Fashion Leaf Garment Co. Ltd v. Ringer Jeans LLC

Background

Fashion Leaf Garment Co., Ltd. and CTR Holdings LLC sued Ringer Jeans LLC and Gabriel Zeitouni. Fashion Leaf claimed that Ringer Jeans failed to pay for clothing that Fashion Leaf sold and delivered. CTR claimed that Ringer Jeans and Zeitouni breached agreements connected to a planned joint venture involving Ringer Jeans Apparel, LLC (RJA).

Fashion Leaf asserted that the unpaid balance was $2,411,933.10. The parties disputed the total amount and value of the goods, whether the goods met quality requirements, and whether Ringer Jeans owed the claimed amount. Ringer Jeans also asserted a counterclaim based on allegedly defective inventory that customers marked down or returned.

CTR relied on an Asset Purchase Agreement and an RJA limited liability company agreement. CTR alleged that Ringer Jeans did not transfer certain assets and licenses, did not stop operating its wholesale apparel business, and did not operate RJA as contemplated. CTR also alleged that it paid $375,000 toward the venture; Ringer Jeans contended that CTR paid $300,000.

The court’s analysis

Under the summary-judgment rule, a court may enter judgment without a trial only when the evidence shows that no important factual dispute exists and the moving party is entitled to judgment under the law.

For Fashion Leaf’s goods-sold-and-delivered claim, the court treated two purchase orders supplied by the defendants as evidence of valid contracts totaling $582,606.40. The purchase orders contained quantity and price terms, and the parties did not dispute their authenticity or accuracy. But the court found multiple factual disputes. The parties disagreed about the total amount and value of the goods, and the invoices did not establish the claimed outstanding balance. The court also noted that some invoices involved purchase orders issued to another company, and that Fashion Leaf had not provided documentary evidence establishing that the goods were shipped or received by Ringer Jeans. The court therefore denied summary judgment on this claim.

For CTR’s breach-of-contract claims, the court found that the Asset Purchase Agreement and the RJA Agreement were enforceable agreements. The court rejected the defendants’ argument that the Asset Purchase Agreement had been orally modified, because the agreement required amendments to be in writing and the plaintiff denied the alleged modification. Even so, the court found that the Asset Purchase Agreement did not contain a provision governing damages liability, so CTR was not entitled to summary judgment on that claim.

The court likewise denied summary judgment on the RJA Agreement claim. The agreement did not contain a provision governing damages liability. Although it allowed the parties to seek return of capital contributions after dissolution, the court found no documentary evidence that RJA had been dissolved. The parties also disputed the amount CTR paid, and the court therefore concluded that CTR had not met its burden for summary judgment.

Ruling

Judge Andrew L. Carter, Jr. denied plaintiffs’ motion for partial summary judgment, ECF No. 223, on both Fashion Leaf’s goods-sold-and-delivered claim and CTR’s breach-of-contract claims. The Clerk was directed to close the motion, and the parties were directed to file a joint status report by April 5, 2024.