Moore Printing, Inc. v Automated Print Solutions, LLC

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NO. COA11-308 NORTH CAROLINA COURT OF APPEALS Filed: 1 November 2011 MOORE PRINTING, INC., Plaintiff, v. Mecklenburg County No. 10 CVS 5884 AUTOMATED PRINT SOLUTIONS, LLC, Defendant. Appeal by plaintiff from order entered 23 November 2010 by Judge Timothy S. Kincaid in Mecklenburg County Superior Court. Heard in the Court of Appeals 28 September 2011. John F. Hanzel, P.A., by John F. Hanzel, for plaintiffappellant. H.M. Whitesides, Jr., for defendant-appellee. HUNTER, Robert C., Judge. Plaintiff Moore Printing, Inc. ( Moore Printing ) appeals from the trial court s order granting defendant Automated Print Solutions, LLC s ( APS ) motions for summary judgment. After careful review, we affirm. Background This case stems from a dispute regarding the lease of a high-speed company commercial located in printer by Lincolnton, Moore North Printing, Carolina. a printing APS is a - 2Charlotte-based company dedicated to the sales and service of the Riso line of digital printing products. demonstration of a Riso HC5500 high-speed APS performed a commercial printer ( the printer ) for Moore Printing and submitted a proposal for the lease and maintenance of the printer. The proposal, which states it is a proposal only and informative in nature[,] provides the specifications of the printer, leasing options, and terms of a maintenance plan that included parts, labor, and ink. On 17 April 2009, Cathy Moore ( Ms. Moore ), president of Moore Printing, signed an Equipment Lease Agreement with Wells Fargo Financial Leasing, Inc. ( Wells Fargo ). The lease agreement specified Wells Fargo was leasing the printer to Moore Printing and that supplier. proposal Network Although and APS the lease Data Systems provided was Moore agreement, the equipment Printing and with conducted the the demonstration of the printer, APS is not mentioned in the lease agreement. Rather, Moore Printing entered into a separate maintenance agreement for the printer with APS. The lease between Moore Printing and Wells Fargo included a disclaimer of all warranties and states the lessee is leasing the equipment as is. However, the lease also states that the lessee may be entitled to the promises and warranties (if any) provided to [Wells Fargo] by the Supplier. The lease further provides that Wells Fargo did transfer to [Moore Printing] all - 3automatically transferable warranties, if any, made to [Wells Fargo] by the Supplier. Moore Printing states that it began having problems with the printer maintenance shortly after contract with taking Moore delivery. Printing, Through attempted APS its to resolve the problems on several occasions, but Moore Printing had to discard many printing jobs due to the problems. Ultimately, APS was unable to resolve the printer problems to the satisfaction of Moore Printing. On 15 March 2010, Moore Printing filed suit against APS alleging breach of contract, breach of fitness for a particular purpose, conversion, and unfair and deceptive trade practices. Moore Printing also sought rescission of the lease agreement and quantum meruit. On 19 April 2010, APS filed a counterclaim for nonpayment maintenance of services rendered and supplies delivered to Moore Printing. On judgment 17 September asking the 2010, trial APS court filed to a motion dismiss for Moore summary Printing s complaint in its entirety, arguing that APS was not a party to Moore Printing s lease agreement for the printer and that any representations made constitute warranties. by APS were not specific enough to APS also moved for summary judgment on its counterclaim for lack of payment pursuant to its maintenance contract with Moore Printing. On 21 October 2010, APS moved - 4for, and was Printing s granted, first set an of extension to interrogatories respond and to Moore requests for production of documents, extending the deadline to and including 25 November 2010. However, on 23 November 2010, after reviewing the pleadings, depositions, and documents tendered, the trial court entered judgment and counterclaim. an order awarded granting $4,784.50 APS s in motions favor of for APS summary on its Moore Printing timely appealed from this order. Discussion We review the trial court s grant of summary judgment de novo. Stratton v. Royal Bank of Canada, __ N.C. App. __, __, 712 S.E.2d 221, 226 (2011). judgment the moving party To prevail on a motion of summary must establish that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Taylor v. Ashburn, 112 N.C. App. 604, 606, 436 S.E.2d 276, 278 (1993). party can satisfy this burden by showing The moving either (1) an essential element of the non-movant s claim is nonexistent, (2) the non-movant cannot produce evidence to support an essential element of his claim, or (3) the non-movant cannot surmount an affirmative defense which would bar his claim. 436 S.E.2d at 278. Id. at 606-07, - 5A. Lease Agreement Moore Printing argues the trial court erred in granting APS motions for summary judgment as there is a genuine issue of material fact as to whether a contract exists between Moore Printing and APS for the lease of the printer, either as a matter of fact or as a matter of law. We disagree. 1. Complete Office Solutions Agreement First, Moore Printing argues that APS proposal for the lease and maintenance of a Riso printer was a firm offer under the Uniform Commercial Code ( UCC ) and was accepted by Moore Printing, via the signature of Ms. Moore. Moore Printing contends that a genuine issue of material fact exists as to the scope of this agreement. The document, which Moore Printing refers to as a firm offer, is printed on APS letterhead and is titled Complete Office Solutions Agreement. The text of the document contains a brief description of an HC 5500 Main Unit and additional items which appear to be parts associated with a printer. It also specifies the terms of a lease, 60 mo. Lease $640.00 mo. Ms. Moore s signature appears under the text THIS CONTRACT IS NON-CANCELABLE. Moore Printing further argues that the fact that it later entered into a written agreement between Wells Fargo for the lease of the printer, does not negate existence of the Complete Office Solutions Agreement. the - 6We note, however, that the UCC, as codified in our General Statues, provides, in pertinent part, that [a] lease contract is not enforceable by way of action or defense unless: . . . (b) there is a writing, signed by the party against whom enforcement is sought or by that party s authorized agent, sufficient to indicate that a lease contract has been made between the parties and to describe the goods leased and the lease term. N.C. Gen. Stat. § 25-2A-201(1) to -201(1)(b) (2009) (emphasis added). signed Here, the Complete Office Solutions Agreement is not by document. APS; only Ms. Moore s signature appears on the Therefore, the document is insufficient to form an enforceable lease between Moore Printing and APS. 2. Privity Alternatively, existed between contract. Moore itself Moore Printing and Printing APS argues due contends to that that implied through a contract privity its of lease agreement with Wells Fargo, Moore Printing has implied privity of contract with the company that sold the printer to Wells Fargo and that this establishes privity of contract between Moore Printing and APS. In support of its argument, Moore Printing relies on Coastal Leasing Corp. v. O Neal in which this Court held that a lease agreement between the lessor and lessee established privity of contract between the lessee and the supplier-seller - 7(the company that sold the leased equipment to the lessor). N.C. App. 230, 236, 405 S.E.2d 208, 212 (1991). 103 In that case, the lessee negotiated a deal by which the supplier-seller sold refrigeration equipment to the lessor so that the lessor could then lease the equipment to the lessee. S.E.2d at 209-10. Id. at 232-33, 405 The lease expressly provided no warranties existed between the lessor and lessee, but provided that the lessee would seek redress equipment supplier-seller. for warranty issues against the Id. at 232-33, 405 S.E.2d at 210. When the equipment failed to meet the lessee s needs, the lessee stopped making lease payments, prompting the lessor to file suit. Id. at 231, 234, 405 S.E.2d at 209-10. then a filed leased crossclaim equipment against alleging a breach equipment s poor performance. 210. the The lessee supplier-seller of warranty due of the to the Id. at 231, 233, 405 S.E.2d at Claiming, inter alia, a lack of privity, the supplier- seller was granted a dismissal of the crossclaim. Id. at 231, 234, 405 S.E.2d at 209, 211. On appeal, this Court concluded the lessee and supplierseller were in privity of contract for warranty purposes and the lessee had a cognizable claim against the supplier-seller rather than the warranty-disclaiming lessor. Coastal Leasing Corp., 103 at N.C. emphasized App. that at the 235-36, clear 405 S.E.2d and unambiguous 212. This language Court of the - 8lease directed the lessee to seek relief exclusively from the [supplier-]seller of the equipment and identified the supplierseller by name. Id. at 235, 237, 405 S.E.2d at 211, 213. The Court further noted that the supplier-seller was a party to the suit. Id. at 234, 405 S.E.2d at 211. While the language in the lease between Wells Fargo and Moore Printing is similar to the language in the lease at issue in Coastal Leasing Corp., the present case is distinguishable. Significantly, in Coastal Leasing Corp., the supplier-seller of the leased equipment was specifically identified in the lease as the entity from which the lessee should seek redress and was a party to the subsequent suit for breach of warranty. Id. Here, the lease agreement specifies that Network Data Systems is the supplier-seller of the leased equipment, not APS. In fact, APS is not mentioned anywhere in the lease agreement. Furthermore, in Costal Leasing Corp., this Court concluded that where the lessee was a third-party beneficiary of the sales contract between the supplier-seller and the lessor, the lessee had the right to try to prove that the equipment seller s direct representations to him, or any implied or express warranties made to the lessor, were part of the inducement to enter into the contract. Id. at 236, 405 S.E.2d at 212. In the present case, Moore Printing may have been a third-party beneficiary of the sales contract between the supplier-seller and Wells Fargo, - 9but the supplier-seller, Network Data Systems, was not a party to Moore Printing s suit. Thus, we conclude the reasoning of Coastal Leasing Corp. does not establish privity of contract between Moore Printing and APS. B. Warranties Next, Moore Printing argues that APS is liable to Moore Printing as APS made printer. actionable warranties regarding the We disagree. Moore Printing relies on the theory that the two parties are in privity of contract for the lease of the printer and any applicable warranties. The written contract between the parties, however, is only for printer maintenance and supplies. Moore Printing cites Coastal Leasing Corp. for the proposition that any warranties owed to Wells Fargo from the supplier-seller inure to warranties, Moore if Printing. any exists, However, would be redress owed by under those Network Data Systems, the equipment supplier-seller, not by APS. C. Discovery Moore Printing also argues that the trial court erred by granting summary judgment before discovery was concluded. We disagree. Generally, it is improper for a court to enter summary judgment prior to the close of discovery as long as there are discovery procedures still pending, which might lead to the -10production of evidence relevant to the motion. Cellu Products Co. v. G.T.E. Products Corp., 81 N.C. App. 474, 477, 344 S.E.2d 566, 567 (1986). In that case, this Court concluded that the information sought, by the nonmoving party was not material to the disposition of the case. Id. at 477, 344 S.E.2d at 567-68. Therefore, plaintiff suffered no prejudice because the court granted the summary judgment motion prior to the completion of discovery. Id. at 477, 344 S.E.2d at 568. Moore Printing fails to allege what evidence might have been produced during the three remaining days between the filing of the order granting discovery period. summary judgment and the end of the In addition, there is nothing in the record to show that Moore Printing sought any additional information through discovery prior to the order granting summary judgment. Therefore, Moore Printing fails to demonstrate it was prejudiced. D. Rescission Moore Printing argues that it should be able to rescind both its contract with APS and its lease with Wells Fargo for breach of warranties. First, contract necessary Moore with party a We disagree. Printing party is one requests that who is is this not so Court before vitally the to rescind Court. interested in a A the controversy that a valid judgment cannot be rendered in the -11action completely and without his presence. finally determining the controversy Crosrol Carding Developments, Inc. v. Gunter & Cooke, Inc., 12 N.C. App. 448, 451-52, 183 S.E.2d 834, 837 (1971). Here, the parties to the lease agreement for the printer are Moore Printing and Wells Fargo. As Wells Fargo was not made a party to the suit, it is not possible to rescind the lease agreement. Additionally, Moore Printing is not entitled to rescission of the maintenance contract with APS because Moore Printing s alleged basis for rescission is breach of warranties made by APS for the printer. Rescission, an equitable remedy, is allowed to promote justice. The right to rescind does not exist where the breach is not substantial and material and does not go to the heart of an agreement. Wilson v. Wilson, 261 N.C. 40, 43, 134 S.E.2d 240, 243 (1964). Moore Printing again relies on having a contract, either in fact or in law, for the lease of the printer from which Moore Printing would be entitled printer s performance. to warranties from APS for the As discussed above, Moore Printing has no such privity of contract with APS. Therefore, failure of the printer to meet performance expectations does not qualify as a substantial and material breach of the agreement between Moore Printing and APS. Moore Printing s argument is without merit. -12E. Unfair and Deceptive Trade Practices Next, Moore Printing argues that APS engaged in unfair and deceptive trade practices. Moore Printing alleges that APS pushed the company into leasing the printer from Wells Fargo and that APS supplied the company with a printer that did not conform to Moore Printing s requirements. We disagree. The elements of a claim for unfair or deceptive trade practices in violation of N.C. Gen. Stat. § 75-1.1 (2003) are: (1) an unfair or deceptive act or practice or an unfair method of competition; (2) in or affecting commerce; (3) that proximately causes actual injury to the plaintiff or to his business. RD&J Props. v. Lauralea-Dilton Enters., 165 N.C. App. 737, 748, 600 S.E.2d 492, 500 (2004). Moore Printing fails to establish the elements required to sustain a claim of unfair and deceptive trade practices by APS. First, the lease agreement provided no warranty protection to Moore Printing from the lessor. Moore Printing argues that APS pushed it into leasing the equipment in an attempt to leave Moore Printing with no remedies if the printer did not perform. Based on the deposition of Ms. Moore, Moore Printing was not forced to sign the lease agreement but was merely encouraged to lease rather than purchase the printer. observed though a the demonstration machine was of not the machine performing Second, Ms. Moore in person and satisfactorily, even she -13attributed the confirming the quality entered into Printing problems to or the user error. performance lease of Without the agreement further printer, with Wells Moore Fargo. Thus, we cannot conclude that Moore Printing was victim of any unfair or deceptive act that prompted the company to enter into the lease agreement with Wells Fargo. F. Counterclaim Lastly, Moore Printing argues that the order granting summary judgment on APS counterclaim should be reversed as the counterclaim for ink and maintenance charges were actually an attempt to cure a nonconforming good, the printer. Under Moore Printing s theory, APS s efforts to resolve the printing problems were not made pursuant to the maintenance agreement but were attempts to cure a nonconforming good. Printing characterizes its contract with APS as a Moore purchase agreement for the printer and cites N.C. Gen. Stat. § 25-2508(1) (2009). Section 25-2-508(1) provides that after delivery of a nonconforming good has been rejected, and time for the seller s performance has not expired, the seller may seasonably notify the buyer of his intention to cure and may then within the contract time make a conforming delivery. Id. Moore Printing again relies on the existence of a contract for the lease of the printer between itself and APS. As discussed above, APS is not a party to the lease agreement. -14Moore Printing and APS have a contract merely for maintenance and supplies for the printer and N.C. Gen. Stat. § 25-2-508(1) does not apply. nonconforming good, Assuming N.C. arguendo Gen. Stat. that § the printer 25-2-508(1) was would a not apply here because APS is not the seller of the printer; the equipment supplier-seller is Network Data Systems. Furthermore, Moore Printing does not dispute that it has not paid APS for the maintenance subject of the counterclaim. and supplies that are the Plaintiff s argument is overruled. Conclusion For the reasons stated above, we conclude the trial court did not err in granting defendant s judgment. Affirmed. Judges STEELMAN and McCULLOUGH concur. motions for summary

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