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MALNOVE INC. v. HEARTHSIDE BAKING CO.

October 31, 1996

MALNOVE INCORPORATED OF NEBRASKA, d/b/a MALNOVE INCORPORATED, a Nebraska corporation, Plaintiff,
v.
HEARTHSIDE BAKING CO., INC., d/b/a MAURICE LENELL COOKY COMPANY, an Illinois corporation, Defendant.



The opinion of the court was delivered by: DENLOW

 The Court conducted a two-day bench trial on October 21 and 22, 1996. The Court has considered the testimony of the four witnesses called to testify, Patrick Buckley, Terry Cohen, Wayne Cohen and Patrick Murnane, has reviewed the exhibits introduced into evidence, has studied the legal authorities cited by the parties in their written submissions and has listened to the fine closing arguments of counsel. The Court enters the following findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure.

 I. THE PARTIES

 1. Plaintiff Malnove Incorporated of Nebraska, (d/b/a Malnove Incorporated ("Malnove") is a Nebraska corporation with its principal place of business in Omaha, Nebraska. Malnove is engaged in the business of manufacturing and selling printed folded cartons.

 2. Defendant Hearthside Baking Co., Inc., (d/b/a Maurice Lenell Cooky Company ("Maurice Lenell"), is an Illinois corporation with its principal place of business in Chicago, Illinois, engaged in the business of manufacturing, packaging and selling bakery goods. In connection with its business, Maurice Lenell purchases millions of printed folding cartons per year to package the cookies it manufactures.

 II. JURISDICTION AND VENUE

 3. The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a), because there is complete diversity of citizenship and the amount in controversy exceeds $ 50,000.00, exclusive of interest and costs. Venue lies in this district pursuant to 28 U.S.C. § 1391(a).

 III. THE MERITS

 4. This dispute involves two claims by Malnove arising out of two orders by Maurice Lenell to purchase printed folding cartons to package its cookies. The first claim involves the amounts remaining due and owing on the delivery of 250,000 printed folding cartons known as 20 oz. Family Favorite boxes ("Family Favorite claim"). The second claim involves the amounts remaining due and owing on the order of 500,000 printing folded cartons known as 20 oz. Pinwheel Cookie boxes ("Pinwheel claim"). Illinois substantive law governs this dispute.

 A. FAMILY FAVORITE CLAIM

 5. The parties entered into a contract for the manufacture and sale by Malnove of 250,000 Family Favorite boxes pursuant to Maurice Lenell purchase order No. 30658 dated October 29, 1993 (Px 2), and Malnove acknowledgment No. 16860 dated November 4, 1993 and executed by Terry Cohen on behalf of Maurice Lenell on November 12, 1993. (Px 3). Pursuant to this contract, Malnove manufactured and delivered all 250,000 of the Family Favorite boxes.

 6. Maurice Lenell has paid for all of the Family Favorite boxes, except for the final shipment of 30,000 boxes which were invoiced in the amount of $ 4,140.00 on January 31, 1995 pursuant to invoice No. 93577. (Px 4).

 8. The acknowledgment form agreed to by the parties provides that Maurice Lenell is liable for a finance charge of 1 1/2% per month on all past due invoices and all expenses and fees, including reasonable attorneys' ...


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