Why a Queens Court Denied a TRO in Breach of Contract Action
Sometimes, a party can lose a case, or at least part of a case, but you can tell from reading the court's decision that it was a close call. There are other times that the court's decision makes clear that the party wasn't even close.
A Queens County trial court's decision dated August 6 in New York Office Systems v. Canon USA, Inc. quite obviously falls in the latter category. In this breach of contract case, the plaintiff was a business equipment retail dealer that, pursuant to an agreement with defendant, was permitted plaintiff to sell and service Canon business equipment.
In 2012, Canon opted to terminate its agreement with NYOS because the plaintiff hired a salesman who had previously committed defrauded numerous Canon customers, and was being investigated for forgery, misappropriation of funds and conversion of property while employed with a different Canon-affiliated equipment dealer, yet plaintiff refused to fire this individual despite Canon's demand that they do so. Importantly, the contract between the parties provided that Canon reserved the right to terminate the agreement if the dealer failed to operate their business in a manner that promotes and maintains the goodwill of Canon USA and Canon-brand products.
Plaintiff then commenced this lawsuit, and sought injunctive relief on the grounds that if Canon is not held to its end of the agreement, its business will suffer imminent and irreparable harm because it will be unable to service the Canon machines without Canon selling to plaintiff its spare parts and supplies.
The Court's rejection of the plaintiff's claim was telling:
"NYOS' claims of irreparable injury rest entirely upon factually unsupported contentions ... that are not only bare and conclusory but also self-serving and not credible ...
"The defendant also has a legitimate interest in enforcing the business agreement. In the absence of a sufficient showing by the plaintiff that enjoining the defendants from enforcing the agreement would result in irreparable injury to it, the balance of the equities favor the defendants. Hernandez's convictions, which involve crimes of dishonesty involving his business, and NYOS' failure to comply with the agreed-upon and reasonable terms of the dealer agreement, justify termination. The court will not force Canon to continue its business relationship with NYOS, whose employee convictions adversely affect Canon's reputation and violate the dealer sales and service agreement. Further, requiring the business relationship to continue after NYOS' decisions to continue the employment of Hernandez and the unauthorized opening of the Manhattan store would eviscerate material provisions of the contract to which NYOS agreed and put this court in the business of regulating business relationships without respect to reasonable business expectations."