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SONY FINANCIAL SERVICES v. MULTI VIDEO GROUP

United States District Court, S.D. New York


January 18, 2005.

SONY FINANCIAL SERVICES, LLC, Plaintiffs,
v.
MULTI VIDEO GROUP, LTD., RHINOCEROS VISUAL EFFECTS & DESIGN, LLC and COOL BEANS DIGITAL AUDIO, INC., Defendants. MULTI VIDEO GROUP, LTD. and RHINOCEROS VISUAL EFFECTS & DESIGN, LLC, Plaintiffs, v. SONY ELECTRONICS, INC., Defendant.

The opinion of the court was delivered by: GABRIEL GORENSTEIN, Magistrate Judge

REPORT AND RECOMMENDATION

These are two diversity actions that have been consolidated for pretrial purposes pursuant to Fed.R.Civ.P. 42(a). See Order, filed February 23, 2004 (Docket #42 in 1730).*fn1 In one action (04 Civ. 1321), plaintiffs Multi Video Group, Ltd. ("Multi Video") and Rhinoceros Visual Effects & Design, LLC ("Rhinoceros") filed suit against defendant Sony Electronics, Inc. ("Sony Electronics") alleging breach of contract ("Sony Electronics action"). Sony Electronics now moves to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(1) or 12(b)(3), or in the alternative, for summary judgment under Fed.R.Civ.P. 56. In the other action (03 Civ. 1730), plaintiff Sony Financial Services, LLC ("Sony Financial") filed suit against defendants Multi Video for breach of a lease agreement and against Rhinoceros and Cool Beans Digital Audio, Inc. ("Cool Beans") for breach of two guaranties ("Sony Financial Action"). In that case, Sony Financial has moved for summary judgment pursuant to Fed.R.Civ.P. 56. For the following reasons, both Sony Electronics' and Sony Financial's motions for summary judgment should be granted.

I. BACKGROUND

  A. Factual Background

  1. The Beta-Test Site Arrangement

  Multi Video is a corporation organized under the laws of the State of New York. Complaint, filed Feb. 17, 2004 ("Complaint") (Docket #1 in 1321), ¶ 3. Multi Video is engaged in the business of "video and film post-production services, including editing, graphics and related activities." Id. Rhinoceros is a limited liability company with offices in New York City. Id. ¶ 4. Multi Video is a "managing member of Rhinoceros with a substantial equity ownership" interest in Rhinoceros. Id. ¶ 4. David Binstock is the President and CEO of Multi Video, as well as the managing member of Rhinoceros and Cool Beans, which is now known as Tonic Digital Equipment, LLC. Affidavit of David Binstock, filed Sept. 29, 2004 ("Binstock Aff.") (Docket # 77 in 1730), ¶ 1. Multi Video is the sole principal in Tonic Digital Equipment, LLC. Id.

  In the summer of 1999, Sony Electronics approached Multi Video and proposed installing certain state-of-the-art video equipment known as the "Edit Suite" and "Telecine Suite" (or "Vialta Telecine Suite") on Multi Video's premises. See Binstock Aff. ¶ 2; Affidavit of Anthony Manzo ("Manzo Aff.") (annexed to Sony Financial Service LLC's Notice of Motion for Summary Judgment (Docket #65 in 1730) ("Sony Fin. Notice of Motion")). Under this arrangement, Multi Video would "act as a beta test site" for the equipment so that Sony Electronics could "test, upgrade, modify and tailor the equipment `in the field,' . . . with the goal of selling such equipment to other companies in the industry." Binstock Aff. ¶¶ 2, 4. A "beta" test is the "second phase of technology testing" for an experimental product. See Complaint at 3 n. 2. After a product has been through the first, or "alpha," test, but before it is ready for the market, the beta test occurs, at which time the product is made available to select members of the intended audience who use the product and provide feedback. See id. Multi Video asserts that following the beta test, "Multi Video would be given the opportunity to purchase the Telecine and related equipment." Binstock Aff. ¶ 5. Sony Electronics also "agreed to service and maintain the Telecine and related editing equipment" and keep the equipment "in consistent working condition." Id. ¶ 7.

  2. The System Sale Agreement

  In order to enter into the beta testing arrangement, Multi Video, through Binstock, signed a System Sale Agreement with Sony Electronics effective October 28, 1999. See System Sale Agreement, dated Aug. 26, 1999 ("SSA") (reproduced as Ex. B to Notice of Motions to Supplement the Record, or to Dismiss, Transfer, or for Summary Judgment, filed Sept. 1, 2004 (Docket #21 in 1321) ("Sony Elec. Notice of Motion")). The SSA consisted of both the agreement and the annexed schedules. See id. § 1(i). The SSA "provides for the development, delivery, installation, and sale of the System . . . by [Sony Electronics] and the purchase of the System . . . by [Multi Video]." Id. § 2. The SSA also provides that "[a]ll references . . . to the `purchase' or `sale' of the System shall be understood by the parties to mean the purchase or sale of the Equipment and the Work and the licensing of the software by/to [Multi Video]." Id. "Equipment" is defined under the SSA as "all products, equipment, materials, and accessories furnished by Sony [Electronics] and listed on Schedule A. . . ." Id. § 1(iii). "Schedule A," which was annexed to the SSA, specifically lists as equipment the "HD Edit System" and the "HD Telecine System." Schedule A (reproduced as Ex. B to Sony Elec. Notice of Motion), at 1, 5. "Work," as it is defined in the SSA, refers to the services provided by Sony Electronics under the SSA concerning "the design, engineering and installation of the System. . . ." See SSA § 1(vi); Schedule B (reproduced as Ex. B to Sony Elec. Notice of Motion), at 1. Schedule B also provides that Sony Electronics will be responsible for managing all stages of the design, engineering and installation of the System. See Schedule B at 1, 3.

  The SSA defines the manner in which Multi Video is to accept the equipment upon delivery and Sony Electronics' obligations to Multi Video if the equipment does not conform to the requirements of the SSA. See SSA § 11. The SSA defines "Substantial Completion" as "that stage in the delivery of the System when same is operational and ready for use." Id. § 1(ix). The SSA outlines the procedure by which Multi Video is to accept or reject the equipment. See id. § 11. It states that once Sony Electronics has provided Multi Video with notice of substantial completion, Multi Video must determine whether the equipment conforms to the requirements of the SSA. See id. At that point, Multi Video may either accept the equipment or reject the equipment in "good faith" by giving Sony Electronics notice thereof. See id. If the equipment is rejected by Multi Video, Sony Electronics is thereafter obligated to "diligently work to correct any deficiencies noted" as to any portion rejected by Multi Video. Id. This procedure is repeated until Multi Video indicates that it is accepting the equipment. See id.

  The SSA specifically provides, under the heading "Prevailing Terms," as follows:

If any purchase order, acceptance or other document is used by [Multi Video] in connection with the purchase of the System, then notwithstanding any provisions therein contained to the contrary, the terms of all such documents shall be governed by the provisions of [the SSA] and any terms thereof which are inconsistent, different from, or in addition to, the provisions of [the SSA] shall be null and void and of no force or effect.
Id. § 3 (emphasis added). The SSA also contains an integration clause, which provides that it "supersedes, terminates, and otherwise voids any and all prior written and/or oral agreements between the parties with respect to the System." Id. § 21(j). In addition, the SSA contains a no-oral-modifications clause providing that it "may be modified only by a written instrument signed by both parties, making specific reference to [the SSA] and to the changes to be made." Id.

  The SSA also contains a provision designating California as the exclusive forum for disputes between the parties, see id. § 21(g), and also provides that any dispute arising under the agreement must be brought within two years of the accrual of the cause of action, id. § 19.

  3. The Lease Agreements

  Multi Video was free to obtain financing to purchase the equipment provided under the SSA from an entity other than Sony Financial. Manzo Aff. ¶ 5; see Multi Video Group Ltd.'s, Rhinoceros Visual Effects & Design, LLC's and Cool Beans Digital Audio, Inc.'s Opposition to Sony Financial Services, LLC's Statement Pursuant to Local Civil Rule 56.1, filed Sept. 29, 2004 (Docket #79 in 1730) ("MV Sony Fin. 56.1"), ¶¶ 9-11. Nonetheless, Multi Video utilized Sony Financial to finance the transaction. Id. Thus, in November 1999, shortly after the effective date of the SSA, Multi Video executed a Master Lease Agreement with Sony Financial. See Master Lease Agreement, signed by Multi Video Nov. 16, 1999 and signed by Sony Financial Jan. 27, 2000 (reproduced as Ex. A to Affidavit of Jeffrey L. Friesen, filed Sept. 1, 2004 (Docket #68 in 1730) ("Friesen Aff.") ("Lease")); MV Sony Fin. 56.1 ¶ 1. The purpose of the Lease was to finance the transaction between Sony Electronics and Multi Video. See Manzo Aff. ¶ 2. Sony Electronics was not a party to the Lease. Id. ¶ 3.

  The Lease has two parts, one for the Edit Suite and one for the Telecine Suite, which were reflected in two separate equipment schedules. MV Sony Fin. 56.1 ¶ 8. In addition, Rhinoceros and Cool Beans each executed guaranty agreements in favor of Sony Financial. See id. ¶ 16. Binstock was authorized to execute each guaranty. Id. ¶ 17.

  4. The Dealings Between the Parties

  In March 2000, the equipment that is the subject of the Lease and the SSA was delivered to Multi Video and installed. See Deposition of David Binstock (reproduced as Ex. R to Sony Fin. Notice of Motion) ("Binstock Dep."), at 89-90. On March 24, 2000, Multi Video signed the Notice of Substantial Completion as contemplated by the SSA. See SSA § 11; Binstock Dep. at 91. On or about September 27, 2000, Multi Video signed a second Notice of Substantial Completion. See Notice of Substantial Completion, dated Sept. 27, 2000 (reproduced as Ex. C to Friesen Aff.) ("Notice of Substantial Completion"), at 2. The purpose of the Notice of Substantial Completion was to verify that certain equipment had been installed and was operational. See id. at 1-2. The Notice of Substantial Completion also gave Multi Video the opportunity to acknowledge that certain equipment had not been installed or was not operational, and to list such equipment on a separate document. See id. The September 2000 Notice of Substantial Completion contained no exceptions. See id. at 1-2.

  Multi Video contends that after signing the September 2000 Notice of Substantial Completion, the equipment broke down on "multiple" occasions. Binstock Aff. ¶ 21. Thereafter, Multi Video was assured by Sony Electronics that the equipment would be made operable despite the breakdowns, but Sony Electronics "was never able to maintain the equipment in reliable working condition." Id.

  Nonetheless, on November 15, 2000, Multi Video signed a Delivery and Acceptance Certificate. See Binstock Dep. at 38; Delivery and Acceptance Certificate (annexed as Ex. A to Friesen Aff.) ("Certificate"). The Certificate states that, upon delivery of the equipment to Multi Video, the equipment "has been examined and/or tested and is in good operating order and condition and is in all respects satisfactory to [Multi Video] and as represented, and that said [e]quipment has been accepted . . . and complies with all requirements of [Multi Video]." Certificate ¶ 1. Multi Video again asserts that there continued to be "numerous breakdowns and deficiencies" with the equipment, Binstock Aff. ¶ 22, and that despite Sony Electronics' assurances, it was "never able to render the equipment in dependable and consistent working condition." Id.

  After Multi Video signed the Certificate, Sony Financial performed its obligation under the Lease by paying Sony Electronics. See MV Sony Fin. 56.1 ¶¶ 29-30. On November 7, 2000 Multi Video signed an Equipment Schedule. Equipment Schedule Number: 608740 (annexed as Ex. A to Friesen Aff.) ("Equipment Schedule"). The Equipment Schedule provided that any representations made by Sony Electronics or any of its representatives would not "affect [Multi Video] or [Sony Financial's] rights or obligations" to perform under the Lease. See Equipment Schedule.

  Multi Video made three up-front payments on the Telecine Suite portion of the Lease on October 31, 2000; November 15, 2000; and December 6, 2000. See Deposition of Patricia Paul at 178-79, 181 (annexed as Ex. S to Sony Fin. Notice of Motion) ("Paul Dep."). Multi Video was not required to make another payment on the Telecine portion of the Lease until more than a year later, or December 29, 2001. See Manzo Aff. ¶ 6; Sony Financial Services, LLC's Statement Pursuant to Local Civil Rule 56.1 (annexed to Sony Fin. Notice of Motion) ("Sony Fin. 56.1"), ¶ 44; Amortization Schedule (annexed as Ex. A to Sony Fin. Notice of Motion) ("Amortization Schedule"), at 1. Beginning on that date and continuing through September 29, 2006, Multi Video was required to make a number of monthly payments in the amount of $50,631.38. See Amortization Schedule at 1-2. None of these payments was ever made. Manzo Aff. ¶ 6; Sony Fin. 56.1 ¶ 45.*fn2

  Part II § 14 of the Lease also provides that Sony Financial may "accelerate under the Lease and any other agreement" between Sony Financial and Multi Video "all sums" that are due and "the discounted value . . . of those that will become due." Lease Pt. II § 14. Further, the Lease states that each accelerated sum shall have a discounted or present value "computed at 6% per annum." Id. Pt. II, § 15. Sony Financial accelerated the sums due pursuant to Part II § 14 of the Lease on March 13, 2003, the same date it filed its complaint in this matter. Manzo Aff. ¶ 7. The sum of the payments that Multi Video failed to pay from December 2001, when it was obligated to begin making payments, until the last payment missed prior to acceleration was $759,470.70. See id. Taking into consideration Sony Financial's right to accelerate under the Lease, the value of the sums that became due at the time the complaint was filed is $2,005,269.65. Id. ¶ 8. In addition, the Lease provides for collection charges in the event a payment is missed. Lease Pt. II § 12. The sum of the collection charges owed to Sony Financial through the date of acceleration was $172,146.69. Manzo Aff. ¶ 9. The sum of all damages calculated under the Lease is $2,936,887.04. Id. ¶ 10. Under the terms of both the Lease and the guaranties, Sony Financial is also entitled to attorneys' fees. Sony Fin. 56.1 ¶¶ 55-56.

  B. The Claims and Motion in the Sony Electronics Action

  In the Sony Electronics action, Multi Video has asserted a breach of contract claim against Sony Electronics, contending that Sony Electronics breached what it terms a "Beta Test Site Agreement" (also referred to herein as a "BTSA") by failing to appropriately service the Vialta Telecine video editing equipment, which Multi Video alleges never functioned as it was supposed to. See Complaint ¶¶ 29-33.

  On March 15, 2004, Sony Electronics filed a motion to dismiss or, in the alternative, for summary judgment in the Sony Electronics action. Notice of Motions to Dismiss or for Summary Judgment, filed March 15, 2004 (Docket #5 in 1321). Because, following briefing on this motion, both parties indicated that further discovery might be necessary, this Court denied Sony Electronics' motion without prejudice to re-filing the motion following the completion of discovery on August 10, 2004. See Report and Recommendation, dated August 9, 2004 (Docket #13 in 1321), at 3-4, 7, adopted by Order, filed Sept. 8, 2004 (Docket #24 in 1321). On September 1, 2004, Sony Electronics filed the instant motion to dismiss or, in the alternative, for summary judgment. Sony Elec. Notice of Motion at 1-2. The central dispute raised by the motion is whether the SSA governs the relationship between Sony Electronics and Multi Video with respect to Multi Video's claims in this case. Multi Video, in opposing Sony Electronics' motion, relies entirely upon the agreement it refers to as the "Beta Test Site Agreement," which it describes as "encompass[ing] the various writings, agreements and representations surrounding Sony Electronics' installation and lease . . . of certain Telecine and other editing equipment to Multi Video for use in its post-production and video editing business." Multi Video Group Ltd. and Rhinoceros Visual Effects & Design, LLC's Memorandum of Law in Opposition to Motions to Supplement the Record, or to Dismiss, Transfer, or for Summary Judgment, filed Sept. 29, 2004 (Docket #26 in 1321) ("MV Sony Elec. Mem."), at 1, 10. Multi Video maintains that the SSA and the Lease with Sony Financial were merely "preliminary" agreements entered into prior to entering into the overarching BTSA, which it asserts is the "governing agreement" between the parties. Id. at 10.

  In contrast, Sony Electronics maintains that there is no "enforceable contract for the provision of the equipment by Sony Electronics other than the [SSA] itself." Memorandum of Law in Support of Motions to Supplement the Record, or to Dismiss, Transfer or for Summary Judgment, filed Sept. 1, 2004 (Docket #23 in 1321) ("Sony Elec. Mem."), at 20. In other words, Sony Electronics contends that the SSA is not "part of" a larger, more "overarching" enforceable contract. Id. Rather, Sony Electronics relies entirely upon the SSA, arguing that "[t]he evidence shows that the [SSA] is the written, integrated contract by which Sony Electronics agreed to install the equipment that is the subject of Multi Video['s] . . . claim." Id. at 13. According to Sony Electronics, regardless of whether or not the BTSA exists, the provisions of the SSA, including its forum selection clause, apply to Multi Video's breach of contract claim and require that this action be dismissed. See id. at 20.

  Thus, Sony Electronics has now moved to dismiss Multi Video's complaint on the ground that the forum selection clause contained in the SSA required that the instant action be brought in either a federal or state court in California. See SSA § 21(g); Sony Elec. Notice of Motion at 2. Alternatively, Sony Electronics seeks to transfer the instant action to the United States District Court for the Northern District of California pursuant to 28 U.S.C. § 1406(a) on the same grounds. Sony Elec. Notice of Motion at 2. Sony Electronics has also moved for summary judgment on the grounds that under the SSA, Multi Video's claims are time-barred and its remedies are limited. See SSA §§ 17, 19; Sony Elec. Notice of Motion at 2. Because Sony Electronics' motion for summary judgment may be resolved based on the applicability of the SSA's forum selection clause alone, it is unnecessary to reach Sony Electronics' contractual-limitations-period and limitation-of-remedies arguments.

  C. The Claims and Motion in the Sony Financial Action

  In the Sony Financial action, Sony Financial alleges that Multi Video breached the Lease by failing to make all requisite payments. See Amended Complaint, filed Mar. 26, 2003 (Docket #7 in 1730), ¶¶ 24-26. In its amended complaint, Sony Financial also alleged that Rhinoceros and Cool Beans breached their guaranties by not making payments on the Lease when Multi Video failed to do so. See id. ¶¶ 31-34. On August 31, 2004, Sony Financial moved for summary judgment with respect to its claims against Multi Video, Rhinoceros and Cool Beans. See Sony Fin. Notice of Motion at 1-2. In response to Sony Financial's motion for summary judgment, Multi Video "disputes that the Master Lease is the governing agreement between the parties." MV Sony Fin. 56.1 ¶ 1. Rather, according to Multi Video, the Lease was "merely ancillary" and "[was] not to have any legal effect" until after the beta test was successfully completed. Multi Video Group Ltd., Rhinoceros Visual Effects & Design, LLC and Cool Beans Digital Audio, Inc.'s Memorandum of Law in Opposition to Plaintiff's Motion for Summary Judgment, filed Sept. 29, 2004 (Docket #76 in 1730) ("MV Sony Fin. Mem."), at 2. According to Multi Video, "neither the Lease, the equipment schedule nor the guaranties govern the agreement between the parties as the [L]ease was only to govern a prospective sale in the event the beta test proved successful." MV Sony Fin. 56.1 ¶ 16. Multi Video contends that the successful completion of the beta test was a condition precedent to the Lease's applicability, see id. ¶ 1, and that the beta test failed because Sony Electronics "was never able to render the equipment in dependable and consistent working condition," id. ¶ 24. According to Multi Video, therefore, it justifiably never commenced payment on the Lease for the Telecine Suite "because the beta test did not prove successful." Id. ¶ 48.

  II. APPLICABLE LEGAL PRINCIPLES

  A. Sony Electronics' and Sony Financial's Motions

  As noted, Sony Electronics has moved to dismiss Multi Video's complaint pursuant to Fed.R.Civ.P. 12(b)(1) and Fed.R. Civ. P. 12(b)(3) in part on the ground that the forum selection clause contained in SSA § 21(g) required that the instant action be brought in either a federal or state court in California. Sony Elec. Notice of Motion at 1-2.*fn3 Alternatively, Sony Electronics has moved to transfer the instant action to the United States District Court for the Northern District of California pursuant to 28 U.S.C. § 1406(a) on the same ground. Sony Elec. Notice of Motion at 2. Given that Sony Electronics has moved in the alternative under Fed.R.Civ.P. 56 and that both parties have followed the procedures governing such motions, the Court will treat this motion as one for summary judgment.

  In the Sony Financial action, Sony Financial has moved for an order granting summary judgment on its claims against Multi Video, Rhinoceros and Cool Beans. See Sony Fin. Notice of Motion at 1-2. Sony Financial also seeks a judgment "declaring that it is entitled to attorney[s'] fees and costs" pursuant to the terms of the agreements at issue and that it be permitted to present proof of such fees and costs. Id. at 2.

  B. Law Governing Motions for Summary Judgment

  Fed.R.Civ.P. 56(c) provides that summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." See also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A material issue is a "dispute? over facts that might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. Thus, "`[a] reasonably disputed, legally essential issue is both genuine and material'" and precludes a finding of summary judgment. McPherson v. Coombe, 174 F.3d 276, 280 (2d Cir. 1999) (quoting Graham v. Henderson, 89 F.3d 75, 79 (2d Cir. 1996)).

  "In moving for summary judgment against a party who will bear the ultimate burden of proof at trial, the movant may satisfy [its] burden by pointing to an absence of evidence to support an essential element of the nonmoving party's claim." Vann v. City of New York, 72 F.3d 1040, 1048 (2d Cir. 1995) (citing Celotex, 477 U.S. at 322-23). "A defendant moving for summary judgment must prevail if the plaintiff fails to come forward with enough evidence to create a genuine factual issue to be tried with respect to an element essential to its case." Allen v. Cuomo, 100 F.3d 253, 258 (2d Cir. 1996) (citing Anderson, 477 U.S. at 247-48); see also Nebraska v. Wyoming, 507 U.S. 584, 590 (1993) ("When the nonmoving party bears the burden of proof at trial, summary judgment is warranted if the nonmovant fails to `make a showing sufficient to establish the existence of an element essential to [its] case.'") (quoting Celotex, 477 U.S. at 322) (alteration in original). If, however, any reasonable inference could be drawn from the record in favor of the non-moving party as to an issue of material fact, summary judgment is improper. See, e.g., Cantanzaro v. Weiden, 140 F.3d 91, 93 (2d Cir. 1998).

  III. DISCUSSION

  A. Sony Electronics' Motion for Summary Judgment

  1. Choice of Law

  The central issue in Sony Electronics' motion for summary judgment is which agreement governs: the BTSA, as Multi Video contends, or the SSA, as Sony Electronics contends. Consistent with their respective positions, Multi Video maintains that New York law governs since New York has sufficient contacts with the transaction at issue, see MV Sony Elec. Mem. at 23 n. 14, while Sony Electronics maintains that California law should be applied, see Sony Elec. Mem. at 21 n. 16. As a federal court sitting in diversity, this Court applies the choice-of-law rules of the forum state, which in this case is New York. See, e.g., Fieger v. Pitney Bowes Credit Corp., 251 F.3d 386, 393 (2d Cir. 2001). New York choice-of-law doctrine provides, however, that a court is free to bypass the choice-of-law analysis and apply New York law in the absence of a material conflict. Curley v. AMR Corp., 153 F.3d 5, 12 (2d Cir. 1998). Laws are in conflict "[w]here the applicable law from each jurisdiction provides different substantive rules." Id. A "material conflict" is a conflict that is likely to have "a significant possible effect on the outcome of the [case]." In re Simon II Litig., 211 F.R.D. 86, 166 (E.D.N.Y. 2002) (citing In re Complaint of Bankers Trust Co., 752 F.2d 874 (3d Cir. 1984)). Neither party has pointed the Court to any substantive differences between the laws of New York and California that would affect the adjudication of this motion. Accordingly, it is unnecessary to engage in a choice-of-law analysis and the Court is free to cite to New York or California law.

  2. The Merits of Sony Electronics' Motion for Summary Judgment

  In moving for summary judgment, Sony Electronics has presented evidence that its only agreement with Multi Video regarding the installation and service of the equipment — and thus, the only agreement Sony Electronics possibly could have breached — is the SSA. Specifically, Sony Electronics has presented a signed and dated copy of the SSA, which states that the subject of the agreement is "the development, delivery, installation, and sale of the System," SSA § 2, which includes video editing equipment known as the "HD Telecine System." See id. § 1(i), Schedule A at 5. The SSA contains an unambiguous statement that it supersedes, terminates, and otherwise voids any and all prior written and/or oral agreements between the parties with respect to the System. [The SSA] incorporates the parties' entire understanding and there are no warranties, representations, or understandings of any kind, nature, or description whatsoever made by either party to the other, except such as are expressly set forth herein.

 Id. § 21(j). In addition, the SSA contains a no-oral-modifications clause providing that it "may be modified only by a written instrument signed by both parties, making specific reference to [the SSA] and to the changes to be made." Id. Finally, the SSA states that if any document other than the SSA is used by Multi Video and Sony Electronics in connection with the purchase of the subject equipment, that document is to "be governed by the provisions of [the SSA] and any terms thereof which are inconsistent, different from, or in addition to, the provisions of [the SSA] shall be null and void and of no force or effect." Id. § 3.

  There is no factual dispute as to whether Multi Video signed the SSA or as to the terms of the SSA. The only relevant question, therefore, is whether, as Multi Video contends, there is some other agreement between Sony Electronics and Multi Video that makes the SSA inapplicable to Sony Electronics' motion for summary judgment or that has in some way modified the SSA's forum selection clause.

  a. Whether the BTSA is a Separate, Enforceable Agreement

  As noted, Multi Video's central contention is that the SSA does not govern the instant dispute because the SSA is merely part of the larger, overarching BTSA. See MV Sony Elec. Mem. at 10. In Multi Video's view, the BTSA "encompass[es]" the agreements entered into between Sony Electronics and Multi Video with respect to the installation of the Telecine Suite and other related equipment. Id. Thus, Multi Video does not argue that the SSA read by itself would not in fact govern the instant dispute. Rather, Multi Video argues that the applicability of the SSA was "contingent" upon the success of the beta test. Id. at 17. Multi Video argues that it was "required to sign the . . . SSA as a mandatory requirement for Multi Video to act as [a] beta test site," but because the "beta test was not a success," the SSA had "no legal operability." Id. at 17 n. 11.

  As is discussed in Section III.A.3 below, the fundamental problem with Multi Video's argument is that the SSA contained both a merger and an integration clause. Nor has Multi Video pointed to any document that supplants the SSA's forum selection provision. Before discussing this issue, however, we first examine the evidence Multi Video has offered for the existence of the BTSA.

  Multi Video has pointed to no single document that constitutes the BTSA. Rather, as evidence of the existence — and controlling nature — of the BTSA, Multi Video relies on two types of evidence. First, it relies on the deposition testimony of a number of former and current employees of Sony Electronics: specifically, Robert St. John, a Sony Electronics sales manager; Fabio Pansolini, a former Vice President of Sales for Sony Electronics; Laurence Thorpe, a former Senior Vice President of Sony Electronics; and Paul Rockwell, a service technician for Sony Electronics. See MV Sony Elec. Mem. at 11-18. According to Multi Video, the deposition testimony of these individuals serves to establish "(i) that the BTSA is the governing agreement, (ii) that the SSA did not alter or encompass the BTSA; and (iii) that Sony Electronics is in breach of the BTSA." Id. at 10.

  Second, Multi Video relies upon six excerpts from letters written by representatives of Sony Electronics to representatives of Multi Video or Rhinoceros. Id. at 12-13. Multi Video contends that these letters demonstrate that "Sony Electronics itself has on numerous occasions acknowledged the existence and controlling nature of the BTSA." Id. at 12.

  The deposition testimony and letters are the only admissible evidence Multi Video relies upon to establish the existence of the BTSA. Accordingly, we now examine such evidence to determine whether a reasonable jury could conclude from it that there existed a BTSA that governs the parties' relationship in this dispute.

  i. Deposition Testimony. Multi Video has listed multiple excerpts of deposition testimony which it relies upon to show the existence and terms of the BTSA. MV Sony Elec. Mem. at 11-18. There is no discernable organizational principle regarding the excerpts it has submitted. Accordingly, they are largely addressed in the order they are presented by Multi Video.

  Multi Video points to the following colloquy from the deposition of St. John to prove the existence of the BTSA:

St. John: I have had one beta test agreement, formal beta test agreement with Broadway Video that included a formal beta test document. And the other, what I would consider formal beta test agreement that we had, was with Multi Video. I'm not sure if it did — if an agreement was sent to Mr. —
Q: In general would you say there was a beta test site arrangement with the Multi Video Company? When I say Multi Video, including Rhinoceros and the related companies in the case?
St. John: Yes.
Deposition of Robert Saint John ("St. John Dep.") (reproduced as Ex. A to Affidavit of Natalia P. Good, filed Sept. 29, 2004 (Docket #28 in 1321) ("Good Aff.")), at 23-24. Multi Video also contends that Pansolini acknowledged the existence of the BTSA during his deposition:
Q: Was there a written beta test agreement that was prepared for this case? Pansolini: I don't believe there was a formal beta test agreement. I think there was a contractual agreement. Again, I'm going by memory. A contractual agreement that says, this period of time will be the beta test site period. As part of beta test site, this is what Sony's expectations are, and this is what Multi Video's expectations are.
Deposition of Fabio Pansolini (reproduced as Ex. D to Good Aff.) ("Pansolini Dep."), at 74-75. In his deposition, Thorpe stated as follows:
Q: Can you tell us, with your experience, what is meant in the last paragraph: `Sony agrees to utilize Multi Video as a `test site' for the Sony Vialta telecine and high definition edit suite.' To the best of your experience, what does that mean?
Thorpe: My personal interpretation, after the fact, after seeing it much later, is that this would have been the agreement between the customer and the supplier to take a new product, being the first customer of that new product, and that we would mutually work together to bring that product to final fruition.
Deposition of Laurence Thorpe (reproduced as Ex. E to Good Aff.) ("Thorpe Dep."), at 52-53. Similarly, Multi Video points to Rockwell's deposition testimony, wherein Rockwell recognizes that Multi Video was Sony Electronics' beta test site, although Rockwell also indicated that "[he] never saw that in writing or officially." Deposition of Paul Robert Rockwell (reproduced as Ex. C to Good Aff.) ("Rockwell Dep."), at 45.

  The above deposition testimony, however, merely confirms a fact that is not in dispute: namely, that by mutual agreement Multi Video served as a beta test site for the Telecine and Edit Suite equipment. None of this testimony provides any specific details with respect to the terms of the alleged Beta Test Site Agreement. Thus, St. John's deposition testimony merely reconfirms that there was a "beta test site arrangement" between Sony Electronics and Multi Video. While St. John refers to entering into a "formal beta test agreement" with Multi Video, the terms of such an agreement are never specified, nor is there any indication that the agreement to which he refers is one that supplants the terms of the SSA or is even something other than the SSA itself. Pansolini's deposition testimony also reconfirms the fact that Multi Video served as a beta test site for the Sony Electronics equipment. Again, the terms of the "contractual agreement" to which Pansolini refers are never specified. Nor does Pansolini confirm the existence of an agreement that supplants the SSA. As was the case with St. John's testimony, Pansolini fails to provide any details as to the terms of the BTSA. Moreover, any references to an "agreement" by Pansolini could be references to the SSA itself. Thorpe's testimony is of no assistance to Multi Video since Thorpe generally describes the purpose of a beta test site arrangement and thus fails to provide any evidence of an agreement separate and apart from the SSA or any of the details of such an agreement. Finally, Rockwell's testimony adds nothing to the testimony of any of the other witnesses and certainly does not provide any evidence of the terms of the BTSA.

  It is important to note that even if Multi Video presented testimony showing the existence of some "agreement" regarding beta site testing, that would not be sufficient to defeat Sony Electronics' motion. "Few principles are better settled in the law of contracts than the requirement of definiteness. If an agreement is not reasonably certain in its material terms, there can be no legally enforceable contract." Cobble Hill Nursing Home, Inc. v. Henry and Warren Corp., 74 N.Y.2d 475, 482 (1989) (citing Joseph Martin, Jr., Delicatessen, Inc. v. Schumacher, 52 N.Y.2d 105, 109 (1981)), cert. denied, 498 U.S. 816 (1990); see also Boyd v. Bevilacqua, 55 Cal. Rptr. 610, 620 (Cal.Ct.App. 1966) ("Contracts must be definite enough so that a court can ascertain what is required of the respective parties and whether their respective obligations have been performed or breached.") (citing Richards v. Oliver, 328 P.2d 544 (Cal. Dist. Ct. App. 1958)); see also Restatement (Second) of Contracts § 33 (1981) ("Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain."). Thus, evidence that fails to describe any of the terms of the BTSA is insufficient to establish a genuine issue of material fact.

  Perhaps recognizing this principle, Multi Video relies upon other deposition testimony that it claims establishes the actual terms of the BTSA. See MV Sony Elec. Mem. at 13-18. Multi Video directs the Court's attention to the following testimony from St. John's deposition:

Q: Could you tell us to the best of your knowledge, what is a beta test or beta test site?
St. John: As I know it from my other beta test site that I've done, it specifically relates to Sony launching a new technology that we are bringing to market, and we deliver it to the customer and there is generally a period of six months where the customer has to evaluate the technology and decide whether or not they want to stay with the system or return the system. . . .
Q: Isn't it a fact that the ultimate purpose, or one of the major purposes of a beta test relationship, is to improve the equipment from its earlier stages, so that when the beta test period is over, hopefully if successful, the equipment will be sellable to the commercial public that uses it?
St. John: Well, I think, you know, the beta test is — in this case, the beta test is designed to make sure the system is functioning properly and to spec. And in many ways it's a test where we can properly test certain features that have not come to fruition yet, that come after the system is working, and make sure that the system as we intended to design it, is working and that we can sell to everybody.
St. John Dep. at 14, 17-18. Multi Video also cites to deposition testimony provided by Rockwell, wherein Rockwell discusses his "understanding of the term . . . beta test" and the "goal of a beta test site." Rockwell Dep. at 43-44.

  This deposition testimony, however, suffers from the same inadequacies as the other deposition testimony previously discussed in that it merely reconfirms the fact that Multi Video served as a beta test site for the Sony Electronics' equipment. St. John's deposition testimony does nothing more than discuss the purposes of a beta test site and the way in which a beta test site arrangement is conducted. Rockwell's deposition testimony, which refers to the purpose of a beta test site and the "goal" of such an arrangement, is irrelevant in proving the terms of the alleged BTSA. Therefore, this testimony merely reconfirms the undisputed fact that Multi Video served as a beta test site for Sony Electronics' equipment.

  Multi Video points the Court to the following statements of Laurence Thorpe for the purpose of establishing the nature of the BTSA:

Q: In your experience with these various beta test relationships or arrangements that you have testified about previously, was there an opportunity on the part of the customer not to accept, but to reject the equipment?
Thorpe: Yes, there's always that opportunity. My experience is, it is rare. Generally after a period, there is a mutual agreement to reach satisfaction.
Q: You found, in your experience, that it was exercised rarely; is that correct? But to your knowledge of these types of arrangements, was it not the right of the customer to refuse the equipment after a certain period of time?
Thorpe: In my experience, there was usually careful documentation at the beginning, in the contract, that would stipulate what acceptance would mean. To date, I haven't seen any in this case. But in my experience, there was always careful documentation, if there was going to be a beta test site. . . .
Thorpe Dep. (reproduced as Ex. C to Supplemental Affidavit of Jeffrey L. Friesen, filed Oct. 12, 2004 (Docket #31 in 1321)), at 72-73.*fn4 This testimony, focusing upon Thorpe's "experience" and "knowledge" of beta test agreements, similarly fails to establish the terms of the BTSA. At most, this testimony discusses the details of beta test site arrangements generally — an arrangement that is consistent with the SSA.

  Multi Video also directs the Court's attention to the following deposition testimony of St. John:

Q: At the last bulleted section of the first part where it says: `Vialta included a six-month beta test with acceptance tentatively planned for September 2000. In addition, 12-month deferral after acceptance.' Was that an accurate description, to the best of your knowledge, of the transaction? St. John: My understanding was that there would be a six month beta test with acceptance, not tentative acceptance, but it was a six month beta test period. The deferral, yes, the 12 month deferral was discussed.
St. John Dep. at 110-11. The reference here to a "12 month deferral" does not assist Multi Video since the testimony itself does not even indicate that Sony Electronics and Multi Video ever reached an agreement with respect to such a term. Rather, the testimony merely indicates that the parties "discussed" incorporating a deferral on payments into their agreement. Mere "discussion" or negotiation, however, is insufficient to form a binding contract under either New York or California law. See, e.g., Estate of Lever v. New York State Tax Comm'n, 144 A.D.2d 751, 752 (3d Dep't 1988) ("the parties' intent to continue negotiations with a possible ultimate meeting of the minds deferred until some future time" does not create a binding contract); Kruse v. Bank of Am., 248 Cal. Rptr. 217, 229 (Cal.Ct.App. 1988) ("Preliminary negotiations or an agreement for future negotiations are not the functional equivalent of a valid, subsisting agreement."), cert. denied, 488 U.S. 1043 (1989). In any case, it appears that the 12-month deferral provision was ultimately negotiated with Sony Financial (not Sony Electronics) as the Lease documents allowed a 12-month period during which Multi Video was not required to make any payments. Amortization Schedule at 1.

  Multi Video also relies upon the following testimony from Pansolini's deposition:

Q: What did you mean when you said — after you said `not part of the substantial completion document and are covered by the beta test site agreement.' What agreement are you talking about?
  Pansolini: I believe there was an agreement with Multi Video that would offer to place the Vialta on a longer sales cycle, and be covered under a beta test, so we would get some mutual information back and forth on the telecine's performance and so forth. Pansolini Dep. at 136-37. Pansolini's reference to an "agreement" with Multi Video, however, does not demonstrate that Multi Video and Sony Electronics had an agreement separate and apart from the SSA. There is simply no indication from this testimony that Pansolini was referring to any "agreement" other than the SSA itself.

  Other testimony relied upon by Multi Video fails to demonstrate even that an agreement was ever reached between Multi Video and Sony Electronics on the terms being discussed, or that such terms were ever incorporated into an agreement separate from the SSA. Multi Video relies upon the following testimony from St. John's deposition to prove the terms of the BTSA:

St. John: In general, I had direction to go to, oh, I believe it was around a $650,000 price, which was the equivalent of a 40 percent discount. . . . [The discount was] predicated on the beta test site being successful, obviously, that there would be a 40 percent discount, exclusive to the telecine or the Vialta."
St. John Dep. at 27. There is no indication in St. John's testimony, however, that the parties ever agreed to the terms being discussed. Nor is there any indication that such terms were ever embodied in an agreement separate from the SSA — let alone one that superseded it in any material respect.

  Multi Video contends that the following three statements from St. John's deposition prove the terms of the BTSA:

St. John: My understanding was, that we, in the spirit of working together, were going to utilize the national and local publications like Post Magazine and Shoot, those journals, to promote what we were doing with Multi Video, to help promote Multi Video's business, and beyond, you know.
St. John: `Please be advised that Multi Video will receive, as part of the SIC high definition edit system and telecine package, free software and hardware upgrades to the 24P and 1080P standard,' those were, I believe, part of the beta test, which I believe were provided to Multi Video. St. John: The second sentence, `Also, Multi Video will receive annually $40,000 in parts, service and hardware credit over the next five years, which can be applied either to the telecine or high definition system room,' my recollection is that pertained to — I believe the 200K over five years was pertaining to offsetting the interest that Multi Video was going to have to pay on the deferral.
St. John Dep. at 34-35, 44-45 (referring to Letter from Robert Saint John to David Binstock, dated Nov. 11, 1999 ("Nov. 11 St. John Letter") (reproduced as Ex. F to Sony Elec. Notice of Motion)).

  None of these statements, however, is sufficient to prove the terms of an agreement separate from the SSA. Rather, these statements merely reaffirm the provisions of the SSA and the purpose of the beta test site arrangement entered into between Multi Video and Sony Electronics. The schedules annexed to the SSA make clear that one of the "services" to be provided to Multi Video by Sony Electronics was to assist in the "successful development" of the equipment. See Schedule B at 1. An agreement between Multi Video and Sony Electronics wherein Sony Electronics agreed to assist in the promotion of the equipment that was subject to the SSA is consistent with its duties under the SSA to ensure the "successful development" of the equipment. Moreover, St. John's testimony does not indicate that Sony Electronics and Multi Video agreed to promote the equipment pursuant to the terms of any agreement other than the SSA. Nor is there any indication that this agreement to promote the equipment between Multi Video and Sony Electronics was intended to supplant the provisions of the SSA. As to the second and third statements, neither of these statements indicate that the parties entered into an agreement separate and apart from the SSA. Rather, these statements demonstrate that Sony Electronics was engaging in efforts to develop the subject equipment throughout the beta test period, as it was required to do under the SSA. See Schedule B at 1, 3 (stating that it was Sony Electronics' responsibility to oversee the "design, engineering and installation of the System" throughout all the various stages of the project). Neither of these statements from St. John, nor the letter to which he refers, indicate that any of these agreements was intended to supplant the responsibilities of either Sony Electronics or Multi Video under the SSA. In fact, the letter from which both of these statements are taken indicates that the software and services being provided were intended to assist in the development of the equipment that was the subject of the SSA. See Nov. 11 St. John Letter (explicitly referring to the "SIC High Definition Edit System and Telecine Package"). Therefore, this evidence merely reconfirms that Sony Electronics was adhering to its obligations under the SSA by servicing and improving the equipment that was the subject of the beta test site arrangement.

  Relying upon the deposition testimony of Thorpe already cited, Multi Video contends that the terms of the BTSA required that, if the beta test proved to be unsuccessful, Multi Video would be permitted to return the equipment to Sony Electronics. MV Sony Elec. Mem. at 16; see Thorpe Dep. at 72-73. As already discussed, however, none of this testimony would allow a reasonable jury to conclude that there was an agreement on this point between Multi Video and Sony Electronics that was reached separately from the SSA or that superseded it. Rather, this testimony merely reiterates a requirement of the SSA itself, which provided that Multi Video would have the option to "reject" certain equipment by giving Sony Electronics notice of such rejection, thereby obligating Sony Electronics to cure any deficiency. See SSA § 11. The same is true of the excerpt of St. John's testimony relied upon by Multi Video in support of this argument, which merely notes that Multi Video had the option of "sending . . . back" the equipment if it were not operational. See St. John Dep. at 28-29. In sum, none of the deposition testimony relied upon by Multi Video creates a genuine issue of material fact with respect to the existence of a BTSA containing terms that supersede the SSA — and, in particular, its forum selection clause. As noted, a legally enforceable contract does not exist unless the "material terms" of the agreement are "reasonably certain." Cobble Hill Nursing Home, 74 N.Y.2d at 482. Because the deposition testimony relied upon by Multi Video fails to demonstrate the terms of a BTSA agreement, it is insufficient to create a genuine issue of material fact.

  ii. Writings by Sony. Multi Video contends that certain writings authored by representatives of Sony Electronics demonstrate that the BTSA exists and controls the instant dispute. See MV Sony Elec. Mem. at 12-13. First, Multi Video relies on the November 11, 1999 letter from St. John to Binstock which states that "[t]he details of the Beta Test Agreement are currently being defined." Nov. 11 St. John Letter. This letter was written after the execution of the SSA, providing some evidence that Sony Electronics and Multi Video contemplated some further agreement with regard to beta testing and were negotiating the terms of such an agreement. The letter does not, however, indicate that such an agreement ever came into existence or, more to the point, that the terms of such an agreement affected the terms of the SSA in any way. At most, this writing evidences an unenforceable agreement to agree in the future on the terms of the alleged "Beta Test Agreement." See, e.g., Joseph Martin, Jr., Delicatessen, 52 N.Y.2d at 109 ("it is rightfully well settled in the common law of contracts in this State that a mere agreement to agree, in which a material term is left for future negotiations, is unenforceable" (citations omitted)); Autry v. Republic Prod., 180 P.2d 888, 893 (Cal. 1947) ("There is no dispute that neither law nor equity provides a remedy for breach of an agreement to agree in the future. Such a contract cannot be made the basis of a cause of action."). Therefore, the letter from St. John to Binstock cannot be considered anything more than a reference to a possible future agreement and did not create an enforceable contract.

  Next, Multi Video points to two letters from Pansolini to Binstock. The first, which is an addendum to a "Notice of Substantial Completion" signed by both parties, is dated March 24, 2000 and states in part, "Line items 1230, 6110, 6120, 6130 (Sony Vialta Telecine) are not part of the substantial completion document and are covered by the Beta Test Site agreement, as per our contract." Memo from F. Pansolini to David Binstock, dated Mar. 24, 2000 (reproduced as Ex. G to Good Aff.) ("March 24 Memo"), at 1. The second is dated March 28, 2000 and states in part that "line items 1230, 6110, 6120, and 6130 relating to the Sony Vialta telecine will be considered substantially complete. In consideration for your acceptance, Sony will extend the Beta test site period on the Sony Vialta until December 31, 2000." Letter from Fabio Pansolini to David Binstock, dated Mar. 28, 2000 (reproduced as Ex. H to Good Aff.) ("March 28 Ltr.").

  Again, neither of these documents provides the terms of the BTSA allegedly entered into between Sony Electronics and Multi Video. Nor do these writings explain the relationship of any such agreement to the existing SSA. Notably, both documents demonstrate that the parties were actually following the provisions of the SSA: specifically, in terms of the procedures it outlined regarding substantial completion. See SSA § 1(ix) (defining "Substantial Completion" as "that stage in the delivery of the System when same is operational and ready for use"). The SSA specifically provides that the parties would correspond with one another regarding whether Multi Video found the system to be conforming to the requirements of the SSA and whether Sony Electronics believed it had corrected any deficiencies noted by Multi Video. Id. § 11. Notably, the documents support the notion that the authors were referring only to the SSA. In the first letter, the "contract" that is referred to is never specified and thus the author's references to "our contract" and the "Beta Test Site agreement" may well have referred to the SSA. See March 24 Memo. The second letter offers no more conclusive evidence, as it refers only to a "Beta test site period" and not to any agreement entered into between Multi Video and Sony Electronics. See March 28 Ltr. The letters to which Multi Video directs the Court's attention thus indicate that both parties were following the SSA's "substantial completion" procedure. See SSA § 11. In compliance with this procedure, as discussed earlier, Multi Video signed a "Notice of Substantial Completion" on March 24, 2000, and at that time noted certain equipment which had not yet been installed. Binstock Dep. at 91, 94-97. Those pieces of equipment were then listed specifically in a separate document as "noted exceptions." Id. at 94-95, 96-97. The accompanying addendum cited by Multi Video merely adds four pieces of equipment to the original list of exceptions, see March 24 Memo, and the March 28 letter indicates that these four pieces of equipment were thereafter accepted by Multi Video, see March 28 Ltr. Multi Video's signing of these two documents in accordance with §§ 8 and 11 of the SSA does nothing to show that there is some other agreement with inconsistent or superseding terms.

  Next, Multi Video offers three writings from Sony Electronics to Multi Video and/or Rhinoceros in which representatives of Sony Electronics mentioned or alluded to Multi Video and/or Rhinoceros serving as a beta test site for the Vialta Telecine equipment. In the first, Doug Bruns of Sony Electronics wrote to, inter alia, Roman Sypco of Rhinoceros, stating that "Rhino is an SEL betasite for the telecine. . . ." Email, dated May 11, 2000 (reproduced as Ex. B to Good Aff.), at 1. In the second, St. John wrote to Binstock, "Hardware and software upgrades to the Vialta during the beta test period will be free of charge. . . . DME-7000/defocus board on loan through completion of Vialta beta test period." Letter from Bob Saint John to David Binstock, dated Aug. 1, 2000 (reproduced as Ex. I to Good Aff.), at 1. In the third, Stephen Stubelt of Sony Electronics wrote to Binstock, "[T]he Rhino Vialta operates in accordance with the functional requirements specified by Rhino in the relevant contract documents. Rhinoceros Editorial was one of our first Telecine customers and we mutually agreed to work together to develop and improve the Sony Vialta Telecine products for our mutual benefit." Letter from Stephen J. Stubelt to David Binstock, dated Nov. 21, 2001 (reproduced as Ex. J to Good Aff.), at 2.

  These letters offer nothing as to the existence — let alone the terms — of a Beta Test Site Agreement. Again, these letters merely serve as proof of a fact that is not in dispute: that Multi Video and Rhinoceros served as a beta test site for the Telecine equipment. Nor does the reference to "contract documents" in the third excerpt help Multi Video prove the existence of the BTSA. The only "contract documents" that are before the Court in the Sony Electronics action are those comprising the SSA. This statement could not allow a reasonable jury to conclude that Sony Electronics and Multi Video entered into an agreement other than the SSA.

  In sum, both the deposition testimony and letters submitted by Multi Video, even when considered collectively, would not permit a reasonable jury to find that there is any enforceable agreement between Multi Video and Sony Electronics other than the SSA which relates to the breach alleged in Multi Video's complaint. 3. Whether the Relevant Portions of the SSA Have Been Modified

  The narrower question presented by this motion, however, is whether the governing agreement in this dispute — the SSA — has been modified in such a manner that would permit this suit to be brought in New York. See Sony Elec. Mem. at 20-21.

  As noted, the SSA contains both an integration clause, as well as a no oral modifications clause, which states as follows:

[The SSA] supersedes, terminates, and otherwise voids any and all prior written and/or oral agreements between the parties with respect to the System. [The SSA] incorporates the parties' entire understanding and there are no warranties, representations, or understandings of any kind, nature, or description whatsoever made by either party to the other, except such as are expressly set forth [in the SSA]. [The SSA] may be modified only by a written instrument signed by both parties, making specific reference to [the SSA] and to the changes to be made.
SSA § 21(j) (emphasis added). Thus, no agreements entered into prior to the execution of the SSA are of any relevance. Nor has Multi Video demonstrated the existence of any writing setting forth the modifications to the SSA. Provisions like the one in the SSA requiring a signed writing in order to modify an existing agreement are enforceable and prevent subsequent oral modification. See Wechsler v. Hunt Health Sys., Ltd., 186 F. Supp. 2d 402, 412 (S.D.N.Y. 2002) ("A requirement that all modifications be in writing . . . is enforceable under New York law") (citing N.Y. Gen. Oblig. Law § 15-301(1) (McKinney 2004)); Conley v. Matthes, 66 Cal. Rptr. 2d 518, 526 (Cal.Ct.App. 1997) ("Oral modifications of written agreements are precluded . . . if the written agreement provides for written modification.") (citing Marani v. Jackson, 228 Cal. Rptr. 518 (Cal.Ct.App. 1986)). Because Multi Video has not presented written evidence establishing that the SSA was modified, the SSA governs in full. Notably, even if the SSA had been modified in the manner urged by Multi Video, such modifications would not show that the SSA — including its forum selection clause — was "superseded" in its entirety. See MV Sony Elec. 56.1 ¶ 1. Multi Video argues that agreements were made regarding: (1) the financing for the transaction including when payments would begin; (2) the specific equipment to be provided under the agreement; (3) service guarantees; (4) the provision of credits; and (5) free hardware and software upgrades. Id. But "[m]odifications do not necessarily abrogate the original contract entirely; indeed, the terms of the old contract are still to be followed so far as not changed or as inconsistent with the new terms." Marine Transp. Lines, Inc. v. Int'l Org. of Masters, Mates & Pilots, 878 F.2d 41, 46 (2d Cir. 1989) (internal quotations omitted) (alteration in original) (quoting Robinson v. Crosson, 368 P.2d 791, 792 (Colo. 1962)), cert. denied, 493 U.S. 1022 (1990); accord Keeble v. Brown, 266 P.2d 569, 571 (Cal. Dist. Ct. App. 1954) ("An executed oral modification of a term or provision of a contract does not wholly extinguish the contract. . . .").

  Thus, notwithstanding Multi Video's assertions to the contrary, subsequent modifications do not necessarily supersede an original agreement in its entirety. Rather, in instances where an agreement is subsequently modified, the unmodified provisions of the original agreement continue to be enforceable. See, e.g., Beacon Terminal Corp. v. Chemprene, Inc., 75 A.D.2d 350, 354 (2d Dep't 1980) ("The modification of a contract results in the establishment of a new agreement between the parties which pro tanto supplants the affected provisions of the original agreement while leaving the balance of it intact.") (citing cases). Finally, none of Multi Video's arguments regarding any of the documents carries weight in light of § 3 of the SSA, which states that if any document other than the SSA is used by Multi Video and Sony Electronics in connection with the purchase of the equipment that document is to "be governed by the provisions of [the SSA] and any terms thereof which are inconsistent, different from, or in addition to, the provisions of [the SSA] shall be null and void and of no force or effect." Id. Significantly, Multi Video does not even suggest that the forum selection provision of the SSA has ever been modified or abrogated by the parties. Therefore, the forum selection clause contained in the SSA remains applicable to this dispute.

  4. Enforceability of the SSA's Forum Selection Clause

  Multi Video argues that the SSA's forum selection clause is inapplicable to the instant dispute because (1) by filing suit in New York in the Sony Financial action "the Sony entities have waived their right to enforce a California forum selection clause"; and (2) public policy and judicial economy dictate that the claim should be heard in New York because it is "essentially a compulsory counterclaim in the Sony Financial action." See MV Sony Elec. Mem. at 25-28.

  First, Multi Video's argument that Sony Financial's filing suit in New York waives Sony Electronics' right to enforce the California forum selection clause is without merit. As this Court has previously noted in the Sony Financial action, "no allegation has been made — let alone evidence presented — that [Sony Financial and Sony Electronics'] corporate forms have been disregarded. Rather, it appears that Sony Financial and Sony Electronics are two distinct albeit related corporate entities." Sony Fin. Servs., LLC v. Multi Video Group, Ltd., 2003 WL 22928602, at *4 (S.D.N.Y. Dec. 12, 2003) (Report and Recommendation), adopted by 2004 WL 194027, at *1 (S.D.N.Y. Feb. 2, 2004). No evidence has been presented by Multi Video in response to the instant motion suggesting any legal basis under which this Court can disregard the separate corporate forms. Because there are two different entities involved in the two suits, Multi Video's claim against Sony Electronics obviously cannot be a "compulsory counterclaim" with respect to the Sony Financial Action. See Sony Fin. Servs., 2003 WL 22928602, at *4-*5.

  Second, while a "party's . . . representations to the court that it is the proper forum may waive its right to subsequently raise the claim that venue lies elsewhere," see Krape v. PDK Labs Inc., 194 F.R.D. 82, 86 (S.D.N.Y. 1999) (citing Orb Factory, Ltd. v. Design Science Toys, Ltd., 6 F. Supp. 2d 203, 206-07 (S.D.N.Y. 1998)), Sony Electronics has never represented to the court that New York was the appropriate forum for Multi Video's action against it. Moreover, Sony Financial is not a party to the Sony Electronics action, nor is Sony Financial a party to the SSA. Thus, that Sony Financial has chosen New York as the venue for its breach of contract claim against Multi Video under the Lease is irrelevant.

  Finally, Multi Video has shown no reason why public policy disfavors enforcing the SSA's forum selection provision. See M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972) (forum selection clauses in freely negotiated private contracts "are prima facie valid and should be enforced unless enforcement is shown by the resisting party to be unreasonable under the circumstances") (internal quotations omitted) (citing cases); Starad, Inc. v. Lawson Software, Inc., 2004 WL 2093512, at *1 (S.D.N.Y. Sept. 16, 2004) (in order to avoid enforcement of a forum selection clause "the opposing party has a `heavy burden' of showing that adjudication in the contractually-dictated forum `will be so manifestly and gravely inconvenient that it will be effectively deprived of a meaningful day in court . . . or that the clause [is] invalid for such reasons as fraud or overreaching'") (quoting The Bremen, 407 U.S. at 15, 19) (internal citations and ellipsis omitted) (alteration in original). Multi Video has offered no evidence that the forum selection clause contained in the SSA was obtained as the result of fraud or overreaching. Multi Video's only argument on this point is that "New York, as opposed to California, is undeniably the proper forum for adjudication of the instant dispute" because the equipment, the parties, and witnesses are all located in the New York vicinity. MV Sony Elec. Mem. at 27. This assertion boils down to a claim that New York is the more convenient forum for litigating this dispute. Barring unusual circumstances not present here, however, mere inconvenience to a party cannot prevent enforcement of an otherwise valid forum selection clause. See, e.g., K.K.D. Imports, Inc. v. Karl Heinz Dietrich GmbH & Co. Int'l Spedition, 36 F. Supp. 2d 200, 202 (S.D.N.Y. 1999). Therefore, Multi Video's effort to bring the Sony Electronics action in New York must be rejected.

  In sum, Multi Video has not presented any evidence that the forum selection clause contained in the SSA was modified in any way or that it is unenforceable. Because the motion for summary judgment should be granted on this point alone, the Court need not reach Sony Electronics' alternative claims that the SSA's limitations period and limitation-of-remedies provisions also bar Multi Video's claim. Rather, the Court must enforce the parties' agreement that a California court should determine in the first instance all issues arising under the SSA.

  5. Transfer or Dismissal

  Because the Court finds that the forum selection clause contained in the SSA is valid and enforceable, the remaining question for this Court to determine, therefore, is whether the Sony Electronics action should be dismissed or transferred. Multi Video has set forth no arguments as to which of these two options would be more appropriate under these circumstances. Sony Electronics, however, maintains that where, as here, see SSA § 21(g), the forum selection clause specifies both state and federal courts in a particular jurisdiction as being the appropriate forum, "dismissal rather than transfer is the more appropriate disposition." Sony Electronics' Reply Memorandum of Law in Support of its Motions to Supplement the Record, or to Dismiss, Transfer, or for Summary Judgment, filed Oct. 12, 2004 (Docket #32 in 1321), at 9 n. 11 (citing Tech. Express, Inc. v. FTF Bus. Sys. Corp., 2000 WL 226628, at *3 (S.D.N.Y. Feb. 25, 2000)). Because Sony Electronics' contention on this score is correct, this Court will dismiss the Sony Electronics action.

  "Determining whether to dismiss or transfer depends upon which remedy is most consistent with the forum selection clause at issue." GMAC Commercial Credit, LLC v. Dillard Dep't Stores, Inc., 198 F.R.D. 402, 409 (S.D.N.Y. 2001) (citing Licensed Practical Nurses, Technicians and Health Care Workers of N.Y., Inc. v. Ulysses Cruises, Inc., 131 F. Supp. 2d 393, 406 (S.D.N.Y. 2000)). Significantly, the forum selection clause at issue permits suit to be brought in either the federal or state courts of California. SSA § 21(g). In instances where a forum selection clause allows a choice of federal or state court, courts in this district have dismissed the case in lieu of transfer. See, e.g., GMAC Commercial Credit, 198 F.R.D. at 409; HNY Assoc., L.LC. v. Summit Resort Properties, Inc., 2001 WL 456250, at *3 (S.D.N.Y. Apr. 30, 2001) (citing cases). Dismissal, rather than transfer, is appropriate since transferring the case to the federal district court would "depriv[e] plaintiff of its right under the forum selection clause of [the] contract to bring suit in either state or federal court." GMAC Commercial Credit, 198 F.R.D. at 409 (emphasis in original); accord HNY Assoc., 2001 WL 456250, at *3 ("Since the forum selection clause here permits the parties to bring suit in the federal and state courts of California, transferring the case would deprive the parties of their contractual right to choose between state and federal court.") (citing cases). The GMAC Commercial court reasoned that "[a]lthough defendant would be able to remove to federal court an action filed by plaintiff in . . . state court, this court cannot and should not rule in anticipation of what defendant may or may not do." 198 F.R.D. at 409.

  The Court agrees with the reasoning of GMAC Commercial. Because the SSA's forum selection clause permits a suit arising out of the SSA to be brought in either federal or state court in California, SSA § 21(g), the case should be dismissed without prejudice.

  B. Sony Financial's Motion for Summary Judgment

  In moving for summary judgment, Sony Financial has presented evidence that the Lease and the related guaranty agreements are the only agreements between it and Multi Video with respect to the financing of the equipment that was the subject of the SSA. Specifically, Sony Financial has submitted signed and dated copies of the Lease (with attached Equipment Schedules) and guaranty agreements that specify the equipment that is the subject of the Lease. See generally Lease; Guaranty Agreement (annexed as Ex. B to Sony Fin. Notice of Motion); Equipment Schedule. It is undisputed that both Multi Video and Sony Financial executed the Lease. Moreover, the Lease contains an integration clause, which provides as follows:

THIS LEASE CONSTITUTES THE FULL AND COMPLETE AGREEMENT between the Lessor [Sony Financial] and Lessee [Multi Video] in connection with the Equipment and MERGES ANY OTHER UNDERSTANDING.
Lease Pt. II § 1 (capitalization in original). The Lease also contains a no-oral-modifications clause which states that

  THIS LEASE CANNOT BE CANCELLED OR TERMINATED except as provided herein . . . AND CANNOT BE MODIFIED OR TERMINATED EXCEPT BY MUTUAL, SIGNED WRITTEN AGREEMENT. Id. at Pt. II (emphasis in original). Immediately adjacent to the no-oral-modifications clause are the initials "DB" belonging to David Binstock. See id.

  Multi Video's defense to the enforceability of the Lease is the same one it presents in the Sony Electronics' Action: that "the equipment that was subject to the lease at issue was installed as part of the overarching [BTSA]." MV Sony Fin. Mem. at 1. According to Multi Video, "the lease documents were merely ancillary and were a Sony mandated prerequisite to Multi Video entering into the BTSA." Id. at 2. Multi Video therefore contends that the lease documents "were not to have any legal effect until Multi Video agreed to purchase the Telecine and related video editing equipment, which itself was conditioned upon the successful completion of the beta test — which never occurred." Id. Multi Video asserts that, because the Telecine Suite "never advanced . . . beyond the beta stage, Multi Video refused to purchase the Telecine and related equipment," and, as a result, was not required to begin making payments under the Lease. See id. at 2, 6-7; accord id. at 14 ("The successful completion of the beta test on the Telecine was . . . a condition precedent to the Lease's applicability.").

  The question on this motion, therefore, is whether Multi Video has presented admissible evidence showing that the terms of the Lease do not govern. In seeking to establish the existence of the BTSA, Multi Video points to the same deposition testimony and letters relied upon in the Sony Electronics Action. Compare MV Sony Fin. Mem. at 9-13, 15-16 with MV Sony Elec. Mem. at 11-19. As already discussed at length, however, Multi Video has failed to show the existence of an enforceable BTSA. See supra Section III.A.2.a. In addition, Multi Video's brief in the Sony Financial action argues that representatives from Sony Electronics were involved in the negotiations of the Lease. See MV Sony Fin. Mem. at 16-17. The assertions set forth by Multi Video with respect to the relationship between Sony Electronics and Sony Financial, however, are irrelevant since they cannot be relied upon to create a genuine issue of material fact concerning the existence or controlling nature of the BTSA. Nor does anything in the various pieces of testimony or documentation show that the payment provisions of the Lease were superseded. Finally, nothing in the affidavit of David Binstock, see generally Binstock Aff., demonstrates that there was any writing or other event that vitiated the provisions of the Lease. As a result, this Court rejects Multi Video's contention that the Lease does not govern the instant dispute.

  Nevertheless, as noted, Multi Video argues that successful completion of the beta test was a condition precedent to the applicability of the payment provisions of the Lease. See MV Sony Fin. Mem. at 2, 6-7, 14. This argument, however, overlooks the fact that the only condition precedent stated within the Lease required that the Equipment Schedules be "fully executed" before the Lease provisions became operable. See Lease Pt. I ("The Lease shall be effective with respect to each Schedule from and after the date said Schedule is fully executed."). It is undisputed that Multi Video executed the Equipment Schedules upon delivery of the equipment that was the subject of the Lease. In its attempt to establish the existence of a condition precedent other than the one explicitly stated in the Lease, Multi Video points the Court to no evidence sufficient to overcome the Lease's no-oral-modifications clause. In other words, Multi Video has not submitted a mutual, signed written agreement entered into between the parties altering or modifying the condition precedent set forth in the Lease itself. See Lease at Pt. II. Accordingly, this Court must reject Multi Video's contention that successful completion of the beta test was a condition precedent to the Lease's effectiveness. See Cohen v. Elephant Wireless, Inc., 2004 WL 1872421, at *10-*11 (S.D.N.Y. Aug. 19, 2004) (rejecting defendant's contention that its performance of the contract was subject to a "condition precedent" where the defendant's argument concerning the condition precedent directly contradicted "explicit language" within the contract "requiring modifications to be in writing") (citing cases).

  The only remaining question, therefore, is whether Sony Financial is entitled to summary judgment on its claim that Multi Video, Rhinoceros and Cool Beans breached the Lease and guaranty agreements.

  1. Choice of Law

  There are two forums whose laws might apply to the Sony Financial Action. The equipment and at least some of the parties are located in New York. The Lease and guaranties themselves state that Michigan law is to apply to any dispute arising out of the agreements. Lease Pt. II § 16 (stating that the Lease shall be "governed by and construed in accordance with" the law of the State of Michigan); Guaranty (stating that the guaranty agreement "shall be construed pursuant to the laws of the State of Michigan"). Multi Video contends that, since the Lease and guaranties are not controlling, Michigan law does not apply. See MV Sony Fin. Mem. at 19 n. 9. As a result, Multi Video's brief cites entirely to New York case law. See generally id. Sony Financial, however, contends that, although the Lease and guaranties "are governed by Michigan law," there are no relevant substantive differences between the law of New York and the law of Michigan. See Sony Fin. Mem. at 10 n. 10. As was true for the Sony Electronics action, neither party has demonstrated how the adjudication of this motion would differ if Michigan as opposed to New York law were applied. Indeed, it appears that the laws of the two states are identical in respects material to this action, particularly given that the provisions of the Uniform Commercial Code ("U.C.C.") relating to third-party lease financing agreements are identical in both states. Compare N.Y.U.C.C. § 2-A-103(1)(g), with Mich. Comp Laws Ann. § 440.2803(a) (West 2004). Accordingly, for convenience, the Court will rely on New York law.

  2. Breach of the Lease Agreement and the Validity of the Guaranties

   Sony Financial seeks summary judgment on its claims relating to Multi Video's breach of the Lease and guaranty agreements. See Sony Fin. Mem. at 10-11. In order to succeed on its claim for breach of contract, Sony Financial must establish "the existence of a valid contract, performance by one party, breach by the other party, and damages caused by the breach." Netrix Leasing, LLC v. K.S. Telecom, Inc., 2001 WL 228362, at *3 (S.D.N.Y. Mar. 7, 2001) (citing Rexnord Holdings, Inc. v. Bidermann, 21 F.3d 522, 525 (2d Cir. 1994)).

   a. Existence of a Valid Contract

   Because Multi Video has failed to establish the existence of the BTSA, the Lease and guaranties were the only agreements in place between Sony Financial and Multi Video. Multi Video has not provided any evidence that the Lease does not constitute a valid contract.

   b. Performance Under the Lease

   Sony Financial has demonstrated that it adequately performed under the Lease. The equipment that was the subject of the Lease was delivered and accepted by Multi Video in March 2000. Binstock Dep. at 89-92. Multi Video, through Binstock, subsequently signed two Notices of Substantial Completion, the Certificate, and an Equipment Schedule indicating that the equipment that was the subject of the Lease was adequate and was in good working condition. Id. at 91-92; Notice of Substantial Completion at 1-2; Certificate; Equipment Schedule. In so doing, Multi Video made Sony Electronics and Sony Financial aware that it found the goods to be conforming and that it was accepting the goods. By signing the Certificate, Multi Video confirmed that the equipment was

examined and/or tested and [was] in good operating order and condition and [was] in all respects satisfactory to [Multi Video] and as represented, and that said Equipment [had] been accepted by [Multi Video] and complies with all requirements of the Lessee.
Certificate ¶ 1. The Equipment Schedule executed by Multi Video "certifie[d] that all property described [in the schedule] ha[d] been furnished, that delivery and installation ha[d] been . . . completed as required, and that after final inspection the Equipment [was] accepted as satisfactory in all respects by [Multi Video]." Equipment Schedule. The Certificate signed by Binstock also made clear that

  

[i]n the future, in the event that [the] Equipment fails to perform as expected or represented, [Multi Video] will continue to honor the Lease by continuing to make monthly payments in the normal course of business and will look solely to the seller or manufacturer . . . for the performance of all covenants and warranties, whether express or implied.
Certificate ¶ 2.

   By signing the Certificate, Binstock expressly authorized Sony Financial to pay for the equipment and commence the Leases. Id. ¶ 1 (". . . LESSOR IS HEREBY AUTHORIZED TO PAY FOR THE EQUIPMENT AND COMMENCE SAID LEASE(S).") (capitalization in original). Therefore, Sony Financial properly performed under the Lease since it provided Multi Video with the equipment and Multi Video accepted it by executing the Notices of Substantial Completion, the Equipment Schedules and the Certificate. See Lease Pt. I ("The Lease shall be effective with respect to each Schedule from and after the date said Schedule is fully executed."). c. Breach of the Lease

   Sony Financial has provided uncontroverted evidence that Multi Video breached the Lease and guaranty agreements. Sony Financial has set forth facts indicating that, with respect to the Telecine Suite portion of the Lease, three payments were made by Multi Video in October, November and December 2000. Paul Dep. at 178-79, 181. Beginning on December 29, 2001, Multi Video was obligated to begin making monthly payments on the Telecine portion of the Lease in the amount of $50,631.38. Manzo Aff. ¶ 6; Amortization Schedule at 1. Following the payments made by Multi Video in late 2000, no payments were made at any time thereafter by Multi Video, Rhinoceros or Cool Beans. See Manzo Aff. ¶ 6. The failure of Multi Video to make lease payments as they became due constitutes a breach of the Lease by Multi Video. A breach of the Lease by Multi Video triggered the responsibilities of Rhinoceros and Cool Beans under the guaranty agreements. See Guaranty (the guarantors "absolutely and unconditionally" guarantee "the full and prompt performance of all Obligor's obligations, including payment to Creditor of any . . . indebtedness, liability, or obligation of Obligor to Creditor"). Neither of these entities, however, subsequently made any lease payments.

   In response to Sony Financial's evidence, Multi Video does not assert that it made payments as it was required to do under the Lease. See MV Sony Fin. 56.1 ¶¶ 44-45. Instead, Multi Video contends only that it was the BTSA, and not the Lease and guaranty agreements, that governed the agreement between Sony Financial and itself. MV Sony Fin. Mem. at 14, 16. Specifically, Multi Video contends "that the leases were not to take effect and payments would not be due with respect to the Telecine Suite unless and until the successful completion of the beta test." Id. at 14. According to Multi Video, "[b]ecause of Sony Electronics' failure to properly service and maintain the subject equipment in consistent, predictable working condition, the beta test was a failure," and, therefore, the Lease and related agreements were rendered inoperable. Id.

   Multi Video's first contention with respect to the BTSA is foreclosed inasmuch as the Court has rejected Multi Video's claims concerning the existence and controlling nature of that agreement. See supra Section III.A.2.a. With respect to the claim raised by Multi Video regarding Sony Electronics' failure to service the equipment, this argument is also meritless. The Lease entered into between Sony Financial and Multi Video expressly and unambiguously indicated that Sony Financial was an entity separate from Sony Electronics. The Lease states:

IMPORTANT: NO SUPPLIER OR ANY SALESPERSON [i.e., Sony Electronics] IS AN AGENT OF LESSOR [Sony Financial] NOR ARE THEY AUTHORIZED TO WAIVE OR ALTER THE LEASE. THEIR REPRESENTATIONS OR ASSURANCES OF CURE SHALL IN NO WAY AFFECT THE RIGHTS OR OBLIGATIONS OF LESSOR.
Lease at Pt. II (capitalization in original, emphasis added). The Equipment Schedule contained a similar provision. See Equipment Schedule. In addition, the Lease made clear that Multi Video's obligation to Sony Financial under the Lease was distinct from Multi Video's relationship with Sony Electronics. The Lease stated as follows:
LESSEE [Multi Video] AGREES THAT TIME IS OF THE ESSENCE; AND TO MAKE PAYMENTS REGARDLESS OF ANY PROBLEMS LESSEE MIGHT HAVE WITH THE EQUIPMENT INCLUDING ITS OPERATION, CAPABILITY, INSTALLATION, OR REPAIR REGARDLESS OF ANY CLAIM . . . OR DEFENSE LESSEE MIGHT HAVE AGAINST THE VENDOR [i.e., Sony Electronics], DISTRIBUTOR OR MANUFACTURER . . . AND ANY SALESPERSON OR OTHER THIRD PARTY.
Lease Pt. II § 4 (capitalization in original, emphasis added). Moreover, as noted, the Certificate provided as follows: . . . in the event that [the] [e]quipment fails to perform as expected or represented, Lessee [Multi Video] will continue to honor the Lease by continuing to make monthly payments in the normal course of business and will look solely to the seller or manufacturer [Sony Electronics] for the performance of all covenants and warranties, whether express or implied.

  Certificate ¶ 1(emphasis added).

   In sum, the Lease and related documents unambiguously stated that a failure on the part of Sony Electronics with respect to any obligation it might have to provide working equipment would have no effect on Multi Video's obligation to continue making lease payments to Sony Financial. Therefore, Multi Video's failure to continue making lease payments constitutes a breach of the Lease agreement.

   Leases of this kind have been routinely upheld by courts in this district. See, e.g., Siemens Credit Corp. v. Am. Transit Ins. Co., 2001 WL 40775, at *1 (S.D.N.Y. Jan. 17, 2001) (stating that the lease at issue is a "finance lease under Article 2-A of the New York Uniform Commercial Code and obligates [the defendant] to make all payments due under it regardless of the condition or performance of the leased equipment") (citations omitted); Netrix Leasing, 2001 WL 228362, at *4 & n. 4 (interpreting Article 2-A of the New York Uniform Commercial Code and finding that "[a]s a general matter of law, third-party finance agreements are given full force and effect") (citing cases); Telecom Int'l Am., Ltd. v. AT&T Corp., 187 F.R.D. 492, 497 (S.D.N.Y. 1999). Thus, in Telecom Int'l Am., Ltd., the plaintiff agreed to purchase equipment from AT&T Corp. and to obtain financing by signing leases with AT&T Credit Corp. Id. at 493. The plaintiff, after encountering technical problems with the equipment, ceased making lease payments to AT&T Credit Corp. Id. at 494. AT&T Credit Corp. subsequently accelerated the unpaid balance on the lease prompting the plaintiff to bring suit against AT&T Corp., alleging, inter alia, breach of contract. Id. AT&T Credit Corp. subsequently intervened and the court granted its motion for summary judgment, id. at 494-95, stating as follows:

AT&T Credit [Corp.] is entitled to judgment because [the plaintiff] had accepted the equipment, executed commencement certificates unequivocally stating its unconditional obligation to AT&T Credit [Corp.] in accordance with the terms of the [leases], and had agreed under the [leases] that its obligations of repayment of the financing extended by AT&T Credit [Corp.] were independent of any defenses or breaches under [the plaintiff's] contracts with AT&T [Corp.].
Id. at 494. The court noted that any relationship between AT&T Corp. and AT&T Credit Corp. was "irrelevant" since the leases provided that AT&T Credit Corp. "shall not be deemed to have made any representation made by [AT&T Corp.]," and that neither AT&T Credit Corp. nor AT&T Corp. should "be deemed to be an agent of the other . . . [or] be bound by, or liable for, any representation or promise made by the other." Id. at 496 (internal quotations omitted). Here, the Lease agreement and structure of the transaction entered into between Sony Financial and Multi Video are virtually identical to those at issue in Telecom Int'l Am., Ltd.

   d. Damages

   It is undisputed that Sony Financial has been damaged due to the failure of Multi Video to make payments under the Lease. See Sony Fin. 56.1 ¶¶ 44-56. Sony Financial has set forth admissible and uncontroverted evidence establishing that its damages under the Lease amount to $2,936,887.04 plus interest. Manzo Aff. ¶ 10; Sony Fin. 56.1 ¶¶ 49-53. This figure consists of fifteen missed monthly lease payments of $50,631.68 beginning in December 2001, the accelerated sums due and owing under the Lease, and the collection charges that Sony Financial is specifically entitled to under the Lease. Manzo Aff. ¶¶ 6-10; Sony Fin. 56.1 ¶¶ 44-53. In response to Sony Financial's assertions with respect to damages, see Sony Fin. 56.1 ¶¶ 44-56, Multi Video merely reasserts its contentions regarding the existence and controlling nature of the BTSA. See MV Sony Fin. 56.1 ¶¶ 44-56. Multi Video thus contends that no damages were suffered by Sony Financial because the BTSA governed the agreement between the parties and did not require Multi Video to make payments on the Lease until the beta test was successfully completed. See id. ¶¶ 1, 12, 16, 44-56. These contentions are without merit given that Multi Video has presented insufficient evidence to prove the existence of the BTSA. Therefore, there is no genuine issue of material fact with regard to Sony Financial's claim that it is entitled to damages in the amount of $2,936,887.04 plus interest as of March 13, 2003. See Sony Fin. 56.1 ¶ 53.*fn5

   According to Sony Financial, it is entitled "to prejudgment interest on the damages of $2,936,887.04 from the date of acceleration of March 13, 2003, at the rate of 9% simple interest per annum," totaling $388,151.19 in prejudgment interest. Sony Fin. 56.1 ¶ 53 (citing N.Y.C.P.L.R. §§ 5001, 5004). Section 5001 of the N.Y.C.P.L.R. provides that "[i]nterest shall be recovered upon a sum awarded because of a breach of performance of a contract." N.Y.C.P.L.R. § 5001(a). This provision also states that "in an action of an equitable nature, interest and the rate and date from which it shall be computed shall be in the court's discretion." Id. Multi Video has set forth no evidence or argument regarding the calculation of prejudgment interest.

   Because this is a diversity action, state law controls with respect to an award of prejudgment interest. See, e.g., Campbell ex rel. Campbell v. Metro. Prop. and Cas. Ins. Co., 239 F.3d 179, 186 (2d Cir. 2001) (citing Schwimmer v. Allstate Ins. Co., 176 F.3d 648, 650 (2d Cir. 1999)). It is unclear why Sony Financial believes that New York as opposed to Michigan law applies to the calculation of this interest, but inasmuch as Multi Video itself argues that New York law applies generally, the Court will apply New York law to this calculation as well. See generally Krumme v. WestPoint Stevens Inc., 238 F.3d 133, 138 (2d Cir. 2000) (choice of law established by "implied consent") (quoting Tehran-Berkeley Civil & Envtl. Eng'rs v. Tippetts-Abbett-McCarthy-Stratton, 888 F.2d 239, 242 (2d Cir. 1989)). Here, the action brought by Sony Financial seeking damages for the breach of the Lease and guaranties is an action at law, as opposed to an equitable action. "Under New York law, `prejudgment interest is normally recoverable as a matter of right in an action at law for breach of contract.'" Graham v. James, 144 F.3d 229, 239 (2d Cir. 1998) (quoting Adams v. Linblad Travel, Inc., 730 F.2d 89, 93 (2d Cir. 1984)); see also Gussack Realty Co. v. Xerox Corp., 224 F.3d 85, 93 (2d Cir. 2000) ("[S]ection 5001 imposes an affirmative mandate on trial courts; they have no discretion not to award prejudgment interest under New York law.") (citing Indu Craft Inc. v. Bank of Baroda, 87 F.3d 614, 617 (2d Cir.), cert. denied, 519 U.S. 1041 (1996)); United Bank Ltd. v. Cosmic Int'l, Inc., 542 F.2d 868, 878 (2d Cir. 1976) ("This Court has repeatedly held that since [C.P.L.R. Section] 5001 is obviously phrased in mandatory terms, New York law does not permit the trial court to exercise any discretion with regard to prejudgment interest determinations.") (citing cases); accord Stanford Square, L.L.C. v. Nomura Asset Capital Corp., 232 F. Supp. 2d 289, 292 (S.D.N.Y. 2002); Shamis v. Ambassador Factors Corp., 2001 WL 25720, at *5 (S.D.N.Y. Jan. 10, 2001); Donovan v. Dairy Farmers of Am., Inc., 53 F. Supp. 2d 194, 197 (N.D.N.Y. 1999). Accordingly, because this is an action at law seeking damages for the breach of the Lease and guaranties, Sony Financial is entitled to prejudgment interest.

   Section 5001(b) provides that "[i]nterest shall be computed from the earliest ascertainable date the cause of action existed except that interest upon damages incurred thereafter shall be computed from the date incurred." N.Y.C.P.L.R. § 5001(b). Section 5001(b), however, also states that when "damages were incurred at various times, interest shall be computed upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date." Id. In this instance, the payments under the Lease and guaranties were first unpaid beginning in December 2001 and the entire amount due was accelerated to the March 13, 2003 date. Because Sony Financial seeks to run the pre-judgment interest only from this later date, see Sony Fin. 56.1 ¶ 53, and since Multi Video does not contend that any other date would be an appropriate starting point from which to calculate prejudgment interest, see MV Sony Fin. 56.1 ¶ 53, it is unnecessary to determine a "reasonable intermediate date."

   Section 5004 of the N.Y.C.P.L.R. provides that interest is to be calculated at the rate of nine percent per annum "except where otherwise provided by statute." N.Y.C.P.L.R. § 5004. Unless a statutory exception applies which authorizes a lower interest rate, courts enforcing Section 5001 in an action at law consistently apply the nine percent rate of interest set forth in Section 5004. See Davenport v. Martin, 4 A.D.3d 873, 874 (4th Dep't 2004) ("the [trial] court did not have the discretionary power to fix a rate of interest other than the statutory rate of 9%") (citations omitted); Mirand v. City of New York, 221 A.D.2d 194, 194 (1st Dep't 1995) ("there is no merit to defendant's contention that the rate of interest is a discretionary determination that . . . should take into account prevailing market rates of interest"); see also Action S.A. v. Marc Rich & Co., Inc., 951 F.2d 504, 509 (2d Cir. 1991) (where "[t]he cause of action and damages requested [are] essentially legal in nature . . . the court must apply the statutory rate of interest"), cert. denied, 503 U.S. 1006 (1992). Because no statutory exception is applicable to Sony Financial's claim and this is an action at law, the statutory interest rate of nine percent will be applied in this instance. See N.Y.C.P.L.R. § 5004.

   In sum, Sony Financial is entitled to prejudgment interest under Section 5001(a) beginning on March 13, 2003, at a rate of nine percent per annum. Thus, Sony Financial is entitled to a total of $2,936,887.04 in damages, plus interest at the rate of $724.16 per day beginning on March 13, 2003 and continuing until the date judgment is entered.

   e. The Guaranty Agreements

   Multi Video has offered no argument as to the invalidity of the guaranty agreements (other than its rejected contentions with respect to the alleged BTSA). See MV Sony Fin. 56.1 ¶ 16. Thus, the guaranties are enforceable. It is undisputed that Binstock was authorized to execute both guaranty agreements on behalf of Rhinoceros and Cool Beans. See Sole Officer's Certificate (reproduced as Ex. A to Sony Fin. Notice of Motion). The guaranty agreements provided that both Rhinoceros and Cool Beans

  

absolutely and unconditionally [guarantee] to [Sony Financial] . . . the full and prompt performance of all [Multi Video's] obligations, including payment to [Sony Financial] of any and every indebtedness, liability or obligation of [Multi Video] to [Sony Financial] . . . together with all interest thereon, and attorney's fees, costs and expenses of collection incurred by [Sony Financial] in connection therewith, and in any action against the undersigned.
Guaranty. The guaranty agreements also stated that, in the event of a breach, Sony Financial had the option to proceed against Rhinoceros and Cool Beans and that both entities could be held jointly and severally liable for any amounts due under the Lease. See id. Although Cool Beans has changed its name to Tonic Digital Equipment, LLC ("Tonic"), Binstock Aff. ¶ 1, the guaranty agreements apply not only to Rhinoceros and Cool Beans but also to their "successors, endorsees, and assigns." Guaranty Agreement. Therefore, Tonic is responsible for Cool Beans' guaranty.

   Conclusion

   For the foregoing reasons, Sony Electronics' and Sony Financial's motions for summary judgment should be granted. The Sony Electronics Action (04 Civ. 1321) should be dismissed without prejudice to Multi Video refiling the case in a California state or federal court. In the Sony Financial Action (03 Civ. 1730), judgment should be entered in favor of Sony Financial and against all defendants as well as Tonic, jointly and severally, in the amount of $2,936,887.04 plus pre-judgment interest at the rate of $724.16 per day beginning on March 13, 2003 and continuing until the date of judgment.

   Sony Financial also seeks attorneys' fees and costs pursuant to the Lease and guaranties, Sony Fin. Notice of Motion at 2, but has submitted no evidence regarding such fees and costs. Because both the Lease and the guaranty agreements contain provisions entitling Sony Financial to attorneys' fees and costs under certain circumstances, see Lease Pt. II, § 12; Guaranty, Sony Financial should be directed to promptly make an appropriate motion for such fees and costs.*fn6

  

PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
   Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties have ten (10) days from service of this Report and Recommendation to file any objections. See also Fed.R.Civ.P. 6(a), (e). Such objections (and any responses to objections) shall be filed with the Clerk of the Court, with extra copies sent to the Hon. Lewis A. Kaplan, 500 Pearl Street, New York, New York 10007, and to the undersigned at 40 Centre Street, New York, New York 10007. Any requests for an extension of time to file objections must be directed to Judge Kaplan. If a party fails to file timely objections, that party will not be permitted to raise any objections to this Report and Recommendation on appeal. See Thomas v. Arn, 474 U.S. 140 (1985).


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