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Bright Lights USA, Inc. v. Elecsys Inc.

United States District Court, D. New Jersey

December 31, 2014

Bright Lights USA, Inc., Plaintiff,
Elecsys Incorporated, d/b/a Delaware Elecsys Incorporated, Division of DCX-CHOL Enterprises, Inc., a/k/a Elecsys, Division of DCX-CHOL Enterprises, Inc., Defendants

For Plaintiff: Joshua B. Ladov, Esq., Ladov Law Firm, Philadelphia, PA.

For Defendants: Philip L. Guarino, Esq., Mavroudis, Rizzo & Guarino, Oradell, New Jersey.


NOEL L. HILLMAN, United States District Judge.

This matter comes before the Court for decision after a bench trial on the merits. The parties have submitted proposed Findings of Fact and Conclusions of Law. As set forth below, the Court finds that the parties in this action formed a contract missing an essential term - namely the time for payment. However, when the time for delivery came both parties acted in a manner inconsistent with a gap-filling measure provided for by New Jersey's version of the Uniform Commercial Code (" UCC") designed to address this very quandary. The result was either a breach by the plaintiff absolving the defendant of any further performance or a mutual breach of the contract entitling neither side to the benefits that would have flowed from a unilateral breach by the other.

The Court also concludes that Plaintiff's equitable claim is equally defective in that it failed to prove that it acted in detrimental reliance on misrepresentations or conduct of the defendant or is otherwise entitled to equitable relief in light of its own conduct. Accordingly, the operative complaint in this matter will be dismissed with prejudice.


Jurisdiction is founded upon diversity of citizenship pursuant to 28 U.S.C.A. § 1332 (a)(1) in that the matter in controversy exceeds the sum of $75, 000.00, exclusive of interest and costs, and is between citizens of different states. Plaintiff, Bright Lights U.S.A., Inc. (" BL"), is a citizen of the State of New Jersey with a principal place of business at 145 Shreve Avenue, Barrington, N.J. 08007. Defendant is Elecsys, Division of DCX-CHOL Enterprises, Inc. (" Elecsys"), a Colorado corporation with its principal place of business in that state.


The Court makes the following Findings of Fact and Conclusions of Law.

A. Findings of Fact

1. BL is a manufacturer and distributor of defense spare parts. Trial Tr. 34.[2]

2. On July 9, 2007, BL submitted a quotation (Pl. Exh. l) for a hose assembly in response to a request from Shauna Shay (" Shay") of Elecsys. Trial Tr. 36. The quotation provided her with a price on certain made-to-order components for an M-88 light armored recovery vehicle used by the U.S. Army. Trial Tr. 37. The quotation provided for payment on Cash On Delivery (" COD") terms. Id.

3. A second quotation dated July 17, 2007 was provided (Pl. Exh. 2) for a hose assembly, again with COD terms. Trial Tr. 38-39.

4. A third quotation (Pl. Exh. 3) was provided for additional hose assemblies dated July 27, 2007, again with COD terms. Trial Tr. 40.

5. Elecsys submitted a July 13, 2007 purchase order (Pl. Exh. 4) for the goods that had been quoted as of that date. Trial Tr. 41. The terms section was left blank, and the purchase order referenced the July 9, 2007 BL quotation. Trial Tr. 41. Shay referenced the quotation so that someone reading the purchase order would know where the price and delivery terms came from. Trial Tr. 170-71. The amount of the order was $38, 340. Trial Tr. 42.

6. The purchase order was then modified two times, as the items ordered were components of another assembly. Trial Tr. 42-43. The second version of the purchase order (Pl. Exh. 5) was for two hose assemblies, and it was to supplant and take the place of the first version. Trial Tr. 43. Lines 1, 2, and 3 on the first purchase order became line item 5 on the second purchase order. Trial Tr. 43. The second purchase order, like the first, contained nothing in the payment terms section and expressly referenced the BL quotation. The amount of the order was $64, 260. Trial Tr. 44.

7. In an e-mail dated July 19, 2007 (Pl. Exh. 6), Shay attached a copy of her company's corporate information and requested terms[3] rather than COD. Trial Tr. 45. Because Shay was requesting terms, she provided Dan Farber (" Farber"), the president of BL (Trial Tr. 35), financial information about Elecsys. Farber replied that generally BL does not consider terms until the company procures $100, 000 in product a year, but that he was sending the information to the BL accounting department for evaluation and that he would let Shay know as soon as possible. Trial Tr. 45.

8. In his response to Shay (Pl. Exh. 6) on July 19, 2007, Farber also told Shay that BL already had started work on the two items of the purchase order (Pl. Exh. 5).

9. On July 27, 2007, Shay sent an e-mail to Farber (Pl. Exh. 6) asking him whether he had any response to her question about the terms of payment. Trial Tr. 45-46. That day or at the beginning of the following week Farber testified that he orally told Shay that the terms were as quoted, i.e., COD. Trial Tr. 46.

10. On July 30, 2007, Shay sent an e-mail (Pl. Exh. 7) with a revised and final version of the full purchase order to Farber. Trial Tr. 46. Once again, Shay asked " Please ... advise on terms." Id. Upon receiving the e-mail and revised purchase order, Farber wrote to tell Shay that BL would need a wire transfer prior to dispatch. Trial Tr. 46-47. Whatever the discussions had been previously about either a short extension of credit or COD, from the perspective of BL the terms were now CIA or " cash in advance." Trial Tr. 47. According to Farber, had BL shipped the goods COD the freight company would have charged Elecsys six percent of the value of the goods. Trial Tr. 47. Farber testified that BL wanted cash in advance because it was trying to " offer excellent customer service to our clients." Trial Tr. 48. Whatever Farber's motives may have been, Shay never agreed to CIA terms.

11. As noted, the third, revised purchase order (Pl. Exh. 8) sent with Shay's July 30, 2007 e-mail was the final version. Trial Tr. 48. It was for three different hose assemblies. Trial Tr. 49. As with the first two versions, the terms section was left blank and the original quotation which included COD terms was referenced. Trial Tr.49. The only difference between the second version of the purchase order (Pl. Exh. 5) and the final version (Pl. Exh. 8) was the addition of line item 6 and the referencing of a different quotation made by a different BL individual. Trial Tr. 49.

12. The final purchase order stated that Elecsys would accept delivery any time after November 1, 2007. Trial Tr. 49. There was a column at the right of the purchase order labeled " REQ. date." with different dates for the three items, the earliest being December 12. 2007 and the latest being December 28, 2007. Trial Tr. 50. According to Farber, and it seems a reasonable interpretation, this meant that Elecsys wanted the goods in its possession by these dates. Trial Tr. 50.

13. The third purchase order dated July 30, 2007, as did the first two versions, contained language that stated: " This PO is governed by the terms and conditions found at HTTP [website][]", a reference to Elecsys's website which contained a set of standard or boilerplate purchase terms for transactions with vendors (" Terms and Conditions"). Trial Tr. 50. Farber admitted that he had gone to the Elecsys website to read the Terms and Conditions. Trial Tr. 51. Farber also acknowledged under cross-examination that is was important for him to have done so because in general the Terms and Conditions were incorporated into the purchase order. Trial Tr. 93-95.

14. When BL acknowledged the July 30, 2007 purchase order (Pl. Exh. 9), a BL employee hand-wrote " COD" in the terms section. Trial Tr. 52. As detailed below, this directly contradicted the Terms and Conditions on the Elecsys website. Trial Tr. 121. Farber does not recall Shay ever agreeing to COD terms. Trial Tr. 103-04. Shay never agreed to COD terms (Trial Tr. 160, 164, 168) nor did anyone else at Elecsys. Nobody contacted Shay prior to writing COD on the purchase order. Trial Tr. 164. By the time BL confirmed the purchase order on July 30th, BL had already begun work on the purchase order items beginning no later than July 19th. Trial Tr. 51.

15. The Terms and Conditions (Def. Exh. 15) provided at Section 2 that, unless otherwise stipulated in the body of the purchase order, invoices would be paid within 30 days of receipt of the goods or the invoices, whichever was later. Trial Tr. 95. Farber recalled having read Section 2 at the time. Trial Tr. 95. However, he did not recall speaking to Shay about it. Trial Tr. 97-98. Although he spoke to Shay about COD terms, Farber concedes that Shay never agreed to pay COD. ...

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