Diskin v. JP Stevens & Co., Inc.

• Decision Date: 28 January 1987
• Docket Number: Civ. A. No. 86-2477-C.
• Citation: 652 F. Supp. 553
• Court: U.S. District Court — District of Massachusetts
• Parties: Ben DISKIN — Mass. State Mfg., Co., Plaintiff, v. J.P. STEVENS & CO., INC., Defendant.

652 F. Supp. 553

Ben DISKIN — Mass. State Mfg., Co., Plaintiff, v. J.P. STEVENS & CO., INC., Defendant.

Civ. A. No. 86-2477-C.

United States District Court, D. Massachusetts.

January 28, 1987.

Ben Diskin, pro se.

Otterbourg, Steindler, Houston, Rosen, Kurt J. Wolff, New York City, Gary R. Greenberg, Goldstein and Manello, Boston, Mass., for defendant.

MEMORANDUM

CAFFREY, Senior District Judge.

This matter arises out of a contract action brought pro se by Benjamin Diskin, a manufacturer of woolen garments for women, against J.P. Stevens & Co., Inc. ("Stevens"), formerly in the business of manufacturing woolen goods. Plaintiff is a resident of Milton, Massachusetts and defendant's principal place of business is in New York. The amount in controversy is in excess of $10,000, therefore this Court exercises diversity jurisdiction over the subject matter of the suit pursuant to 28 U.S.C. § 1332(a). This matter is now before the Court on defendant Stevens' motion to dismiss plaintiff's complaint pursuant to Fed.R.Civ.P. 12(b)(6) on the grounds that the complaint is time barred. Alternatively, Stevens seeks an order pursuant to 9 U.S.C. § 3 staying this action pending arbitration of the dispute according to the terms set forth in the contract.

I. Background

Plaintiff is the sole owner of Massachusetts State Manufacturing Company, an enterprise that purchases fabrics from wholesale suppliers, manufactures garments, and then sells them to retail chain stores. On December 24, 1984, plaintiff travelled to New York City to determine whether any Stevens fabrics were appropriate for his manufacturing needs. Plaintiff found a "full-bodied, lofty all-wool flannel" that suited him, and, according to Stevens, plaintiff ordered 290 pieces of it. Plaintiff also requested that Stevens send him a ten yard sample for further evaluation. Later that day, while he was still at the Stevens office, plaintiff wrote out a check payable to Stevens for the amount of $151,380.00. The check was dated December 31, 1984. Plaintiff signed the check and on its reverse side wrote the following notation:

In full payment for 290 pcs. flannel as per contract, less anti. to be figured upon billing. Final total subject to adjustment.

Exhibit C to Defendant's Affidavit.

Subsequent to this transaction, Stevens sent to plaintiff its standard form sales contract. Exhibit A to Defendant's Affidavit. The contract covers 290 pieces of greige goods, priced at $6.30 per yard, to be delivered in April. In the section of the contract marked "ship to," the name of plaintiff's company is lined out and underneath is written "will advise" and "Bill and Hold." According to the initialed areas of the contract, the contract was approved by the Sales Department and the Credit Department. No signatures appear on the contract. Stevens also sent to plaintiff an invoice, dated December 31, 1984, for 290 pieces of greige goods at a price of $155,295.00. Exhibit B to Defendant's Affidavit. On January 14, 1985, Stevens shipped to plaintiff one piece (ten yards) of flannel in the greige at a price of $63.00. An invoice for that amount, numbered 300148 and dated 1/14/85, accompanied the shipment. Exhibit A to Plaintiff's Rebuttal memorandum.

Plaintiff contends that the dispute before the Court arises because the flannel sample he received in mid-January, 1985, was different, and of a lower quality, than the flannel he picked out while at Stevens' office in New York City. After plaintiff received this flannel sample, he sent a letter, dated January 24, 1985, to Stevens, in which plaintiff outlined his disappointment with the fabric and noted that his "interests are stopped for re-evaluation to determine where I go from here." Exhibit B to Plaintiff's Rebuttal Memorandum. According to both parties, this letter marked the beginning of a year-long period of correspondence and telephone calls concerning the greige goods in dispute. Plaintiff refused to assort the allegedly nonconforming goods, thus on June 30, 1986, Stevens shipped the goods via Overnite Transportation Co., to Eastern Distribution, Inc. ("EDI") for plaintiff's account. Exhibit D to Plaintiff's Rebuttal Memorandum. An EDI invoice, no. 13981, shows that the goods were received by EDI on July 7, 1986. Exhibit C to Plaintiff's Rebuttal Memorandum. Plaintiff, a Massachusetts resident, brought an action against Stevens in this Court on August 25, 1986, seeking judgment against the defendant in the amount of his initial payment of $151,380.00 plus interest and costs.

II. The Contract

Stevens first maintains that there is an enforceable contract between Stevens and plaintiff, and that by its terms the contract bars plaintiff's institution of this lawsuit. As permitted by the New York Uniform Commercial Code § 2-725(1), the contract shrinks the usual four year limitation on the institution claims to one year.¹ Any claim against Stevens must therefore be commenced within one year of the accrual of the cause of action. Stevens contends that plaintiff's action was instituted sixteen months after it accrued and is therefore time barred. Plaintiff disputes the existence of the contract on the grounds that he never signed it and instead claims he had merely entered into preliminary negotiations with Stevens.

Turning first to the issue of whether there was a contract between the parties, it is noted that complaints filed by parties who appear pro se are to be liberally construed and are held to standards less stringent than those applied to members of the Bar. Haines v. Kerner, 404 U.S. 519, 520-21, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972), reh'g denied, 405 U.S. 948, 92 S.Ct. 963, 30 L.Ed.2d 819 (1972); Gilday v. Boone, 657 F.2d 1, 2 (1st Cir.1981). Despite a liberal construction of plaintiff's complaint, however, it is evident that he is bound to a contract with Stevens.

When confronted with issues involving the formation of contracts, courts in New York apply an objective test. Camrex Contractors (Maine) Ltd. v. Reliance Marine Applicators, Inc., 579 F.Supp. 1420, 1426 (E.D.N.Y.1984). In examining these issues courts look "not at the parties' after-the-fact professed subjective intent, but their objective intent as manifested by their expressed words and deeds at the time." Id. at 1426. It is well established that the test of whether a communication is an offer is whether the recipient could reasonably believe that the offeror intended to give him the power to conclude the contract. Gennaro v. Rosenfield, 600 F.Supp. 485, 489-90 (S.D.N.Y.1984). Applying this traditional test to the communication here, it is clear that plaintiff made to Stevens a written offer to purchase Stevens' textiles. Plaintiff went to Stevens' office with the intention of purchasing textiles and in fact he selected suitable textiles. According to plaintiff, he requested that Stevens quote him an approximate price for the quantity of flannel he had selected. Stevens agreed to provide such a price and plaintiff then drafted a check for that amount. Plaintiff's notation on the back of his check contains essential and definite terms, as well as a description of the goods to be covered. Although plaintiff now contends that his check was intended to prove his "credit worthiness" to Stevens, it is not for this Court to engage in an after-the-fact inquiry into plaintiff's state of mind when he wrote the check. It appears to this Court that plaintiff's check is a clear, objective manifestation of his intent to contract. See New York Uniform Commercial Code § 2-206(1)(a).²

Concluding that in the totality of the circumstances plaintiff's December 31, 1984 check operates as an offer to purchase flannel from Stevens, we now turn to the issue of whether, and in what form, plaintiff's offer was accepted by Stevens.

After plaintiff returned to Massachusetts, Stevens mailed to him a copy of its standard form sales contract, designated as a "confirmation" and dated December 31, 1984. The terms provide that the confirmation is given "subject to all of the terms and conditions on the face and reverse sides ... including the provisions for arbitration...." Moreover the terms of the confirmation provide that it shall become "a contract for the entire quantity specified ... when ... buyer receives and retains this confirmation without written objection for ten (10) days...." Next to the words "accepted by" is printed "J.P. Stevens & Co., Inc."

It is not disputed by plaintiff that he received this confirmation and, although he did not sign it, he failed to object to it. There is no question that this was a transaction "between merchants" within the meaning of the New York Uniform Commercial Code § 2-104(1) and (3).³ Stevens thus contends that the confirmation operates as an acceptance of plaintiff's offer, and that, together with the terms of its standard form contract, it is binding on both parties. I agree. Stevens sent to plaintiff a seasonable confirmation, which I rule operates as an acceptance under the New York Uniform Commercial Code § 2-207. Rite Fabrics, Inc. v. Stafford-Higgins Co., Inc., 366 F.Supp. 1, 8-9 (S.D.N.Y. 1973).

The next issue is whether the terms on the reverse side of the Stevens confirmation, including the arbitration and limitation on claims clauses at issue here, become part of the enforceable contract between the parties. The terms are additional to those offered by plaintiff, however under the New York Uniform Commercial Code § 2-207, such terms are to be construed as "proposals for addition to the contract" and, with some exceptions, become part of the contract.

A. The Limitation on Claims Clause

Where, as here, there is a transaction between merchants, proposals for additional terms become part of the contract unless such terms materially alter it. New York Uniform Commercial Code § 2-207(2)(b); Rite Fabrics, Inc. v. Stafford-Higgins Co., Inc., 366 F.Supp. 1, 7 (S.D.N.Y.1973). It is well established that shortening the time for...