75975538.6 

IN THE UNITED STATES DISTRICT COURT 

WESTERN DISTRICT OF TEXAS 

AUSTIN DIVISION 

JAKE GUARINO, 

Plaintiff, 

v. 

VISUAL EDGE, INC., 

Defendant. 

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Civil Action No.: 1:20-CV-00670RP 

DEFENDANT’S ANSWER TO PLAINTIFF’S FIRST AMENDED COMPLAINT 

Defendant Visual Edge, Inc. (“Defendant”) respectfully submits this Answer to Plaintiff 

Jake Guarino (“Plaintiff”)’s First Amended Complaint (the “Amended Complaint”). 

PRELIMINARY STATEMENT 

All allegations not specifically admitted or otherwise qualified are denied. 

ANSWER 

In response to the specific allegations in the enumerated paragraphs in the Amended 

Complaint, Defendant responds as follows: 

PARTIES 

1. Defendant admits the allegations contained in Paragraph 1 of Plaintiff’s Amended 

Complaint. 

2. Defendant admits the allegations contained in Paragraph 2 of Plaintiff’s Amended 

Complaint. 

JURISDICTION AND VENUE 

3. The allegations contained in Paragraph 3 of Plaintiff’s Amended Complaint 

constitute legal conclusions to which no response is required. To the extent a response is required, 

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Defendant states that jurisdiction is proper in this federal district. Defendant denies, however, that 

Plaintiff is entitled to any of the relief he seeks in this action. 

4. The allegations contained in Paragraph 4 of Plaintiff’s Amended Complaint 

constitute legal conclusions to which no response is required. To the extent a response is required, 

Defendant states that venue is proper in this federal district. Defendant denies, however, that 

Plaintiff is entitled to any of the relief he seeks in this action. 

FACTUAL BACKGROUND 

5. Defendant admits, upon information and belief, that in 2008, Plaintiff was hired as 

Vice President of Managed Print Services of Zeno Digital Solutions, LLC d/b/a Zeno Imaging 

(“Zeno”). Defendant lacks sufficient information to admit or deny the remaining allegations 

contained in Paragraph 5 of Plaintiff’s Amended Complaint and, therefore, denies same. 

6. Defendant admits, upon information and belief, that Zeno adopted a new 

compensation plan for Plaintiff effective January 1, 2015. Defendant admits, upon information and 

belief, that Plaintiff’s compensation plan as Executive Vice President was set forth in a letter 

agreement dated January 13, 2015, and that the terms are set forth in such letter. Defendant denies 

the remaining allegations contained in Paragraph 6 of Plaintiff’s Amended Complaint. 

7. Defendant admits that it entered into an Asset Purchase Agreement (the “APA”), 

dated November 14, 2018 and effective as of October 31, 2018, with Zeno Digital Solutions, LLC 

d/b/a Zeno Imaging (“Zeno”) and certain other parties, which included the purchase by Defendant 

of certain Zeno assets located in the Houston and Austin markets and the name “Zeno Imaging.” 

Defendant admits that certain Zeno assets in the Dallas market were excluded from the purchase 

and sale contemplated in the APA and that Zeno retained ownership of these assets. To the extent 

Plaintiff’s allegation that Defendant “operated the Dallas assets retained by Zeno” implies that 

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Defendant had a right to any revenue or profit from these assets, that allegation is denied. 

Defendant states that it managed the back office operations of the Zeno assets located in Dallas. 

Defendant admits that in connection with the APA it agreed to hire Plaintiff as an at-will employee 

and to retain his compensation plan that had been in effect prior to the asset purchase. Defendant 

admits that it agreed that Plaintiff would be granted certain stock options in its parent, Visual Edge 

Technology, Inc. (“VET”), a California corporation. Defendant denies the remaining allegations 

set forth in Paragraph 7 of Plaintiff’s Amended Complaint. 

8. Defendant admits that on or around October 31, 2018, Defendant hired Plaintiff as 

an at-will employee to manage the Zeno assets that it had purchased located in the Houston and 

Austin markets and that it retained his compensation plan that had been in effect prior to the asset 

purchase. Defendant states that it paid Plaintiff all amounts owed to him under the terms of the 

compensation plan and provided standard benefits to Plaintiff. Defendant denies that Plaintiff’s 

compensation plan included any bonus payments based on the revenues and/or profits of the 

Dallas-based Zeno assets that were not purchased by Defendant. Defendant denies the remaining 

allegations set forth in Paragraph 8 of Plaintiff’s Amended Complaint. 

9. Defendant denies the allegations set forth in Paragraph 9 of Plaintiff’s Amended 

Complaint. 

10. Defendant admits that through March 2020, Plaintiff continued to receive 

compensation due to him under his compensation plan. Defendant denies that the $574,000 

transaction referenced in paragraph 10 of the Amended Complaint related to a personal sale by 

Plaintiff or that Plaintiff was entitled to a commission under the terms of his compensation plan. 

Defendant admits that it told Plaintiff that the referenced $574,000 transaction was not subject to 

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payment of a commission or bonus under the terms of his compensation plan. Defendant denies 

the remaining allegations set forth in Paragraph 10 of Plaintiff’s Amended Complaint. 

11. Defendant denies the allegations set forth in Paragraph 11 of Plaintiff’s Amended 

Complaint. 

12. Defendant admits the allegations set forth in Paragraph 12 of Plaintiff’s Amended 

Complaint. 

13. Defendant lacks sufficient information to admit or deny the allegation that “[d]uring 

his temporary layoff, Guarino continued his efforts to induce VET to honor its contractual 

obligations” and therefore denies same. Defendant admits that it received a demand letter dated 

March 30, 2020 from Plaintiff’s attorneys. Defendant admits that Plaintiff was sent and received 

a letter dated June 15, 2020, informing him that his layoff was now permanent. Defendant denies 

the remaining allegations contained in Paragraph 13 of Plaintiff’s Amended Complaint. 

14. Defendant denies the allegations set forth in Paragraph 14 of Plaintiff’s Amended 

Complaint. 

CONDITIONS PRECEDENT 

15. Defendant denies that all conditions precedent have been performed by Plaintiff or 

have occurred in connection with the purported contract at issue; specifically, Defendant denies 

that Plaintiff has earned commissions and/or bonuses, including in the amounts alleged by 

Plaintiff, based upon the actual gross profit, monthly revenue and/or total quarterly earnings before 

EBDA in accordance with the terms of the purported contract. 

COUNT 1: BREACH OF CONTRACT 

16. Defendant denies the allegations set forth in Paragraph 16 of Plaintiff’s Amended 

Complaint. 

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ATTORNEYS’ FEES AND COSTS 

17. Defendant denies the allegations set forth in Paragraph 17 of Plaintiff’s Amended 

Complaint.

REQUEST FOR RELIEF 

Defendant admits that Plaintiff requests certain relief in the unnumbered “Request for 

Relief” paragraph, including subsections 1-4, contained in his Amended Complaint, but denies 

that Plaintiff is entitled to any of the relief requested. 

DEFENDANT’S AFFIRMATIVE AND OTHER DEFENSES 

Defendant hereby states the following affirmative and additional defenses to the Amended 

Complaint, but does not assume the burden of proof on any such defense except as required by 

applicable law with respect to the particular defense asserted. Further, Defendant reserves the right 

to assert other affirmative and additional defenses, and/or otherwise supplement this Answer upon 

discovery of facts or evidence rendering such action appropriate. 

FIRST DEFENSE 

Plaintiff’s Amended Complaint fails to state a claim upon which relief can be granted. 

SECOND DEFENSE 

Plaintiff’s claims are barred, in whole or in part, by the equitable doctrines of estoppel, 

laches, waiver, and unclean hands. 

THIRD DEFENSE 

Plaintiff’s claims are barred, in whole or in part, because the contract at issue is ambiguous. 

FOURTH DEFENSE 

Plaintiff’s claims are barred, in whole or in part, because Defendant was discharged from 

performance by Plaintiff’s material breach of the purported contract at issue. 

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FIFTH DEFENSE 

Plaintiff’s claims are barred, in whole or in part, by fraud perpetrated by Plaintiff against 

Defendant and/or persons or entities affiliated with Defendant. In connection with amounts 

allegedly owed pursuant to Plaintiff’s purported compensation employment agreement, Plaintiff 

made material and false representations to Defendant and/or affiliated persons or entities about the 

gross profit of sales, total monthly revenue and/or total quarterly earnings before EBDA relating 

to commissions and bonuses that Plaintiff claims are owed. Plaintiff knew such representations 

were false or were made recklessly, as a positive assertion, and without knowledge of its truth. 

Plaintiff’s representations were made with the intent that the Defendant act on it and Defendant 

relied on such representations which caused injury to Defendant. 

SIXTH DEFENSE 

Defendant is entitled to an offset against or reduction of any monetary award to Plaintiff 

for damages, if any, for amounts owed by Plaintiff to Defendant as a result of Plaintiff’s fraudulent 

conduct. 

SEVENTH DEFENSE 

Plaintiff’s claim for accrued, unused Personal Time Off (“PTO”) in the amount of 

$13,101.00 is barred because Plaintiff was paid this amount for all accrued, unused PTO on or 

about June 26, 2020. 

EIGHTH DEFENSE 

Plaintiff’s claims are barred, in whole or in part, by the doctrine of after-acquired evidence. 

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NINTH DEFENSE 

Plaintiff’s claims are barred, in whole or in part, because the conditions precedent 

necessary to enforce and/or recover on the purported contract(s) at issue have not been performed 

by Plaintiff and/or have not occurred. 

TENTH DEFENSE 

Plaintiff’s claims are barred, in whole or in part, because Plaintiff materially breached the 

purported contract(s) at issue. 

ELEVENTH DEFENSE 

Plaintiff’s claims are barred, in whole or in part, because the damages and/or injuries 

alleged therein, none being admitted, were not caused by any allegedly wrongful conduct by 

Defendant. 

TWELTH DEFENSE 

Plaintiff’s claims are barred, in whole or in part, because the original contract upon which 

Plaintiff bases its breach of contract claim was modified and/or superseded by one or more 

subsequent contracts between the parties. 

THIRTEENTH DEFENSE

Defendant denies all allegations set forth in and/or implied by headings and subheadings 

contained in the Amended Complaint. Defendant denies each and every allegation set forth in the 

Amended Complaint that is not expressly admitted by Defendant herein. 

FOURTEENTH DEFENSE 

Defendant reserves the right to assert additional defenses at such time and to such extent 

as warranted by discovery and the factual developments in this case. 

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PRAYER 

WHEREFORE, having fully answered or otherwise responded to the allegations in 

Plaintiff’s First Amended Complaint and having stated its defenses thereto, Defendant Visual 

Edge, Inc. prays that Plaintiff take nothing by his claims and asks the Court to enter judgment in 

Defendant’s favor as to all claims and causes of action against it; to award Defendant its reasonable 

attorneys’ fees and costs; and to grant Defendant any and all relief, in law or in equity, to which it 

may be justly entitled. 

DATED: January 7, 2020 Respectfully submitted, 

By: /s/ Thomas E. Reddin 

Thomas E. Reddin

Texas Bar No. 16660950 

treddin@polsinelli.com

Joshua S. Owings 

Texas Bar No. 24117274 

jowings@polsinelli.com

POLSINELLI PC 

2950 N. Harwood Street, Suite 2100 

Dallas, Texas 75201 

Telephone: 214.397.0030 

Facsimile: 214.397.0033 

COUNSEL FOR DEFENDANT 

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CERTIFICATE OF SERVICE 

I hereby certify that on January 7, 2020, a true and correct copy of the foregoing has been 

filed with the Court via the CM/ECF filing system and served via same on the following counsel 

of record: 

Daniel H. Byrne 

dbyrne@fbhg.law

Christine E. Burgess 

cburgess@fbhg.law

FRITZ, BYRNE, HEAD & GILSTRAP, PLLC

221 West 6th Street, Suite 960 

Austin, TX 78701 

Tel: 512.476.2020 

Fax: 512.477.5267 

COUNSEL FOR PLAINTIFF

/s/ Thomas E. Reddin 

Thomas E. Reddin 

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