Facts

Plaintiff EVGA Corp. (EVGA) and defendant Hon Hai Precision Industry Co. Ltd. (Hon Hai) entered into an agreement on April 26, 2006, where Hon Hai would assemble parts for EVGA to sell to customers. A provision of the agreement provided that Hon Hai would credit EVGA's account for non-conforming merchandise returned by EVGA's customers in the form of a Return Merchandise Authorization (RMA) number. Various goods were returned by the customers to Hon Hai. EVGA brought suit for damages and Hon Hai counter-claimed.

PLAINTIFF'S CONTENTIONS:
EVGA claimed that it was not properly credited by Hon Hai for returned goods and seeks recovery in cash for the value of the goods in Hon Hai's warehouses. It also sought recovery of those goods still stored in Hon Hai's warehouses.

DEFENDANT'S CONTENTIONS:
Hon Hai contended that EVGA breached the contract by failing to make timely payments. Hon Hai claimed that this untimeliness absolved it of blame, according to the contract. Hon Hai contended that EVGA's accounting was questionable and, once a proper allocation was made for outstanding unpaid orders, EVGA would not be entitled to any recovery. Also, Hon Hai contended that some of the returned goods in question did not comply with the RMA procedures or were not under warranty. Finally, Hon Hai contended that EVGA failed to pay about 94 invoices Hon Hai issued for products delivered to EVGA pursuant to purchase orders issued by EVGA. Hon Hai contended that EVGA had accepted the goods as conforming.

Damages

EVGA sought to recover $546,506 for uncredited returned goods and $287,831 for goods consigned to Hon Hai and stored in warehouses. Hon Hai sought to recover $59,326.

Result

The court found in favor of Hon Hai on EVGA's claims and in favor of Hon Hai on its counterclaim, awarding damages.

Other Information

FILING DATE: Nov. 16, 2007.