Opinion
31610703
Decided May 5, 2005.
William I. Weiss, Esq., for Plaintiff.
Howard Rubin, Esq. of Goetz FitzPatrick, LLP, for Defendant.
On April 26, 2002, defendant Jolie Intimates, Inc. issued two Purchase Orders to plaintiff Matrix International Textiles, Inc. With Purchase Order No. 37947, Jolie ordered 6000 yards of printed cotton fabric, for which Matrix issued two Invoices, dated, respectively, May 16 and May 17 in the total amount of $16,513.75. With Purchase Order No. 37948, Jolie ordered 2000 yards of printed cotton fabric, for which Matrix issued an Invoice dated May 3 in the amount of $5,130.45. In this action, Matrix is seeking to recover $17,796.37, representing the total amount of the two Invoices on Purchase Order No. 37947, none of which has been paid, and $1,282.62, due on the Invoice on Purchase Order No. 37948, $3,847.83 having been paid against that Invoice.
A bench trial was held on March 28, 2005, at which both parties were represented by counsel. Matrix's President, Kourosh Neman, testified on its behalf, as did Rick Winkoff, an independent sales representative for Matrix who dealt with Jolie on the subject orders. Jolie's former head of domestic sportswear operations, Richard Bobo, testified on its behalf, as did Judy Huang, its former Production Manager, who dealt with Mr. Winkoff on the subject orders.
Real Party in Interest
In the first instance, Jolie contends that the action must be dismissed because Matrix is not the real party in interest. Rather, Jolie contends, the real party in interest is SunTrust Bank, named in each of the Invoices as the owner of the subject accounts. Specifically, each of the Invoices states: "This account has been assigned to and is owned by SunTrust Bank. Payment of this account must be made . . . directly to SunTrust Bank."
Generally, an objection that the plaintiff is not a real party in interest is an affirmative defense that must be raised in the defendant's answer or by a motion to dismiss, and, if it is not, the defense is deemed waived. ( See Stevenson Equipment, Inc. v. Chemig Construction Corp., 170 AD2d 769, 771 [3rd Dept 1991], aff'd 79 NY2d 989; Advanced Magnification Instruments of Oneonta, NY, Ltd. v. Minuteman Optical Corporation, 135 AD2d 889, 890 [3rd Dept 1987].) Jolie's Answer alleges "on information and belief, plaintiff and defendant had no business relationship, and were not in privity with one another." ( See Answer with Affirmative Defenses, ¶ 8.) In addition to being factually incorrect, these allegations cannot be read to contend that Matrix is not a real party in interest.
Nonetheless, when the issue is litigated at trial without objection by the plaintiff, the court may address it. ( See Massi v. Alben Builders, 270 AD 482, 486-87 [1st Dept], aff'd 296 NY 767; Robert R. Scott Corp. v. D. Kwitman Son, Inc., 3 Misc2d 812, 813 [App Term, 1st Dept 1955].) Pleadings may always be deemed amended to conform to the proof at trial, even on appeal, unless the other party would be surprised or otherwise prejudiced. ( See Caceras v. Zorbas, 74 NY2d 884, 885; Murray v. City of New York, 43 NY2d 400, 405-06.)
Here, the assignment upon which Jolie relies is described on the face of each of the Matrix Invoices. Since Matrix's office is located in Southern California, it was somewhat hampered in meeting Jolie's contention when it was raised at trial, but Matrix did succeed over the lunch recess to obtain by fax a copy of its Factoring Agreement with SunTrust. Matrix requested neither a continuance nor other opportunity to provide additional evidence on the issue.
Jolie bears the burden of persuasion on the issue ( see Matter of Weinstock, 283 AD2d 510, 510 [2nd Dept 2001]; Brignoli v. Balch, Hardy Scheinman, Inc., 178 AD2d 290, 290-91 [1st Dept 1991]), and, on consideration of all of the evidence, the Court concludes that it has not carried the burden with respect to two of the Invoices sued upon.
"The real party in interest has been defined by this court: `If, as between the assignor and assignee, the transfer is complete, so that the former is divested of all control and right to the cause of action, and the latter is entitled to control it and receive its fruits, the assignee is the real party in interest.' . . . In other words, the plaintiff must have some title, legal or equitable, to the thing assigned." ( Spencer v. Standard Chemicals Metals Corporation, 237 NY 479, 480-481 [1924] [ quoting Cummings v. Morris, 25 NY 625, 627 [1862]; see also Cardtronics, LP v. St. Nicholas Beverage Discount Center, Inc., 8 AD3d 419, 420 [2nd Dept 2004].)
The legend on Matrix's Invoices to Jolie, stating that the "account has been assigned to and is owned by SunTrust Bank" is sufficient to establish prima facie that Matrix is not a real party in interest with respect to the respective accounts. But the Invoices speak primarily from their respective dates, and, in any event, the relationship between Matrix and SunTrust Bank is more complex than the legend suggests.
The legend is mandated in terms by the Factoring Agreement between Matrix and SunTrust. ( See ¶ 6.) "[A]s security for [Matrix's] obligations" under the Agreement, Matrix "pledge[s] and assign[s] to [SunTrust] and grant[s] [SunTrust] a security interest in", among other things, "all [its] right, title and interest in and to . . . all of [its] accounts, whether or not such accounts are factored by [SunTrust] pursuant to" the Agreement. ( See ¶ 5.) Matrix agrees "on [SunTrust's] request" to "execute such further assignments, conveyances, financing statements and other written instruments . . . to perfect [its] title and security interest." ( See id.)
The core of the Factoring Agreement, however, is SunTrust's purchase from Matrix of "certain accounts receivable created by [Matrix's] sale of goods to . . . customers approved by" SunTrust, clearly including Jolie. ( See ¶ 1.) The purchase and sale of accounts is "without recourse to [Matrix] for insolvency or nonpayment, after the goods . . . have been actually delivered to and finally accepted without claim or dispute by [Matrix's] customer." ( See id.) When, however, there is a "claim or dispute based upon alleged shortages, defects, noncompliance or failure to deliver", the Agreement provides for "repurchase [of] a disputed account or claim" and "set off [of] the claimed or disputed amount of [the] account." ( See ¶ 8.) Matrix agrees to "indemnify [SunTrust] and hold [it] harmless from any liability or expense on account of any deduction or claim of any of [Matrix's] customers arising from a merchandise dispute or claim." ( See id.)
Looking first at Purchase Order No. 37948 and the related Invoice, there is no dispute between the parties that there was a contract for the sale of fabric described in the documents, that Matrix made timely delivery, and that Jolie accepted the goods, thereby becoming obligated to pay the contract price ( see UCC § 2-607.) Plaintiff itself introduced into evidence a copy of a check from Jolie dated July 9, 2002 in the amount of $3,847.83, payable to the order of "Matrix Int'l c/o SunTrust." Apparently attached to the check was a stub that showed the date, number, and amount of the Invoice, $5,130.45, and a deduction from that amount for $1,282.12, described only with the notation "credit 018".
Neither party introduced any evidence explaining the "credit" noted on Jolie's check stub, nor is there any evidence of a "claim or dispute" with respect to Jolie's right to the credit. More importantly, there was no testimony or documentary evidence of the status under the Factoring Agreement of the account arising out of Purchase Order No. 37948 and the related Invoice. All of the evidence points to a sale of the account without recourse and SunTrust's ownership and control of the account. In other words, the only evidence on the issue makes it more likely than not that Matrix is not a real party in interest with respect to this account.
On June, 14, 2002, Jolie wrote to SunTrust Bank, referring to the two Matrix Invoices related to Purchase Order No. 37947, and stating that they "do not represent any goods or services received by" Jolie and that Jolie "consider[ed] these invoices null and void." The letter further advised that Jolie had "discontinued operations of [its] USA TEASE division" as of May 1, 2002, and that "[s]ince then no merchandise shipments have been received, and all vendors have been notified not to ship or invoice any merchandise."
Jolie's letter is replete with factual misstatements. At the end of April 2002, Jolie had issued at least two Purchase Orders to Matrix calling for delivery of goods after May 1, at least three shipments had been received from Matrix after that date, and near the end of May Jolie issued a purchase order to another supplier to replace goods delivered by Matrix. There was no evidence at trial of the effect of this letter on Matrix's relationship with SunTrust, other than with respect to the two Invoices at issue, and the Court makes no comment other than as may be relevant to determine the issues in this action.
On November 15, 2002, SunTrust wrote to Matrix, advising that, "after numerous conversations and written letters, Jolie Intimates maintains that the goods were not as ordered", and that, "[s]ince SunTrust Bank is not in a position to mediate this dispute, [it] will charge these invoices against Matrix's factoring account in accordance with the factoring agreement." Matrix wrote to Jolie on November 27, advising of the "chargeback", and demanding payment on threat of legal action.
A review of the Factoring Agreement between Matrix and SunTrust Bank reveals a traditional factoring arrangement, in which "the factor acts as the insurer only of its client's customers' insolvency, . . . not of the quality of its client's goods". ( See Bonnie Co. Fashions, Inc. v. Bankers Trust Co., 945 FSupp 693, 700 [SDNY 1996].) "If a dispute arises between the factor's client and one of the client's customers over the goods or invoices, . . . the factor is entitled to `charge back' to its client the full amount of the disputed accounts receivable", which had previously been advanced to the client. ( See id.) The factor's ability to "charge back" has been characterized as "absolute". ( See Garden State Yarn Corp. v. Rosenthal Rosenthal, Inc., 99 AD2d 721, 722 [1st Dept 1984]; Exportos Apparel Group, Ltd. v. Chemical Bank, 593 FSupp 1253, 1256 [SDNY 1984].)
"Once there is . . . a dispute concerning goods that are the subject of unpaid accounts, the [factoring] agreement places the risk of collecting those accounts on the seller, not the factor." ( See Danleigh Fabrics, Inc. v. Gaynor-Stafford Industries, Inc., 62 NY2d 677, 681.) The "chargeback" shifts the risk of collection from the factor, who accepted it in the first instance by purchase of the account, back to the seller of the goods.
The evidence shows that this is what happened here. Jolie's notification to SunTrust that it would not be paying the two Invoices, initially based upon factual misstatements, led SunTrust to return control of the account and the risk of collection to Matrix. The "chargeback" resulted in an "undoing" of the assignment of the account to SunTrust ( see Southern Kraft Corp. v. Standard Capital Corp., 40 NYS2d 947, 949 [Sup Ct, NY County 1943], mod on other grounds 268 AD 959 [1st Dept 1944], aff'd 294 NY 937), and reconstituted Matrix as a real party in interest even without a formal "reassignment" ( see Purfield v. Kathrane, 73 Misc2d 194, 197-98 [Civ Ct, NY County 1973].)
In any event, Jolie made no showing that the subject account was not formally reassigned from SunTrust to Matrix or formally repurchased by Matrix from SunTrust, or that Matrix did not, by reason of the "chargeback", receive control of the account or was not made to bear the risk of collection. These would have been appropriate subjects of discovery had Jolie timely asserted its real-party-in-interest defense. Mr. Neman testfied that he did not know whether there had been a formal reassignment or repurchase. Since the real-party-in-interest defense was raised for the first time at trial, and Matrix had but the lunch recess to deal with it, with a three-hour time difference to its home office, the Court takes no negative inference from Matrix's failure to produce any such document.
Breach of Contract
The real dispute between the parties is about Purchase Order No. 37947 and the related Invoices. Jolie's printed Purchase Order described the goods as "pistressed paislex baby rib with glitter (preproduction strike-off approval required)" and specified the color "purple", but the copy of the Purchase Order that Matrix introduced into evidence shows under the printed description the handwritten notation "RIB1X1-100", and there is a line written through "purple" and "blue" is handwritten.
Jolie's Purchase Order called for shipment beginning May 9, and Matrix shipped in two installments on May 16 and May 17. The two Invoices and two Packing Slips for these shipments describe the goods as blue and "RIB1X1-100". The delivery receipt for the May 16 shipment does not indicate the date of delivery, but presumably it was no later than May 22 when, according to the delivery receipt for the May 17 shipment, the latter installment was delivered.
None of the witnesses at trial acknowledged having made the handwritten notations on the Purchase Order, which do not appear on the copy of the Order that Jolie introduced into evidence, and none could testify with personal knowledge as to the identity of the person who made the notations. Both witnesses for Jolie did acknowledge, however, that Jolie did direct a change in the color of the fabric after the Purchase Order was submitted. The Court concludes that it is more likely that the notations were made by a person acting for Matrix, and that, except for the change in color, were not made at the direction of Jolie.
Mr. Neman testified that, if a buyer had a problem on an order, the buyer would deal with the sales representative who took the order or with SunTrust. That is what happened here. On May 22, the date of delivery, Ms. Huang faxed a memo to Mr. Winkoff in which she "advised that P.O ( sic) . . . 37947 [was] not delivered properly due to the problems as we discussed." Ms. Huang requested "$1.00 off each yard . . . if you like us to keep the goods", and that Matrix "confirm your acceptance by the end of today, or if not, you have to arrange to pick up."
The "problem" eluded to, and the heart of this dispute, is that, according to Jolie, Matrix did not deliver the fabric that Jolie ordered specifically, that the fabric did not meet the description in its Purchase Order for "baby rib". Jolie maintains that "baby rib" and "RIB1X1-100" are not the same, whereas Matrix maintains that it is. The "rib" characteristic of a fabric relates primarily to the tightness of the weave, and affects "softness" and the ability of the fabric to accept printing.
Matrix did not accept Jolie's offer to keep the goods at a $1.00/yard discount. Also on May 22, Jolie issued a purchase order to another supplier for 6000 yards of cotton fabric, described as "pistressed paisley printed baby rib with glitter", as in Purchase Order No. 37947; but blue rather than purple, and "as sample yardage" rather than for "preproduction strike-off approval", and at $2.80/yard rather than the $2.75/yard price from Matrix. Ms. Huang explained that the fabric was needed to complete an order for Sears, which required apparel of a quality consistent with "baby rib" but not "RIB1X1-100". Since the fabric delivered by Matrix was not "defective", in the sense that it could not be used for other purposes, Jolie was willing to keep it, but only at a price compatible with the price it could charge for the finished goods.
There apparently was no written communication between the parties from May 22, the date of Ms. Huang's letter to Mr. Winkoff, and Jolie's June 14 letter to SunTrust Bank, stating that Jolie considered the two Invoices "null and void". Subsequent correspondence between the parties, dated in November and December 2002, reveals confusion about their dispute, referring to the problem as related to the print rather than the weave. There was no testimony as to any discussion between the parties during the periods May 22 to June 14 or from June 14 to the November and December correspondence.
A buyer of goods may reject them if they "fail in any respect to conform to the contract." (UCC § 2-601.) Rejection "must be within a reasonable time after their delivery or tender", and the buyer must "seasonably notif[y] the seller." (UCC § 602[1].) Rejection requires a "clear and unequivocal act", and not merely a request for a cure. ( See Hooper Handling, Inc. v. Jonmark Corp., 267 AD2d 1075, 1076 [4th Dept 1999]; Sears, Roebuck Co. v. Galloway, 195 AD2d 825, 827 [3rd Dept 1993]; Ask Techs., Inc. v. Cablescope, Inc., 2003 US Dist LEXIS 18694, *7 [SDNY].)
Here, Jolie's written communication on May 22, although conditional in that it proposed a cure through a reduction in price, constitutes an effective rejection. The statement that, in the absence of Matrix's acceptance of Jolie's proposal "by the end of today", Matrix "have to arrange to pick up" is clear and unequivocal, and, coming on the day of delivery of the second installment, and perhaps a day or so after delivery of the first, it was made "within a reasonable time" and "seasonably" communicated to Matrix. ( See UCC § 602[1].) There was no testimony of any oral discussion that would distill the import of Jolie's communication. Nor does Matrix contend that the communication was ineffective for having been directed to the sales representative.
Matrix does contend, however, that the reason given by Jolie for rejecting the goods was not, in fact, the reason. Rather, relying exclusively on Jolie's June 14, 2002 letter to SunTrust Bank, Matrix contends that Jolie rejected the goods because it was "discontinu[ing] operations of [its] USA TEASE division." This Court has held that the Uniform Commercial Code's duty of good faith ( see UCC § 2-103[b]) applies to a buyer's decision to reject the goods ( see Y N Furniture, Inc. v. Nwabuoku, 190 Misc2d 402, 408 [Civ Ct, Kings County 2001].) For a merchant like Jolie, "good faith" requires "honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade." ( See UCC § 2-103[b].)
If, as Matrix contends, Jolie rejected the fabric because it had decided subsequent to placing the order to discontinue the operations of the division that would use it, rather than as a result of an honest assessment of the conformity of the fabric to the contract, its rejection would certainly not have been in good faith. But, except for the June 14 letter, admittedly problematic for reasons already discussed, there is no evidence to support Matrix's contention. Rather, the evidence suggests the contrary, particularly Jolie's order to another supplier for the same fabric at a higher price.
The finding and conclusion that Jolie effectively rejected the goods is highly significant. Under the Code, "[t]he burden is on the buyer to establish any breach with respect to the goods accepted." (UCC § 2-607.) The "[b]urden of establishing" a fact "means the burden of persuading the triers of fact that the existence of the fact is more probable than its non-existence." (UCC § 1-201.) Although the Code does not explicitly place the burden on the seller to prove that delivered goods conformed to the contract when there has been an effective rejection by the buyer, that is the clear import. Placing the burden on the seller is consistent with pre-Code law, although the construct of passage of title played a formal role. ( See Smiley Steel Co. v. Schmoll, 200 AD 655, 660-62 [1st Dept 1922], aff'd 235 NY 520; Korde Corp. v. Casino Classics, Inc., 280 AD 740, 742-43 [1st Dept 1952]; Union Broach Co. v. Guterman, 187 NYS 477, 478 [App Term, 1st Dept 1921]; Miron v. Yonkers Raceway, Inc., 400 F2d 112, 117 n13 [2d Cir 1968]; John Fabick Tractor Co. v. Lizza Sons, Inc., 298 F2d 63, 65 [2d Cir 1962].)
There is no dispute between the parties that they had a contract for the sale of printed fabric. Indeed, "[s]ellers usually do not ship and buyers do not receive goods unless they think they have struck a deal." ( Quaker State Mushroom Co., Inc. v. Dominick's Finer Foods, Inc., of Illinois, 635 FSupp 1281, 1285 [ND 1986].) The question is, was it a contract for the sale of "baby rib" as stated in Jolie's Purchase Order, or for the sale of "RIB1X1-100" as stated in Matrix's Invoices, assuming, for the present, that there is a difference. The answer to that question requires a determination of how the contract was formed.
There was no testimony as to discussions or informal correspondence before Jolie submitted its Purchase Order or before Matrix issued its Invoices, so that any of those documents could be deemed a "written confirmation" of an oral or informal agreement. ( See UCC § 2-207 and Official Comment 1; see also Frank v. Superior Industrial Systems, Inc., 2002 NY Slip Op 40553[U], *2 [App Term, 9th and 10th Jud Dists].) "Generally, the first document to be sent is the offer." ( Reaction Molding Technologies, Inc. v. General Electric Co., 585 FSupp 1097, 1106 [ED Pa 1984].) Jolie's Purchase Order, therefore, must be considered the offer.
"[A]n order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or non-conforming goods." (UCC § 2-206[b].) Matrix's Invoices and Packing Slips establish that the goods were shipped on the same day as the Invoices were prepared. Since there was no evidence that the Invoices were delivered to Jolie before the goods were shipped, Matrix accepted Jolie's offer on the terms of the Purchase Order when it shipped the goods. ( See Technographics, Inc. v. Mercer Corp., 777 FSupp 1214, 1216 [MD Pa 1991], aff'd 26 F3d 123 [3d Cir 1994]; Coastal Native Plant Specialties, Inc. v. Engineered Textile, 139 FSupp2d 1326, 1334 [ND Fla 2001].)
Although not determinative, the Court notes that, in any event, Matrix's Invoices would not qualify as a "definite and seasonable expression of acceptance." ( See UCC § 2-207.) Although "[w]hat constitutes a `definite and seasonable expression of acceptance' is somewhat cloudy under the Code" ( Rite Fabrics, Inc. v. Stafford-Higgins Co., Inc., 366 FSupp 1, 8 [SDNY 1973]), "[i]f the return document diverges significantly as to a dickered term, it cannot be a 2-207(1) acceptance." (White and Summers, Uniform Commercial Code, § 1-3, at 46 [West Group 2000].) The "dickered terms" are those that are unique to each transaction such as price, quality, quantity, or delivery terms as compared to the "usual unbargained terms on the reverse side [of a form] concerning remedies, arbitration, and the like." ( See id., at 33.) The description of the goods must be included among those terms on which writings must agree for the writings to form the contract.
Matrix was, therefore, required to deliver printed fabric that met the Purchase Order description "baby rib". It is Matrix's ultimate position that the fabric it delivered with the description "RIB1X1-100" conformed to the Purchase Order description "baby rib". Preliminarily, however, Matrix contends that, in accordance with the Purchase Order requirement for "preproduction strike-off approval", it delivered a printed sample to Jolie, and that Jolie approved the sample before the goods were produced and shipped. But Matrix could provide no documentation that the sample was delivered or that Jolie approved it, even though Mr. Winkoff stated that "most of the time" written approval was required.
Jolie maintains that preproduction approval was never given or sought. Mr. Bobo testified that no sample of the actual fabric was submitted to Jolie, although Jolie may have seen and approved a sample of the print pattern and color. Ms. Huang testified that, had she seen and approved a strike-off, it would have been noted in the file, but was not. There was also testimony that the order for printed fabric was on an usually quick time frame so that Jolie could comply with its commitment to its customer for the finished goods.
The Court concludes that Matrix has not established that it is more likely that Jolie approved a strike-off sample of the goods before the goods were produced and shipped. Among other reasons, the Court can conceive of no reason why Jolie would have approved a sample merely days before it rejected the delivered goods, only to place an order for goods with the identical description with another supplier at a higher price. Experience and common sense suggest that it is likely that the preproduction approval that would have avoided this lawsuit was by-passed in order to meet the time requirements of Jolie and its customer.
Both Matrix and Jolie pointed to their prior course of dealing to support their respective contentions concerning "baby rib" and "RIB1X1-100" fabric, but neither proved a single prior transaction, nevermind "a sequence of previous conduct between [them] which is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct." ( See UCC § 1-205.) The deficiency in proof is of greater consequence to Matrix, of course, since it bears the burden of proof.
Similarly, although Mr. Neman characterized the subject transaction as a "sale by sample" ( see UCC § 2-313[c] and Official Comment 6), Matrix presented no proof of any sample from which the subject orders were placed. ( See Daisy Industries v. Kmart Corp., 1999 US Dist LEXIS 17718, *27-*28 [SDNY]; Plastireal, S.A. v. Hirica USA, Ltd., 1990 US Dist LEXIS 6039, *10-*11 [SDNY]; see also Alper Blouse Co. v. E.E. Connor Co., 309 NY 67, 71.)
Matrix and Jolie agree that the descriptive term "baby rib" has a particular meaning in the trade, but they disagree on whether "RIB1X1-100" is accepted in the trade as "baby rib". The Code defines "[a] usage of trade" as "any practice or method of dealing having such regularity of observance in a place, vocation or trade as to justify an expectation that it will be observed with respect to the transaction in question." (UCC § 1-205.) "The existence and scope of [trade] usage are to be proved as facts." ( Id.)
Trade usage can determine whether a seller has delivered goods that conform to the contract description. ( See O'Donohue v. Leggett, 134 NY 40; Frigaliment Importing Co. v. B.N.S. International Sales Corp., 190 FSupp 116, 117 [SDNY 1960] ["The issue is, what is chicken?"].) Neither Matrix nor Jolie contend that "baby rib" has a different meaning in the textile industry than it does in the apparel industry. ( See Avedon Engineering, Inc. v. Seatex, 126 F3d 1279, 1285 [10th Cir 1997].)
Expert testimony is usually required to prove trade usage. ( See id.; see also Wise Co. v. Wecoline Products, 286 NY 365, 369-71.) Neither Matrix nor Jolie offered any independent expert testimony to support its contention as to the meaning of "baby rib". A party and its employees may certainly be qualified to give expert testimony ( see Zinn v Jefferson Towers, 14 AD3d 398, 398 [1st Dept 2005]), and each of the witnesses here appears to have spent some time in the textile or apparel industries, but none was offered or qualified as an expert. Perhaps more importantly, none testified to third-party practice or provided any examples of how other companies understand and use "baby rib". ( See Frigaliment Importing Co. v. B.N.S. International Sales Corp., 190 FSupp at 119].) Again, Matrix bore the burden of proving that "baby rib" includes "RIB1X1-100". Because Mr. Winkoff represents ten fabric suppliers, he might have been in the position to provide evidence as to the use of the terms "baby rib" and "RIB1X1-100" by suppliers other than Matrix, but he did not do so. The opinions of Mr. Neman and Mr. Winkoff (or, for that matter, Mr. Bobo and Ms. Huang) are in and of themselves insufficient to establish the "fact" of trade usage. ( See British International Ins. Co. Ltd. v. Seguros LA Republica, S.A., 342 F3d 78, 84 [2d Cir 2003]; Avedon Engineering, Inc. v. Seatex, 126 F3d at 1285; H W Industries, Inc. v. Occidental Chemical Corp., 911 F2d 1118, 1122 [5th Cir 1990]; Pantone, Inc. v. Esselte Letraset, Ltd., 878 F2d 601, 606 [2d Cir 1989].)
Evidence that was introduced, although not determinative, supports the conclusion that Matrix did not carry its burden. First, there is the obvious circumstance that someone acting for Matrix, as the Court has found, added the designation "RIB1X1-100" to Jolie's Purchase Order, suggesting at least that Matrix employees who would be processing the order would not immediately know to do so with "RIB1X1-100". A similar inference arises from the use of "RIB1X1-100", rather than "baby rib", in the two Invoices.
Jolie's Purchase Order to UFN Textile for fabric to replace that received from Matrix called for "baby rib", and was apparently filled by delivery of fabric that was different from "RIB1X1-100", and that was satisfactory to Jolie for use in meeting its contract with Sears. Jolie presented at trial a swatch of printed fabric that was not clearly identified as having been supplied by UFN, but that Jolie's witness characterized as "baby rib", and asked the Court to compare that swatch to a swatch of fabric that was cut from the goods delivered by Matrix. There clearly was a difference, even to the non-expert's perception. But, again, only Jolie's witness said that the comparison swatch was "baby rib".
Difference is not the same as lack of equivalence, although it may be evidence of it. "Baby rib" and "RIB1X1-100" may be different names for the same thing, or different names for different things, or "baby rib" may be a name for a group of things that includes "RIB1X1-100". Neither Matrix nor Jolie presented evidence sufficient for the Court to determine how the two designations are understood and used in the trade. It was Matrix's job, however, to provide evidence that would lead the Court to determine that the trade would accept "RIB1X1-100" as "baby rib", but Matrix did not do that.
In sum, with respect to Matrix's claim for payment of the unpaid balance on the Invoice issued on Jolie's Purchase Order No. 37948, Jolie has carried its burden in showing that Matrix is not a real party interest; with respect to Matrix's claim for payment of the two Invoices issued on Jolie's Purchase Order No. 37947, Matrix has not carried its burden of showing that it delivered goods that conformed to the contract.
Judgment for Defendant, dismissing the action.
May 5, 2005
Judge, Civil Court
From: Eric Steinberg
To: State Reporter
Date: 5/5/2005 12:16 PM
Subject: Re: Opinions Submitted Electronically
Dear Mr. Spivey:
The date of May 4, 2005 in the first paragraph of my prior message was in error and should have read May 5, 2005 in accordance with the date of the opinion in Matrix International Textiles Inc. v. Jolie Intimates, Inc.
Apologies for the error and let me know if I can be of any further assistance.
Sincerely,
Eric G. Steinberg
Court Attorney
State Reporter 05/05/05 12:06PM
Dear Mr. Steinberg:
We are acknowledging receipt of your message with the Matrix attachment. However, when reviewing the opinion prior to processing for consideration, we note that the decision date typed on the opinion is May 5, 2005 but the decision date in your message is May 4, 2005. Please confirm the correct decision date so we can continue with this opinion.
We will hold your message and attachment pending your return reply to this message.
Very truly yours,
Gary D. Spivey
State Reporter
Eric Steinberg 05/05/2005 11:48 AM
Dear Mr. Spivey:
Attached hereto is the following opinion: Matrix International Textiles Inc. v. Jolie Intimates, Inc., Civil Court of the City of New York, Kings County, May 4, 2005, Judge Jack M. Battaglia, saved as Matrix International Textiles Inc. v. Jolie Intimates, Inc. — Decision After Trial.
The opinion addresses a number of issues that commonly arise in sale-of-goods transactions, specifically those subject to factoring arrangements. The Court first addresses the buyers contention that the seller who assigns the buyers account to a factor is not a real party in interest in an action to collect the account, and concludes that the buyer in this case failed to carry its burden on the issue with respect to some, but not all, of the subject accounts.
The Court then addresses several issues under Article 2 of the Uniform Commercial Code, including contract formation, buyers good faith rejection, and proof of the trade meaning of the description of the goods. In an apparent ruling of first impression, the Court holds that, when the buyer has effectively rejected the goods, the seller has the burden of proving that they conformed to the contract.