## Facts

- In July 1994, Transglobal Telecom Alliance, Inc. (Transglobal) executed a Master Equipment Lease Agreement with AT&T Credit Corp. (AT&T Credit), which AT&T Credit accepted in August 1994.
- The transaction was structured as a finance lease: Transglobal selected telephone equipment from AT&T Corp.; AT&T Credit purchased that equipment and then leased it to Transglobal.
- Transglobal also executed a lease schedule (Schedule 00010) covering an AT&T Corp. Conversant Communications System and related equipment for a 48-month term commencing August 31, 1994, with monthly rent of $4,537.41.
- Transglobal signed documents stating the lease, schedule, and related papers constituted the entire agreement between Transglobal and AT&T Credit regarding the equipment (integration/entire-agreement language).
- Transglobal executed a commencement certificate acknowledging delivery, acceptance, and that the equipment was in proper working condition.
- The lease required Transglobal to pay rent without setoff or defenses and included a waiver-of-defenses (“hell-or-high-water”) provision directed at claims arising from nonpayment.
- James Carraway executed a guaranty guaranteeing Transglobal’s obligations under the lease.
- Transglobal made one lease payment in November 1994 and made no further payments.
- The lease provided a liquidated-damages remedy for default: unpaid amounts with interest, plus remaining payments discounted by 5%, plus the equipment’s present casualty value discounted by 5%.
- AT&T Credit sued for breach of the lease and guaranty, seeking liquidated damages and possession of the leased equipment.
- Transglobal opposed payment and argued AT&T Corp. failed to provide additional promised services, and that the lease with AT&T Credit was part of a larger arrangement involving AT&T Credit and AT&T Corp., so Transglobal’s waiver should not control.
- Defendants sought additional discovery while related claims against AT&T Corp. remained in the case.

## Issues

1. Whether AT&T Credit was entitled to summary judgment for Transglobal’s nonpayment and Carraway’s guaranty obligations under the lease documents.
2. Whether Transglobal could avoid or delay payment to AT&T Credit by asserting defenses based on AT&T Corp.’s alleged service failures or by claiming a broader, combined business deal outside the written lease.
3. Whether additional discovery was required to defeat summary judgment.
4. Whether the court should certify any judgment for AT&T Credit as final under Federal Rule of Civil Procedure 54(b) despite remaining claims involving AT&T Corp.

## Decision

- The court granted AT&T Credit’s motion for summary judgment against Transglobal and Carraway.
- The court held Transglobal’s promise to pay under the finance lease was enforceable as an independent obligation once the equipment was accepted, and the contractual waiver barred defenses tied to AT&T Corp.’s performance.
- The court enforced the lease’s contractual remedies, including the liquidated-damages formula and AT&T Credit’s right to seek possession following default.
- The court rejected defendants’ attempt to treat the lease as part of an unwritten larger arrangement that would negate the written waiver and integration language.
- The court denied final-judgment certification under Rule 54(b) because related claims remained pending between defendants and AT&T Corp.

## Legal Principles

- Under U.C.C. Article 2A as adopted in New Jersey (including N.J.S.A. 12A:2A-407), a lessee’s payment obligation in a finance lease becomes irrevocable and independent upon acceptance of the goods, making “hell-or-high-water” promises enforceable.
- A clear waiver-of-defenses provision in a finance lease bars a lessee from withholding payment to the financing lessor based on complaints about the supplier’s performance, services, or related disputes.
- An integration/entire-agreement clause limits efforts to impose extra obligations on the financing lessor based on alleged side promises or a broader course of dealing not reflected in the lease documents.
- A commencement certificate acknowledging delivery, acceptance, and satisfactory condition supports enforcement of the lessee’s independent payment duty and weakens claims that performance disputes excuse nonpayment.
- A guarantor is liable under an unconditional guaranty where the underlying default is shown and the guaranty’s terms are clear.
- Summary judgment is appropriate when the material facts (execution of the lease/guaranty, acceptance, and nonpayment) are undisputed and the defenses are barred by contract and governing finance-lease law.
- Rule 54(b) certification is discretionary and may be denied when remaining claims among other parties make immediate entry of a final judgment inappropriate.

## Conclusion

The court enforced the finance-lease structure and the waiver-of-defenses clause, holding that Transglobal’s accepted equipment and admitted nonpayment entitled AT&T Credit to summary judgment for contractual remedies, and that disputes about AT&T Corp.’s alleged service promises could not be used to resist payment to the financing lessor; the court also declined to enter a Rule 54(b) final judgment because related claims against AT&T Corp. were still pending.


AT&T Credit Corp. v. Transglobal Telecom Alliance, 966 F. Supp. 299, 33 UCC Rep. Serv. 2d 492 (1997)