Intertex Trading Corp. v. Ixtaccihuatl S.A. De CV
754 F. Supp. 2d 610
S.D.N.Y.2010Background
- Intertex acted as a textile broker and intermediary, earning commissions on deals brokered between U.S. buyers and the Defendants.
- Intertex alleges a Commission Agreement with Ixtaccihuatl and Quiltex granting a 3% commission on Dan River sales, terminable at will by any party.
- From 2002 to 2006 the Defendants placed only one Dan River order; Intertex received its commission for that sale in 2003.
- Intertex later learned the Defendants conducted substantial Dan River business from 2002 to 2007 and did not pay Intertex's commissions.
- Intertex seeks to enforce the Commission Agreement in a federal action removed from state court, asserting breach of contract and related claims.
- The court concludes the Commission Agreement could be performed within one year but is a broker's agreement barred by the statute of frauds under section 5-701(a)(10).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 5-701(a)(1) bars enforcement | Intertex argues the agreement could be performed within one year. | Defendants contend the agreement is not performable within a year due to indefinite duration. | Not barred; could be performed within one year. |
| Whether 5-701(a)(10) bars enforcement as a broker's agreement | Intertex provided know-how/know-who as a broker and arranger of Dan River deal(s). | Agency role does not trigger the statute or is not a finder/broker claim. | Barred; constitutes a broker's agreement to procure a business opportunity. |
| Whether unjust enrichment claim is permissible | Unjust enrichment could avoid the writing requirement. | Courts bar unjust enrichment to circumvent the statute of frauds. | Precluded; cannot circumvent the statute of frauds via unjust enrichment. |
Key Cases Cited
- Freedman v. Chemical Const. Corp., 43 N.Y.2d 260 (N.Y. 1977) (statute of frauds aims to prevent mischief by requiring writing for certain broker agreements)
- Pace v. Perk, 81 A.D.2d 444 (N.Y. App. Div. 2d 1981) (performance within one year governs 5-701(a)(1) applicability)
- Rifkind v. Web IV Music, Inc., 67 Misc. 2d 26 (N.Y.Sup. Ct. 1971) (indefinite duration contracts may be performable within a year)
- McCollester v. Chisholm, 104 A.D.2d 361 (N.Y.S.2d 1984) (service contracts of indefinite duration analyzed for 1-year performance window)
- Zaveri v. Rosy Blue, Inc., 4 A.D.3d 146 (N.Y. App. Div. 1st Dept. 2004) (commission payables after termination can be void under 5-701(a)(1)(10))
- Goldmark Assocs., Inc. v. Technical Erectors, Inc., 1990 WL 89369 (S.D.N.Y. 1990) (finder/broker scope within statute of frauds regardless of job title)