Robinson Brog Leinwand Greene Genovese & Gluck, P.C. - New York City Business Litigation Attorneys

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Supreme Court Denies Seller Damages For Returned Goods Which It Sold In A Private Sale Without Notice To Buyer

John D. D'Ercole of Robinson Brog Leinwand Greene Genovese & Gluck P.C. received a verdict after trial in favor of his client Zalmen Reiss & Associates, Inc. from Justice Carolyn E. Demarest of the Supreme Court in Kings County. In Fuji Photo Film USA, Inc. v. Zalmen Reiss & Associates, Inc., No. 1708/09, plaintiff seller brought an action seeking to recover damages representing the balance between the contract price of one gigabyte XD Picture Memory Cards that it sold to the defendant buyer, and the price it obtained when it resold the goods in a private sale upon the return of the goods by the defendant. The Supreme Court held that pursuant to UCC §2-706(3) a seller reselling goods which have been wrongfully rejected must give notice to the buyer of its intent to resell the goods at a private sale. The Court held that the failure of the seller to provide such notice to the buyer precludes the seller from recovering damages pursuant to UCC §2-703 representing the difference between the contract price and the amount recovered upon resale. The Supreme Court also held that as an alternative the plaintiff could have sought recovery pursuant to UCC §2-708 for the difference between the market price at the time and place for tender and the contract price. The burden, however, is upon the seller to establish the applicable market price so as to demonstrate that the unnoticed private sale resulted in a fair price. The Supreme Court determined that the seller was precluded from recovering damages under UCC §2-708 since the proof at trial demonstrated that the resale of the returned merchandise was not commercially reasonable.