Siderpali, S.P.A. v. Judal Industries, Inc.

Conipost, owned by Siderpali, S.P.A. (plaintiff), was a producer of steel shafts for streetlights. Judal Industries, Inc. (Judal) (defendant) was a manufacturer and distributor of street-lighting equipment. Conipost entered into a contract with Judal to supply it with steel shafts. The purchase price was $169,504 in total. Judal paid $70,000 in cash to a bank in New York prior to delivery. Judal obtained a letter of credit from a bank for the balance. As security for Judal’s cash payment, Siderpali agreed to post a standby letter of credit issued by an Italian bank in the amount of $80,000, which would be available to Judal if Conipost failed to deliver the goods by September 15, 1989. The standby letter stated that the sum would be made available upon a certified letter signed by an authorized officer of Judal attesting to the goods not being received. The president of Judal wrote a demand letter on September 7, stating that Judal had not received the goods. The Italian bank issued a payment of $80,000. On September 13, Conipost placed the goods in possession of Netumar (defendant), an ocean common carrier, for transport from Brazil to New York. Netumar then issued a negotiable order bill of lading, authorizing Judal to take possession of the light poles. Conipost was paid the outstanding balance. The light poles arrived in New York on October 27. Judal attempted to pick up the light poles by employing cranes to unload the cargo. However, Netumar, at the behest of Conipost, refused to release the cargo to Judal. Siderpali sought but was denied a temporary restraining order to prevent Netumar from releasing the cargo to Judal. After Netumar released the remaining containers, Siderpali filed an amended complaint, alleging fraud in invoking the standby letter, conversion, and breach of contract against Judal. A magistrate granted summary judgment to Siderpali on the breach-of-contract and conversion claims. Judal answered the amended complaint by asserting numerous counterclaims, including that Conipost improperly instructed Netumar to refrain from releasing the light poles, causing damages for trucking, cranes, and crane operators. Conipost argued that it was justified in doing so because Judal had collected almost half of the purchase price by invoking the standby letter. Judal also filed a crossclaim against Netumar.