643 F.2d 987 (4th Cir. 1981), 79-1743, Hoffman v. National Equipment Rental, Ltd.

Docket Nº:79-1743.
Citation:643 F.2d 987
Party Name:Arnold HOFFMAN and Mary Hoffman, Appellees, v. NATIONAL EQUIPMENT RENTAL, LTD., a corporation, Appellant, and Advanced Leasing Services, Inc., a corporation; and Eagle Mortgage Co., a corporation; and Dairy Farm Leasing Co., a corporation, Defendants.
Case Date:January 12, 1981
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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Page 987

643 F.2d 987 (4th Cir. 1981)

Arnold HOFFMAN and Mary Hoffman, Appellees,

v.

NATIONAL EQUIPMENT RENTAL, LTD., a corporation, Appellant,

and

Advanced Leasing Services, Inc., a corporation; and Eagle

Mortgage Co., a corporation; and Dairy Farm

Leasing Co., a corporation, Defendants.

No. 79-1743.

United States Court of Appeals, Fourth Circuit

January 12, 1981

Argued Oct. 6, 1980.

Rehearing Denied Feb. 18, 1981.

Page 988

Lawrence J. Lewis, Huntington, W.Va. (Vinson, Meek, Lewis, Peoples & Pettit, Huntington, W. Va., Charles Jacobson, Dorfman & Jacobson, Jeriche, N.Y., on brief) for appellant.

William D. Levine, Huntington, W.Va. (Marshall & St. Clair, Huntington, W. Va., on brief) for appellee.

Before BRYAN, Senior Circuit Judge, and RUSSELL and WIDENER, Circuit Judges.

ALBERT V. BRYAN, Senior Circuit Judge:

This appeal evolves from an action begun on August 6, 1975 in the Federal Court for the Southern District of West Virginia by Arnold F. Hoffman, a citizen dairy farmer in that State, and his wife, Mary, against National Equipment Rental, Ltd. (NER), a Delaware corporation. As ultimately tried, their complaint alleged breach of warranty and usury under a lease of 21 dairy cows by NER's assignor. 1

NER not only denied liability of any kind, but counterclaimed on the basis of a judgment entered July 11, 1975, by the Supreme Court of the State of New York, County of Nassau, awarding NER the sum of $36,458.68 as the amount due by the Hoffmans under the lease. The District Court on cross-motions for summary judgment refused to accord full faith and credit to the New York judgment. Instead, it submitted the claims of both parties to a jury for special findings and, on May 15, 1979, accepted a verdict awarding to the plaintiffs $72,266.00 and to NER $30,654.22. The Court then gave judgment to the Hoffmans for the net difference of $41,611.78.

Page 989

We reverse the trial court for error in the rejection of the New York judgment which, we hold, concludes adversely all of the Hoffmans' claims.

I.

Under the lease and guarantee signed by them on July 24, 1974 the Hoffmans covenanted to make 50 monthly rental payments of $693.00 with the proviso that two payments be made in advance. After the final payment they were to be entitled to buy the cows for one dollar. The Hoffmans made no payments after May 1975, due to their dissatisfaction with the cows. They charged that the animals did not produce the quantity of milk promised before the lease was closed, that their health was impaired, and that some had died soon after delivery; they maintained that these complaints went unanswered.

NER commenced its New York action to recover the unpaid lease moneys in May 1975. The Hoffmans failed to appear, and the judgment noted above was obtained by default. The lease, signed in New York by NER's assignor after it had been executed by the Hoffmans in West Virginia, specified the method and mechanics of execution and embodied the parties' agreement as to the governing law, service of process, and choice of jurisdiction. It provided as follows:

24. EXECUTION: LAWS GOVERNING: SERVICES: This lease shall only be binding when accepted by Lessor at its New York, N. Y. office and shall be deemed to have been made in New York County, New York and shall be governed by the laws of the State of New York except for local recording statutes. As part of the consideration for the Lessor's executing this Lease, Lessee agrees that all actions or proceedings arising directly or indirectly from this Lease shall be litigated only in courts having situs within the State of New York and the Lessee hereby consents to the...

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