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Martha Stewart Testifies in Manhattan Court

Donald Bowers/Getty Images for JCPENNEY(NEW YORK) -- Martha Stewart returned to a New York courtroom Tuesday to testify in a legal spat between Macy's Inc. and J.C. Penney Co. over which retailer has rights to the domestic diva's product line.

Macy's sued Martha Stewart Living for breach of contract in Jan. 2012, saying an agreement to sell products at J.C. Penney in 2011 ran counter to Stewart's deal with Macy's in 2006.

Stewart, 71, took the stand in New York State Supreme Court in Manhattan. In a short, light brown skirt and matching vest with a cream colored blouse underneath Stewart answered questions about the Macy's, J.C. Penney dispute.

It's been eight years since she was convicted of lying to authorities about her sale of ImClone stock and served a prison term.

Stewart founded Martha Stewart Living Omnimedia in 1997 and she is chairwoman of the public company. The company's stock (NYSE: MSO) fell 1.2 percent to $2.47 a share around 10:15 a.m. EST.

Asked by Ted Grossman, attorney for Macy's, whether she was comfortable on the witness stand, Stewart replied, "As comfortable as can be."

Macy's insists it has exclusive rights to Stewart's line of linens and other home items and is suing to block J.C. Penney from selling similar products.

Asked whether Stewart's company suggested to Macy's that it could or would sell goods in any competing department store Stewart answered, "There were categories that were non-exclusive to Macy's that we could sell in other department stores."

Stewart said she did business with lots of other stores.

"I don't know if you can consider Petsmart a department store for pets," she said. "Michaels is kind of a department store for crafts."

Copyright 2013 ABC News Radio

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