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J & D Textile, Inc. v. Gabo Industries, LLC

Superior Court of New Jersey, Appellate Division

December 24, 2013

J & D TEXTILE, INC. d/b/a M.S. TEXTILE CO., LTD., Plaintiff-Respondent,
v.
GABO INDUSTRIES, LLC, PACIFIC INTERNATIONAL ALLIANCE, INC., INFORMATION PROCESS SOLUTIONS, LLC, PACIFIC WORLDWIDE, INC., LMT GLOBAL, LLC, ATLANTIC PACIFIC GROUP, LLC, and HAK Y. LIM, a/k/a JAMES H. LIM, an individual, Defendants-Appellants.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted October 29, 2013

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-1988-11.

Ballon Stoll Bader & Nadler, P.C., attorneys for appellants (Vano I. Haroutunian, on the brief).

Hadley Perkins, P.C., attorneys for respondent (Paul I. Perkins, of counsel and on the brief).

Before Judges Reisner and Alvarez.

PER CURIAM

Defendants Gabo Industries, LLC (Gabo), LMT Global, LLC (LMT), and Hak Y. Lim, also known as James H. Lim, (collectively referred to as defendants) appeal the August 24, 2012 grant of summary judgment awarding $180, 790.07, together with costs of $224 and pre-judgment interest in the amount of $16, 295.86, to plaintiff J & D Textile, Inc. (J & D), doing business as M.S. Textile Company, Ltd. (M.S.). Defendants also appeal the dismissal with prejudice of their counterclaims. We affirm.

J & D filed this lawsuit to collect balances they alleged were due for fabric delivered to defendants, who used the goods in manufacturing clothing. J & D is a New York corporation owned by Yeong Shim, who also owns M.S., an enterprise headquartered in Korea in the business of selling fabric. Lim owns Gabo, while Martin Terzian owns LMT. LMT and Gabo operate as a business partnership.

On May 21, 2009, Lim issued two fabric purchase orders from Gabo to J & D. The delivery date section stated: "[s]tart [shipping?]-on or before 6/13/09 & balance 7/13/09. Will advise detail of what needs to be shipped by 6/13/09 with Mr. Shim in NYC. Cancel date-7/13/09/." The parties agreed that J & D would ship the material to K.R. Intercorp (KR), a factory located in Vietnam, for the production of finished garments. The garments would then be shipped to LMT's warehouse in California for the fulfillment of a contract with K-Mart. J & D accepted Gabo's order on May 28, 2009, by issuing two invoices. Shim issued the invoices from M.S. because he was in Korea at the time. The total invoiced amount was $316, 989.98.

Payments were structured as follows: a ten percent deposit prior to shipment with the designation "T/T 60 days, " meaning payment by wire transfer within sixty days. The shipment dates were specified in print, but Shim accelerated some to June 14 by handwritten amendment. J & D also requested a letter of credit as a condition for the contract, which Lim refused to provide. Instead he agreed to pay the invoices within ten days of issuance, or within ten days of shipment of the finished garments to K-Mart.

By June 12, 2009, two days prior to the first scheduled delivery of fabric, Gabo had not paid the ten percent deposit. That day, Shim visited Lim at Lim's office, and Lim executed and signed a personal guarantee to M.S. on his letterhead. The personal guarantee referenced the following contracts:

Contract #:

MSNGB001/Missy/$89, 302.84

Contract #:

MSNGB001/Plus/$227, 687.14

The guarantee stated, "In case any default payment or payments from Gabo Industries, LLC to MS Textile Co., LTD for above mentioned cont[r]acts, I (James H Lim) will [be] personally responsible and will personally take care [of] the payments."

When deposed, Lim claimed he felt pressured into issuing the personal guarantee because he did not want to default on his commitment to LMT. Shim, however, claimed the personal guarantee was freely and willingly signed by Lim. Shim explained that he requested the guarantee because there had been no payments towards the outstanding sums due, and he knew that Gabo had been created only a month before placement of that first order.

Shim also claimed he had asked Lim for a letter of credit, but was refused. Shim said he ordinarily required a letter of credit for these types of transactions, but that he had not informed Lim or LMT that one was necessary before he accepted the orders.

Lim testified that at the time he signed the personal guarantee, he had already been advised by Norma Leaderman, the employee responsible for quality control of the garments delivered to K-Mart, that some of the orders were late. The invoices, however, indicate that the earliest deliveries were scheduled for June 14, 2009, two days after Lim and Shim met. Only one entry indicated a delivery date of June 11, 2009, but did so as ...


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