Diversified Colors Inc. v. Cranston Print Works Co.
| Decision Date | 09 August 2011 |
| Docket Number | C.A. No. 7:10-2156-HMH |
| Court | U.S. District Court — District of South Carolina |
| Parties | Diversified Colors Inc., Plaintiff, v. Cranston Print Works Company, Defendant. |
This matter is before the court on the parties' cross-motions for summary judgment. After consideration, the court grants Cranston Print Works Company's ("Cranston") motion and grants Diversified Colors Inc.'s ("Diversified") motion.
(Id. Ex. 1 (Moore Aff. at 1-2).) Cranston would accept inventory on consignment to ensure that adequate inventory was available for use. Thus, Diversified was paid for the rapidogen dye only after it was sent to Cranston on consignment and actually used by Cranston. (Def. Mem. Supp. Summ. J. 2.)
In late 2008, Diversified changed its raw materials supplier. Prior to late 2008, Diversified obtained its raw materials for making rapidogen dyes from an Indian company, Chem-Tex. (Def. Mem. Supp. Summ. J. Exs. (Moore Dep. Vol. II at 13).) However, Chem-Tex's raw materials had quality issues. According to Moore, Chem-Tex's "products contained higher than acceptable salt content which required reworking by Diversified [] at its expense without any damage or cost" to Cranston. (Pl. Mem. Opp'n Summ. J. Ex. 4 (Moore Aff. at 2).) Thus, Diversified began purchasing raw materials from Eastar Chemical, a Chinese company, in late 2008. However, Eastar would only provide the materials to Diversified in six-month batches, known in the industry as "campaigning production." (Id. Ex. 4 (Moore Aff. at 2).) Previously, Diversified purchased raw materials based on quarterly estimates. (Def. Mem. Supp. Summ. J. Exs. (Moore Dep. at 55).) According to Cranston, the decision to purchase raw materials from Eastar was made "solely by Diversified and prior to placing the order withEastar, Diversified did not have any communications with Cranston to confirm that Cranston would use six months of material." (Id. 3.)
In 2009, Cranston closed its Webster manufacturing plant for economic reasons. Cranston notified Diversified that it would no longer need rapidogen dye two weeks prior to the January 26, 2009 public notice that the plant was closing. (Id. Exs. (Moore Dep. at 52).) However, Cranston continued to use and pay for rapidogen dye for an additional five months "while its Webster manufacturing plant phased out." (Id.) Diversified's final request for payment for rapidogen dye used by Cranston was emailed on June 1, 2009. (Id. Ex. 3 (June 1, 2009 Email).) In the instant suit, Diversified is seeking to recover $85,476.25, for raw materials that it purchased between 2006 and 2008 from Chem-Tex and Eastar. None of the materials that Diversified is seeking payment for were delivered to Cranston or converted "into a finished product suitable for use by Cranston." (Id.)
Cranston moved for summary judgment on June 30, 2011, alleging that it is entitled to summary judgment on Diversified's breach of contract claim because there was no oral contract, and even if an oral contract existed, the oral agreement violates the statute of frauds. Diversified responded to Cranston's motion for summary judgment on July 15, 2011. On July 19, 2011, Diversified moved for summary judgment on Cranston's counterclaims for an accounting and abuse of process. Diversified alleges that it has performed an accounting and that the abuse of process claim is without merit. Cranston never responded to Diversified's motion for summary judgment and the deadlines have expired. Therefore, these matters are ripe for consideration.
Summary judgment is appropriate only "if the movant shows that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). In deciding whether a genuine issue of material fact exists, the evidence of the non-moving party is to be believed and all justifiable inferences must be drawn in his favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). However, Id. at 248.
A litigant "cannot create a genuine issue of material fact through mere speculation or the building of one inference upon another." Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, disposition by summary judgment is appropriate." Monahan v. County of Chesterfield, 95 F.3d 1263, 1265 (4th Cir. 1996). "[T]he mere existence of some alleged factual dispute between parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Ballinger v. N.C. Agric. Extension Serv., 815 F.2d 1001, 1005 (4th Cir. 1987).
Cranston moves for summary judgment on Diversified's breach of contract claim, arguing that (1) there is no oral contract between Cranston and Diversified; and (2) even if therewere an oral contract, this claim is barred by the statute of frauds. (Def. Mem. Supp. Summ. J., generally.)
To recover for a breach of contract, a plaintiff must prove the existence of a contract, the breach of the contract, and damages caused by the breach. See Fuller v. E. Fire & Cas. Ins. Co., 124 S.E.2d 602, 610 (S.C. 1962). The required elements of a contract are an offer, acceptance, and valuable consideration. Sauner v. Pub. Serv. Auth. of S.C., 581 S.E.2d 161, 166 (S.C. 2003). "A contract is an obligation which arises from actual agreement of the parties manifested by words, oral or written, or by conduct." Roberts v. Gaskins, 486 S.E.2d 771, 773 (S.C. Ct. App. 1997). Valuable consideration may consist of "some right, interest, profit or benefit accruing to one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other." Prestwick Golf Club, Inc. v. Prestwick Ltd. P'ship, 503 S.E.2d 184, 186 (S.C. Ct. App. 1998). In order to have a binding contract, it is necessary that the parties to a contract have a meeting of the minds with regard "to all essential and material terms of the agreement." Player v. Chandler, 382 S.E.2d 891, 893 (S.C. 1989). Price, time, and place are essential terms of a contract. Edens v. Laurel Hill, Inc., 247 S.E.2d 434, 436 (S.C. 1978). Furthermore, the assent must be as to all of the terms of the contract. See Lee v. Travelers' Ins. Co. of Hartford, Conn., 175 S.E. 429, 433 (S.C. 1934).
The court finds that there are no genuine issues of material fact concerning whether an oral contract requiring Diversified to "keep on hand a sufficient amount of raw materials in order to make on call rapidogen dyestuffs for the need of Cranston" existed between the parties. (Compl. ¶ 5.) In conclusory form, Diversified alleges that (Pl. Mem. Opp'n Summ. J. 2.) However, Diversified has failed to present any evidence of offer or acceptance of the alleged oral contract. The evidence presented is devoid of any inference of discussion or negotiation of contract terms or a meeting of the minds on the essential terms of an oral contract. Diversified, without consulting Cranston, decided to purchase a six-month supply of raw materials from Eastar. (Id. Ex. 4 (Moore Aff. at 2).); (Def. Mem. Supp. Summ. J. Exs. (Moore Dep. at 54).) Diversified decided to "campaign production" because of the "economy in manufacture." (Pl. Mem. Opp'n Summ. J. Ex. 4 (Moore Aff. at 2).)
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