The following e-filed documents, listed by NYSCEF document number (Motion 003) 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 109, 110, 111, 113, 114, 115, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 136, 137 were read on this motion for ORDER OF PROTECTION DECISION ORDER ON MOTION ORDER Upon the foregoing documents, it is ORDERED that the motion of defendant RAINBOW APPAREL DISTRIBUTION CENTER CORP. for a protective order is GRANTED; and it is further ORDERED that the discovery status conference order dated September 24, 2019 is vacated to the extent that it directed defendant to “produce its financial statements for 2010, 2011, 2012, 2013″; and it is further ORDERED that the notice for discovery and inspection of such financial statements is quashed, and the defendant need not, and shall not, produce the foregoing records; and it is further ORDERED that the cross motion of plaintiff JRG APPAREL GROUP, CO., LTD., for summary dismissal of the affirmative defenses interposed by defendant and partial summary judgment on its complaint is denied; and it is further ORDERED that counsel are directed to appear for a discovery status conference in lAS part 59, 60 Centre Street, Room 331, New York, New York, not personally but via Skype for Business on August 19, 2020, 11 AM, upon the filing by any counsel of the standard request for conference form ([email protected]) at least two days in advance of such date. DECISION This court concurs with defendant buyer that its financial statements, which plaintiff seeks to discover, are immaterial to its counterclaim for damages for breach of purchase orders arising from plaintiff’s alleged late delivery, failure to deliver, or delivery of non-conforming goods under the various purchase orders. As to plaintiff’s alleged failure to deliver goods under certain purchase orders: “The Uniform Commercial Code, §2-711 gives the nonbreaching party the alternative of either seeking partial self-help of cover along with recovery of damages (UCC 2-712), or recovering damages only for the differential between the market price and the contract price, together with incidental and consequential damages less expenses saved (UCC 2-713)”. Fertico Belgium S.A. v. Phosphate Chemicals Export Assn., Inc., 70 NY2d 76, 81-82 (1987). With regard to the counterclaim that plaintiff allegedly delivered the goods late or that the goods delivered were non-conforming, defendant offers some evidence that within a reasonable time after it discovered the breach, it notified plaintiff seller. Under such circumstances, “[a] buyer must pay for accepted goods at the contract rate (see UCC 2-609[1]), but may eliminate or diminish the amount claimed by a seller by asserting a valid counterclaim for breach of the sales agreement.” Accent Commercial Furniture, Inc. v. P. Schneider & Associates, PLLC, 110 AD3d 1415, 1416 (3d Dept. 2013). Defendant’s annual financial statements are not material, i.e. such records would not tend to lead to evidence probative on the question of damages, as such statements have no bearing on either the alleged market price of the goods not delivered when plaintiff cancelled the purchase order and anticipatorily breached such purchase order(s), or on the alleged unpreventable damage that defendant suffered as a result of the late delivery of goods under certain purchase orders. Since they are thus immaterial, defendants are entitled to a protective order quashing the request for some. See Slavenburg Corp. v. North Shore Equities, Inc. 76 AD2d 769, 770 (1st Dept. 1980). As for plaintiff’s cross motion for summary judgment, defendant comes forward with a copy of a factoring agreement dated July 14, 2009, between plaintiff and a non-party Rosenthal & Rosenthal, wherein plaintiff assigned its receivables to that financing company. Defendant also submits several of its checks, made payable to such non-party- for the benefit of plaintiff, one, in the amount of $109,161.07, dated April 3, 2013 Taken together, such documents raise an issue of fact whether the invoice dated February 3, 2013 in the amount of $57,600.00 for goods that plaintiff asserts were delivered and accepted by defendant has already been paid. Defendant has also raised an issue of fact as to whether plaintiff lacks standing to sue for payment of the invoices, in light of its assignment of its receivables to non-party Rosenthal and Rosenthal. Plaintiff is not entitled to either summary judgment on such invoice or to a dismissal of defendant’s affirmative defenses, as there are triable issues of fact with respect to payment and standing. CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION X GRANTED DENIED GRANTED IN PART OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE Dated: July 27, 2020
