Industria De Calcados Martini Ltda. v. Maxwell Shoe Co.

630 N.E.2d 299, 36 Mass. App. Ct. 268, 23 U.C.C. Rep. Serv. 2d (West) 89, 1994 Mass. App. LEXIS 274
CourtMassachusetts Appeals Court
DecidedMarch 21, 1994
Docket92-P-1322
StatusPublished
Cited by2 cases

This text of 630 N.E.2d 299 (Industria De Calcados Martini Ltda. v. Maxwell Shoe Co.) is published on Counsel Stack Legal Research, covering Massachusetts Appeals Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Industria De Calcados Martini Ltda. v. Maxwell Shoe Co., 630 N.E.2d 299, 36 Mass. App. Ct. 268, 23 U.C.C. Rep. Serv. 2d (West) 89, 1994 Mass. App. LEXIS 274 (Mass. Ct. App. 1994).

Opinion

Porada, J.

The plaintiff, Industria De Calcados Martini Ltda. (Martini), a Brazilian shoe manufacturer, filed an action in the Boston Municipal Court against the defendant Maxwell Shoe Co., Inc. (Maxwell), a wholesale distributor of shoes, for breach of contract and for violation of G. L. c. 93A arising out of the sale of 12,042 pairs of men’s shoes by Martini to Maxwell. Maxwell filed an answer and a counterclaim against Martini claiming that the shoes did not conform to the contract specifications and, thus, Martini was in breach of the implied warranty of merchantability. The action was removed to the Superior Court and tried by a judge sitting without a jury. The judge ruled that Maxwell was in breach of its contract and awarded damages to Martini in the sum of $25,890.30, the balance remaining due on the parties’ contract. The judge also determined that Maxwell had not violated G. L. c. 93A. On Maxwell’s counterclaim, the judge decided that Martini was in breach of the implied warranty of merchantability and awarded Maxwell the sum of $24,084, leaving a net loss to Maxwell of $1,803.30. Both Martini and Maxwell appealed from the judgment. We affirm.

We summarize the facts as found by the judge. Martini manufactured shoes for Thom McAn, a shoe retailer. Thom McAn rejected the shoes because of a finish defect. Thereafter, a sample of the shoes from this order was shown to the president of Maxwell by Louis Fingerhut, a shoe broker. The *270 sample of shoes did not appear to have any defects nor was Maxwell informed that Thom McAn had rejected the shoes due to the finish defect. After inspecting the shoes, Maxwell placed an order through Fingerhut’s company, Fingerhut Footwear Inc., for 12,042 pairs of men’s shoes from Martini. The purchase order invoices indicated the order was for “regular” shoes “as sampled.” The price to be paid for the shoes was $116,205.30 ($9.65 a pair), of which $90,315 was to be paid by a letter of credit and the balance of $25,890.30 by personal check. On February 1, 1988, Maxwell established a letter of credit in the sum of $90,315 in favor of Martini with the Bank of Boston. In its application for the letter of credit, Maxwell attached a pro forma invoice prepared by Fingerhut which indicated that the shoes were to be inspected in Brazil by Southline, a trading company in Brazil chosen by Fingerhut to inspect the shoes. The issuance of the letter of credit was contingent upon the issuance of a certificate of inspection by Southline. On or about February 8, 1988, Maxwell also sent its personal check to Martini in the sum of $25,890.30, which was received by Martini.

About February 1, 1988, Maxwell received a supplemental sample of the shoes from Brazil. Upon inspection, Maxwell discovered the shoes were cracked and peeling. As a result, Maxwell immediately contacted Fingerhut and informed him that if all the shoes were in that condition, he did not want the shoes shipped. Fingerhut in turn contacted his employees in Brazil to find out (1) if the shoes had been inspected by Southline, (2) whether there were any quality problems, and (3) if so, whether they could be corrected.

The shoes were shipped on February 10, 1988. A certificate of inspection was issued by Southline dated February 18, 1988, certifying that the shoes were in strict compliance with the specifications in the contract. The shoes arrived at Maxwell’s warehouse on March 23, 1988. Upon inspection, Maxwell discovered the entire shipment was defective. All the shoes were cracked and peeling. Maxwell immediately contacted Fingerhut and told him that he did not want the shoes and wanted returned the money already collected by *271 Martini under the letter of credit. Maxwell had previously stopped payment on its check for $25,890.30, so Martini never received that payment. Fingerhut in turn contacted his associates at Southline in Brazil and informed them that Maxwell had rejected the shoes, but that he was trying to work out a solution to the problem. Subsequently, Maxwell notified Fingerhut by letter that the shoes had been misrepresented; that it considered Fingerhut responsible for recovering the money that it had paid Martini; and that if it did not have a positive response from Fingerhut by May 1, 1988, it would start selling the shoes at any price and would charge any expenses or losses to Fingerhut. Maxwell also offered to reship the goods provided it received a guaranty of payment of its shipping costs. When Maxwell did not receive word from anyone by May 1, 1988, as to whether the shoes were to' be reshipped, it sent the shoes to Maine to be refinished at two dollars a pair. Maxwell then sold the refinished shoes over the next two years for the sum of $145,737 which it retained.

Martini never received notice directly from Maxwell itself regarding the quality of the shoes or that Maxwell wished to return the shoes. When Maxwell stopped payment on its check, Martini did ask Southline why Maxwell did so and was informed by Southline that Maxwell was dissatisfied with the shoes but that they were trying to work out a solution to the problem.

Based on these facts, the judge concluded that Maxwell, at first, properly rejected the shoes but once it shipped the goods to Maine to be refinished, it accepted them and, thus, was liable for the remaining balance due on its contract with Maxwell in the sum of $25,890.30. The judge determined, however, that Martini was liable for breach of the implied warranty of merchantability, because the shoes received by Maxwell were defective and could not be sold by Maxwell in that condition. The judge decided that Maxwell was entitled to recover only the cost of refinishing the goods in the amount of $24,084 (two dollars a pair). The judge also deter *272 mined that Maxwell’s issuance of a stop payment of its check for $25,290.30 was not a violation of G. L. c. 93A.

Martini claims the judge erred (1) in failing to find when and where the shoes were to be delivered and in failing to determine the effect of the issuance of the certificate of inspection by Southline on the issue of acceptance; (2) in concluding that it was in breach of the implied warranty of merchantability; and (3) in ruling that Maxwell had not violated G. L. c. 93A. In its cross appeal, Maxwell claims the judge erred (1) in finding it had accepted the shoes and (2) in her computation of damages on its claim for breach of implied warranty of merchantability. We now address the parties’ claims of error.

The principal issue in this case is whether the shoes were accepted by Maxwell. The judge ruled that Maxwell accepted the shoes when it shipped the goods to Maine to be refinished on the ground that an alteration or repair of a defect in goods is an act “inconsistent with the seller’s ownership,” G. L. c. 106, § 2-606(1 )(c), as inserted by St. 1957, c. 765, § 1, as it is not one of the prescribed remedies which a buyer is allowed to pursue once he rightfully rejects the goods. G. L. c. 106, § 2-604. Maxwell claims this was error because the judge applied too rigid an interpretation of G. L. c. 106, § 2-604.

Section 2-604, as inserted by St. 1957, c. 765, § 1, provides in pertinent part, “if the seller gives no instructions within a reasonable time after notification of rejection the buyer may store the rejected goods for the seller’s account or reship them to him or resell them for the seller’s account with reimbursement. . .

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630 N.E.2d 299, 36 Mass. App. Ct. 268, 23 U.C.C. Rep. Serv. 2d (West) 89, 1994 Mass. App. LEXIS 274, Counsel Stack Legal Research, https://law.counselstack.com/opinion/industria-de-calcados-martini-ltda-v-maxwell-shoe-co-massappct-1994.