Xerox Corp. v. JCTB Inc.

18‐3552‐cv
Xerox Corp. v. JCTB Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT.
CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS
PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A
SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE
(WITH THE NOTATION ASUMMARY ORDER@). A PARTY CITING TO A
SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT
REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit,
held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the
City of New York, on the 6th day of December, two thousand nineteen.
PRESENT: JOHN M. WALKER, JR.,
RICHARD J. SULLIVAN,
Circuit Judges,
ALISON J. NATHAN,
District Judge.
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XEROX CORPORATION,
Plaintiff‐Counter‐Defendant‐Appellee,
v. No. 18‐3552‐cv
JCTB INCORPORATED, SHIRLEY BUI, JIMMY
CAUDILLO, AKA Jaime Caudillo,
Defendants‐Counter‐Claimants‐Appellants.
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
Judge Alison J. Nathan, of the United States District Court for the Southern District of
New York, sitting by designation.
FOR APPELLANTS: M. Salman Ravala, Crisione
Ravala, LLP, New York, NY.
FOR APPELLEE: TONY R. SEARS (William R.
Leinen, on the brief), Ward
Greenberg Heller & Reidy LLP,
Rochester, NY.
Appeal from a judgment of the United States District Court for the Western
District of New York (Michael A. Telesca, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the district court is
AFFIRMED.
Defendants‐Appellants JCTB Inc. (“JCTB”), Shirley Bui, and Jimmy Caudillo
(together with JCTB, “Defendants”) appeal from an order of the United States
District Court for the Western District of New York (Telesca, J.) granting summary
judgment in favor of Plaintiff‐Appellee Xerox Corporation (“Xerox”) on its claims
for breach of contract and dismissing Defendants’ counterclaims for breach of
contract and fraudulent inducement. We assume the parties’ familiarity with the
underlying facts and the record of prior proceedings, to which we refer only as
necessary to explain our decision to affirm.
Defendants argue on appeal that (1) summary judgment was not warranted
prior to discovery, (2) they pleaded sufficient facts to proceed on their
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counterclaims – or at least should be permitted to amend their pleadings – and (3)
the district court improperly calculated damages. We disagree.
First, the district court properly granted Xerox’s pre‐discovery motion for
summary judgment because the Finance Lease and Modification Agreement
executed by the parties imposed an absolute duty on JCTB to pay, regardless of
how Xerox performed. See Sayers v. Rochester Tel. Corp. Supplemental Mgmt. Pension
Plan, 7 F.3d 1091, 1094 (2d Cir. 1993) (“In a contract dispute a motion for summary
judgment may be granted only where the agreement’s language is unambiguous
and conveys a definite meaning.”). This duty arose from the “hell or high water
clause,” see Wells Fargo Bank, N.A. v. BrooksAmerica Mortg. Corp., 419 F.3d 107, 110
(2d Cir. 2005), which was both explicit in the contract and a statutory feature of a
“Finance Lease” under New York’s Uniform Commercial Code. Thus, the only
remedy available to JCTB was to seek new equipment from Xerox – non‐payment
was not an option.
Second, with respect to Defendants’ counterclaims, we agree with the
district court that Defendants failed to state a claim. As to their breach of contract
counterclaim, Defendants’ exclusive remedy for a purported breach by Plaintiff
was not litigation, but to request new equipment. See N.Y. U.C.C. Law §§ 2‐a‐503,
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719(1)(a). And as to their counterclaim for fraudulent inducement, Defendants
expressly released their claims against Plaintiff involving the execution of the
Finance Lease when they signed the Modification Agreement. See AG Capital
Funding Partners, L.P. v. State St. Bank & Tr. Co., 11 N.Y.3d 146, 155 (2008). Because
the terms of the contracts prevent Defendants from asserting their counterclaims,
the district court did not abuse its discretion in refusing to grant leave to replead.
Therefore, we affirm for substantially the reasons stated in the district court’s
thorough and well‐reasoned decision and order.
Finally, Defendants’ conclusory argument that the district court’s
calculation of damages resulted in a windfall for Xerox was never raised in the
district court, and for that reason alone, we reject the argument on appeal. See
Spiegel v. Schulmann, 604 F.3d 72, 77 n.1 (2d Cir. 2010). But even if we were to
consider the merits of this argument, the record provides no basis for concluding
that the district court erred in its calculation of damages.
We have considered Defendants’ remaining arguments and conclude that
they are without merit. Accordingly, we AFFIRM the judgment of the district
court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
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