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Windsor Card Shops, Inc. v. Hallmark Cards, Inc.

957 F. Supp. 562 (D. N.J. 1997)

STATUTE OF LIMITATIONS; CONTRACTS; ORAL AGREEMENTS — In New Jersey, the statute of limitations begins to run when the plaintiff knows of its injuries and of facts sufficient to attribute fault for them. When parties disagree as to an essential contract term, the court cannot supply the missing term.

A greeting card shop which had long done business with a major greeting card manufacturer complained of the manufacturer’s conduct when it allowed competing shops to open in 1987 and 1988. Subsequently, the card shop amassed a large debt to the manufacturer which went unpaid despite a series of agreements purporting to settle the debt. When final settlement failed in 1996, the card shop sued the manufacturer on nine grounds ranging from breach of contract to duress. The Court found eight of the plaintiff’s causes of action to be time barred, holding that the plaintiff’s causes of action were based on the opening of the competing shops in the late 1980s.

In New Jersey, a cause of action accrues when a potential plaintiff knows of its injuries and of facts “sufficient to attribute those injuries to the fault of another.” The record indicated that the plaintiff knew and complained about the opening of the competing card shops in 1988, and that whatever causes of action the plaintiff may have had accrued at that time. Plaintiffs conceded that the statute of limitations had run on these claims by the time they brought suit in 1996, but propounded equitable arguments for tolling the statute. The Court was not impressed with these arguments, finding that the corporate plaintiff had misstated the facts, breached some of the agreements it had made, and, in sum, was “not a party properly situated to receive an ‘equitable’ remedy.”

The sole cause of action to survive the statute of limitations was the claim of the individual plaintiffs, who guaranteed the debt of the plaintiff greeting card store, that those guarantees had been executed under duress. However, this claim also was dismissed. The substantive reason for the dismissal was the Court’s earlier finding that the “duress” was nothing more than normal renegotiation of debt between creditor and debtor.

The Court also denied plaintiffs’ motion to amend its complaint to attempt to enforce a purported settlement agreement. Reviewing the procedural history of the case, the Court dismissed on the ground of undue delay. However, the Court stated that a permitted alternative ground of dismissal is if the amended complaint would not withstand a renewed motion to dismiss, and amendment would therefore be futile. The Court concluded that this futility also presented a viable ground for denial of the motion.

The last attempt to settle the debt centered on a proposal by the manufacturer to accept a settlement amount in installments paid at specified times. The greeting card shop purportedly agreed to the settlement amount, but requested changes in the times and amounts of the installments. In the Court’s view, no enforceable obligation existed because the card store’s proposal constituted disagreement on an essential term and therefore amounted to “less than the unqualified acceptance” required to create a contract. Because the parties had disagreed on an essential term, not omitted it, the Court did not have the power to fill it in. Almost as an aside, the Court noted that the card store had never tendered payment in accordance with the terms to which it claimed it had agreed. Such a tender, if made, would have evidenced its intent to be bound, but “without mutual assent as to the payment schedule and without the tendering of payment found it unlikely” that an enforceable agreement was formed.


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