H.Daya Int'l Co. v. Arazi
348 F. Supp. 3d 304
S.D. Ill.2018Background
- H.Daya (Hong Kong seller) invoiced Arazi/Princess, Inc. for six apparel shipments between Oct 2014 and Apr 2015, totaling roughly $616k–$629k. Invoices were on H.Daya letterhead and sent promptly.
- Princess, Inc. had been dissolved in 2010, but Arazi continued to operate under that name and ordered goods as Princess; Arazi met H.Daya in China and executed a personal guarantee on Dec 10, 2015 acknowledging $629,618.27 owed and promising payment in early 2016.
- Arazi repeatedly acknowledged the debt in WhatsApp messages and made payment promises; no significant payments were made by Defendants to H.Daya except two transfers totaling $15,980 from a corporate entity controlled by Arazi.
- H.Daya sued (Dec 22, 2016) under New York law for trade price (UCC 2-709(1)(a)), breach of contract, account stated, and unjust enrichment; H.Daya moved for summary judgment.
- The court found undisputed that contracts existed, goods were accepted and resold by Arazi, payment was not made, and Arazi personally guaranteed the debt despite Princess’ prior dissolution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Recover price for goods accepted (UCC 2-709(1)(a)) | H.Daya: invoices constitute merchant confirmation; goods were accepted and not paid for. | Arazi: plaintiff must first attempt resale; claim not ripe. | Granted — invoices and acceptance suffice under §2-709(1)(a); resale requirement inapplicable because buyer accepted and resold goods. |
| Breach of contract | H.Daya: valid contracts, performance, breach, damages. | Arazi: performance was impossible because third-party (National Stores) cancelled orders. | Granted — impossibility defense fails (no unforeseen, unguardable event). |
| Account stated | H.Daya: invoices, repeated acknowledgments, personal guarantee and partial payments establish account stated. | Arazi: verbally told plaintiff he would not pay due to cancellation (undated objection). | Granted — no timely, adequate objection; implied agreement established. |
| Personal liability of Arazi / joint & several liability | H.Daya: Arazi acted for dissolved corporation and personally guaranteed debt; seek judgment for agreed amount minus payments. | Defendants: (no effective contest of personal liability). | Granted — Arazi personally liable for $613,638.27 (guarantee amount minus $15,980), jointly and severally; prejudgment interest awarded; attorneys’ fees denied. |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden allocation) (movant must show absence of genuine dispute)
- Kel Kim Corp. v. Cent. Markets, Inc., 70 N.Y.2d 900 (impossibility defense limited to objectively impossible, unforeseen events)
- U.S. Naval Inst. v. Charter Commc'ns, Inc., 936 F.2d 692 (prevailing breach plaintiff entitled to prejudgment interest; no automatic right to attorneys’ fees)
- B & R Textile Corp. v. Domino Textiles Inc., 77 A.D.2d 539 (merchant invoice on letterhead can satisfy UCC §2-201(2) confirmation writing)
- Jim-Mar Corp. v. Aquatic Const., Ltd., 195 A.D.2d 868 (account stated defined as agreement on correctness of prior transactions)