All-States Leasing Co. v. Top Hat Lounge, Inc.
| Decision Date | 02 September 1982 |
| Docket Number | ALL-STATES,No. 81-391,81-391 |
| Citation | 649 P.2d 1250,39 St.Rep. 425,198 Mont. 1 |
| Parties | , 33 UCC Rep.Serv. 152 LEASING COMPANY, A Montana Corporation, Plaintiff and Respondent, v. TOP HAT LOUNGE, INC., A Montana Corporation and Harry Boskovich, Defendants and Appellants. |
| Court | Montana Supreme Court |
Hood & Sherwood, Missoula, for defendants and appellants.
Milodragovich, Dale & Dye, Missoula, Donald S. Smith, Great Falls, for plaintiff and respondent.
This is an appeal from a summary judgment entered by the District Court of the Fourth Judicial District, Missoula County, against Top Hat Lounge, Inc., and Harry Boskovich for $9,032.92 in delinquent lease payments.
Appellant, Top Hat Lounge, Inc. (Top Hat), and respondent All-States Leasing, Inc. (All-States), are corporations organized and existing under the laws of the State of Montana and authorized to do business here. On or about January 22, 1975, All-States and Top Hat entered into a lease agreement for an automated liquor-dispensing system. Under this agreement, Top Hat agreed to pay $134 per month for sixty months. Harry Boskovich, as an individual, guaranteed Top Hat's payments on the lease.
In a purchase order, Top Hat requested All-States to purchase the liquor-dispensing system from a third party supplier, C & C Sales. After purchasing the system from the supplier, All-States leased the system to Top Hat.
On the back of the lease agreement are twenty-three separate paragraphs stating the rights and obligations of the parties. The print of these clauses is the smallest print on the agreement. The heading for each paragraph is larger bold-face print. Under this agreement, All-States as lessor disclaimed all warranties; Top Hat as lessee waived the rights of jury trial, counterclaim and offset, and personal service.
On January 20, 1975, when the liquor-dispensing system was installed, Boskovich, as a representative of Top Hat, signed a "completion certificate" which stated that the system was in proper condition and in full compliance with the terms and specifications of the contract.
Top Hat has not made any payments on the liquor-dispensing system since June 10, 1976. All-States eventually repossessed the system and sold it for $100.
On May 3, 1979, All-States began this action against Top Hat and Boskovich for payments owed to it under the lease agreement. All-States sent Top Hat and Boskovich a request for admissions on September 5, 1979. Neither Top Hat nor Boskovich made an attempt to answer this request for admissions until December 1, 1980.
On December 15, 1980, a hearing was held on All-States' motion for summary judgment. After concluding that under Rule 36, M.R.Civ.P., the facts in the request for admissions must be deemed true, the District Court granted All-States' motion for summary judgment.
The following facts were deemed true by the District Court:
1. Harry Boskovich, as an individual, guaranteed Top Hat's obligations to respondent.
2. The supplier of the equipment, C & C Sales, acted as the appellants' agent in proposing the leasing transaction to respondent.
3. Appellants selected both the equipment and the supplier of the equipment.
4. Respondent ordered the equipment at the request of the appellants.
5. Pursuant to paragraph two on page one of the lease agreement, appellants agreed that no oral agreement, guarantee, promise, condition, representation or warranty shall be binding.
6. Pursuant to paragraph four of the lease agreement, respondent disclaimed express or implied warranties of merchantability, fitness, quality, design, condition, capacity, fitness for any particular purpose, and suitability of performance of the equipment or the material or workmanship thereof and leased the equipment "as is."
7. Appellants, pursuant to paragraph four of the lease agreement, agreed that the respondent was not to be obligated to install, erect, test, adjust, service or repair the equipment and that any installation or erection of the equipment or property leased was to be at the sole discretion and under the control of the appellants.
8. Pursuant to paragraph five of the lease agreement, the respondent granted and assigned to the appellants the right to enforce all warranties, agreements, representations, if any, made by the supplier to the respondent.
9. Pursuant to paragraph five of the lease agreement, appellants agreed that no defect or unfitness of the equipment would relieve the obligation to pay rent or any other obligations due under the terms of the lease agreement.
10. Pursuant to paragraph six of the lease agreement, appellants agreed to inspect the property within forty-eight hours of their receipt thereof, and unless within such period gave notice to the respondent specifying any defects in the property received, the property would conclusively be deemed accepted by the appellants.
The District Court concluded as a matter of law that while the lease agreement had an unconscionable provision providing for waiver of jury trial and counterclaims, the agreement was not unconscionable without this provision. The District Court therefore held that the agreement was entitled to full enforcement once the unconscionable provisions were stricken.
Appellants raise only two issues for review: (1) whether the summary judgment was improper since genuine issues of material fact are still present in the record; and (2) whether the lease agreement is unconscionable.
Under Rule 56(c), M.R.Civ.P., summary judgment is proper only if the record discloses no genuine issues of material fact. The initial burden is on the party moving for summary judgment to show that no genuine issues of material fact exist. Once the moving party has met its burden, the party opposing the motion must come forward with substantial evidence raising a genuine issue of material fact. Rumph v. Dale Edwards, Inc. (1979), Mont., 600 P.2d 163, 36 St.Rep. 1022; Harland v. Anderson (1976), 169 Mont. 447, 548 P.2d 613.
Here, all issues of material fact were resolved by the facts deemed admitted as true by the District Court. Appellants have, at no time, argued that the District Court erred by deeming such facts as true. Instead of making this argument, appellants claim that two questions of material fact still exist: (1) whether Top Hat effectively waived any warranties; and (2) whether Boskovich signed the completion...
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