NRT Metals, Inc. v. Laribee Wire, Inc.

• Decision Date: 07 June 1984
• Citation: 102 A.D.2d 705,476 N.Y.S.2d 335
• Parties: NRT METALS, INC., Plaintiff-Appellant, v. LARIBEE WIRE, INC., et al., Defendants. LARIBEE WIRE, INC., et al., Counterclaim-Plaintiffs-Respondents, v. NRT METALS, INC. et al., Counterclaim-Defendants-Appellants.
• Court: New York Supreme Court — Appellate Division

Page 335

476 N.Y.S.2d 335

102 A.D.2d 705

NRT METALS, INC., Plaintiff-Appellant, v. LARIBEE WIRE, INC., et al., Defendants.

LARIBEE WIRE, INC., et al., Counterclaim-Plaintiffs-Respondents, v. NRT METALS, INC. et al., Counterclaim-Defendants-Appellants.

Supreme Court, Appellate Division First Department.

June 7, 1984.

J.P. Beggans, Jr., New York City, for plaintiff-appellant and counterclaim-defendants-appellants.

J.B. Yaeger, for defendants and counterclaim-plaintiffs-respondents.

Before SANDLER, J.P., and ASCH, SILVERMAN, BLOOM and KASSAL, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County, entered July 8, 1983 unanimously reversed on the law to the extent appealed from, with costs, to grant plaintiff's motion for summary judgment dismissing defendants' second and third counterclaims for tortious interference with business relations and libel per se.

Plaintiff NRT Metals, Inc. ("NRTM") is a former dealer in metals and a former supplier of copper to wire manufacturers including defendant Laribee Wire, Inc. and several of its subsidiaries and affiliates (hereafter referred to collectively as "Laribee"). NRTM is presently in liquidation pursuant to a plan of voluntary liquidation approved by its general creditors in April 1980. The underlying action between the parties is based on a claim by NRTM that Laribee failed to pay for goods sold and delivered, and repudiated its contractual obligations to NRTM under a commodity agreement for forward purchases of copper.

The issue here arises from Special Term's denial of plaintiff's motion to dismiss two counterclaims by Laribee alleging tortious interference with business relations and libel.

Beginning in January 1978 the parties commenced a course of dealing in forward purchases of copper pursuant to an agreement which was never reduced to writing. Under the established procedure James Holme, the NRTM vice president in charge of the Laribee account, was in daily contact with Herman Rogge, Laribee's president, regarding the price and market outlook for copper. From time to time, when Rogge deemed the market factors favorable for purchase, he placed orders with Holme, based on the current Comex price, for physical copper to be delivered several months in the future. NRTM would then place a hedge on the transaction by purchasing one or more futures contracts on the Comex to protect its financial position in the event the price of copper went up between the date of the order and the date of delivery. After NRTM had executed the hedge purchases, it would confirm the forward sale in writing. Shortly before the delivery date, Rogge would specify Laribee's particular requirements with regard to the place of delivery, premium and shape of the copper, and a contract embodying the previously confirmed price and the additional terms would be sent to Laribee by NRTM. When the copper was finally ready for delivery, NRTM would notify the mill to release the metal to Laribee's account, and NRTM would invoice Laribee.

On March 20, 1980 NRTM declared itself to be insolvent, and a plan of voluntary liquidation pursuant to Section 305 of the Bankruptcy Code was adopted by NRTM's board of directors, and approved by NRTM's general creditors in April 1980. Under the plan NRTM was to engage only in liquidating transactions, and was thereafter to distribute the remaining assets to the creditors. James P. Beggans, Jr., a member of the law firm representing NRTM prior to and during the liquidation proceedings and the instant lawsuit, was appointed liquidator.

As of March 20, 1980, one of the forward pricing transactions (CS 884) had proceeded to the contract stage, i.e., Laribee had specified the required shape of the copper and the dates and place of delivery at Bayway, New Jersey. The first of three shipments under this contract had already been made to Laribee during the week commencing March 17. The industry practice was to require payment for metal shipments within ten days of delivery, and the contracts in question so specified; however, under the parties' actual practice Laribee would pay 30 days after delivery and would be charged interest for the additional 20 days.

NRTM did not deliver the remaining two 180,000 pound copper shipments which were due the weeks of March 24 and March 31, 1980. NRTM explained this in an April 3, 1980 letter sent to Laribee by Mr. Beggans: "We herewith tender delivery in your favor for 360,000 lbs. Copper Wirebars as per our contract CS-884. Under the terms of our contract payment is due in 10 days, however, pursuant to our verbal agreement that because your line of credit is above 1.5 million U.S.-dollars this payment must be received prior to release."

On April 14, 1980 Mr. Beggans sent to Laribee on behalf of NRTM two contracts (CS 887 and CS 888) based on forward pricing agreements on March 13 and March 19, and tendered delivery on a net cash basis at a New York Commodity Exchange warehouse. By letter of April 18, 1980, Mr. Rogge rejected the tender of copper on the terms contained in the letters of April 3 and April 14. As a consequence of a dramatic drop in the price of copper between March 20 and April 18, 1980, and NRTM's inability to cover its substantial hedge position by executing the deliveries of copper to Laribee at the prices previously negotiated for future deliveries, NRTM allegedly lost approximately $1,000,000, and Laribee allegedly saved an equivalent amount by later purchasing its copper from other sources at the then prevailing lower price.

Sometime after NRTM's general creditors approved the plan of voluntary liquidation in April 1980, Mr. Beggans, as liquidator, prepared a memorandum for the creditors setting forth details of the aforesaid contractual dispute and concluding with his opinion that NRTM had a claim against Laribee for breach of contract. The Beggans memorandum was also sent to Mr Rogge to give him an opportunity to prepare a responsive memorandum, which he did prepare, and which was sent by Mr. Beggans to the creditors for their consideration. O...