United Brands Co. v. INTERMEDIATE CREDIT CORP., 75 Civ. 6034 (HFW).

• Decision Date: 26 May 1977
• Docket Number: No. 75 Civ. 6034 (HFW).,75 Civ. 6034 (HFW).
• Citation: 443 F. Supp. 44
• Parties: UNITED BRANDS COMPANY, Plaintiff, v. INTERMEDIATE CREDIT CORPORATION and Metals Holding Corporation, Defendants.
• Court: U.S. District Court — Southern District of New York

443 F. Supp. 44

UNITED BRANDS COMPANY, Plaintiff, v. INTERMEDIATE CREDIT CORPORATION and Metals Holding Corporation, Defendants.

No. 75 Civ. 6034 (HFW).

United States District Court, S. D. New York.

May 26, 1977.

Chadbourne, Parke, Whiteside & Wolff, New York City, for plaintiff; Donald I. Strauber, Richard J. Ney, New York City, of counsel.

Satterlee & Stephens, New York City by Henry J. Formon, Jr., John T. Schmidt, New York City, for Intermediate Credit Corp.

MEMORANDUM DECISION

WERKER, District Judge.

United Brands Company ("United") has moved for rehearing and reconsideration of its motion for summary judgment against Intermediate Credit Corporation which was denied on January 12, 1977. (My prior opinion has been reported at 426 F.Supp. 856.) The motion was filed on January 25, 1977, more than ten days after the court's original determination, and consequently is clearly untimely under Rule 9(m) of the General Rules for this court. Rule 59(a) of the Federal Rules of Civil Procedure, under which it purportedly is brought, also affords no basis for relief, for even if that rule applies to motions, see Ionian Shipping Company v. Tyson Shipping Co., 49 F.R.D. 334 (S.D.N.Y.1969), adequate cause for a rehearing has not been shown. So that there will be no uncertainty as the meaning of the court's earlier decision, however, United's motion for rehearing and reconsideration will be granted in the exercise of this court's discretion. See Zucker v. Sable, 426 F.Supp. 658, 663 (S.D.N.Y.1976). But, on rehearing the court only intends to address those "new" matters which have been raised in United's motion papers.

United argues, in essence, that even if the submission of financial reports fell within the exception to acceleration for matters relating to "payments of principal and interest," Metals Holding Corporation ("Metals") still was in default under other provisions of the June 26, 1973 agreement among the parties ("Agreement"). It is true, as United observes, that notwithstanding the exception to acceleration discussed in the court's earlier decision,¹ paragraph 8(d) of the Agreement goes on to provide that

in the event Metals fails to make payment of principal hereunder when due, it shall have the right upon the occasion of the first such default to cure such default by making payment within seven (7) days after notice by United of such occurrence of such event of default. Any subsequent non-payment shall not require notice nor shall Metals have the right to cure such default.

However, none of the notices relied upon by United is adequate for judgment to be awarded as a matter of law.

The Agreement states that notice to Metals will be deemed adequate if it is given to C. N. Bellm by registered or certified mail (return receipt requested) with a duplicate copy sent by telegram.

On July 15, 1975, Suzanne Chinn, Banking and Cash Manager for United, sent Leland Boren, president of the Avis Industrial Corporation, ("Avis") a letter in which she observed that "since the payment for the March quarter was due no later than May 15, 1975, we would appreciate your help in this matter." Chinn also asked that payment be sent to United's office in Boston. But it stretches credulity to suggest that this letter constitutes formal notice of an event of default since it fails to use that term and on its face appears not to have been sent in the manner contemplated by the parties.² Furthermore, in an affidavit made in support of the United summary judgment motion, Chinn states that the letter "requested" payment, not that it was intended to serve as notice of Metals' default.

Boren...