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Xerox Corporation v. Imprint Images

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION


April 23, 2013

XEROX CORPORATION, PLAINTIFF,
v.
IMPRINT IMAGES, INC., DEFENDANT.

The opinion of the court was delivered by: Howard R. Lloyd United States Magistrate Judge

*E-FILED: April 23, 2013*

NOT FOR CITATION

INTERIM ORDER ON MOTION FOR DEFAULT JUDGMENT

Xerox Corporation ("Plaintiff" or "Xerox") sues Imprint Images, Inc. ("Imprint") for breach 15 of contracts for the lease and rental of equipment. The parties entered two agreements: one to lease 16 equipment, and one to rent equipment. According to Xerox, Imprint defaulted on both contracts 17 when it stopped making required payments. The Clerk of Court has entered default against Imprint 18 and Xerox has moved for entry of default judgment. 19

The parties entered the lease agreement around April 16, 2009. Verified Complaint (Dkt. 1)

("Complaint" or "Compl."), ¶ 6; Compl., Ex. A ("Lease Agreement"). The Lease Agreement states 21 that its term is 60 months, or, until approximately April 16, 2014. Id. According to Xerox, Imprint 22 stopped making payments on May 22, 2011. Compl. ¶ 9. In the declaration supporting its motion 23 for default judgment, the declarant states that, "[u]nder the Lease Agreement, upon a default of the 24 terms of the agreement, the entire remaining balance is accelerated and immediately due and 25 owing." Atkinson Decl. (Dkt. 15), ¶ 12. However, the default provision of the Lease Agreement 26 differs from Plaintiff's characterization. It states that "[i]f you default, Xerox may . . . require 27 immediate payment . . . of: (a) all amounts then due, plus interest from the due date until paid at the 28 rate of 1.5% per month; [and] (b) the Minimum Payments (less the Maintenance Services and Consumable Supplies components thereof, as reflected on Xerox's books and records) 2 remaining in the Term, discounted at 4% per annum." Lease Agreement (emphasis added). It is 3 unclear to the Court whether Ms. Atkinson's calculations were based on "Minimum Payments," and 4 whether her calculations included the 4% per annum discount on the remaining payments due -- she 5 simply states that Imprint owes Xerox a total of $92,725.97 for its breach of the Lease Agreement. 6

"the entire remaining balance is accelerated and immediately due" leads the Court to believe that 8 she did not make the more nuanced calculation required by the Lease Agreement. 9

10 agreement states that its term is 24 months, or, until approximately April 16, 2011. Compl., Ex. B

("Rental Agreement"). Declarant states that payments were due monthly. Compl. ¶ 18. Although the Rental Agreement contains provisions for the renewal of the contract, and for termination of the 13 contract, Plaintiff does not indicate that the Rental Agreement was either renewed or terminated. 14

According to Xerox, Imprint stopped making payments on the Rental Agreement on May 24, 2011, 15 a date that seems to fall outside the term of the contract attached to the Complaint, if the contract 16 was not renewed. In the declaration supporting its motion for default judgment, the declarant states 17 that, "[u]nder the Rental Agreement, upon a default of the terms of the agreement, the entire 18 remaining balance is accelerated and immediately due and owing." Atkinson Decl., ¶ 20. Here 19 again, the provisions of the Rental Agreement contradict Plaintiff's statement. First, it appears as 20 though the term of the contract had already run by the time of Imprint's default. Second, the default 21 provision of the Rental Agreement states that "[i]f you default, Xerox may . . . require immediate 22 payment . . . of: (a) all amounts then due, plus interest from the due date until paid at the rate of 23

1.5% per month; (b) the remaining Minimum Payments, not to exceed 6 such payments; and, (c) 24 all applicable Taxes." Rental Agreement (emphasis added). Even if the Rental Agreement was 25 renewed, it does not appear, based on her statement that "the entire remaining balance is accelerated 26 and immediately due," that the declarant limited her damages calculation to only 6 months of 27

Minimum Payments. Neither the motion nor the declaration describe Ms. Atkinson's calculations or 28 explain the contract term, which appears to have expired before Imprint's alleged breach.

Neither the motion nor the declaration describe Ms. Atkinson's calculations, and her statement that 7

The parties entered the rental agreement around April 16, 2009. Compl., ¶ 16. The rental

Accordingly, Plaintiff is directed to submit a declaration showing exactly how it arrived at 2 its damages calculations, and clarifying how the calculations are based on the terms of the Rental 3

Agreement and the Lease Agreement. Plaintiff shall submit the declaration no later than April 30, 4 2013. 5 6

IT IS SO ORDERED.

C 12-03223 HRL Order will be electronically mailed to:

David M. Kritzer dkritzer@hemar-rousso.com 3 Pamela Lorraine Cox pcox@hemar-rousso.com 4 Robert McKendrick rmckendr@hemar-rousso.com 5 Counsel are responsible for distributing copies of this document to co-counsel who have not registered for e-filing under the court's CM/ECF program. 6 7 8 9 10

20130423

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