LISA A. CAIRO, J.S.C.
Unpublished Opinion
PRESENT: HON. LISA A. CAIRO, J.S.C.
DECISION AND ORDER ON MOTION
LISA A. CAIRO, J.S.C.
The following papers were read on this motion DOCS NUMBERED
Notice of Motion (MS 4), Affidavits, Affirmations, Exhibits, Memos............ 98-147
Opposition Papers......................................................................... 167-195
Reply Papers............................................................................... 196-197
Notice of Cross-Motion (MS 5), Affidavits, Affirmations, Exhibits, Memos..... 148-149
Opposition Papers......................................................................... 157-164
Upon the foregoing motion by the Plaintiff, Island Ordnance Systems, LLC ("Island"), for an order pursuant to CPLR § 3212 granting partial summary judgment in its favor on the First and Second Causes of Action in the Complaint and dismissing the Counterclaims served by Defendant, Amerimex, Inc. ("Amerimex") or, in the alternative, dismissing Amerimex's Second counterclaim for lost profits (Sequence #004), and upon the cross-motion interposed by Amerimex for an order pursuant to CPLR § 3211 (a) (10) dismissing the within Complaint due to Island's failure to name the Mexican Navy as a necessary party (Sequence #005) and related relief, are consolidated for disposition and determined as set forth below.
Island is a company specializing in the supply of military ordnance. Amerimex imports and exports military ordnance to foreign nations. On or about May 29, 2018, the parties entered into an agreement (the "Agreement") whereby Island sold to Amerimex 450 target practice rounds (the "Goods") for a purchase price of $477,900. Pursuant to the Agreement, Island was required to deliver the Goods within "12-14 months" of it procuring "approval of [an] export license", which license was obtained by Island on October 22, 2018. The Agreement further provided for Island to ship the Goods from Brazil, the place of manufacture, to the Port of Veracruz, Mexico, and directly to the Mexican Navy, with whom Amerimex had a separate contract to import the ordnance (the "Mexican Navy Contract"). On December 6, 2019, the Goods were delivered to the Port of Veracruz. At some point, however, the Mexican Navy Contract was cancelled purportedly due to "Island's failure to delivery [sic] by the deadline contained in the Mexican Navy Contract."
Island alleges that notwithstanding it having performed under the Agreement, Amerimex has failed to tender payment, although duly demanded, and Island has consequently suffered damages in the sum on $477,900. On or about May 26, 2020, Island commenced the underlying action asserting a total of four claims. The First and Second causes of action are premised upon breach of contract and an action for price under UCC § 2-709. On or about August 17, 2020, issue was joined when Amerimex served an answer containing four counterclaims all of which are predicated upon Island's alleged breach of the Agreement by failing to deliver the Goods in a "timely manner". Island and Amerimex now move for the relief recited above.
Island's Motion for Summary Judgment (Motion Sequence #004)
A party moving for summary judgment bears the initial burden of demonstrating prima facie entitlement to judgment as a matter of law by proffering proof, in admissible form, which establishes the absence of material issues of fact (Zuckerman v City of New York, 49 N.Y.2d 557, 562 [1980]). However, once the proponent of the motion establishes a prima facie showing, the burden shifts to the opposing party to come forth with admissible proof to establish triable issues of fact, the existence of which precludes summary judgment and necessitates a trial of the action (Alvarez v Prospect Hospital, 68 N.Y.2d 320, 324 [1986]).
As noted, Island's First Cause of Action is premised upon breach of contract. "The essential elements for pleading a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiffs performance pursuant to the contract, the defendant's breach of his or her contractual obligations, and damages resulting from the breach" (Dee v Rakower, 112 A.D.3d 204,208-09 [2d Dept 2013]).
In moving herein, Island has established prima facie entitlement to judgment as a matter of law (id.', Zuckerman v City of New York, supra at 562). Here, Island has demonstrated the existence of the Agreement by submitting its initial quotation dated, February 16, 2018 (the "2018 Quotation"), Amerimex's ensuing purchase order dated, May 29, 2018, together with its acknowledgment thereof and the final invoice dated, November 21, 2019, confirming a purchase price of $477,900. Additionally, Island provides the confirmation from the carrier, Sealand, establishing that the Goods were timely delivered on December 6, 2019 to the Port of Veracruz and within "12-14" months of having obtained its license on October 22, 2018. Finally, Island submits the sworn deposition of its President, Amnon Parizat, who testified that there is an unpaid balance of $477,900 as reflected on the invoice.
In opposition, Amerimex asserts that there remain numerous questions of fact regarding the contractual arrangement between the parties thus warranting denial of Island's application. More specifically, Amerimex asserts that "the parties treated Amerimex as a mere representative-agent of Island, and not a buyer of goods" and in said capacity, "Amerimex agreed to sign the Mexican Navy Contract, as Island's representative, with the understanding that Island would deliver the ammunition and abide by the terms of the Mexican Navy Contract". Amerimex proffers a plethora of documents including, inter alia, the 2018 Quotation addressed by Island to the Secretariat of the Mexican Navy. Amerimex asserts that this document, regarding which "Island has provided absolutely no explanation for why it would have drafted" same, raises questions of fact as to the true "contractual arrangement" existing between the parties.
Having reviewed the record, the Court finds that Amerimex has failed to raise any triable issues of fact (Alvarez v Prospect Hospital, supra at 324). Here, contrary to Amerimex's assertions, its Principal, Amos Gilad, unequivocally testified that Amerimex executed the Mexican Navy Contract and "[n]ot Island". Additionally, in email correspondence sent on January 15, 2020, Amos Gilad directed Island to "[i]gnore any contact with the Navy" as Island was "not a part of [Amerimex's] contract with them", while Amerimex asserts that Island provided no explanation for why it would have drafted the 2018 Quotation, Amos Gilad testified that he "asked [Island] to prepare a written quotation" for purposes of providing pricing information to the Mexican Navy. Finally, Amos Gilad testified that Amerimex refused to pay Island notwithstanding that the Goods were timely delivered under the Agreement. These admissions remain unrebutted.
As to the Second Cause of Action asserted pursuant to UCC § 2-709, the Court finds that Island has established entitlement to summary judgment (Zuckerman v City of New York, supra at 562). UCC § 2-709 (1) (a) provides, in pertinent part, that "[w]hen the buyer fails to pay the price as it becomes due the seller may recover, together with any incidental damage, . ., the price . . . of goods accepted" (UCC § 2-709 [1] [a]). "Under the New York UCC, to recover on a claim for goods sold and delivered, a plaintiff must show that: (1) it had a contract with the buyer; (2) the buyer failed to pay the purchase price: and (3) the buyer accepted the goods" (Kasper Glob. Collection & Brokers, Inc. v Glob. Cabinets & Furniture Mfrs. Inc., 952 F.Supp.2d 542, 571 [SDNY2013]).
Consistent with the foregoing, Island has demonstrated prima facie entitlement to judgment by establishing the existence of a contract under which it performed and that Amerimex failed to remit payment for the Goods delivered.
In opposing Island's claim premised upon UCC § 2-709, Amerimex asserts that any agreement between the parties "was in the nature of a services contract" and that "the Mexican Navy refused to accept the goods". Initially, "[i]n determining whether or not a contract is one of sale or to provide services, [the Court] must look to the essence of the agreement" and "[w]hen service predominates, the incidental sale of items of personal property, does not alter the basic transaction (N. Am. Leisure Corp, v A&B Duplicators, Ltd., 468 F.2d 695, 697 [2d Cir 1972] [internal quotation marks omitted] citing Perlmutter v Beth David Hospital, 308 NY 100, 104 [1954]). Conversely, when the predominate purpose of an agreement constellates around the sale of goods, then any services provided are "merely incidental or collateral" thereto and the contract is substantively one of sale and not of service (Sawyer v Camp Dudley, 102 A.D.2d 914, 914 [3d Dept 1984]). Here, while the Court agrees that the Agreement obligated Island to both sell and ship the Goods, the core of the Agreement was the sale of the military ordnance, the absence of which would have rendered the ensuing transportation unnecessary and irrelevant (id.). Further, contrary to Amerimex's assertions regarding the Mexican Navy's refusal of the Goods, Eyal Gilad, representative of Amerimex, testified that the ordnance is in a "Mexican Navy warehouse".
Turning to that branch of Island's application seeking dismissal of Amerimex's counterclaims, all of which are predicated upon Island's breach of the Agreement, in order for any party to recover on a claim sounding in breach of contract, it "must prove not only a breach of the contract by the opposing party, but its own performance of each of its obligations under the contract" (LaRoss Partners, LLC v Contact 911 Inc., 2015 WL 2452616, at *6 [EDNY May 21, 2015]). Here, in addition to Amerimex failing to raise any triable issues of fact as to Island's alleged breach of the Agreement, the record evidence, as cited above, establishes that Amerimex breached the Agreement by failing to tender payment upon Island's timely delivery of the Goods. Accordingly, dismissal of Amerimex's four counterclaims is warranted.
Amerimex's Motion to Dismiss (Motion Sequence #005)
As recited above, Amerimex moves pursuant to CPLR § 3211(a) (10) seeking dismissal of the within complaint due to Island's failure to name the Mexican Navy as a party. CPLR § 3211 (a) (10) provides that a party may move to dismiss a complaint on the basis that "the court should not proceed in the absence of a person [or entity] who should be a party." Relatedly, "[a] party who ought to be joined is a party whose presence is necessary if complete relief is to be accorded to the persons [or entities] who have already been joined or who might be inequitably affected by a judgment in the action" (Joanne S. v Carey, 115 A.D.2d 4, 7 [1st Dept 1986] citing CPLR 1001 [a]). Of relevance herein, "[a] nonparty to a commercial contract ordinarily is not a necessary party to an adjudication of rights under the contract" (ConnTech Dev Co. v Univ, of Connecticut Educ. Properties, Inc., 102 F.3d 677, 682 [2d Cir 1996] quoting Northrop Corp, v McDonnell Douglas Corp., 705 F.2d 1030, 1044 [9th Cir 1983]).
As discussed above, Island is not a party to the Mexican Navy Contract. Further, the Mexican Navy bears no contractual obligations referable to the Agreement at bar as it is not a party thereto. Thus, the fact that the Mexican Navy has not been named as a party does not prevent this Court from affording complete relief to either Island or Amerimex (Joanne S. v Carey, supra at 7). Further, as a nonparty to the Agreement, the Mexican Navy will not be inequitably affected by this Court's determination.
Based upon the foregoing, it is hereby
ORDERED, that Island's motion pursuant to CPLR § 3212 granting partial summary judgment in its favor on the First and Second Causes of Action in the Complaint and dismissing Amerimex's Counterclaims is GRANTED in its entirety (Sequence #004); and it is further
ORDERED, that Amerimex's cross-motion for an order pursuant to CPLR § 3211 (a) (10) dismissing the within Complaint due to Island's failure to name the Mexican Navy as a necessary party and for related relief is DENIED (Sequence #005).
The foregoing constitutes the decision and order of this court. All applications not specifically addressed herein are denied.