Rocheux Int'l of N.J. Inc. v. U.S. Merchants Financial Group Inc.

Citation741 F.Supp.2d 651
Decision Date29 September 2010
Docket NumberCivil No. 06–6147.
PartiesROCHEUX INTERNATIONAL OF NEW JERSEY, INC., Plaintiff,v.U.S. MERCHANTS FINANCIAL GROUP, INC., U.S. Merchants, Inc. (a division of U.S. Merchants Financial Group, Inc., and/or d/b/a U.S. Merchants), The Merchant of Tennis Inc., and Diversified Repackaging Corp., Defendants.
CourtUnited States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey

741 F.Supp.2d 651

U.S. MERCHANTS FINANCIAL GROUP, INC., U.S. Merchants, Inc. (a division of U.S. Merchants Financial Group, Inc., and/or d/b/a U.S. Merchants), The Merchant of Tennis Inc., and Diversified Repackaging Corp., Defendants.

Civil No. 06–6147.

United States District Court, D. New Jersey.

Sept. 29, 2010.

[741 F.Supp.2d 655]

Brian William McAlindin, Edward B. Kasselman, Bathgate, Wegener & Wolf, P.C., Lakewood, NJ, Nicholas R. Caputo, Robinson Brog Leinwand Greene Genovese & Gluck P.C., South Kearny, NJ, for Defendants.Brian J. McMahon, Gibbons, PC, Newark, NJ, for Defendants.

BROWN, Chief Judge:

This matter comes before the Court upon cross-motions for summary judgment. (Doc. Nos. 88, 92.) Defendants' cross-motion also seeks to redesignate affirmative defenses as counterclaims pursuant to Federal Rule of Civil Procedure 8(c)(2). Plaintiff also moves in limine to exclude certain defense expert witnesses pursuant to Federal Rule of Evidence 702. (Doc. No. 87.) This Court heard oral argument on these motions on September 16, 2010. For the following reasons, the Court will grant Plaintiff's motion in part without prejudice and deny Defendants' motion. The Court will allow Defendants to redesignate their affirmative defenses, but the Court will limit these counterclaims to the 2006 deliveries. The Court will also deny Plaintiff's motion in limine without prejudice and permit Plaintiff to refile in light of this Court's ruling with regard to the other motions.


This case involves a contract dispute between Plaintiff Rocheux International of New Jersey, Inc. (“Rocheux”), a distributor of raw plastic materials, and Defendants U.S. Merchants Financial Group, Inc., U.S. Merchants Inc. (d/b/a U.S. Merchants or The Merchant of Tennis, Inc.), and Diversified Repackaging Corporation, who are California-based providers of plastic product-packaging services. The dispute concerns large shipments of raw plastics delivered by Rocheux to Defendants between January and June 2006. For purposes of the parties' cross-motions for summary judgment, the Court draws all reasonable inferences in the light most favorable to the respective non-moving

[741 F.Supp.2d 656]

party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

A. Undisputed Facts

The Court begins with the uncontested facts. The parties agree that Defendants ordered large quantities of raw PVC and APET plastic from Rocheux in 2005 and 2006, as demonstrated by purchase orders 21920, 22190, 22897, P13295, P13300, P13302, 20188, 20491, 20564, 20583, and 22488 (hereinafter “2005–2006 purchase orders”). (Pl.'s 56.1 Statement ¶ 1; Defs.' 56.1 Resp. ¶ 1.) According to the parties' descriptions, the plastic was ordered by the pound and delivered in rolled-up form as more than 7,000 rolls of plastic the size of garbage cans. (Flood Decl. ¶¶ 3, 9; see also Pl.'s Br. at 1; Defs.' Resp. Br. at 6.) There is no dispute that Rocheux delivered to Defendants some of the plastic products related to the 2005–2006 purchase orders between January 2006 and June 2006 (hereinafter “2006 deliveries”), and that Rocheux sent Defendants invoices for these deliveries. ( See Pl.'s 56.1 Statement ¶¶ 2, 6; Defs.' 56.1 Resp. ¶¶ 2, 6.) It is undisputed that Defendants did not pay for most if not all of the 2006 deliveries and that Defendants no longer possess the goods from the 2006 deliveries. (Pl.'s 56.1 Statement ¶¶ 8, 12; Defs.' 56.1 Resp. ¶¶ 8, 12.) According to Plaintiff, the outstanding balance for the 2006 deliveries is $2,116,571.76. (Pl.'s 56.1 Statement ¶ 9; Stephanoff Decl. ¶ 32 & Ex. A; Defs.' 56.1 Resp. ¶ 9.)

In addition to the 2006 deliveries, it appears that Rocheux delivered some of the goods related to the 2005–2006 purchase orders to a local warehouse so that Defendants would be able to access the goods as needed on short notice. These deliveries to the warehouse (hereinafter “warehouse goods”) appear to have taken place between November 2005 and August 2006. (Pl.'s 56.1 Statement ¶¶ 262, 266, 270, 274, 277, 280, 283, 286, 289, 292, 295, 298, 301, 305, 308, 311, 314, 317, 320, 323, 326, 329, 332, 335, 338, 341, 344, 347, 350, 353; McRavin Decl. ¶¶ 275, 279, 283, 287, 290, 293, 296, 299, 302, 305, 308, 311, 314, 318, 321, 324, 327, 330, 333, 336, 339, 342, 345, 348, 351, 354, 357, 360, 363, 366; Defs.' Resp. ¶¶ 262, 266, 270, 274, 277, 280, 283, 286, 289, 292, 295, 298, 301, 305, 308, 311, 314, 317, 320, 323, 326, 329, 332, 335, 338, 341, 344, 347, 350, 353.) According to Rocheux Vice President and Chief Operating Officer Robert Stephanoff, the original purchase price for the warehouse goods was $1,582,282.31. (Stephanoff Decl. ¶ 28; see also Defs.' 56.1 Statement ¶ 3.) On September 24, 2006, Rocheux President Wendy Steed sent an email to Defendants' President and CEO Jeffrie Green requesting the delinquent payments for the 2006 deliveries and the warehouse goods by September 29, 2009, and notifying Defendants that their failure to pay would result in Rocheux selling the warehouse goods and seeking any deficiency from Defendants pursuant to UCC § 2–706. (Steed Decl. ¶ 14 & Ex. F.) Rocheux incurred $18,562.36 in freight charges and $56,622.67 in additional warehouse charges in attempting to re-sell the warehouse goods, and Rocheux eventually sold the warehouse goods to third parties for $1,194,582.68, resulting in a deficiency of $387,699.70 compared to the original purchase price for the warehouse goods. (Pl.'s 56.1 Statement ¶¶ 18–19; Stephanoff Decl. ¶¶ 28–29; Defs.' 56.1 Resp. ¶¶ 18–19.)

B. Disputed Facts

Although the parties do not contest the basic facts surrounding the 2006 deliveries and the warehouse goods, Defendants contest their liability for both, contending that the 2006 deliveries contained substantial amounts of unusable and/or nonconforming materials, and that Rocheux breached its contracts with Defendants when it resold

[741 F.Supp.2d 657]

the warehoused goods without Defendants' consent. With regard to the 2006 deliveries, Defendants contend that they either rejected or revoked acceptance of the goods within a reasonable time after discovering latent defects in the plastic. According to Defendants' Thermoforming Manager Nick Margaros, the plastic's medium—garbage can-sized rolls of plastic, delivered on large pallets—made it “impossible” to discover anything but external defects at the time of delivery. Rather, internal defects would only be discovered once Defendants used machines to unwind the plastic from the rolls and thermoform the plastic film into individual packaging parts. (Margaros Decl. ¶¶ 6–8.) Such flaws would manifest themselves in the thermoformed products as discoloration, flow marks, waviness, pitting, and scratches. ( Id. ¶ 8.) Packaging products containing these flaws could not be sold to Defendants' customers, and thus had to be sold as scrap. ( Id.) Other latent flaws, such as products' sealing capabilities, could not be discovered until later in the manufacturing process. ( Id.) Mr. Margaros attests that Defendants discovered the above defects in a “substantial portion” of the plastic Rocheux sold to Defendants between 2000 and 2006 after processing the materials in the above fashion, and that the goods made with this plastic were useless for anything other than scrap. ( Id. ¶ 9.) Catalin Oprisan, who works for Defendants' accounting department, also states that Mr. Margaros notified his department of problems with Rocheux's materials on “a number of occasions between 2000 and the end of 2006.” (Oprisan Decl. ¶ 4.) Although Defendants do not identify specific conversations Mr. Margaros had with Rocheux about problematic shipments during this time period, Mr. Margaros asserts that he contacted Rocheux representatives—specifically Allison Tuan Lee and Michael Flood—whenever “there was a quality issue to report,” and that “[o]n each such occasion, [he] explained to [Rocheux] the particular defects Defendants were experiencing, that Defendants could not use the defective material, and that Defendants did not want the unusable plastic.” ( Id. ¶ 11.) Mr. Margaros further generally asserts that, during the course of the parties' business relationship, Defendants set aside the defective plastic for a brief period before disposal so that Rocheux could inspect the product, but that Rocheux typically did not come for inspection. (Margaros Decl. ¶ 11 (“On each such occasion.... I asked [Rocheux] to come ... to look at the defective and nonconforming Rocheux plastic. I also told them that the material would be set aside ... for a short time in case they wanted to look at it. On many occasions they said [a Rocheux representative] would come by and look at the plastic, but he only came by on two or three occasions and generally did not do so.”).) Mr. Margaros also states that, when Rocheux did not come to inspect goods, Defendants sold the defective goods as scrap. ( See id.) He further contends that Rocheux representatives did not provide instructions regarding the defective materials, but that Rocheux “always and repeatedly assured that Defendants would receive credits to their account for any and all defective and/or nonconforming material.” ( Id. ¶¶ 11–12.)

For its part, Rocheux claims that it was not notified of problems with the 2006 deliveries until its president received an email from Defendants' president on September 6, 2006. (Steed Decl. Ex. D (Sept. 6, 2006 email from Jeffrie Green to Wendy Steed) (indicating that “there have been some problems with the materials which Rocheux supplied,” and inquiring whether “[Rocheux's] other customers encountered sealing problems”).) Prior to the September 6 email, Rocheux claims that Defendants had generally acknowledged that they owed payments for the 2006 deliveries.

[741 F.Supp.2d 658]

Rocheux's sales representative Michael Flood, who handled...

To continue reading

Request your trial
24 cases
  • Newark Bay Cogeneration P'ship, LP v. ETS Power Grp., Civil Action 11-2441 (ES) (CLW)
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • September 28, 2012
    ...nonassenting party has the burden of proving surprise or hardship." Rocheux Intern. Of N.J., Inc. v. U.S. Merchants Fin. Group, Inc., 741 F.Supp.2d 651, 682 (D.N.J. 2010) (quoting American Ins. Co. v. El Paso Pipe & Supply Co., 978 F.2d 1185, 1190 n.9 (10th Cir. 1992)). See Bayway Ref. Co. ......
  • ICM Controls Corp. v. Honeywell Int'l Inc.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court of Northern District of New York
    • August 9, 2021
    ...[p]laintiff with any notice of the proposed counterclaims, making Rule 8(c)(2) inapplicable"); Rocheux Int'l of N.J., Inc. v. U.S. Merchs. Fin. Grp., Inc., 741 F. Supp. 2d 651, 660 (D.N.J. 2010) ("The question before the [c]ourt, then, is whether [d]efendants’ proposed modification redresse......
  • Piazza v. Pac. Mar. Indus. Corp. (In re George G. Sharp)
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York
    • May 25, 2022
    ... In re GEORGE G. SHARP, INC., Debtor. DEBORAH J. PIAZZA, as Chapter 7 ... See,. e.g. , Pirinate Consulting Group, LLC v. Kadant. Solutions Division (In re ... assurance" under this provision. Rocheux Int'l. of N.J., Inc. v. U.S. Merchants Fin. ... contingent "success fees" under financial advisory. contracts constituted the payment ......
  • Bourdeau Bros., Inc. v. Boissonneault Family Farm, Inc.
    • United States
    • United States State Supreme Court of Vermont
    • May 8, 2020 supported by a factual analysis of the particular case—is the better-reasoned approach. See Rocheux Int'l of N.J., Inc. v. U.S. Merchs. Fin. Grp., Inc., 741 F. Supp. 2d 651, 686 (D.N.J. 2010) (criticizing Herzog and Johnson Tire ...
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT