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VOL. 122 | NO. 190 | Monday, October 8, 2007

Contracts in Breach

AutoZone among entities filing breach of contract complaints in Q3

By Rosalind Guy

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CASE CLOSED: Click on the image to read the full order of dismissal regarding this case.

Editor's Note: In May 2008, a Chancery Court lawsuit over the wrong barcodes on items at AutoZone stores has been settled and dismissed. The claim by Autozone and the counter claim by Mizco were settled in May and the consent order for dismissal was signed by Chancellor Arnold B. Goldin. No terms of the settlement were disclosed.

During the third quarter of this year, AutoZone Parts Inc. filed a breach of contract complaint against New York-based Mizco International and the company's CEO, Albert Mizrahi, and vice president of operations, Sam Mizrahi.

AutoZone is seeking $3 million in compensatory damages and the reimbursement of $115,000 in labor costs, in a case where AutoZone accused Mizco International of intentionally taking actions outside of what was spelled out in an August 2006 vendor agreement.

The suit, which was filed in Shelby County Chancery Court, was just one of the 51 breach of contract complaints filed in the quarter, according to The Daily News Online, www.memphisdailynews.com.

In breach

Though the number of third quarter breach of contract filings in Chancery Court remained relatively unchanged when compared to the same quarter last year, breach of contract filings in Shelby County Circuit Court almost doubled. In Q3 2007, 214 breach of contract suits were filed, up considerably from the 121 filed during the same period last year.

The filings have jumped because more people are having difficulty paying debts such as furniture or credit card bills, said Van Sturdivant, chief administrator of Shelby County Circuit Court.

"When the economy goes south and people have a hard time making ends meet, the companies end up coming in and filing civil suits against them to try and get their money," Sturdivant said.


Mizco International is a supplier of multiple products including cellular phone accessories such as chargers, cases, headsets and other products.

In the suit, AutoZone claimed Mizco violated the terms of their vendor agreement when it shipped mislabeled products to various AutoZone locations. In September, AutoZone officials said they noticed some of the items shipped from Mizco were improperly labeled.

"When scanned by the cashier, the earphones would ring up as if they were an FM radio, and the customer would be charged the FM radio price," AutoZone officials claimed in the suit.

"Mizco had intentionally mislabeled products because it had run out of some of the products that AutoZone ordered. Mizco chose to fill AutoZone's orders with different products labeled as if they were the products that had been ordered," the suit alleges.

Burch, Porter & Johnson PLLC filed the suit on behalf of AutoZone. There haven't been any new developments in the case as of yet, said Burch Porter attorney Jef Feibelman.

"We're just getting started," he said.

Up, down and all around

In other courts, meanwhile, filing activity is across the board.

In Circuit Court, for example, Q3 filings overall fell 7.3 percent to 1,550 from the 1,673 Q2 filings, and fell 8.6 percent from the 1,695 Q3 2006 filings.

The majority of case types filed in the court continues to be divorce, divorce with children, auto accidents and breach of contract. Auto accident cases edged to the forefront of Circuit Court filings, representing 21.2 percent of all cases filed in Circuit Court. Auto accidents numbered 277 in Q3 2006, making up 16.3 percent of filings.

Other types of cases filed in Circuit Court include workman's compensation, personal injury and appeals from Shelby County General Sessions Court.

Some case types, such as divorce and divorce with children cases, can be heard in either Circuit Court or Shelby County Chancery Court.

In Q3 this year, 185 divorce cases - with 105 of those being divorce with children petitions - were filed in Chancery Court. That number is slightly down from 197 filed in the same period last year.

Other filings in Chancery Court include adoptions, which climbed to 84 in Q3, compared with 50 filed during the same period in 2006.

The total number of Q3 filings in Chancery Court was 646, up 8.4 percent from Q3 2006 and Q2 2007, both of which came in at 596 filings.

Despite the fluctuations in certain case types at Circuit Court last quarter, the overall number of cases remained steady, something Sturdivant said is typical with the court.

"Unless there's something going on legislatively, there usually aren't any big changes or noticeable trends in filings," he said. "And, of course, it just depends on who needs to file a case at that time."

Filings in Shelby County Probate Court also remained steady last quarter, with 310 filings compared to 324 filed in the same period in 2006. In Q2, 306 cases were filed in Probate Court. Cases filed in Probate Court include wills, administrations, conservatorships and guardianships.

The number of civil filings in the Memphis office of the U.S. District Court, Western District of Tennessee fell nearly 28 percent to 183 from 254 in Q3 2006 and fell 29 percent from 258 in Q2 2007, according to the court's electronic document filing system. Those numbers include civil cases that were opened or re-opened during the quarter.

PROPERTY SALES 101 603 9,602
MORTGAGES 92 538 10,616
BUILDING PERMITS 215 1,282 20,958
BANKRUPTCIES 51 408 6,108