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Korg USA, Inc. v. In Tune Industries, Inc.

Appellate Division of the Supreme Court of New York, Second Department
Jun 4, 1998
251 A.D.2d 380 (N.Y. App. Div. 1998)

Summary

collecting New York cases holding non-compliance with the notice provision of bulk transfer statute amounts to concealment

Summary of this case from I. Kruger, Inc. v. Oconto Falls Tissue, Inc.

Opinion

June 4, 1998

Appeal from the Supreme Court, Nassau County (Burke, J.).


Ordered that the order is affirmed, without costs or disbursements.

The plaintiff sold and delivered musical goods to the defendant Focus Guitar Center, Inc. a/k/a Focus II Guitar Studio (hereinafter Focus). Focus defaulted on its payments and in November 1990 the plaintiff obtained a judgment against Focus in the amount of $87,076.67. In September 1996, the plaintiff commenced the instant action alleging, inter alia, that the goods which it had sold to Focus were transferred by Focus to the defendant In Tune Industries, Inc. d/b/a Music Emporium (hereinafter In Tune) without complying with article 6 of the Uniform Commercial Code. The appellants moved to dismiss the complaint insofar as asserted against them contending, among other things, that the plaintiff had notice of the transfer in March 1991 and that the action was, therefore, time-barred.

Uniform Commercial Code § 6-111 U.C.C. provides that an action pursuant to UCC article 6 shall be commenced within six months after the date on which the transferee took possession of the goods unless the transfer has been concealed, in which case, actions may be brought within six months after discovery of the transfer. Here, contrary to the appellants' contention, there was a complete failure upon their part to comply with the notice provisions of UCC article 6 which was tantamount to a concealment of the transfer of assets within the meaning of UCC 6-111 U.C.C. (see, E. J. Trum, Inc. v. Blanchard Parfums, 33 A.D.2d 689; Amboy Sequine Assocs. v. Gar Sing Rest., 248 A.D.2d 496; Cleaners Prods. Supply v. Garcia, 169 Misc.2d 418). This action, commenced within six months of the plaintiff's discovery of the alleged fraudulent transfer, was therefore not barred by the Statute of Limitations.

The appellants' remaining contentions are without merit.

Ritter, J. P., Thompson, Altman and McGinity, JJ., concur.


Summaries of

Korg USA, Inc. v. In Tune Industries, Inc.

Appellate Division of the Supreme Court of New York, Second Department
Jun 4, 1998
251 A.D.2d 380 (N.Y. App. Div. 1998)

collecting New York cases holding non-compliance with the notice provision of bulk transfer statute amounts to concealment

Summary of this case from I. Kruger, Inc. v. Oconto Falls Tissue, Inc.
Case details for

Korg USA, Inc. v. In Tune Industries, Inc.

Case Details

Full title:KORG USA, INC., Respondent, v. IN TUNE INDUSTRIES, INC., Doing Business as…

Court:Appellate Division of the Supreme Court of New York, Second Department

Date published: Jun 4, 1998

Citations

251 A.D.2d 380 (N.Y. App. Div. 1998)
674 N.Y.S.2d 100

Citing Cases

I. Kruger, Inc. v. Oconto Falls Tissue, Inc.

Id. Non-compliance with the notice provision is tantamount to concealment of the bulk transfer. See Korg USA,…