed mutual departure from the written agreement."[FN19] Written provisions restricting alterations must be enforced "absent an executed modification, waiver, or estoppel."[FN20] The Grinbergs have not submitted an executed modification of the original agreement. Nor have the Grinbergs submitted an executed waiver. Estoppel by conduct may modify an agreement if performance is essentially unchanged,[FN21] but the Grinbergs do not submit that performance was unchanged when they kept all of the doors in addition to $24,000 of the original $28,000 they were supposed to have paid for the doors. Therefore, there was no mutual departure from the existing contract, no evidence of any modification, or of any waiver. Additionally, there was no estoppel manifested by any conduct that left the contract essentially unchanged. Consequently, the original contract should be regarded as a final expression of the agreement and the contract is not subject to unilateral modification. [*5]

Alternatively, the alleged agreement may be examined as though it were a new contract. A new contract "is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing."[FN22] The Grinbergs offer no writing to support a new contract giving the Grinbergs the 28 doors in exchange for $4,000. To enforce a new contract and show its intent, the Grinbergs are required to show a writing, signed by Creative Interiors, and listing the number of doors mutually agreed upon by the Grinbergs and by Creative Interiors to be included in the contract.[FN23] The Grinbergs offer no evidence of any writing. In the absence of a writing conforming to the Statute of Frauds, the Grinbergs have not supported their claims of a new contract or the modification of the existing contract.

Any claim for damages due to non-conformance must be pursued as a separate claim.[FN24] No such claim is part of this action.

Conclusion

The Grinbergs kept the $24,000 partial refund and also kept all of the doors. Since the Grinbergs retained all of the doors they are required to pay the contract price for them absent an adjustment in price agreed to by both parties. While the Grinbergs claim that the return of $24,000 was the adjustment agreed to with Creative Interiors, that position is not credible. Instead, it is the finding of this Court that the accommodation offered by Creative Interiors for the alleged non-conforming doors was a return to the status quo ante wherein Creative Interiors was to return the $28,000 contract price back to the Grinbergs, and in turn, Creative Interiors would receive all of the doors back from the Grinbergs. The alleged adjustment of $24,000 given to the Grinbergs from the original contract price of $28,000 owed to Creative Interiors represented an 86% reduction, which this Court finds incredible. This Court discards these assertions made by the Grinbergs as being implausible and not worthy of belief because they are "manifestly untrue, ... contrary to experience, or self-contradictory."[FN25] [*6]

The issue of merchantability is extraneous to this action, and the Grinbergs have not submitted evidence supporting any economic injury. Whether viewed as a modification of an existing contract or as a new contract, the oral contract the Grinbergs claim to exist would require a writing to satisfy the Statute of Frauds. The Grinbergs have not presented any writing.

Since the Grinbergs retained and used the doors, they must pay the $28,000 price they contracted for them absent an agreed upon adjustment in price that is simply not present here.

Accordingly, it is hereby,

ORDERED, that the plaintiff, Creative Interiors, Inc. is awarded a $24,000 judgment, plus court costs and disbursements, to be paid by the defendants Marina Epelbaum, also known as Marina Grinberg, and by Yuri Grinberg.

ENTER,

DATED: July 30, 2009

Joseph J. Maltese

Justice of the Supreme Court

Footnotes


Footnote 1:New York Uniform Commercial Code("UCC") § 2-601 (a), (b), and (c).

Footnote 2:Texpor Traders, Inc. v. Trust Co. Bank, 720 F. Supp. 1100, 1109 [S.D. NY 1989].

Footnote 3:UCC § 2-606 (1) (c).

Footnote 4:Oribis Co. v. Rivera, 140 AD2d 679, 680 [2d Dept 1988]; Paul Conte Cadillac, Inc. v. C.A.R.S. Purchasing Service, Inc., 126 AD2d 621, 622-3 [2d Dept 1987]; and Foley Machinery Co. v. Amaco Constr. Corp., 126 AD2d 603, 604 [2d Dept 1987].

Footnote 5:UCC § 2-607 (1).

Footnote 6:Oribis Co. v. Rivera,140 AD2d at 680.

Footnote 7:Sunny Side Up, Inc. v. Agway, Inc., 40 AD2d 899, 900 [3d Dept 1972].

Footnote 8:UCC § 2-209 (2).

Footnote 9:UCC§ 2-201 (3).

Footnote 10:UCC § 2-201 (1).

Footnote 11:Lieberman v. Templar Motor Co., 236 NY 139, 147 [1923].

Footnote 12:UCC§ 2-201 (1).

Footnote 13:UCC§ 2-209 (2).

Footnote 14:Defense Exhibit "D".

Footnote 15:Id.

Footnote 16:Examination before trial of Plaintiff, p. 18, 2-9.

Footnote 17:UCC§ 2-202.

Footnote 18:Id.

Footnote 19:Klein v. Klein, 79 NY2d 876, 878 [1992]; Rose v. Spa Realty, Corp. 42 NY2d 338, 343 [1977].

Footnote 20:Elmsford Sheet Metal Workers, Inc. v. Shasta Industries, Inc., 103 AD2d 764, 764 [2d Dept 1984].

Footnote 21:CT Chems., Inc. v. Vinmar Impex, Inc., 81 NY2d 174, 179 [1993].

Footnote 22:UCC § 2-201 (3).

Footnote 23:UCC§ 2-201 (3).

Footnote 24:Sunny Side Up v. Agway, Inc., 40 AD2d 899, 900 [3d Dept 1992]; see also Oribis Co. v. Rivera, 140 AD2d at 690; and Paul Conte Cadillac, Inc. v. C.A.R.S. Purchasing Service, Inc., 126 AD2d at 623.

Footnote 25:People v. Garafolo, 44 AD2d 86, 88 [2d Dept 1984]; see also People v. Lynch, 2009 NY Slip Op 5155, *2 [2d Dept 2009]; People v. Coles, 62 AD3d 1022 [2d Dept 2009]; People v. Galbo, 218 NY 283, 292 [1916]; and Ashcroft v. Iqbal, 129 S.Ct 1937, 1949-50 [2009].