Starchem Laboratories, LLC v. Kabco Pharmeceuticals, Inc.

43 Misc. 3d 1213(A) (2014)

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Nature of the Case

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Facts

P manufactures and sells dietary and nutritional supplements. D and Futurebiotics, LLC are in the business of manufacturing vitamins as well as dietary and nutritional supplements. P sent D purchase order 64 for 13,000 bottles of Armageddon and 4,000 bottles of Evolution, two of P's products, for $190,120.00. The payment terms were '30 days.' Kabco ordered the raw materials and bottles from third-party vendors but did not commence manufacturing or deliver any products to P. D sent a letter to P detailing out the fact that the bottles required are custom parts that are not returnable and the raw materials for the ingredients are not returnable as well. The payment term set by D for P is net 30 days, while D's credit limit is for $25,000. D detailed out how P has not paid D's sister company Futurebiotics in spite of several written and verbal promises made. D then stated it would proceed with the orders after a payment with a bank certified check for $165,120. The balance amount of $25,000 will be net 30 as per our agreed payment terms. D also wanted P to pay the outstanding balance due to Futurebiotics. P owed D $3,192.60 for another purchase order. P also owed Futurebiotics $27,880.00. D e-mailed P that it would begin manufacturing if P agreed to accept D's $25,000 credit limit. D e-mailed the plaintiff that it would begin producing P's products on Monday, September 8, 2008, and asked if P wanted to be present when production began or if it wanted D to send it a sample for testing. P asked D to extend it credit in the amount of $60,000 to $90,000. D did not respond to that request. P commenced this action against D and Futurebiotics. P sued Ds for breach of contract, fraudulent inducement, and estoppel. P alleges that D breached by unilaterally changing the terms of PO 64, by creating a credit limit in the amount of $25,000, and by demanding that P make payments to Futurebiotics. P alleges that D fraudulently induced it to enter into PO 64 by misrepresenting the terms of their agreement. P claims it relied on D's misrepresentations and that D is estopped from changing the terms of PO 64. The two causes of action against Futurebiotics were for tortious interference and for breach of a separate nondisclosure agreement. Ds counterclaimed in the amounts of $27,800.00 and $3,192.60. Ds moved for summary judgment dismissing the complaint and for summary judgment in their favor on the counterclaims.