Narrative Opinion Summary
This case involves a breach of contract dispute where the plaintiffs, North American Foreign Trading Corporation and Unisonic Products Corporation, seek recovery from Direct Mail Specialist (DMS, Inc.) for a contract to supply blackjack games. The plaintiffs delivered part of the order, but DMS later requested a delay and then canceled the order. The plaintiffs sold the remaining goods at a loss and retained a deposit from DMS. The core legal issue revolves around the calculation of pre-judgment interest under New York law, specifically CPLR § 5001, and whether interest should apply to the full contract price or only to the net damages after resale proceeds. The plaintiffs argue for interest from the breach date, asserting their right to be restored to their original position under the Uniform Commercial Code. Conversely, the defendant claims interest should apply only to the net damages. The court examines relevant case law and UCC provisions to determine if the plaintiffs' three-year delay in resale was reasonable and how damages should be calculated. The outcome of these determinations will impact the final award of damages and interest.
Legal Issues Addressed
Interest as Incidental Damagessubscribe to see similar legal issues
Application: Interest on the contract price is recoverable from the breach date until reasonable resale, but statutory interest would not apply to incidental losses to avoid double recovery.
Reasoning: The court noted that plaintiffs could claim interest as incidental damages for bank payments made due to the breach, and the time value of money could be recoverable.
Pre-judgment Interest under New York Lawsubscribe to see similar legal issues
Application: The court considers plaintiffs' request for pre-judgment interest at 9% from the breach date, applying CPLR § 5001, which allows interest on amounts awarded due to breach of contract, calculated from the earliest ascertainable date of the cause of action.
Reasoning: The court will apply New York law, specifically CPLR § 5001, which allows interest on amounts awarded due to breach of contract, calculated from the earliest ascertainable date of the cause of action.
Reasonableness of Resale Periodsubscribe to see similar legal issues
Application: The court must determine the reasonableness of the three-year delay in resale, which could affect the calculation of damages and interest.
Reasoning: The reasonableness of the three-year delay before resale is a matter for trial determination.
Seller's Remedies for Breach under UCCsubscribe to see similar legal issues
Application: The plaintiffs argue for damages under UCC provisions, claiming full contract price minus resale proceeds, with the intent to restore to the position had there been no breach.
Reasoning: Under New York's UCC, sellers can calculate damages in various ways based on circumstances, including reselling the goods and recovering the difference between the contract and resale prices, with a requirement to mitigate damages through resale if feasible.