Xerox Corporation v. Digital Express Graphic, LLC

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
November 6, 2007 Session

XEROX CORPORATION v. DIGITAL EXPRESS GRAPHIC, LLC

Appeal from the Chancery Court for Davidson County
No. 04-2508-I Claudia Bonnyman, Chancellor

No. M2006-02339-COA-R3-CV - Filed May 22, 2008

This is an appeal from summary judgment granted in favor of the lessor in an action to collect the
accelerated unpaid balance of $191,945.47 allegedly due under a lease agreement for digital printing
equipment. After careful review of the record, we find that the lessee failed to meet its burden of
proving the existence of a dispute of material fact that would preclude summary judgment. We
affirm the judgment of the trial court in all respects.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed

ANDY D. BENNETT , J., delivered the opinion of the court, in which HOLLY KIRBY , J., and JON KERRY
BLACKWOOD , SP .J., joined.

Joseph M. Dalton, Nashville, Tennessee, for the appellant, Digital Express Graphic, LLC.

Christopher W. Conner, Maryville, Tennessee, for the appellee, Xerox Corporation.

OPINION

I. FACTUAL AND PROCEDURAL HISTORY

On January 8, 2001, Digital Express Graphic, LLC (“Digital Express”) entered into a lease
agreement (“Agreement”) with Xerox Corporation for the lease of digital printing equipment. The
Agreement required monthly payments of $7,614.81 for a term of five years; these payments
included fees due under a separate maintenance agreement.

According to Digital Express, the equipment began to malfunction approximately eight
months into the lease term, generating inconsistent color prints. Xerox technicians responded to
numerous service calls but were unable to fix the problems. Digital Express claims it lost customer
accounts as a result of the printer problems and quit using the equipment around February 1, 2003.
Digital Express President T.J. Gill sent a letter to Xerox dated January 21, 2003, which outlined the
color consistency problems and the frequent service calls and indicated that Digital Express had
recently stopped making payments to Xerox under the Agreement. Mr. Gill also stated that Digital
Express was placing the equipment in its warehouse for pickup as of February 1, 2003. Apparently,
the equipment at issue was not retrieved by Xerox until June 2006.

The Agreement contained a provision which limited the remedies available to Digital Express
in the event of equipment failures to either the repair or the replacement of the equipment:

REMEDY. If Xerox is unable to maintain the equipment as described above, Xerox
will, as your exclusive remedy, replace the Equipment with an identical product or,
at Xerox’ option, another product of equal or greater capabilities. This replacement
product shall be subject to these same terms and conditions.

(emphasis added). In the event that Digital Express breached the Agreement, paragraph 13 enabled
“Xerox, in addition to its other remedies (including the cessation of Basic Services), [to] require
immediate payment of (a) all amounts then due[.]” The Agreement also included a paragraph
captioned “LIMITATION OF LIABILITY AND ASSIGNMENT” which stated:

Neither [party] shall be liable to the other for any direct damages greater than the
amount hereunder or for any special, indirect, incidental, consequential or punitive
damages arising out of or relating to this Agreement, whether the claim alleges
tortious conduct (including negligence) or any other legal theory.

On August 23, 2004, Xerox filed a Complaint on Sworn Account in the Chancery Court for
Davidson County pursuant to Tenn. Code Ann. § 24-5-1071 seeking judgment against Digital
Express in the amount of $191,945.47 plus costs, interest, and attorney’s fees.2 Xerox claimed it was
owed the accelerated balance due under the Agreement for Digital Express’s breach of the
Agreement.

1
Tenn. Code Ann. § 24-5-107(a) states:

An account on which action is brought, coming from another state or another county of this state, or
from the county where suit is brought, with the affidavit of the plaintiff or its agent to its correctness,
and the certificate of a state commissioner annexed thereto, or the certificate of a notary public with
such notary public's official seal annexed thereto, or the certificate of a judge of the court of general
sessions, with the certificate of the county clerk that such judge is an acting judge within the county,
is conclusive against the party sought to be charged, unless that party on oath denies the account or
except as allowed under subsection (b).

2
The sworn affidavit listed the current balance due, interest accrued, and attorney’s fees totaling $231,727.32.

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 Digital Express answered and filed a counter-complaint claiming breach of contract, breach
of warranty, willful misrepresentation, and violation of the Tennessee Consumer Protection Act.3
Alleging it lost numerous clients as a result of the machine’s malfunction, Digital Express sought
damages for lost profits, past and future, past payments under the Agreement and prejudgment
interest and costs. Xerox then moved for summary judgment4 which the trial court granted on
August 30, 2006. Xerox was awarded damages in the amount of $191,945.47 and instructed to file
a motion seeking reasonable attorney fees and prejudgment interest. Digital Express’s counterclaims
were dismissed.

On appeal, Digital Express takes exception to the grant of summary judgment and the
dismissal of its counterclaims, challenging the trial court’s interpretation of the Agreement’s
limitation of remedies and disclaimer of warranties and dismissal of its claim under the Consumer
Protection Act.

II. ANALYSIS

A. STANDARD OF REVIEW

A number of Digital Express’s arguments on appeal center on the construction or
interpretation of the Agreement. Issues relating to the construction or interpretation of written
instruments are issues of law rather than issues of fact. Cellco P’ship v. Shelby County, 172 S.W.3d
574, 586 (Tenn. Ct. App. 2005). As with issues of law, we review a trial court’s grant of summary
judgment with no presumption of correctness on appeal. BellSouth Adver. & Publ’g Co. v. Johnson,
100 S.W.3d 202, 205 (Tenn. 2003). Our task is to review the record to determine whether the
requirements for granting summary judgment have been met. Hunter v. Brown, 955 S.W.2d 49, 50-
51 (Tenn. 1997).

Summary judgment is appropriate only when the moving party demonstrates that there is no
genuine issue of any material fact and that the moving party is entitled to judgment as a matter of
law. Tenn. R. Civ. P. 56.04; Byrd v. Hall, 847 S.W.2d 208, 210 (Tenn. 1993). Once the moving
party has shown that there is no genuine issue of material fact, the nonmoving party must then
demonstrate the contrary; if the moving party’s motion is properly supported, the nonmoving party
may not rest upon the mere allegations or denials of his pleading but must respond setting forth
specific facts showing that there is a genuine issue for trial. Tenn. R. Civ. P. 56.06; Byrd, 847
S.W.2d at 210. In examining the record on appeal, we view all the evidence in a light most favorable

3
A default judgment was previously entered against Digital Express and later set aside, which contributed to
the delay in the litigation of this matter.

4
Xerox’s motion for summary judgment and supporting memorandum of law are not included in the record on
appeal; however, Xerox’s statement of material facts and Digital Express’s response to Xerox’s statement of material
facts and responding memorandum of law are included in the record on appeal. From these filings, we derive the scope
of the motion for summary judgment as discussed below.

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to the nonmoving party and resolve all factual inferences in favor of the nonmoving party. Byrd, 847
S.W.2d at 210; Price v. Mercury Supply Co., Inc., 682 S.W.2d 924, 929 (Tenn. Ct. App. 1984).

B. SUMMARY JUDGMENT AND TENNESSEE RULE OF CIVIL PROCEDURE 56

The absence of Xerox’s motion for summary judgment and supporting memorandum of law
from the record on appeal did not assist this court in determining exactly what issues were before
the trial court on summary judgment. In accordance with Tenn. R. Civ. P. 56.03, Xerox supported
its motion for summary judgment with a short and concise statement of undisputed material facts,
a copy of the Agreement, and the affidavit of a Xerox litigation specialist attesting to the amount
owed under the terms of the lease. Although Xerox’s motion for summary judgment and
memorandum of law are not in the record, its statement of material facts (excluding its citations to
the record) follows:

1. The parties entered into a lease agreement regarding the lease of equipment
described in said lease agreement.
2. [Digital Express] accepted the equipment, and continues to use the equipment
which remains in [its] possession.
3. [Digital Express] despite continued use and possession of the equipment has failed
to make payments in accordance with the Lease Agreement. Per the Lease
Agreement, [Xerox] is entitled to acceleration of the lease and is owed the principal
amount of $191,945.47.
4. [Xerox] is also entitled to costs and expenses including attorney fees.
5. [Digital Express] has filed a Counter-Complaint seeking money damages, however
the Lease Agreement precludes any special, indirect, incidental, consequential or
punitive damages.
6. In as much as [Digital Express’s] Counter-Complaint is based on breach of
warranty of fitness for a particular purpose, such warranty is disclaimed in the Lease
Agreement.

Based on its statement of material facts, the Agreement, and the affidavit, Xerox established
that (1) an enforceable contract existed, (2) Digital Express’ nonpayment amounted to breach of that
contract, and (3) Xerox was entitled to accelerated damages as a result. See C & W Asset Acquisition,
LLC v. Oggs, 230 S.W.3d 671, 676-77 (Tenn. Ct. App. 2007) (noting the elements for breach of
contract claim). Xerox also placed Digital Express’s counterclaims at issue by addressing them in
its statement of material facts to which Digital Express responded in its summary judgment filings.
Therefore, we find the counterclaims were properly before the trial court and subject to disposition
by summary judgment.

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 In response to Xerox’s motion, Digital Express submitted the affidavit of Mr. Gill in addition
to its statement of material facts and memorandum of law in opposition to summary judgment.5 Mr.
Gill attached as exhibits to his affidavit the January 21, 2003 letter he sent to Xerox complaining of
the equipment’s malfunction as well as three letters from dissatisfied customers complaining of the
digital print quality on orders with Digital Express. Mr. Gill verified that he wrote and mailed his
letter along with the customer letters he received to Xerox and further stated:

Prior to January 21, 2003, I cooperated in every manner with Xerox and its
technicians to correct the multitude of problems with the Xerox machine #2060, to
no avail. That the equipment which is the subject of this litigation was, in fact,
unplugged and stored in a warehouse on February 1, 2003, as stated in the January
21, 2003 letter for pickup by Xerox. That Xerox picked up the equipment in June,
2006. Further affiant saith not.

Rule 56.03 prescribes the proper procedure for responding to a motion for summary
judgment:

Any party opposing [a] motion for summary judgment must . . . file a response to
each fact set forth by the movant either agreeing that the fact is undisputed, (ii)
agreeing that the fact is undisputed for purposes of ruling on the motion for summary
judgment only, or (iii) demonstrating that the fact is disputed. Each disputed fact
must be supported by specific citation to the record.

Tenn. R. Civ. P. 56.03 (emphasis added). In its response to Xerox’s statement of material facts,
Digital Express attempted to dispute Xerox’s statements that (1) the equipment was still in use and
in its possession, (2) Xerox was entitled to acceleration of the Agreement, costs, and attorney’s fees,
(3) the Agreement precluded any special, indirect, incidental, consequential, or punitive damages,
and (4) the validity of the warranty disclaimers.6 However, Digital Express did not make a single

5
Before Xerox moved for summary judgment, Digital Express filed with the court an affidavit of Mr. Gill on
May 24, 2006, which stated:

Comes now T.J. Gill, acting in his capacity as President of Digital Express Graphic, LLC, aka Digital
Express, Inc., and makes oath that said company is not obligated under the contracts relied upon by
Xerox Corporation in this cause for the reasons stated in the counter-complaint filed on behalf of
Digital Express Graphic, LLC, and, as such no monies are owed to Xerox, as stated in the complaint.

Although the affidavit was not submitted in response to the motion for summary judgment, it merely makes legal
conclusions and relies on the allegations in the counter-complaint. Therefore, it does not dispute a material fact or
demonstrate a genuine issue for trial and does not assist our analysis. See Tenn. R. Civ. P. 56.06; Gibbons v. Schwartz-
Nobel, 928 S.W .2d 922, 926 (Tenn. Ct. App. 1996).

6
Digital Express disputed that the counter-complaint was “based solely on the theory of breach of [implied]
warranty of fitness for a particular purpose.” W e do not read Xerox’s statement in paragraph 6 as making this assertion.

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citation to the record in support of its disputed material facts as required by Tenn. R. Civ. P. 56.03.
The purpose of the citation requirement is to allow the court and parties to focus on the crucial
portions of the record and ascertain whether genuine issues of material fact exist. Tenn. R. Civ. P.
56.03 advisory commission cmt. (1997). If a party does not comply with Rule 56.03, the court may
refuse to consider those unsupported facts, regardless of how readily those facts could be ascertained
from the record. Owens v. Bristol Motor Speedway, Inc., 77 S.W.3d 771, 774 (Tenn. Ct. App. 2001)
(citations omitted).

Furthermore, Rule 56.06 does not permit Digital Express, as the nonmoving party, to rely on
the unsworn facts contained in its counter-complaint once Xerox presented evidence that it was
entitled to judgment and the burden shifted. See Wallace v. Nat’l Bank of Commerce, 938 S.W.2d
684, 689 (Tenn. 1996); Byrd, 847 S.W.2d at 211. Digital Express was required to “set forth specific
facts showing that there [was] a genuine issue for trial.” Tenn. R. Civ. 56.06. The affidavits or
evidence offered to support the respective positions on summary judgment must be made on personal
knowledge, establish facts that would be admissible in evidence, and affirm the affiant’s competence.
Id. Generally, documents must be authenticated by and attached to an affidavit that meets the
requirements of Rule 56, subject to the Tennessee Rules of Evidence, and the affiant must be a
person through whom the exhibits may be admitted. Summers v. Cherokee Children & Family
Servs., Inc., 112 S.W.3d 486, 510 (Tenn. Ct. App. 2002); 10A Wright, Miller & Kane, Federal
Practice & Procedure: Civil § 2722 (3d ed. 1998).

The customer letters attached to Mr. Gill’s affidavit only establish complaints regarding the
color and clarity of certain print jobs and only one letter indicates that the client terminated its
account with Digital Express. The letters do not dispute any material fact or essential element of
Xerox’s claim for breach of the Agreement. Moreover, Digital Express admits that it stopped
making payments to Xerox in the January 21, 2003 letter. Digital Express did not offer any proof
to challenge the express provisions of the Agreement limiting the remedies and warranties available
under the lease. Thus, Xerox was entitled to seek the accelerated balance due under the Agreement
because it was undisputed that Digital Express failed to make lease payments. We find that Digital
Express did not establish that a genuine issue of material fact existed for trial as to Xerox’s
complaint on sworn account.

C. REMEDIES

The trial court found that Digital Express did not avail itself of the remedy provided for in
the Agreement. Parties to a lease agreement “may include rights and remedies for default . . . in
substitution for those provided in [Article 2A].” Tenn. Code Ann. § 47-2A-503(1). “Resort to a
remedy provided . . . in the lease agreement is optional unless the remedy is expressly agreed to be
exclusive.” Tenn. Code Ann. § 47-2A-503(2). If, however, an exclusive remedy fails its essential
purpose or is unconscionable, other statutory remedies may be sought. Id.

The Agreement explicitly limited the available remedies to either the repair or the
replacement of the equipment in a paragraph entitled “REMEDY.” Despite repeated service calls

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and attempts to repair, it is undisputed that Digital Express never requested a replacement for the
digital printer that was malfunctioning. “A fair and adequate remedy not invoked by the buyer
cannot be said to fail of its essential purpose” when arguing the limitation of remedies is
unenforceable. Trinity Indus., Inc. v. McKinnon Bridge Co., Inc., 77 S.W.3d 159, 170 (Tenn. Ct.
App. 2001) (citing Arcata Graphics Co. v. Heidelberg Harris, Inc., 874 S.W.2d 15 (Tenn. Ct. App.
1993)). Further, we are unpersuaded by the statement that Digital Express, as a small business, did
not possess the same bargaining power as that of Xerox so as to render the remedy provision
unconscionable. See Id.

Because the Agreement effectively limited the remedies available in the event of a breach,
we find it further supports the court’s dismissal of the counterclaims upon which impermissible
remedies were sought. The independent claim asserted under the Tennessee Consumer Protection
Act is addressed below.

D. DISCLAIMER OF WARRANTIES

The court dismissed Digital Express’s counterclaims “because the warranties upon which the
counterclaims are based, fitness for a particular purpose and merchantability, were conspicuously
waived in the lease” and found the Agreement provisions met the statutory criteria for waiver. The
threshold determinations in this case are whether or not the Agreement, by its terms, effectively
waived the implied warranties and whether or not any express warranties were created and/or
breached.

Tennessee adopted the Uniform Commercial Code (“UCC”) in Title 47 and, in 1993,
codified the law governing the lease of goods, Tenn. Code. Ann. § 47-2A-101 et seq., which is
separate and apart from the law governing sales. Although similar in form to transactions for the sale
of goods, the separate treatment in the UCC for leases was deemed necessary because, among other
differences, “the warranty law with respect to leases is uncertain.” Tenn. Code Ann. 47-2A-101 cmt.
to official text. Thus, the controlling law in the instant action appears in Article 2A, the Uniform
Commercial Code–Leases while Article 2 remains instructive to similar issues construed in leases.
See Tenn. Code Ann. § 47-2A-101 cmt to official text.

1. Implied Warranty of Merchantability

If the lessor is a merchant of goods of the kind subject to a lease, there is an implied warranty
in the lease agreement that the goods will be merchantable. Tenn. Code Ann. § 47-2A-212(1). This
implied warranty of merchantability may be excluded or modified if the disclaimer mentions
“merchantability,” is in writing, and is conspicuous. Tenn. Code Ann. § 47-2A-214(2). However,
these requirements are subject to the following:
[U]nless the circumstances indicate otherwise, all implied warranties are excluded
by expressions like “as is,” or “with all faults,” or by other language that in common

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 understanding calls the lessee’s attention to the exclusion of warranties and makes
plain that there is no implied warranty, if in writing and conspicuous[.]

Tenn. Code Ann. § 47-2A-214(3).

Digital Express objects to the court’s finding that Xerox properly waived the implied
warranty of merchantability, claiming Xerox failed to meet the requirements of Tenn. Code Ann. §
47-2A-2147 because the provision did not to mention merchantability and was not placed
conspicuously within the contract. Digital Express further argues that, based on Patton v. McHone,
822 S.W.2d 608 (Tenn. Ct. App. 1991), Xerox is prevented from disclaiming the implied warranty
of merchantability because it entered into a service agreement with Digital Express.

Although the contract consists of ten total pages, there are only three pages of verbiage
outlining the parties’ rights and liabilities. Appearing on the third page, paragraph 25 reads in part:

XEROX AS FINANCIAL INTERMEDIARY. If this option has been selected, you
are leasing specifically identified products that were selected by you and that are not
sold by Xerox in the normal course of its business. With regard to these products,
you agree that Xerox is leasing them to you “As Is” and without warranty or liability
(either direct or indirect) of any kind. As such, and with regard to these products,
YOU HEREBY WAIVE THE IMPLIED WARRANTY OF MERCHANTABILITY.

The Uniform Commercial Code defines “conspicuous” as:

[A] term or clause so written that a reasonable person against whom it is to operate
ought to have noticed it. A printed heading in capitals . . . is conspicuous. Language
in the body of a form is “conspicuous” if it is in larger or other contrasting type or
color. . . . Whether a term or clause is “conspicuous” or not is for decision by the
court.

Tenn. Code Ann. § 47-1-201(10).8 The Agreement plainly employs “as is” language and expressly
states that Xerox was leasing the digital printing equipment without warranty of any kind.
Accordingly, Xerox was not required to mention merchantability in order to effectively exclude
implied warranties. See Tenn. Code Ann. 47-2A-214(3). The disclaimer stated in capital letters, and
thus conspicuously, that, by executing the Agreement, Digital Express thereby “WAIVE[D] THE
IMPLIED WARRANTY OF MERCHANTABILITY.” We find that the waiver was in writing and
was conspicuous in accordance with Tenn. Code Ann. § 47-2A-214.

7
Digital Express improperly cited and relied on Tenn. Code Ann. § 47-2-316 which governs the exclusion or
modification of warranties in the sale of goods.

8
Definitions appearing in Tenn. Code Ann. § 47-1-201 expressly apply to Chapters 2-9 of Title 47 subject to
additional definitions therein. Tenn. Code Ann. § 47-2A-103(4).

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 As to Digital Express’s reliance on Patton v. McHone, we agree with the trial court that the
rules of law limiting the disclaimer of warranties in Patton do not apply to the instant action. In
Patton, the buyers of a used vehicle sued various parties involved in the sale, claiming breach of the
implied warranty of merchantability, among other things, against the dealership. Patton, 822 S.W.2d
at 612, 616. When the buyers purchased the car, they also purchased an extended service contract
from the dealership, which also financed the transaction. Id. at 612. The court opined that “[t]he
implied warranty of merchantability cannot be disclaimed or limited if the seller either gives the
buyer a written warranty or enters into a service contract with the buyer within ninety days after the
sale.” Patton, 822 S.W.2d at 617 (citing 15 U.S.C. § 2308(a)). However, Patton involved the sale
of a used vehicle, unquestionably considered a consumer product, on claims brought under Tenn.
Code Ann. § 47-2-101 et seq., the Magnuson-Moss Warranty-Federal Trade Commission
Improvement Act governing consumer goods, and other grounds. See 15 U.S.C. § 2301(1) (defining
“consumer product” as any tangible personal property distributed in commerce and normally used
for personal, family, or household purposes); see also 16 C.F.R. § 700.1(a) (stating that “[t]he Act
applies to written warranties on tangible personal property which is normally used for personal,
family, or household purposes.”); 16 C.F.R. § 701.1(b) (stating “[p]roducts which are purchased
solely for commercial or industrial use are excluded. . . .”). The leased digital printing equipment
at issue in this case, used by Digital Express to produce compact disc jackets for commercial
distribution among other things, is not a product normally used for personal, family, or household
purposes.

2. Implied Warranty of Fitness for a Particular Purpose

Next, Digital Express argues the Agreement did not effectively disclaim the implied warranty
of fitness for a particular purpose. Tenn. Code Ann. § 47-2A-213 states:
[I]f the lessor at the time the lease contract is made has reason to know of any
particular purpose for which the goods are required and that the lessee is relying on
the lessor’s skill or judgment to select or furnish suitable goods, there is in the lease
contract an implied warranty that the goods will be fit for that purpose.

To exclude or modify the implied warranty of fitness for a particular purpose, “the exclusion must
be by a writing and be conspicuous.” Tenn. Code Ann. § 47-2A-214(2). Paragraph 5 of the
Agreement states in full: “WARRANTY DISCLAIMER. XEROX DISCLAIMS THE IMPLIED
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.”

As previously defined, the disclaimer in all capital letters was conspicuously placed in the
written Agreement such that a reasonable person and, in this case, a reasonable corporation, would
have noticed the warranty disclaimer. Accordingly, we find that the Agreement effectively waived
the implied warranty of fitness for a particular purpose.

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 3. Express Warranties

Digital Express claims that Xerox made certain representations regarding the capabilities of
the digital printers which induced it to enter into the Agreement. Relying on Tenn. Code Ann. § 47-
2A-210,9 which provides that express warranties may be created by a lessor’s affirmations of fact
or promises about the goods, Digital Express asserts that Xerox breached the express warranties
created at the time of sale when the printers did not perform as represented. This argument
presupposes that an express warranty was created. There is nothing in the record to establish this
material fact. The January letter Digital Express supplied stated in general terms that “Xerox had
and still continues to advertise this machine as color consistent, reliable, etc., but nothing could be
farther from the truth.” While this may be so, the statement alone does not rise to the level of
specificity required to demonstrate there is a genuine issue for trial. See Perryman v. Peterbilt of
Knoxville, Inc., 708 S.W.2d 403, 406 (Tenn. Ct. App. 1985) (finding affidavits submitted in response
to summary judgment which generally stated that seller’s agent made “material fraudulent
misrepresentations and express warranties which were not true” did not “rise to the dignity of
evidence that would support [p]laintiff’s claim). Digital Express offered no evidence about what
specifically was represented, when the representations were made, who made the representations,
or any details about the representations.10

9
Although Digital Express actually cited Tenn. Code Ann. § 47-2-313 governing the sale, instead of the lease,
of goods, the statutory language and construction is essentially the same as Tenn. Code Ann. § 47-2A-210, which
provides that:

(1) Express warranties by the lessor are created as follows:

(a) Any affirmation of fact or promise made by the lessor to the buyer which relates to the goods
and becomes part of the basis of the bargain creates an express warranty that the goods shall
conform to the affirmation or promise.

(b) Any description of the goods which is made part of the basis of the bargain creates an express
warranty that the goods shall conform to the description.

(c) Any sample or model which is made part of the basis of the bargain creates an express
warranty that the whole of the goods shall conform to the sample or model.

(2) It is not necessary to the creation of an express warranty that the seller use formal words such as
“warrant” or “guarantee” or that he have a specific intention to make a warranty, but an affirmation
merely of the value of the goods or a statement purporting to be merely the seller’s opinion or
commendation of the goods does not create a warranty.

10
Digital Express includes in a footnote to its memorandum of law in opposition to summary judgment that:

Mr. Gill would testify that he was approached by Xerox representatives Messrs. Horst and Maddux
who introduced the subject printer/copier to him and made numerous affirmations of fact about the
machine which induced him to contract, affirmations which turned out to be false. Mr. Horst’s name
appears on plaintiff’s Exhibit ‘A.’
(continued...)

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 Likewise, nowhere in the record does Digital Express explain how it relied on or was induced
by the alleged representations to enter into the Agreement, with the exception of the general
allegations in the counter-complaint. When Xerox properly challenged Digital Express’s claims of
breach of express warranties and negligent misrepresentation, it was incumbent upon Digital Express
to substantiate those claims with specific facts lest they be dismissed. “[I]f the non-moving party
fails to establish the existence of an essential element, there can be no genuine issue as to any
material fact since failure of proof concerning an essential element of the cause of action necessarily
renders all other facts immaterial.” Alexander v. Memphis Individual Practice Ass’n, 870 S.W.2d
278, 280 (Tenn. 1993) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548 (1986)).
Accordingly, we find Digital Express failed to prove that Xerox made any express warranties with
respect to the leased equipment.

E. TENNESSEE CONSUMER PROTECTION ACT

Digital Express asks this court to determine “[w]hether the Consumer Protection Act is
applicable under the facts of this case” and raises the issue of its standing to bring a private cause
of action against Xerox under the Tennessee Consumer Protection Act of 1997 (“CPA”), Tenn. Code
Ann. § 47-18-101, et seq. Specifically, Digital Express argues the CPA applies to it as a business
enterprise as well as the leased machine and thus should protect it from the alleged deceptive
misrepresentations of Xerox which allegedly induced it to enter into the Agreement. While we agree
that, as a corporation, Digital Express would have standing under the Consumer Protection Act for
damages resulting from unfair or deceptive practices in violation of the act, ATS Se., Inc. v. Carrier
Corp., 18 S.W.3d 626, 630 (Tenn. 2000), we do not find it relevant to the issues on appeal. The
issue before us is whether Digital Express proved a genuine issue of material fact existed in order
to survive summary judgment.

Xerox contends the issue of standing is not properly before this court because it was not
raised before the trial court. No transcript of the motion hearing appears in the record to assist our
review. The trial court did not explicitly reference the CPA allegations or acknowledge counsel’s
argument regarding the CPA claims in its detailed order. Rather, the court recited the basis for its
findings:

The Court reviewed [Xerox’s] Motion for Summary Judgment and supporting papers
including a memorandum of law, affidavit and statement of material facts. The Court
also reviewed [Digital Express’s] response and ruled in [Xerox’s] favor after
conducting a hearing on July 28, 2006 on all issues except whether the implied

10
(...continued)

However, Mr. Gill did not testify or include any such statements in his sworn affidavit. Additionally, Digital Express
fails to offer or cite specific facts concerning the alleged representations in the record as required by the Rules of the
Court of Appeals. See R. Ct. App. 6(b).

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 warranty of fitness could be disclaimed when the parties also entered into a
maintenance agreement.

(emphasis added). “Without a complete record or sufficient statement of the evidence from which
to determine whether the trial court acted appropriately, we ‘must assume the sufficiency of the
evidence to support the judgment.’” Taylor v. Allstate Ins. Co., 158 S.W.3d 929, 931 (Tenn. Ct.
App. 2003) (quoting Houston v. Mounger, No. E2002-00779-COA-R3-CV, 2003 WL 22415363,
at *2 (Tenn. Ct. App. Oct. 23, 2003)); see also Easterly v. Haun, 1927 WL 2086, at *4 (Tenn. Ct.
App. May 21, 1927) (applying the assumption where the record on appeal is incomplete but
recitations in the court’s order stated it considered the record and argument of counsel before
expounding its opinion and findings).

Again, Digital Express offered no specific facts to support the CPA violation(s) alleged in
its counter-complaint. Digital Express therefore did not create a factual dispute as to whether or not
Xerox represented that the leased goods, services, and equipment were of “a particular standard,
quality or grade when such equipment was not of the standard, quality or grade represented by
[Xerox] which induced [Digital Express] to lease same.” See Tenn. Code Ann. § 47-18-104(b)(7).
Digital Express was required to put forth evidence of similar facts to demonstrate a genuine issue
for trial on its claim for breach of express warranty. Because we find Digital Express did not meet
its burden on summary judgment with respect to the alleged misrepresentations and assume the trial
court based its judgment upon sufficient evidence, we affirm the dismissal of Digital Express’s
counterclaim under the CPA.

III. CONCLUSION

Based upon the foregoing analysis, we affirm the judgment of the chancery court in all
respects. Costs of appeal are assessed against Digital Express Graphic, LLC0 for which execution
may issue, if necessary.

____________________________________
ANDY D. BENNETT, JUDGE

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