OPINION
I. INTRODUCTION
A good relationship is built on good communication. As this case proves, that aphorism is no less true of long-term business dealings than it is of marriages. One of the Defendants, Shore Slurry Seal, Inc. (“Shore”), a construction company, entered into a long-term exclusive requirements contract with the Plaintiff, Koch Materials Company (“Koch”). Midway through the term of the contract, Shore informed the Plaintiff, in rather uncertain terms, that it planned to sell most or all of its assets to the second Defendant, Asphalt Paving Systems, Inc. (“Asphalt”) which is now also in the construction business. Koch, through its attorney, sought assurances that any successor would be willing and able to continue the original deal. Apparently unhappy about dealing through attorneys, rather than as businessmen, Shore’s re
The law of contract, however, is designed to increase certainty in our dealings with one another. Otherwise, few reasonable businesses would be willing to invest in long-term cooperative agreements which, by virtue of the deal-specific investment, expose each party to significant risks of hold-up by the other. Thus, when one’s contractual partner has reasonable grounds to fear that the contract will not be performed, one must answer those fears at the risk of giving the counterparty license to terminate the contract. Nor does the law, understandably, contemplate “I don’t like lawyers” as an excuse for refusing to give such vital assurances.
Thus, for the reasons set forth here, and in more detail throughout the Opinion to follow, I must grant the Motion of the Plaintiff for Summary Judgment, authorizing Plaintiff to treat Shore’s silence as a repudiation of the contract. I also grant much of the Plaintiffs Motion for Summary Judgment on the question of remedies, concluding that the contracts between the Plaintiff and Shore permit the Plaintiff to terminate and seek such damages as are authorized by the U.C.C. and the common law. With respect to Asphalt, Shore’s putative successor, I find disputed questions of material fact related to the question whether or not Asphalt is, in fact, a successor, and therefore deny the Cross-Motions for Summary Judgment by both sides.
II. FACTS AND PROCEDURAL HISTORY
Koch Materials Company, the Plaintiff in this case, is a manufacturer of asphalt and other road surfacing materials. In February of 1998, Koch bought from the Defendant, Shore Slurry Seal, Inc., an asphalt plant in New Jersey, as well as the domestic license rights to a specialty road surfacing substance, known as “Novachip.” Koch’s purchase price was five million dollars, payable in three installments. The last and smallest of these installments, in the amount of $500,000, is not due until 2004.
As part of the sale, Shore entered into two side contracts with Koch. First, Shore and Koch signed an Exclusive Supply Agreement, under which Shore agreed that for the seven years following the sale it would purchase all of its asphalt requirements from Koch, and in any event at least two million gallons of asphalt per year. The Agreement provided that, in the event Shore purchased less than six million gallons over the last three years of the contract, the $500,000 installment payment would be reduced by the same percentage by which Shore missed the six million gallon mark. Second, Shore promised to utilize at least 2.5 million square yards of Novachip annually, either in its own business or through sublicense agreements in certain permitted regions, and to pay royalties to Koch accordingly.
For the first three years of the contract, Shore met or exceeded its two million gallon minimum under the Exclusive Supply contract, but sold somewhat less than the 7.5 million square yards of Novachip the Sublicense Agreement called for. As the contracts provided, the parties adjusted the third-year installment payment to account for the shortfall.
On March 16, 2001, Robert Capoferri (“Capoferri”), the President and sole shareholder of Shore, sent a letter to Koch’s general manager. The letter provided in relevant part that:
I have decided to retire from the road construction business....
The attorney for the buyer purchasing my assets has been in contact with our legal counsel, and they are close to having drafts prepared for the proposed purchase agreement. In addition to the sale of all balance sheet assets, it is also intended that 100% of any and all existing Shore Slurry Seal, Inc. contracts will be assigned and/or sold to the prospective buyer.
Given that the Nova Chip Sublicense Agreement is not part of this proposed asset sale, Shore Slurry Seal, Inc. will continue to exist beyond the closing date in order to primarily collect and remit Nova Chip royalties on behalf of Koch Pavement Solutions.
Pl.’s R. 56.1 Statement Exh. E. 1 Capoferri sent a courtesy copy of the letter to his attorney.
Koch responded on April 3, 2001, with a letter from its attorney to the attorney for Shore. After referencing the Capoferri letter, Koch’s missive stated:
We have concerns about the sale because, during the next four years, Koch is owed a substantial amount of money from Shore under the February, 1998, Sale and Purchase Agreement, namely under the two schedules providing for exclusive supply and for Novachip royalties. In particular, we are concerned as to Shore’s continued capacity to live up to its two million gallon per year commitment to buy asphalt emulsions and cutbacks and to meet its minimum square yardage requirements for Nova-chip.
Mr. Capoferri’s secrecy surrounding Shore’s negotiations and the terms and conditions of sale are adding to our discomfort. We do not know the prospective purchaser, the closing date or what, if any, arrangements have been made to provide for an assignment of Shore’s obligations to the new purchaser. Further, we have no indication that Shore is providing, or is willing to provide any type of security to satisfy its obligations to Koch. To date we know only that the sign in front of Shore’s current offices has been changed to read “Asphalt Paving Systems” and that several company vehicles are now bearing this new moniker.
Of course, once Shore has provided Koch with adequate assurance of performance of its obligations to Koch the process which we began with this letter can be terminated.
Id. Exh. F. Shore’s answer, on April 6, 2001, was again a letter from Capoferri to Koch’s general manager. Capoferri noted that he had conferred with his attorney, and went on to argue that:
There has not been a failure to pay amounts due or to comply with requirements under any of the agreements we have with Koch. Nothing in any of the agreements drafted by Koch prohibit me from retiring business, nor do they require me to provide any type of security, collateral, or personal guarantee of payments similar to those we imposed upon our Nova Chip sublicensees.
Regarding the assertion of secrecy contained in Mr. Hull’s letter of April 3, 2001, I am not aware of provisions within our agreements requiring me to notifyKoch of any business negotiations that I may be involved in.
Id. Exh. G.
Finding little comfort in Shore’s response, Koch filed a Complaint in this Court seeking recognition of their right to treat Shore’s failure to give adequate assurances as a repudiation of the contract, pursuant to New Jersey’s Uniform Commercial Code, N.J. Stat. Ann. § 12A:2-609(1) (1962), and the common law of contracts. Koch’s Complaint also alleged breach of the Exclusive Supply and Nova-chip Sublicense Agreements due to Shore’s bad faith. On October 30, 2001, Koch amended its Complaint to add as a party a possible successor of Shore, Asphalt Paving Systems, Inc. (“Asphalt”). Koch alleges that Asphalt is liable as Shore’s successor, and, alternatively, if Asphalt is not a party to the contracts between Koch and Shore, that Asphalt tortiously interfered with those contracts.
Throughout the pendency of this dispute, Shore has continued to purchase asphalt and other products covered by the Exclusive Supply Agreement (“ESA”) from Koch, and to remit royalties under the Sublicense Agreement.
Koch now seeks partial summary judgment on the liability aspects of its various claims, as well as on the question of what remedies are available to it under the contracts. Shore and Asphalt have both cross-moved for summary judgment on all of Koch’s claims. 2
As the parties are completely diverse, and the amount in controversy exceeds $75,000, exclusive of interest and costs, I have jurisdiction over Koch’s claims pursuant to 28 U.S.C. § 1332. I have jurisdiction over Shore’s Counterclaim pursuant to 28 U.S.C. § 1367(a). 3
III. DISCUSSION
A. Summary Judgment Standard
A party seeking summary judgment must “show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c);
see also Nebraska v. Wyoming,
Under the rule, a movant must be awarded summary judgment on all properly supported issues identified in its motion, except those for which the non-moving party has provided admissible evidence or affidavits to show that a question of material fact remains.
See, e.g., Gleason v. Norwest Mortgage, Inc.,
B. Koch’s Claims Against Shore
1. Repudiation
When, in a contract for the sale of goods, one party has reasonable grounds to doubt that the other party will be able to perform, the doubting party may demand of its counterpart assurance that performance will occur. N.J. Stat. Ann. § 12A:2-609 (l).
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If no adequate assurance is forthcoming within a commercially reasonable time, or in any event within 30 days, the doubting party may treat its counterparty as having repudiated the contract.
Id.
§ 609(3), (4). A party need not wait for an actual material breach to demand assurances; it need only show that it reasonably believed that such an event might be in the offing.
See Magnet Res., Inc. v. Summit MRI, Inc.,
As an initial matter, I note that the parties have indulged in an extended debate about whether a variety of circumstances arising more than 30 days after April 3, 2001 provide either reasonable grounds for seeking assurances or adequate assurance. The question, however, is whether, at the time it sent the April 3, 2001 letter, Koch had a reasonable basis for doing so, and whether Shore adequately assured it within 30 days. I therefore fail to see why it is relevant (at least for liability purposes) whether, for example, Shore continued to buy product from Koch after May of 2001.
See By-Lo Oil Co., Inc. v. Partech, Inc.,
The Exclusive Supply Agreement is a bit more complex, but no less certain. In entering the ESA, Shore promised Koch not only a minimum annual purchase, but also all of the potential upside of Shore’s requirements over and above the minimum should Shore’s demand for asphalt grow over time. See Pl.’s L. Civ. R. 56.1 Statement Exh. B at 1. Thus, the identity of the purchaser, its future business plans, and its anticipated need for Koch’s product could all affect significantly the amount of money that Koch would realize under the ESA, not only from the two million gallon minimum, but also from the potential upside. Capoferri’s letter, it is true, promised that Shore’s contracts, presumably including the ESA, would be assigned to the purchaser. Start-up construction businesses, however, begin un-bonded, unable to win any bid for their first year and unable to secure sufficient bonding for large construction bids for several years. See Pl.’s Reply Br. Exh. 1 at 133; Shore’s BrApp. Exh. 6 at 222-23. Koch had no way of knowing whether Asphalt was already a going business, and, if not, whether it would be able to win sufficient sub-contracting bids even to meet the minimum requirements, let alone approach the potential upside of an established enterprise like Shore.
Even aside from the particular facts of the construction industry, counterparty risk is an important feature of any requirements contract. Courts have often refused to permit assignment or delegation of duties under requirements or “best efforts” contracts where the assignment or delegation would be contrary to the justified expectations of the opposite contracting party. See E. Allan Farnsworth, Contracts 714-16, 745-47 & n. 38 (3d ed.1999). “[M]uch depends on the circumstances of the assignment: a court will react differently to an assignment to a similar operator .... ” Id. at 716.
Indeed, the ESA protected Koch against the risk of assignment of contract rights to unknown third parties, by requiring Koch’s “prior written consent” before assignment. PL’s R. 56.1 Statement Exh. B at ¶ 14 (“¶ 14”). At the time of the April 3 letter, Koch knew that some of Shore’s offices and assets were now under the control of an unknown new party, Asphalt. Koch also knew that it had certainly never agreed to any assignment of the contract. Koch could reasonably have believed that a sale had already happened, either with no assignment of the ESA, or with an assignment in violation of the ESA’s terms. Given the importance of the identity of the
Shore contends, however, and Koch does not dispute, that Koch knew when it entered into the two agreements that Capof-erri was in poor health and intended to retire within three years. Shore’s argument is that Koch should not be permitted to demand assurances for an event Koch should have anticipated. Cf. By-Lo, 2001 WL603050, at *5 (“The grounds that give rise to this feeling have to be something that occurred after the contract was in place.”). Koch’s contract, however, was with Shore, not Capoferri. 6 The contract between Koch and Shore expressly provided for a transfer of Shore’s interests. See PL’s R. 56.1 Statement Exh. B ¶ 14. Whatever Capoferri’s personal plans, Koch was entitled to assurances that its contractual partner, Shore, as well as any successors or assignees, would carry out the obligations of the Agreement.
Shore also argues that, regardless of whether Koch had reasonable grounds for doubt, the April 3, 2001 letter was insufficient, as a matter of law, to trigger any obligation on the part of Shore to respond. Koch’s letter tracked closely the language of § 609,
7
and was sent from one attorney to another. In Shore’s view, Koch should have not only quoted from the U.C.C., but also actually cited § 609. Yet courts have routinely accepted as sufficient under § 609 requests for assurances of a far less formal nature.
See, e.g., C.L. Maddox, Inc. v. Coalfield Servs., Inc.,
The remaining question, then, is whether it did so. Based on the summary judgment record, it appears that any reasonable fact-finder would determine that Shore did not. Far from assuring Koch
I conclude, therefore, that Shore repudiated the ESA and Sublicense Agreement as of May 3, 2001.
2. Bad Faith Breach
Koch also asserts that, by selling its assets to Asphalt, Shore breached an implied requirement of good faith execution of the contract. The U.C.C. requires that parties to a requirements contract conduct themselves in good faith,
see
N.J. Stat. Ann. §§ 1-203, 2-306 (1962), and New Jersey contracts other than for the sale of goods also include an implied covenant of good faith and fair dealing.
See Sons of Thunder, Inc. v. Borden, Inc.,
The summary judgment record permits, but would not compel, a reasonable fact-finder to conclude that Shore acted in bad faith in selling its assets to Asphalt. Shore’s sale of assets, in and of itself, would not necessarily be in bad faith. As I explain in more detail below, see infra Part III.C.l, however, the summary judgment record could support an inference that Shore structured the sale to Asphalt in order to permit future bids to utilize non-Koch sources of asphalt. As I have just noted, that would almost certainly- exhibit bad faith on the part of a party to a requirements contract. The force of this inference, however, is undermined somewhat by the absence of any evidence in the summary judgment record that Shore’s consumption of asphalt and Novachip has actually declined since the sale. It is difficult to say that Shore acted with the intention to reduce its purchases from Koch when Shore has not actually reduced its purchases. On the other hand, Koch does point to some evidence that Asphalt views itself as being under no obligation to utilize Koch products in its future bids. See Pl.’s R. 56.1, Statement Exh. J at 257-58. While marginally probative of the intent of Shore, that is hardly “smoking gun” evidence that would compel any reasonable fact-finder to find that Shore has acted in bad faith.
Accordingly, I will deny both Koch’s Motion for Summary Judgment, and Shore’s Cross-Motion for Summary Judgment, on the bad faith claim. In short, the question of bad faith presents genuine material issues of fact which cannot be resolved on the summary judgment record.
Koch also seeks a determination that, should it decide to treat Shore’s repudiation as a breach, and seek damages, it is not limited to reductions in the final installment payment. The ESA provides for reductions in the 2004 installment payment in the event Shore does not meet its minimum targets.
See
Pl.’s R. 56.1 Statement Exh. B ¶ 5. “Resort to a remedy as provided [in the contract] is optional unless the remedy is expressly agreed to be exclusive.” N.J. Stat. Ann. § 12A:2-719(l)(b) (1962);
see also Chatlos Sys., Inc. v. Nat’l Cash Register Corp.,
Although the ESA does not by its own terms state that the installment reduction is Koch’s exclusive remedy, Shore contends that such was the understood industry practice.
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Established trade usage can fill gaps left by the text of a contract, apparently on the theory that both parties understood, or should reasonably have understood, that any agreement to do business in their field would include such a practice.
See
N.J. Stat. Ann. § 12A:l-205 (1962);
Posttape Assocs. v. Eastman Kodak Co.,
There is almost no evidence in the summary judgment record either establishing or controverting the “regularity” of the trade usage shore alleges. Shore points only to Capoferri’s affidavit, in which he states that “such limitations of remedies in requirements contracts are customary in the road construction and maintenance industry, particularly where jobs are publicly bid .... ” Shore Br.App. Exh. 12. It is unclear just what degree of regularity I can infer from the term “customary,” especially since Capoferri notes that there are some more specific circumstances, public bids, in which the custom is even more common. That implies that it is not a universal practice. Nonetheless, Koch has not provided any contrary evidence, and a reasonable finder of fact could perhaps conclude that a regular trade usage existed.
That leaves me to determine the exact scope of the remedy utilized by the trade. Shore asks me to infer from Capoferri’s affidavit that trade usage can supply an unwritten exclusivity term limiting Koch’s remedies for shortfalls in the minimum amount over the last three years of the contract to set-offs against the last installment payment. I am highly skeptical, however, that most or even many construction industry contracts involve a complicated structure of large cash payments from the seller to the buyer. Thus, while I believe it is a reasonable inference to find that trade usage may limit remedies to the value of the minimum requirement shortfall, it is unreasonable to further limit the ESA’s remedies only to the amount of the last installment payment. In deciding a
Finally, the parties do not dispute that the Sublicense Agreement expressly preserved all available remedies. See Pl.’s R. 56.1 Statement Exh. C at 4. Shore argues, however, that the reservation is effective only to the extent that the set-off against the final installment payment is insufficient to make Koch whole and, as the set-off cannot be calculated until the end of the contact term, no other remedies are yet available. Koch, however, may choose to terminate the contract in response to Shore’s repudiation. Regardless of when the original determination of the set-off was to occur, if Koch terminates, the contract is over. If Koch exercises that option, therefore, it may avail itself of any lawful remedy under the Sublicense Agreement.
In summary, then, Koch was entitled both to terminate the ESA and to seek payment for any shortfalls in the minimum purchase requirement. If it treats Shore’s repudiation as a breach, Koch is also entitled to seek any lawful remedy under the Sublicense Agreement. I express no view at this time whether, in order to mitigate its damages as a result of a termination, Koch was required to continue to sell to Shore as much product as Shore was willing to purchase.
C. Koch’s Claims Against Asphalt
Koch’s Amended Complaint alleges that Asphalt, by purchasing most of Shore’s assets and frustrating Shore’s ability to perform its contracts with Koch, tortiously interfered with both the ESA and Subli-cense Agreement. Koch also alleges that Asphalt is a successor to, or alter ego of, Shore, and therefore jointly liable for its debts. Koch has moved for summary judgment on the tortious interference claim, and Asphalt has cross-moved on both the tortious interference and successor/alter ego allegations. I will deny both motions.
1. Tortious Interference
A tortious interference plaintiff must show malice, that is, intentional and wrongful interference by a non-party with a contractual relationship,
see Printing Mart-Morristown v. Sharp Electronics Corp.,
A reasonable fact-finder could, but would not necessarily, determine that
Asphalt could also reasonably have known that, as a result of its arrangements with Shore, Shore would be unable to fulfill Koch’s expectation that Koch would realize not only the minimum sales volume, but also the potential upside of the ESA and Sublicense Agreement. For example, one plausible story one could tell, based on the summary judgment record, is that Shore hoped to cobble together enough work, either through subcontracting to Asphalt or through work not covered by its non-compete agreement with Asphalt, to barely make its mínimums, while • allowing Asphalt (once bonded) to bid on new projects unconstrained by the ESA. A reasonable fact-finder could infer that both Asphalt and Shore desired such an arrangement, and even that the purchase price for Shore’s assets and “good faith” reflected a premium paid for Asphalt’s freedom from the Koch contracts.
Alternately, one could say simply that, by insisting on secrecy in the sales agreement, Asphalt induced Shore to breach ¶ 14 of the ESA. Again, in that scenario, Koch’s damage story at this point would have to be that Shore’s repudiation was caused by Asphalt’s demand for secrecy, perhaps motivated in part by a desire to gain freedom from the ESA. That is a permissible, but by no means necessary, inference from the summary judgment record.
Finally, in my view, it is possible that at trial Koch would be able to establish that Asphalt’s actions under one of the scenarios I described was “wrongful.” The Restatement notes, for example, that in some circumstances, when party A makes its deal with B contingent on B’s refusal to deal with C, A may be liable for tortious interference.
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See
Restatement (Second) of Torts § 766 cmt. 1. The critical factor,
I conclude, therefore, that I must deny both Koch’s Motion and Asphalt’s Cross-motion for Summary Judgment on the tor-tious interference claim.
2. Successor/Alter-Ego Liability
Although a purchaser is generally not hable for the debts of the company from whom it purchases assets,
see Lefever v. K.P. Hovnanian Enters.,
Asphalt, relying on
McKee v. Harris-Seybold Co.,
109 N.J.Super.
555,
Furthermore, Asphalt does not dispute that nearly all of Shore’s employees are now employed by Asphalt. There is no serious question that Asphalt operates much of the same machinery, is obligated under several of the same contracts related to that machinery, carries out the same public contracts, and utilizes the same office space, as Shore once did. The structure of the sale suggests that the intent of the parties was to continue Shore’s business, and to keep Shore’s employees working at the trade they knew regardless of Capoferri’s quasi-retirement. On these facts, a reasonable finder of fact could conclude that Asphalt is Shore’s successor. Accordingly, I must deny Asphalt’s Motion for Summary Judgment on the question of successor liability.
In contrast, in response to Asphalt’s Motion for Summary Judgment on the alter-ego issue, Koch does not point to any evidence demonstrating that Asphalt
IV. CONCLUSION
For the reasons set forth above, I will grant Koch’s Motion for Summary Judgment on the repudiation question, and grant it in part on the question of liability, as described in more detail supra. I will deny Koch’s Motion in all other respects. I will deny Shore’s Cross-Motion for Summary Judgment in its entirety. Finally, I will grant Asphalt’s Cross-Motion for Summary Judgment on the corporate veil/alter-ego issue, but deny the remainder of its Motion. The Court will enter an appropriate form of Order.
ORDER
This matter having come before the Court on the Motion of Plaintiff and Counterclaim Defendant, Koch Materials Company, for Partial Summary Judgment, pursuant to Fed.R.Civ.P. 56, and on the Cross-Motions for Summary Judgment of Defendants, Shore Slurry Seal, Inc. and Asphalt Paving Systems, Inc., Stephen B. Nolan, Esq., Stradley, Ronon, Stevens & Young, LLP, John R. Ferguson, Esq., Jonathan P. Guy, Esq., L. Misha Preheim, Esq., Swidler Berlin Shereff Friedman, LLP, Michael A. Ceramella, Esq., Koch Industries, appearing on behalf of Plaintiff and Counterclaim Defendant, Koch Materials Company, and Neil C. Schur, Esq., Carl W. Hittinger, Esq., Donald E. Wie- and, Jr., Esq. Stevens & Lee, P.C., appearing on behalf of Defendant and Counterclaim Plaintiff, Shore Slurry Seal, Inc., and Frederic L. Shenkman, Esq., Howard E. Drucks, Esq., Cooper Perskie April Nie-delman Wagenheim & Levenson, appearing on behalf of Defendant, Asphalt Paving Systems, Inc.; and,
The Court having considered the papers submitted by counsel for Plaintiff in support of and in opposition to the motions and the papers submitted by counsel for Defendants in opposition and support; and,
For the reasons stated in the Opinion filed concurrently with this Order, IT IS, on this 12th day of June, 2002, hereby ORDERED that:
1. The Motion of Plaintiff and Counterclaim Defendant, Koch Materials Company, for Partial Summary Judgment, is GRANTED IN PART and DENIED IN PART; and,
2. The Cross-Motion of Defendant and Counterclaim Plaintiff, Shore Slurry Seal, Inc., for Summary Judgment, is DENIED; and,
3. The Cross-Motion of Defendant, Asphalt Paving Systems, Inc., is GRANTED IN PART and DENIED IN PART; and,
5. The Motion of Plaintiff and Counterclaim Defendant, Koch Materials Company, for Partial Summary Judgment, is GRANTED IN PART on the question of remedies available under the contracts; specifically, Plaintiff may terminate the Exclusive Supply Agreement between the parties, and, if Plaintiff elects to treat the Defendant’s repudiation as a breach, Plaintiff may seek any lawful remedy for breach of the Sublicense Agreement and for breach of the Exclusive Supply Agreement other than those relating to minimum volume, however, Plaintiffs remedy for breach of the minimum volume provision of the Exclusive Supply Agreement is limited to payment for any shortfalls in the minimum purchase requirement under that contract; and,
6. The Motion of Plaintiff and Counterclaim Defendant, Koch Materials Company, for Partial Summary Judgment, is DENIED in all other respects; and,
7. The Cross-Motion of Defendant, Asphalt Paving Systems, Inc., is GRANTED as to the claim of the Plaintiff and Counterclaim Defendant, Koch Materials Company, that Asphalt is an alter-ego of the Defendant and Counter-Claim Plaintiff, Shore Slurry Seal, Inc.; and,
8. The Cross-Motion of Defendant, Asphalt Paving Systems, Inc., is DENIED in all other respects.
Notes
. I note that all three of the parties are in need of a refresher course on the Local Civil Rules of this Court. First, the parties seem to have forgotten that briefs, as well as statements drafted by attorneys, are not evidence. Thus, exhibits attached to briefs or statements are also not evidence.
See
L. Civ. R. 79.2;
Miller v. McMann,
. Shore has also filed a Counterclaim against Koch. I have already resolved Koch’s Motion to Dismiss that Counterclaim, and Koch's Motion for Summary Judgment is pending. I do not address the Counterclaim in this Opinion.
. Shore raises a largely meritless argument that Koch’s claims either are not ripe, or fail to present a case or controversy. New Jersey’s Uniform Commercial Code gives parties to a contract a judicially enforceable right to anticipate breach, and seek damages accordingly. See N.J. Stat. Ann. § 12A:2-609. That right accrues at the time provided in the statute — when the defendant fails to give adequate assurances. Id. § 609(4). As the comments to section 609 explain, the right to force repudiation reflects the fact that entities enter into contracts in order to plan for the future. A obligor who must prepare, or actually perform, in exchange for what he knows to be a fruitless exchange has opportunity costs, if nothing else, from the moment he begins preparing to carry out the deal.
See
N.J. Stat. Ann. 12A:2-609 U.C.C. Cmt. 1 ("[A] buyer who believes that the seller’s deliveries have become uncertain cannot safely wait for the due date of performance when he has been buying to assure himself of materials for his current manufacturing or to replenish his stock of mechandise.”). Certainly, at the point by which he reasonably seeks, and fails to receive, adequate assurances, he has suffered an “injury or threat of injury” that is "real and immediate, not conjectural or hypothetical.”
O’Shea v. Littleton,
. Both Agreements are subject to a New Jersey choice-of-law clause. See Pl.s’ R. 56.1 Statement Exh. A ¶ 24, Exh. B ¶ 19, Exh. C ¶11.
. The case cited by Shore to the contrary,
. Shore’s argument would be more persuasive if Capoferri had merely sold his stock in Shore to his employees. As his initial letter clearly indicated, however, he instead planned to maintain Shore while selling the assets and contracts of Shore to a new, unknown, unidentified corporation.
. Koch’s letter requested "adequate assurance of performance of [Shore's] obligations,” Pl.'s R. 56.1 Statement Exh. F; Section 609 allows the seller to "demand adequate assurance of due performance.” N.J. Stat. Ann. 12A:2-609(1).
. I note that the ESA expressly provides that: "This Agreement ... shall contain the entire agreement of the parties, which agreement shall not be modified in any manner except by an instrument in writing executed by the parties .... No promise, representation, warranty, or covenant not included herein has been or is relied on by either party.” Pi’s R. 56.1 Statement Exh. B ¶ 18. The parties have not expressed an opinion as to whether this clause should have any effect on the "trade usage” claim, and therefore I decline to do so, as well.
. Somewhat confusingly, New Jersey has both embraced the Restatement approach for malice,
see Printing Mart-Morristown,