Under the Uniform Commercial Code, "[t]he obligation of the seller is to transfer and deliver and that of the buyer is to accept and pay in accordance with the contract." U.C.C. § 2-301.
The buyer's obligation to make payment is considered so important that even anti-trust statutes may not be pleaded in defense of an action for goods sold and delivered or services rendered, TKD Elecs. Corp. v. M & A Enters., 172 A.D.2d 603, 568 N.Y.S.2d 424 (1991). The rationale is expressed in X.L.O. Concrete Corp. v. Rivergate Corp., 83 N.Y.2d 513, 517-18, 611 N.Y.S.2d 786, 789 (1994):
"The interposition of antitrust defenses in contract actions is not favored (see, Kelly v. Kosuga, 358 U.S. 516, 518, 79 S.Ct. 429, 430-431, 3L.Ed.2d 475). The concern is that "successful interposition of antitrust defenses is too likely to enrich parties who reap the benefits of a contract and then seek to avoid the corresponding burdens" (Viacom Intl. v. Tandem Prods., 526 F.2d 593, 599). Nevertheless, antitrust defenses will be upheld in cases where a court's judgment would result in enforcement of the "precise conduct made unlawful by the Act" (Kelly v. Kosuga, 358 U.S. 516, 520, 79 S.Ct. 429, 432, supra; see, Kaiser Steel Corp. v. Mullins, 455 U.S. 72, 79, 102 S.Ct. 851, 857, 70 L.Ed.2d 833). Beyond that point, however, "courts are to be guided by the overriding general policy * * * 'of preventing people from getting other people's property for nothing when they purport to be buying it' " (Kelly, 358 U.S., at 520-521, 79 Sect., at 432, supra [quoting Continental Wall Paper Co. v. Voight & Sons Co., 212 U.S. 227, 271, 29 S.Ct. 280, 296, 53 L.Ed. 486] [Holmes, J., dissenting]).). Thus, a contract which is legal on its face and does not call for unlawful conduct in its performance is not voidable simply because it resulted from an antitrust conspiracy (see, Kelly, 358 U.S., at 521, 79 S.Ct., at 432, supra Connolly v. Union Sewer Pipe Co., 184 U.S. 540, 547-550, 22 S.Ct. 431, 434- 436, 46 L.Ed. 679; Viacom, 526 F.2d at 598, supra; but see, Continental Wall Paper, 212 U.S. 227, 29 S.Ct. 280, supra)."
In an action for goods sold and accepted, the practitioner can expect that the defendant-buyer will generally deny the allegations of the complaint. The defendant will raise various defenses and interpose counterclaims for breaches of warranties and damages. The defendant may demand a bill of particulars or propound interrogatories and request the production of documents. The defendant may also serve a notice to examine the plaintiff-seller before trial (EBT).
A motion for summary judgment allows the plaintiff-seller to obtain a judgment expeditiously and to avoid an appearance for an EBT or a trial. Summary judgment enables the Court "to deal with issues quickly; to get at the real substance of facts, about which there is no controversy which a judge would take seriously." [County Transp. Co. v. Maltbie, 191 Misc. 391, 393, 77 N.Y.S.2d 746, 747 (N.Y.Sup.Ct. 1948).] In Curry v. Mackenzie, 239 N.Y. 267, 270 (1925), Justice Benjamin Cardozo stated that, for the plaintiff to prevail on a summary judgment motion, "the court must be convinced that the issue is not genuine, but feigned, and that there is in truth nothing to be tried." Summary judgment prevents the defendant from utilizing its general denial, even in a verified answer, for the "mere purpose of delay frequently disastrous to honest creditors." [See General Inv. Co. v. Interborough R.T. Co., 235 N.Y. 133, 138 (1923)] "The purpose of...[summary judgment] was to enable a creditor speedily to obtain a judgment by preventing the interposition of unmeritorious defenses for purposes of delay." [Applebaum v. Gross, 117 Misc. 140, 148, 191 N.Y.S. 710, 715 (N.Y.Sup.Ct. 1921), aff'd, 200 A.D. 914, 192 N.Y.S. 913.]
A motion for summary judgment offers three distinct possibilities: (a) the defendant will not oppose the motion and it will be granted by default, or (b) the defendant's attorney will settle the action, usually on the eve of the motion for summary judgment;
Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316 (1985), states the first rule of a summary judgment motion:
"The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case (see, Zuckerman v City of New York, 49 NY2d 557, 562; Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404). Failure to make such showing requires denial of the motion, regardless of the sufficiency of the opposing papers (Matter of Redemption Church of Christ v Williams, 84 AD2d 648, 649; Greenberg v Manlon Realty, 43 AD2d 968, 969)."
The granting of a summary judgment motion "is the procedural equivalent of a trial." [Falk v. Goodman, 7 N.Y.2d 87, 91, 195 N.Y.S.2d 645, 647 (1959)] In order to grant the drastic remedy of summary judgment 'it must clearly appear that no material and triable issue of fact is presented...[since] issue-finding, rather than issue-determination, is the key...." [Sillman v. Twentieth Century-Fox Film Corp., 3 N.Y.2d 395, 404, 165 N.Y.S.2d 498, 505 (1957)] The testimony of the non-moving party must be accepted as true and a decision on the motion must be made on the version of the facts most favorable to that party, Strychalski v. Mekus, 54 A.D.2d 1068, 1069, 388 N.Y.S.2d 969, 971 (1976).
The memorandum of law that accompanies a motion for summary judgment in a goods sold and accepted case with only one defense would state the facts and law, as follows:
FACTS
Plaintiff moves for summary judgment in this action to recover $7,908.60 for goods sold and accepted.
THE LAW
PLAINTIFF IS ENTITLED TO SUMMARY JUDGMENT AS A MATTER OF LAW
Plaintiff moves for summary judgment on its cause of action for goods sold in the sum of $7,908.60.
The defendant's answer consists of a general denial and an affirmative defense.
Between July 22, 1999, and August 26, 1999, plaintiff made thirty-four (34) sales of grocery products to defendant totaling $8,160.75. Exhibit "A" are plaintiff's thirty-four (34) in-voices/delivery receipts. After credits of $252.15 are deducted (Exhibit "B"), the balance due is $7,908.60 (Exhibit "C"). The moving affidavit and the documentary evidence is the necessary proof in admissible form sufficient to establish plaintiff's prima facie case, Friends of Animals v. Associated Fur Mfrs., 46 N.Y.2d 1065, 1067 (1979).
To defeat a summary judgment motion, defendant must produce evidentiary proof in admissible form, Id. at 1067, 1068; or as Di Sabato v. Soffes, 9 A.D.2d 297, 301 (1959), held, a defendant who opposes a motion for summary judgment must assemble, lay bare and reveal its proofs, in order to show that it can establish its defense at trial.
The defendant cannot defeat this summary judgment motion by the general denial contained in its answer, Iandoli v. Lange, 35 A.D.2d 793 (1970); nor can the defendant defeat this summary judgment motion by repeating the allegations contained in its answer, verified or unverified, Indig v. Finkelstein, 23 N.Y.2d 728, 729 (1968); nor can the defendant defeat this summary judgment motion by bald conclusory assertions, even if believable, Capri Jewelry, Inc. v. Chayavi, 117 A.D.2d 464, 467-68 (1986).
The first defense is that the complaint fails to state a cause of action. The complaint in this action states an adequate cause of action for an endorsed complaint for goods sold in the Civil Court, City Civ.Ct.Act §§ 902, 903.
A summary judgment memorandum of law in an action based upon checks given in payment for goods sold and accepted, where there are multiple defenses, would state the facts and law, as follows:
FACTS
Plaintiff sued the defendant to recover the sum of $70,000.00 pleading seven causes of action upon seven checks made by the defendant to the plaintiff. Each check is in the sum of $10,000.00 and dated between October 15, 1997, and November 28, 1997.
The seven checks were part of a series of eight checks of $10,000.00 each, totaling $80,000.00, given in payment for a shipment of $79,674,00 worth of feta cheese that was shipped by plaintiff in Greece to defendant in Queens, New York, and received by defendant on September 12, 1997.
The first $10,000.00 check cleared defendant's bank. The seven remaining checks of $10,000.00 each were returned by defendant's bank for insufficient funds after presentation on the due dates.
On February 12, 1998, plaintiff received a letter from defendant enclosing a new series of twenty checks, each in the sum of $3,000.00, for a total of $60,000.00. The letter stated that defendant was having a problem with the feta cheese and requested a deduction of $10,000.00 from the unpaid balance of due on the seven checks of $70,000.00.
THE LAW
PLAINTIFF IS ENTITLED TO SUMMARY JUDGMENT AS A MATTER OF LAW
Plaintiff has made out its prima facie case by submission of the seven unpaid checks and the supporting affidavit of the plaintiff, 812 Broadway Enters., Inc. v. Stephen Mallory Assocs., Inc., 210 A.D.2d 30, 620 N.Y.S.2d 939 (1994).
The defendant admits, in its amended answer, that it delivered the seven checks to the plaintiff. Plaintiff's production of the seven checks entitles the plaintiff to recover on the checks, unless the defendant can establish a defense, Uniform Commercial Code (U.C.C.) §3-307(1)(2).
3-307. Burden of Establishing Signatures, Defenses and Due Course.
- Unless specifically denied in the pleadings each signature on an instrument is admitted. When the effectiveness of a signature is put in issue.
- the burden of establishing it is on the party claiming under the signature; but
- the signature is presumed to be genuine or authorized except where the action is to enforce the obligation of a purported signer who has died or become incompetent before proof is required.
- When signatures are admitted or established, production of the instrument entitles a holder to recover on it unless the defendant establishes a defense.
- After it is shown that a defense exists a person claiming the rights of a holder in due course has the burden of establishing that he or some person under whom he claims is in all respects a holder in due course.
The defendant raises four affirmative defenses in its amended answer.
The first defense is that $10,000.00 was paid towards the purchase price of the goods. This is true. This payment left $70,000.00 due upon the seven unpaid checks.
The second defense is that the defendant notified plaintiff in writing regarding $25,000.00 worth of unmerchantable cheese "after defendant's customers returned the products."
The notice that plaintiff received was defendant's letter of dated February 9, 1998. It enclosed a new series of twenty $3,000.00 checks with a request for a $10,000.00 deduction for problems with the cheese from the $70,00.00 remaining unpaid.
U.C.C. § 2-607(1) requires the buyer to pay at the contract rate for any goods accepted; unless, pursuant to U.C.C. § 2-607(3)(a), the buyer notifies the seller of a breach within a reasonable time after he discovers or should have discovered any breach. U.C.C. § 2-607(4) places the burden on the buyer to establish any breach with respect to goods accepted.
UCC § 2-607 states:
- The buyer must pay at the contract rate for any goods accepted.
- Acceptance of goods by the buyer precludes rejection of the goods accepted and if made with knowledge of a non-conformity cannot be revoked because of it unless the acceptance was on the reasonable assumption that the non-conformity would be seasonably cured but acceptance does not of itself impair any other remedy provided by this Article for non-conformity.
- Where a tender has been accepted
- the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy; and
- if the claim is one for infringement or the like (subsection (3) of Section 2-312) and the buyer is sued as a result of such a breach he must so notify the seller within a reasonable time after he receives notice of the litigation or be barred from any remedy over for liability established by the litigation.
- The burden is on the buyer to establish any breach with respect to the goods accepted.
2-608. Revocation of Acceptance in Whole or in Part
- The buyer may revoke his acceptance of a lot or commercial unit whose non- conformity substantially impairs its value to him if he has accepted it
- on the reasonable assumption that its non-conformity would be cured and it has not been seasonably cured; or
- without discovery of such non-conformity if his acceptance was reasonably induced either by the difficulty of discovery before acceptance or by the seller's assurances.
- Revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by their own defects. It is not effective until the buyer notifies the seller of it.
- A buyer who so revokes has the same rights and duties with regard to the goods involved as if he had rejected them.
Cheese is a perishable commodity that can be inspected upon delivery and its quality ascertained immediately, Pease v. Copp, 67 Barb. 132 (1860), and Maggioros v. Edson Bros., 164 N.Y.S. 377, 379 (N.Y.Sup.Ct. 1917). The defendant in the instant action could have ascertained any alleged defect in the cheese immediately upon receipt on or about September 12, 1997, simply by opening up the barrels or cartons and examining the cheese, see DiDomenico Packaging Corp. v. Nails Again, Inc., 139 Misc. 2d 525, 526, 527 N.Y.S.2d 676, 677 (N.Y.Civ.Ct. 1988).
The defendant did nothing to notify the plaintiff of an alleged defect in the goods until February 8, 1998, five months after receipt of the cheese and two months after the last of the seven checks sued upon had been returned unpaid for insufficient funds. A five-month lapse of time is unreasonable, International Paper Co. v. Margrove Inc., 75 Misc. 2d 763, 765, 348 N.Y.S.2d 916, 919 (N.Y.Sup.Ct. 1973).
The defendant's delay in giving the plaintiff notice of the alleged defect in the cheese prevents the defendant from raising a defense of unmerchantability and bars the defendant from raising a triable issue of fact on this motion for summary judgment, see G. & D. Poultry Farms, Inc. v. Long Island Butter & Egg Co., 33 A.D.2d 685, 306 N.Y.S.2d 243 (1969), and Mount Vernon Mills, Inc. v. Murphy Textile Mills, 148 A.D.2d 389, 539 N.Y.S.2d 334 (1989).
The third affirmative defense that the plaintiff is an unauthorized foreign corporation and may not maintain this action is not tenable. There is a presumption that a foreign corporation conducts its business in the State of its organization, Ascher Corp. v. Horvath, 35 Misc. 2d 375, 377, 231 N.Y.S.2d 676, 678 (N.Y.Sup.Ct. 1962). This plaintiff does not maintain any offices or warehouses in New York; has no New York bank accounts and send no officers or employers regularly into the State to perform or oversee the sale of goods. The corporate activities must be more than the occasional visits of plaintiff's officer to New York City. The burden of proof is on defendant to show that the plaintiff is doing business in the State of New York, Dixie Dinettes, Inc. v. Schaller's Furniture, 71 Misc. 2d 102, 103, 335 N.Y.S.2d 632, 635 (N.Y.Civ.Ct. 1972).
The fourth defense is that the plaintiff agreed to credit the defendant with any returned cheese for which reason the defendant paid $10,000.00 on account. The plaintiff's President has denied this assertion. An offer to return goods must be made within a reasonable time. The undisputed facts are that the defendant received the cheese on September 12, 1997, but made no inspection of this perishable commodity at that time. This is not a case where actual use of the product is necessary to disclose a defect, or where the defendant would be dependent upon reports from its customers to ascertain a defect. Any defect could have been ascertained by inspection upon arrival of the cheese in September 1997. The defendant's failure to inspect the cheese immediately upon its receipt and to request a return at that time bars the defendant from revoking its acceptance of the cheese and relying upon an alleged offer of return, see House of Price v. Kliegman Bros., 126 N.Y.S.2d 764, 767-769 (N.Y.Sup.Ct. 1953), aff'd, 283 A.D. 1037, 131 N.Y.S.2d. 875 (1954).
To defeat a summary judgment motion, a defendant must assemble, lay bare and reveal its proofs, in order to show that it can establish its defense at trial, Di Sabato v. Soffes, 9 A.D.2d 297, 301, 193 N.Y.S.2d 184, 189 (1959).
The defendant cannot defeat this summary judgment motion by the general denial contained in its answer, Iandoli v. Lange, 35 A.D.2d 793, 315 N.Y.S.2d 752 (1970); nor by repeating the allegations contained in its answer, Indig v. Finkelstein, 23 N.Y.2d 728, 296 N.Y.S.2d 370 (1968); nor by bald conclusory assertions, even if believable, Capri Jewelry, Inc. v. Chayavi, 117 A.D.2d 464, 468, 503 N.Y.S.2d 370, 373 (1986).
The defenses raised by the defendant are neither genuine nor substantial and are insufficient to defeat plaintiff's motion for summary judgment, Hanrog Distributing Corp. v. Hanioti, 10 Misc. 2d 659, 54 N.Y.S.2d 500 (N.Y.Sup.Ct. 1945).