Africare, Inc. v. Xerox Complete Document Solutions Maryland, LLC
436 F. Supp. 3d 17
| D.D.C. | 2020Background
- Africare (D.C. nonprofit) had a 2013 CIT lease for five Toshiba copiers and separately leased two Xerox machines in 2013 via CDS with financing arranged by DLL.
- In March 2015 Africare signed CDS/DLL agreements to lease five additional Xerox copiers; a 2015 CDS “Letter Agreement” promised CDS would send $100,000 to cover Africare’s outstanding CIT lease (including a $10,000 donation).
- After delivery CDS took possession of the Toshibas and, by conduct, paid CIT monthly invoices from June 2015 through July 2017 (25 payments totaling $87,025) instead of issuing a $100,000 lump sum.
- Africare suffered grant reductions and a workforce cut in 2015–2016; it stopped payments to DLL in late 2016 and to CDS in June 2017; DLL repossessed the seven Xerox machines and recovered $1,823.70 on resale.
- Multiple suits were filed and consolidated; at summary judgment the court granted defendants' motions: CDS, CIT, and DLL prevailed; Africare’s claims of fraudulent inducement and unconscionability were rejected, and damages/interest/fees were awarded to defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CDS breached the 2013/2015 maintenance and letter agreements or fraudulently induced Africare to sign | CDS made false promises ($10k donation, $100k payoff, cost savings, need for 5 machines); contracts are voidable for fraud or unconscionable | 2013 maintenance agreement is integrated (parol evidence bars prior promises); CDS performed maintenance, made donations, and parties modified the 2015 payment terms by conduct | Court: 2013 written agreement integrated — parol evidence barred extrinsic promises; no triable fraud/unconscionability; summary judgment for CDS; Africare owes $10,291.73 for unpaid maintenance invoices |
| Whether Africare was relieved of liability under the CIT lease because CDS paid CIT invoices (modification/delegation) | CIT’s acceptance of CDS payments constituted modification/delegation — CDS (not Africare) should be liable | Delegation by Africare did not discharge Africare absent CIT’s consent; CIT continued to bill Africare | Court: Delegation did not relieve Africare; Africare remains liable under CIT lease; summary judgment for CIT; damages awarded ($53,493.45 plus contractual 18% prejudgment interest and fees) |
| Whether DLL is liable for CDS’s alleged misconduct or whether DLL’s leases are unenforceable/unconscionable | DLL is liable as principal for CDS’s conduct; leases contain hidden, one-sided terms and are unconscionable | No agency/attribution of wrongdoing; CDS did not fraudulently induce; lease default remedies and fee/interest clauses were conspicuous and enforceable | Court: CDS did not establish fraudulent inducement; unconscionability not shown under Pennsylvania law; summary judgment for DLL; damages awarded ($287,797.26 reduced by resale recovery) |
| Damages and mitigation (repossession/sale; interest; attorneys' fees) | DLL/CIT sold equipment slowly and failed to mitigate; damages excessive | Plaintiff offered no evidence how earlier sale would have materially reduced damages; contracts permit acceleration, interest, and fee-shifting | Court: Africare failed to show mitigation facts; contract remedies enforced (18% contractual interest where provided); attorneys' fees to be determined under Rule 54(d)(2) |
Key Cases Cited
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment/genuine-issue standard)
- Celotex Corp. v. Catrett, 477 U.S. 317 (movant’s burden on summary judgment)
- Scott v. Harris, 550 U.S. 372 (evaluating whether evidence creates genuine factual dispute)
- Armenian Assembly of Am. v. Cafesjian, 758 F.3d 265 (objective contract interpretation governs)
- Hercules & Co. v. Shama Rest. Corp., 613 A.2d 916 (parol evidence and integration clauses)
- 2301 M St. Coop. Ass’n v. Chromium LLC, 209 A.3d 82 (course of conduct can modify written contract)
- Byrd v. Admiral Moving & Storage, Inc., 355 F. Supp. 2d 234 (delegation does not discharge obligor absent assent)
- Bashir v. Moayedi, 627 A.2d 997 (D.C. law on delegation and liability)
- Williams v. Walker-Thomas Furniture Co., 350 F.2d 445 (procedural/substantive unconscionability framework)
- Chatham Communications, Inc. v. General Press Corp., 344 A.2d 837 (enforceability of attorney-fees clauses)