Congelados del Cibao v. 3 Kids Corporation

Background

Congelados del Cibao sold and shipped frozen lobster tails from the Dominican Republic to 3 Kids Corporation in several transactions. This dispute concerned three shipments made in 2016 and 2017 under Invoice Nos. 79, 92, and 94. 3 Kids received the shipments and made some installment payments on Invoice No. 79, but made no payments on Invoice Nos. 92 and 94. The parties disputed the amounts remaining due and whether the lobster met quality specifications that 3 Kids claimed had been agreed upon.

Congelados asserted a breach-of-contract claim against 3 Kids and Dominick Chiappone, alternative claims for quantum meruit and unjust enrichment, and a fraud-in-the-inducement claim against Chiappone. Congelados moved for summary judgment under Rule 56 on the contract and alternative claims. Chiappone separately moved for summary judgment on the fraud claim.

Breach of Contract

The court held that the United Nations Convention on Contracts for the International Sale of Goods, commonly called the CISG, governed the contract claim because the parties conducted business in different countries that are parties to the Convention. The court found no genuine dispute that the invoices and accepted shipments created enforceable agreements, that Congelados performed by delivering the lobster, and that 3 Kids failed to pay in full.

The court rejected 3 Kids’ argument that there was a factual dispute about whether the shipments were required to be “Number 1 quality” lobster. The invoices did not specify that quality requirement, and the communications cited by 3 Kids showed dissatisfaction with some shipments but did not establish that the three shipments at issue were subject to that requirement. The court also held that, even assuming the contracts required Number 1 quality and the shipments did not meet that standard, 3 Kids had not demanded substitute goods or declared the contracts void within a reasonable time. Its acceptance of the shipments and continued failure to make full payment therefore did not prevent summary judgment for Congelados against 3 Kids.

The court separately held that the record contained no evidence that Chiappone entered into the contracts in his individual capacity. The court therefore dismissed the breach-of-contract claim against him.

Alternative Claims

Because the court found enforceable contracts, it dismissed Congelados’s alternative quantum-meruit and unjust-enrichment claims. Those theories apply when there is no enforceable contract governing the subject matter.

Fraud in the Inducement

Congelados claimed that Chiappone falsely assured it that 3 Kids would pay the balance on Invoice No. 79, inducing Congelados to enter into later transactions. The court held that Congelados had not identified evidence from which a reasonable factfinder could conclude that Chiappone made those assurances knowing they were false and intending to deceive. The fact that the assurances were made, that 3 Kids wanted to continue its business relationship with Congelados, and that the invoices were ultimately not paid was insufficient to establish fraudulent intent. The court therefore granted Chiappone’s motion for summary judgment on the fraud-in-the-inducement claim.

Disposition

The conclusion states that Congelados’s motion for summary judgment on Counts I and II was GRANTED IN PART and DENIED IN PART. It grants summary judgment for Congelados on Count I against 3 Kids, dismisses any Count I claim against Chiappone, and dismisses Count II in its entirety. It also states that Chiappone’s motion for summary judgment on “Count II” was GRANTED and that the count was dismissed. However, the opinion’s discussion identifies Chiappone’s motion as addressing Count III, the fraud-in-the-inducement claim. The conclusion appears to contain a count-numbering inconsistency. The court directed Congelados to submit a proposed judgment including prejudgment interest and directed the Clerk of Court to close the motions and the case.