Toshoku America, Inc. v. Rhoda Lee, Inc.

—Judgment, Supreme Court, New York County (Herman Cahn, J.), entered February 23, 1994, upon the order of the same court, entered January 24, 1994, which granted plaintiff summary judgment in the amount of $98,912.25 and dismissed the counterclaim for punitive damages and severed the counterclaim for $26,000, leaving it for trial, unanimously modified, on the law, to grant to the defendant judgment on the counterclaim for $26,000 to offset the plaintiff’s judgment, and otherwise affirmed, without costs. The appeal from the order is dismissed, without costs, as subsumed in the appeal from the judgment. The parties entered into an agreement settling a dispute regarding the late shipment of polyester jacquard prints pursuant to which the plaintiff agreed to take back unused goods it had shipped to defendant and to export them to a "non-USA destination.” In addition, the plaintiff gave defendant a $26,000 credit against future business. The plaintiff then sold the goods to a foreign company for $98,912.25 and asked defendant to release the merchandise. Defendant refused to do so, claiming it was retaining the goods to "mitigate its damages.” Consequently, plaintiff’s sale was lost and, therefore, it sued for breach of contract and conversion. Defendant counterclaimed, inter alia, for the $26,000. The IAS Court granted plaintiff summary judgment, determining that the withholding of the fabric was a conversion. [456] However, it severed the counterclaim for the $26,000 credit leaving it to be resolved at trial. However, inasmuch as the judgment for the plaintiff was based on the defendant’s taking of the plaintiff’s property by reason of its withholding the goods when it was asked to release them, such taking would constitute the predicate for the $26,000 credit against future business and, accordingly, there, is no need for a trial on that issue. Concur—Murphy, P. J., Ellerin, Kupferman, Williams and Tom, JJ.