The opinion of the court was delivered by: Honorable David H. Coar
MEMORANDUM OPINION AND ORDER
Before this Court is Defendants' motion to dismiss pursuant to Rule 12(b)(7) and Plaintiff's motion for summary judgment.
Plaintiff LEAF is a Delaware corporation with its principal place of business in Wilmington, Delaware, and is fully authorized to do business in the State of Illinois. Defendant PMI is an Illinois Corporation with its principal place of business located in Wauconda, Illinois. Defendants Michael P. Balaskovits and Darryl Osikowicz are citizens of Illinois.
On or about September 19, 2002, Agfa Corporation ("Agfa") as lessor and PMI as lessee executed a Lease Agreement (the "First Lease") with respect to certain equipment under which PMI agreed to make 60 monthly payments of $2,084.00. On or about September 20, 2002, Agfa as lessor and PMI as lessee executed a Lease Agreement (the "Second Lease")(collectively with the First Lease, the "Leases") with respect to certain equipment under which PMI agreed to make 60 monthly payments of $1,768.17. Under the Leases, upon default, PMI was to pay all past due and all remaining payments due plus interest at the rate of 18%, return the Equipment, and pay all reasonable collection costs and attorneys' fees.
The Leases contain the following provisions:
Assignment...Lessor may assign or transfer this agreement and lessee waives notice of any such assignment. Lessee hereby waives any and all claims, setoffs, and defenses whatsoever against Lessor's assignee.
Use, Maintenance and Repair...Lessee, at its own expense, shall (a) maintain the equipment in good and safe operating order, repair and conditions, and (b) pay for all fuel, service, inspections, overhauls, replacements, substitutions, materials and labor necessary therefore.
Warranties. Lessee leases the equipment "as is." Lessor makes no warranty or representation, either express or implied, as to design or condition of, or as to the quality of, the equipment, its materials or its workmanship. Lessor makes no warranty of merchantability or fitness of the equipment for any particular purpose or as to its title to the equipment or any component thereof, or as to any other matter. Lessee agrees that all such risks as between lessor and lessee, are to be born by lessee, and the benefits of any and all implied warranties of lessor are hereby waived...No representation as to the equipment or any other matter by the vendor shall in any way affect lessee's duty to perform its obligations as set forth in this agreement, schedules, or other related documents...Lessor is not responsible for any repairs, service or defects in equipment operation thereof. Miscellaneous...This Agreement shall in all respects be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts. Entire Agreement: This Agreement consists of the face and additional pages and correctly sets forth the entire agreement between lessor and lessee with respect to the use, possession and lease of the equipment. Lessee acknowledges that he/she has read this agreement, understands it and agrees to be bound by its terms and conditions. Neither party shall be bound by any statement not contained in this agreement.
To secure payment of indebtedness under the First Lease, on or about September 4, 2002, Balaskovits executed a Personal Guaranty. To further secure payment of the indebtedness under the First Lease, on or about September 4, 2002, Osikowicz executed a Personal Guaranty. On September 20, 2002, Balaskovits and Osikowicz also executed Personal Guarantees of PMI's obligations under the Second Lease.
Agfa represented that a renewable Service Agreement was mandatory for the Leases. On or about August 23, 2002, PMI entered into a Consumer Imagining Professional Photo Finishing Retail Sales Contract (the "Supply Agreement") with Agfa, by which Agfa would sell certain supplies for the leased equipment to PMI. This agreement contained an integration clause stating that the "Agreement constitutes the complete and exclusive statement of agreement between the parties." On or about February 9, 2004, Agfa's President Bing Liem wrote a letter to Darryl Osikowicz, President of PMI, stating that Agfa would "continue to provide spare parts and technical service to your PPL's through 2008." PPL is a photo-editing and printing system provided under the Leases. On or about October 14, 2004, PMI and Agfa entered into a one-year Service Support Program (the "Service Agreement") effective October 1, 2004 to September 30, 2005.
On or about October 31, 2004, Agfa and AgfaPhoto USA Corporation ("AgfaPhoto") executed a Local Asset Sale and Transfer Agreement (the "Transfer Agreement") pursuant to which Agfa transferred to AgfaPhoto certain of its assets, including the Leases with PMI.
On November 30, 2005, AgfaPhoto and LEAF executed a Purchase Agreement (the "Purchase Agreement") pursuant to which AgfaPhoto sold and assigned to LEAF its rights as to certain Leases, including PMI's. Under the Purchase Agreement, "Seller, in consideration of the payment by LEAF of the Purchase Price...irrevocably sells, assigns and transfers to LEAF, its successors and assigns the Purchased Assets. Seller hereby agrees that Seller shall not be relieved of, and LEAF does not assume, any of Seller's obligations under the Purchased Leases or with respect to the Equipment." Purchase Agreement, Section 2.2(a). Further, "the Purchased Leases are assignable by Seller to LEAF...[and] Seller shall fulfill and perform all of its obligations, covenants, liabilities, warranties, and duties, if any under each Purchased Lease and/or any other agreements or instruments executed by it with respect to the delivery, maintenance, servicing and updating of the Equipment covered by the Purchased Lease." Purchase Agreement, Section 4.2(a).
Until October 2005, Agfa and AgfaPhoto provided reliable services and replacement parts to PMI. On or about October 10, 2005, AgfaPhoto sent a letter to PMI stating that PMI would no longer receive service or replacement parts. In or about early October 2005, the PPL system failed because it was wrinkling paper. PMI called for services, and learned that Agfa would not provide any service or replacement parts. PMI ...