Alliance Laundry Systems, LLC v. Thyssenkrupp Materials, N.A.

Alliance Laundry Systems, LLC (Alliance) (plaintiff) manufactured equipment. Thyssenkrupp Materials, N.A. (defendant), through its Ken-Mac Metals division (Ken-Mac), sold and distributed stainless steel. In May 2005, Alliance and Ken-Mac entered into an agreement for Ken-Mac to supply Alliance with stainless steel according to Alliance’s specifications. The supply agreement ran between July 1, 2005, and December 31, 2006. During the course of the supply agreement, Alliance sent purchase orders to Ken-Mac, which would sign and return the orders to Alliance by mail or with the corresponding shipment. Starting in 2006, Alliance fell behind in paying Ken-Mac, leading Ken-Mac to send Alliance multiple requests for payment to prevent Ken-Mac’s credit department from holding further shipments to Alliance. By 2007, Alliance still had a past-due balance with Ken-Mac and was buying stainless steel from another supplier. In February and March 2007, Ken-Mac asked Alliance whether it wanted to buy certain stainless steel that Ken-Mac had manufactured to Alliance’s specifications and that Ken-Mac was having trouble selling (leftover steel). On March 20, Alliance emailed Ken-Mac an offer, to which Ken-Mac responded with a request for a purchase-order number so that Ken-Mac could commence shipping. Alliance provided Ken-Mac with a purchase order on March 23. During this period, Alliance paid some, but not all, of the money it previously owed Ken-Mac. Ultimately, Ken-Mac decided that Alliance was not creditworthy and sold the leftover steel to another buyer. Alliance, which did not dispute that it owed Ken-Mac money or complain about Ken-Mac’s decision to suspend shipments of other steel to Alliance, sued Ken-Mac. Per Alliance, the parties’ February and March emails created a valid contract under the Uniform Commercial Code (UCC) for Ken-Mac to sell Alliance the leftover steel, which Ken-Mac breached. Alliance moved for summary judgment. Ken-Mac opposed Alliance’s motion, arguing that the parties’ emails could not form a contract due to the UCC’s statute of frauds and that, even if they did, the parties’ prior dealings and post-email conduct established the terms of their contract, including Ken-Mac’s right to sell the leftover steel to another buyer when it became concerned about Alliance’s creditworthiness. Ken-Mac also sought discovery regarding the contract’s terms.