First Valley Leasing, Inc. v. Goushy

• Decision Date: 02 June 1992
• Docket Number: Civ. No. 91-1202 (CSF).
• Citation: 795 F. Supp. 693
• Parties: FIRST VALLEY LEASING, INC., Plaintiff, v. Theodore GOUSHY, Defendant.
• Court: U.S. District Court — District of New Jersey

795 F. Supp. 693

FIRST VALLEY LEASING, INC., Plaintiff, v. Theodore GOUSHY, Defendant.

Civ. No. 91-1202 (CSF).

United States District Court, D. New Jersey.

June 2, 1992.

Barbara Lanza Farley, P.C. by Barbara Lanza Farley, Haddonfield, N.J., for plaintiff.

Borrus, Goldin, Foley, Vignuolo, Hyman & Stahl, P.C. by Anthony B. Vignuolo, Eileen M. Foley, North Brunswick, N.J., for defendant.

OPINION

CLARKSON S. FISHER, District Judge.

Before the court is a motion for summary judgment brought pursuant to Rule 56 of the Federal Rules of Civil Procedure by plaintiff, First Valley Leasing, Inc. ("First Valley"). Defendant, Theodore Goushy ("Goushy"), the owner of Bow Sales Co., opposes the motion in all respects. For the following reasons, the plaintiff's motion for summary judgment is granted in part and denied in part.

I. Facts

In September 1989, First Valley, a Pennsylvania commercial leasing corporation, was asked by Pagano Performance Truck Parts, Inc. ("Pagano"), a New Jersey corporation and a wholly-owned subsidiary of Clark Truck Leasing, Inc., to enter into a financing lease arrangement so that Pagano could re-establish a repair shop business. Simultaneously, Pagano contacted defendant, Goushy, to discuss leasing certain equipment necessary for the operation of the business. Goushy, who is a manufacturer's representative for the retail sale of machine parts and equipment, is a New Jersey resident doing business as Bow Sales Co., a New Jersey corporation.

Plaintiff alleges that it was told by Pagano that, after Pagano selected the items it needed, plaintiff would purchase the equipment from defendant and, in turn, lease the equipment to Pagano. Plaintiff alleges that Goushy subsequently submitted an invoice listing twenty-six specifically described items and a purchase price in the total amount of $92,924. See Plaintiff's Exh. A. Plaintiff asserts that it paid defendant the amount listed on the invoice plus the New Jersey State Sales Tax amount of $5,575.44.

Plaintiff alleges that, sometime thereafter, Pagano stopped making payments in accordance with the lease agreement and filed a petition for bankruptcy protection under Title 11 of the United States Code. Plaintiff asserts that upon taking inventory of the equipment, which it believed that it had purchased from defendant, it discovered that most of the twenty-six items listed on the invoice were not owned by defendant; instead, plaintiff asserts, most of the items were already owned by Pagano and were encumbered by previously existing security interests. Plaintiff asserts that, in fact, only eight of the items listed on the invoice were actually owned by defendant. Plaintiff alleges that the value of the eight items is $11,970.00, plus tax. See McGee Affidavit, ¶ 3.

Accordingly, in March of 1991, plaintiff filed this action alleging causes of action for common-law fraud, breach of contract and breach of the New Jersey Consumer Fraud Statute, N.J.S.A. § 56:8-1 et seq. Plaintiff has moved for summary judgment.

In opposition to this motion, defendant asserts that he was instructed by Pagano's manager, Fred Marino, to include on the invoice all of the equipment presently existing at Pagano's shop plus the eight newly purchased items. Plaintiff's Exh. C, Goushy deposition, p. 23. Defendant asserts that he complied with this request because he was told by Marino that "another company was willing to lease back its existing equipment." Defendant's letter brief at p. 2. During deposition, however, defendant testified that he did not know the purpose of including all the items on the invoice and that he did not ask. Plaintiff's Exh. C, Goushy Deposition, p. 23. Defendant also testified that he did not purchase the equipment from Pagano and then sell it back to them. Id. at 27. Nevertheless, it is undisputed that defendant submitted the invoice listing twenty-six items to plaintiff. Further, it is undisputed that plaintiff paid to the defendant the amount of $92,924.00, which was the amount listed on the invoice.

Defendant alleges that upon receipt of the check from First Valley, he and Marino met at a diner, where Goushy turned over a substantial portion of the proceeds to Marino. Id. at 35-37. Defendant alleges that he retained $5,000.00, which represented a partial payment for the eight pieces of equipment actually furnished by defendant to Pagano or, stated another way, the eight items actually sold to First Valley. Id. Defendant asserts that summary judgment is precluded because numerous factual questions exist.

II. Summary Judgment Standard

Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56; Brown v. Hilton, 492 F.Supp. 771, 774 (D.N.J.1980). The burden of showing that no genuine issue of material fact exists rests initially on the moving party. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977). This "burden ... may be discharged by `showing' ... that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). Once a properly supported motion for summary judgment is made, the burden shifts to the nonmoving party to "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).

There is no issue for trial unless the nonmoving party can demonstrate that there is sufficient evidence favoring the nonmoving party so that a reasonable jury could return a verdict in that party's favor. Anderson, 477 U.S. at 249, 106 S.Ct. at 2511. In deciding a motion for summary judgment, the court must construe the facts and inferences in a light most favorable to the nonmoving party. Pollock v. American Tel. & Tel. Long Lines, 794 F.2d 860, 864 (3d Cir.1986). The role of the court, however, is not "to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 249, 106 S.Ct. at 2511.

III. Breach of Contract

Although neither party has addressed the issue, it is clear that, because the disputed transaction involved the sale of goods, the provisions of the Uniform Commercial Code ("UCC") will govern the court's analysis. See N.J.S.A. § 12A:2-102. This is true because the "moveable" items listed on the invoice were specifically identified as the objects of the contract for sale. See id. at § 12A:2-105. Having set forth the applicable statutory construct that will govern the court's analysis, the court must look to the applicable provisions of the UCC to determine the rights and remedies of the parties.

Primarily, defendant argues that no enforceable contract existed between the parties because the invoice did not constitute a sufficient writing under the UCC to indicate that a contract had been made. Defendant's letter brief at p. 7 (citing Michael Halebian N.J., Inc. v. Roppe Rubber Corp., 718 F.Supp. 348, 364 (D.N.J.1989)). Hence, defendant argues, the Statute of Frauds is applicable to bar plaintiff's action for breach of contract. The court disagrees.

The Code provides that when a transaction for the sale of goods is over $500, there must be some writing, signed by the party against whom enforcement is sought, sufficient to indicate that a contract for sale has been made. N.J.S.A. § 12A:2-201(1). In this case, defendant sent an invoice to plaintiff which clearly delineated the twenty-six items that were the subject of the transaction. Not only was the price term indicated, but also the invoice contained a specific description of each item. The only issue presented, then, is whether the invoice was signed by the defendant. An examination of the invoice reveals that, although the invoice was not signed by Goushy, the invoice contained a letterhead which provided the name and address of Bow Sales Co. A letterhead has been deemed to fall within the ambit of the definition of "signature" under the Code. See id. at 12A:1-201(39) and Comment 39. Accordingly, it is the court's opinion that the Statute of Frauds has been satisfied.

Even if the invoice had not satisfied the mandate of a "signed writing," the defendant would be prohibited from invoking the Statute of Frauds defense. This is true because the Code prohibits a party from invoking the Statute of Frauds defense if that party has received and accepted payment. Id. at § 12A:2-201(3)(c). It is undisputed that defendant received and accepted plaintiff's check.

Next, defendant argues that there is no contract, because "there was no meeting of the minds between plaintiff and defendant as to the essential elements of the contract." Defendant's brief at p. 7. The defendant's argument, however, ignores the relevant provisions of the Code. Section 12A:2-204(1) provides that "a contract for the sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract." Id. Further, the section provides that a contract will not fail for indefiniteness if the parties have intended a contract. Id. at § 12A:2-204(3). To determine if the parties have intended a contractual relationship, the court will look to the objective intent of the parties as manifested through their conduct, and not, as defendant urges, at the subjective intent of one of the parties. See Air Master Sales Co. v. Northbridge Park Co-op., Inc., 748 F.Supp. 1110, 1115 (D.N.J.1990).

In the case before the court, the defendant submitted to plaintiff an invoice listing twenty-six clearly identified items and requested payment. Plaintiff paid the defendant the amount requested. The court recognizes that there were no face-to-face negotiations between plaintiff and defendant. Moreov...