Scientific Components v. Isis Surface Mounting
| Decision Date | 21 March 2008 |
| Docket Number | No. 02 CV 5426 (DLI) (CLP).,02 CV 5426 (DLI) (CLP). |
| Citation | 539 F.Supp.2d 653 |
| Parties | SCIENTIFIC COMPONENTS CORPORATION d/b/a Mini-Circuits Laboratory, Plaintiff, v. ISIS SURFACE MOUNTING, INC., Defendant. |
| Court | U.S. District Court — Eastern District of New York |
Gary Ettelman, Mark S. Pomerantz, Ettelman & Hochheiser, P.C., Garden City, NY, for Plaintiff.
Bradley Maclean Wilson, Nowell Amoroso Klein Bierman, P.A., Hackensack, NJ, for Defendant.
Plaintiff Scientific Components Corporation, d/b/a Mini-Circuits Laboratory ("Mini-Circuits" or "Plaintiff") brings this breach of contract action against defendant ISIS Surface Mounting, Inc. ("ISIS" or "Defendant"), alleging that Defendant repudiated the contract between the parties by cancelling orders it had placed with Plaintiff. Plaintiff now moves for summary judgment finding Defendant liable for breach of contract and awarding Plaintiff damages, as a lost-volume seller, in the amount of $382,773.31, plus interest and attorneys' fees. Defendant claims that no contract existed between the parties and that, in any event, Plaintiff is not a lost-volume seller and is not entitled to any damages. Defendant cross-moves for summary judgment dismissing this action.
The court finds that a contract existed between the parties and that Defendant breached the contract. However, as described below, Plaintiff does not qualify as a lost-volume seller. Accordingly, Plaintiff's motion for summary judgment is granted with respect to the issue of breach of contract liability but not with respect to Plaintiff's damages claim. Defendant's motion is denied. The calculation of damages is referred to United States Magistrate Judge Cheryl L. Pollak.
Mini-Circuits is a New York corporation that manufactures and sells electronic components primarily used in the wireless communications industry. (Compl. ¶¶ 1, 7.) Proxim Corporation ("Proxim"), a Delaware corporation, is a manufacturer of wireless networking equipment and is the successor-in-interest to Western Multiplex Corporation ("Western Multiplex").1 (Compl. ¶¶ 2-3, 8.) ISIS is a California corporation in the business of manufacturing electronic equipment. (Compl. ¶¶ 4, 9.)
The following facts are undisputed unless otherwise indicated. Sometime during or prior to January 1999, Western Multiplex engaged ISIS to manufacture component parts for electronic equipment. (Def.'s Mem. 1.) Subsequently, Western Multiplex contacted Mini-Circuits and requested that Mini-Circuits sell electronic components to ISIS and extend any established pricing agreements and volume discounts to ISIS. (Def.'s 56.1 ¶ 1.) Starting 1999 until December 2000 or later, ISIS placed numerous orders for the purchase of electronic components from Mini-Circuits. (Def.'s 56.1 ¶ 3; Pl.'s Resp. 56.1 ¶ 3; Pl.'s 56.1 ¶ 2.)
To place an order, ISIS submitted to Mini-Circuits purchase order forms listing the items ordered, the quantity, the price, and the anticipated delivery date. (See Pl.'s 56.1 Ex. D.) In addition, each purchase order form contained the following language displayed in all-capital letters: "ISIS RESERVES THE RIGHT TO CHANGE THIS PO IN ITS ENTIRETY OR IN PART, WITHIN 30 CALENDER [sic] DAYS [sic] NOTICE WITH NO LIABILITY TO ISIS." (See Pl.'s 56.1 Ex. D.) In response to ISIS' orders, Mini-Circuits sent acknowledgment forms listing the items ordered, the quantity, the price, the shipment method, and the delivery date. (See Pl.'s 56.1 Ex. D.) Each acknowledgment form also stated in all-capital letters: "ACCEPTANCE OF YOUR COMPANY'S ORDER IS EXPRESSLY MADE CONDITIONAL ON YOUR COMPANY'S ASSENT TO THE TERMS AND CONDITIONS ON THE FACE AND REVERSE SIDE OF THIS ACKNOWLEDGMENT; THESE TERMS AND CONDITIONS ARE ALSO CONTAINED ON THE REVERSE SIDE OF MINI-CIRCUITS' INVOICE." (See Pl.'s 56.1 Ex. D.) The relevant disputed term contained on the reverse side of the acknowledgment form stated that, (Pomerantz Decl. Ex. 4 ¶ 4(c).) Paragraph seven of Mini-Circuits' terms and conditions permitted the purchaser to cancel only in the event of excessive delay. (Pomerantz Decl. Ex. 4.) ISIS never expressly assented to the terms and conditions set forth in Mini-Circuits' acknowledgment forms. (See Def.'s 56.1 ¶ 9.)
On March 28, 2001, ISIS cancelled all of its open orders with Mini-Circuits, stating that "Western Multiplex has cancelled with us so we have no requirements." (Def.'s Ex. 11.) Plaintiff alleges that the agreed-upon price of the items Defendant cancelled (the "cancelled items") was $817,101.16. (Compl. ¶ 14.) The components ISIS cancelled were standard catalogue items. (Def.'s 56.1 ¶ 16.) The items manufactured for ISIS bore identifying "run numbers but were not segregated from other similar parts." (Def.'s 56.1 ¶¶ 19, 21.)
Starting March 28, 2001, Mini-Circuits re-sold some portion of the cancelled components to Pemstar and SMTC, subcontractors engaged by Western Multiplex for the same project for which ISIS had previously been engaged. (See Def.'s 56.1 ¶¶ 23-25; Def.'s Exs. 6, 8, 9.) ISIS also claims that, after its March 28 cancellation, it re-scheduled delivery of $162,43.16 of the cancelled items. (Def.'s 56.1 ¶ 20.) In addition, Mini-Circuits purportedly re-sold a portion of the cancelled components directly to Western Multiplex and other third parties. (See Def.'s 56.1 ¶ 28; Def.'s Exs. 14, 17.) However, Mini-Circuits claims that, despite reasonable efforts,2 it was unable to re-sell some of the cancelled items. (See Pl.'s 56.1 ¶ 40; Pomerantz Decl. Ex. 5.) Mini-Circuits did not credit any re-sales or re-scheduled deliveries against the amount it claimed ISIS owed. (Def.'s 56.1 ¶¶ 21, 27.)
Dispute over cancellation charges ensued. (See Def.'s 56.1 ¶ 31; Def.'s Exs. 3, 10.) On January 21, 2002, Lelsey Barretta of ISIS sent an electronic mail ("e-mail") to "Kevin" of Mini-Circuits, with a carbon copy to others, objecting to Mini-Circuits' most recent calculation of the cancellation charges. She wrote,
As we have stated since the beginning of this ordeal, ISIS PO's clearly state that we can revise or cancel our orders outside of standard lead time with NO liability to ISIS. In addition all of the parts 'we canceled are standard catalog items, therefore not NC NR. When we originally received your cancellation charges they were approximately $313k, now you have added almost $500k.? This is not acceptable. We gave you a spreadsheet indicating the corrections that needed to be made to the original charges, bringing the total to $221,134.08. As requested by ISIS and Western Multiplex, the orders received from Pemstar and SMTC were to be deducted from the orders we canceled. This did not happen. We are working on resolving the remaining issues with Western, but we need realistic numbers from our suppliers. Please review your information and send me a number we can work with.
(Pl.'s 56.1 Ex. B; see also Pomerantz Decl. Ex. 3.)
On October 8, 2002, Mini-Circuits filed the instant action. Mini-Circuits now moves for summary judgment, and ISIS cross-moves for summary judgment.
Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file; together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. Civ. P. 56(c). The court must view all facts in the light most favorable to the nonmoving party, but "only if there is a `genuine' dispute as to those facts." Scott v. Harris, 550 U.S. ___, 127 S.Ct. 1769, 1776, 167 L.Ed.2d 686 (2007). "When opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment." Id. at 1776.
A genuine issue of material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). However, the nonmoving, party may not rely on "[c]onclusory allegations, conjecture, and speculation," Kerzer v. Kingly Mfg., 156 F.3d 396, 400 (2d Cir.1998), and must affirmatively "set forth specific facts showing that there is a genuine issue for trial." FED. R. Civ. P. 56(e). "When no rational jury could find in favor of the nonmoving party because the evidence to support its case is so slight, there is, no genuine issue of material fact and a grant of summary judgment is proper." Gallo v. Prudential Residential Servs., Ltd. P'ship., 22 F.3d 1219, 1224 (2d Cir.1994) (citation omitted).
The first issue is whether a contract existed between ISIS and Mini-Circuits. ISIS claims that no contract existed, pursuant to section 2-207(1) of the Uniform. Commercial Code ("U.C.C. § 2-207"), and Mini-Circuits, unsurprisingly, argues the contrary, contending that a contract existed based on the parties' conduct.
The court holds that an enforceable contract existed between ISIS and Mini-Circuits. U.C.C. § 2-207(1) states that
[a] definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
In this case, Mini-Circuits' acknowledgment forms set forth additional and/or different terms and,...
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