Starchem Laboratories, LLC v. Kabco Pharmaceuticals, Inc.

Starchem Laboratories, LLC (Starchem) (plaintiff) developed and sold nutritional supplements. Starchem special ordered some of its products from Kabco Pharmaceuticals, Inc. (Kabco) (defendant) and Futurebiotics, supplement manufacturers under the same ownership. Starchem paid Kabco late for some orders, and owed Kabco $3,000. Additionally, Starchem owed Futurebiotics nearly $28,000. Notwithstanding these unpaid balances, Starchem sent Kabco a purchase order for supplements costing $190,000. Under the terms of the purchase order, Starchem had 30 days to pay Kabco. Although Kabco procured the ingredients for Starchem’s order, Kabco did not begin manufacturing the supplements. Instead, Kabco sent Starchem a letter stating that Starchem must pay $165,000 up front and pay the balance it owed Futurebiotics prior to Kabco beginning production. Starchem responded with a request that Kabco extend it more credit. Kabco sent an email to Starchem again requesting that Starchem pay the balance it owed Futurebiotics. Starchem did not respond. Starchem filed suit against Kabco for, among other things, breach of contract. Starchem argued that Kabco unilaterally changed the terms of the contract, the purchase order, by limiting Starchem’s credit to $25,000 and requiring Starchem to pay Futurebiotics. Kabco filed counterclaims against Starchem and moved for summary judgment dismissing Starchem’s complaint.