Canusa Corporation v. A&R Lobosco, Inc.

986 F.Supp. 723 (1997)

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Nature of the Case

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Facts

Canusa (P) sought damages for lost sales as a result of an alleged breach of contract by Lobosco (D). P recycles and brokers waste paper. D receives, collects, cleans and resells recyclable paper to paper mills and brokers. D entered into an agreement with the City of New York to accept 850 tons of material per week to be recycled. D needed a baler to do this work and put down a deposit on a baler but then decided to go with P because P would finance the baler. An output agreement was entered for a five-year period in which D would ship to P 1500 tons per month of number 8 quality old newsprint. From the very beginning of the agreement, problems arose in that D never hit its target goals of shipments. D was off by 30% plus consistently. At the same time, D was also shipping another paper product to Mandala, but there was no direct evidence regarding the quality and content of these overseas shipments. Eventually, D's shipments to P decreased to O by March 1994. The contract was originally supposed to terminate at the end of 1997. Modifications to the contract were offered for a $3 per ton fee for use of the baler and set monthly payments. D never accepted any of the modification proposals. P sued D for breach, fraudulent inducement, and replevin of the baler. Partial settlement was reached, and all that remained was the breach of contract action.