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Transmodal Corp v. Emh Associates

January 14, 2011

TRANSMODAL CORP.,
PLAINTIFF,
v.
EMH ASSOCIATES, INC., ET AL., DEFENDANTS



The opinion of the court was delivered by: Hon. Faith S. Hochberg

NOT FOR PUBLICATION CLOSED

OPINION & FINAL JUDGMENT

HOCHBERG, District Judge

OPINION

I. Introduction

This case arises out of a dispute over the amounts due under a contract to ship goods into the United States from overseas. A bench trial was held before the undersigned on October 12, 2010. Testimony was heard from three witnesses: Mr. Max Kantzer (of Transmodal); Mr. Anthony Ambrosio (of Transmodal); and Mr. Eli Hazan (of EMH). The Court has considered the parties' stipulations of fact, the evidence adduced at trial, and the legal arguments submitted by the parties. The case is now ripe for final judgment on the merits.

II. Background

A. The Parties

EMH Associates, Inc. ("EMH") is a corporation organized under the laws of New York. Its principal place of business is located at 526 Seventh Avenue, New York, New York. EMH is a manufacturer/importer of finished ladies' garments, for sale to retail stores throughout the country. Mr. Eli Hazan is the President and sole shareholder of EMH. (Stip. 1.)

Transmodal Corp. ("Transmodal") is a Massachusetts corporation with its principal place of business in Ramsey, New Jersey. Transmodal is a freight forwarder and customs broker. It arranges for the transportation and customs clearance of cargoes entering the United States by ocean-going vessels and airplanes, as well as for transportation within the United States to customers of Transmodal's clients. (Stip. 5.) It does not own its own ships or airplanes. (Tr. 6:5.)

B. The Contract

Transmodal's Vice President for Sales and Marketing, Mr. Anthony Ambrosio originally contacted EMH in late 2008 or January 2009 to offer Transmodal's services as a freight forwarder. (Stip. 6.) The parties agreed to do business together, and EMH commenced using Transmodal for its shipping needs in or around January 2009. (Stip. 9.)

On or about January 5, 2009 Eli Hazan, on behalf of EMH, executed a document entitled "Credit Application and Agreement", between EMH and firms identified as Freight Savers Shipping Co., Ltd. and Transmodal Associates, Inc. The document was admitted as Exhibit P-1. It is an application by EMH to obtain credit from Transmodal. Exhibit P-1 makes no reference to any credit limit. In the section titled "TERMS AND CONDITIONS," it states that invoices are payable 10 days from the date of the invoice ("Net 10"). Notwithstanding the provision in the writing, the parties agree that invoices were payable within 15 days ("Net 15"). Exhibit P-1 does not purport to incorporate by reference any extraneous documents or terms in the agreement.

Exhibit P-1 is a credit application only. It does not include any provision establishing the rates charged by Transmodal to ship merchandise. Neither party introduced any evidence regarding their agreement as to such rates.

C. The Revised Contract

EMH anticipated a large increase in its shipping volume in Spring 2009. It had orders for delivery of approximately 250,000 to 300,000 garments from Bangladesh, to be imported into the United States over an 8 to 12-week period starting in April 2009. Mr. Hazan informed Mr. Ambrosio at the end of February 2009 about the expected increase in shipping volume and asked whether Transmodal would be able to accommodate the increased volume. Mr. Ambrosio replied that he could accommodate it and wanted all of EMH's shipping business. (Tr. 47:23-48:8, 126:7-19.) The parties stipulate that, by e-mails of January 30, 2009, April 22, 2009, May 2009 and June 12, 2009, Transmodal was soliciting to obtain all of EMH's shipping needs. (Stip. 26.) Mr. Max Kantzer, the President of Transmodal, was also aware in March or April 2009 that EMH's business was going to increase significantly, with hundreds of thousands of garments to be shipped; the shipping charges would be in the hundreds of thousands of dollars. (Tr. 48:8.)

EMH required additional credit terms in April 2009 due to the anticipated increase in the volume of its shipments. (Tr. 18:25-19:3.) The credit period was extended from Net 15 to Net 30. That means that invoices would be due and payable within 30 days. On or about April 14, 2009, Mr. Hazan on behalf of EMH executed a new credit application (Exhibit P-4). On the line entitled "Credit ...


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