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Xerox Corp. v. Print & Mail by Morrell, Inc.

United States District Court, W.D. New York

March 27, 2014

XEROX CORPORATION, Plaintiff,
v.
PRINT & MAIL BY MORRELL, INC., et al., Defendants

For Xerox Corporation, Plaintiff, Counter Defendant: Harold A. Kurland, Tony R. Sears, LEAD ATTORNEYS, Ward Greenberg Heller & Reidy LLP, Rochester, NY.

Kim Morrell, Defendant, Pro se, Seabrook, TX.

Kim Morrell, Counter Claimant, Pro se, Seabrook, TX.

OPINION

Page 266

DECISION AND ORDER

DAVID G. LARIMER, United States District Judge.

INTRODUCTION

Plaintiff Xerox Corporation (" Xerox" ) commenced this action alleging breach of contract and conversion against defendants Print & Mail by Morrell, Inc. (" P& M" ) and Kim Morrell (" Morrell" ), P& M's owner and operator (collectively " defendants" ). Xerox seeks a money judgment against P& M for its default on payments under two finance lease agreements for printing equipment, as well as its conversion of the leased equipment, and against Morrell for his material breach and default under a guaranty agreement whereby he personally guaranteed payment of P& M's financial obligations to Xerox. (Dkt. #1). Defendants filed an answer disputing Xerox's allegations, and asserting a counterclaim for tortious interference with contract. (Dkt. #11).

P& M and Morrell were initially represented by counsel. On June 27, 2013, the Court granted a motion by defendants' counsel to withdraw from the matter, instructed P& M that corporations are required to be represented by counsel, and allotted 30 days for P& M to retain a new attorney. (Dkt. #25). See generally Jones v. Niagara Frontier Transp. Auth., 722 F.2d 20, 22 (2d Cir. 1983) (a corporation must be represented by an attorney). No new counsel has appeared and P& M has offered no explanation for its failure to obtain new counsel. Xerox now moves for summary judgment awarding it money damages against the defendants, and dismissing defendants' counterclaim. Despite ample notice and opportunity to respond over the course of six months, the defendants have not opposed that motion. For the reasons set forth below, the motion is granted.

UNDISPUTED FACTS

P& M entered into two finance lease agreements with Xerox, one in June 2007 (modified in July 208) and one in May 2011. Under the lease agreements, P& M leased printing equipment and software in exchange for monthly payments and " print charges" throughout the sixty-month term of each lease, with the option to purchase the equipment at the end of the lease term. The lease agreements further provided that in the event of P& M's default, the equipment was to be returned to Xerox and P& M would immediately be required to pay, as liquidated damages and not as a penalty, the total of all amounts then due under the lease, plus interest, as well as the remaining payments due for the remainder of the term, a disengagement fee or the value of any associated equipment purchase option, and all applicable taxes. Each agreement further stated that in the event of default, P& M would be responsible for Xerox's reasonable resultant costs, including attorneys fees.

In May 2011, Morrell executed a personal Guaranty in consideration for Xerox's extension of a line of credit to P& M in connection with the lease agreements. The Guaranty states that Morrell " unconditionally guarantees to Xerox payment at maturity or by acceleration of all Obligations that [P& M] owes to Xerox, now and in the future," and further guarantees payment of all attorneys' fees, costs, and expenses incurred by Xerox to enforce the Guaranty and/or the lease agreements. (Dkt. #29-2 at Exh. G).

Page 267

It is undisputed that Xerox duly delivered and installed all of the agreed-upon equipment at P& M's designated location, pursuant to the lease agreements. However, after a few months, P& M defaulted on its payments under both of the lease agreements. Despite repeated demands and invoices from Xerox, P& M has not submitted payments under the July 2008 lease agreement since March 2012, and has not submitted any payments under the May 2011 ...


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