U.S. Leasing Corp. v. Franklin Plaza Apartments, Inc.
| Decision Date | 19 February 1971 |
| Citation | 65 Misc.2d 1082,319 N.Y.S.2d 531 |
| Parties | , 8 UCC Rep.Serv. 1026 UNITED STATES LEASING CORPORATION v. FRANKLIN PLAZA APARTMENTS, INC. |
| Court | New York City Court |
Frank & Frank, New York City (Ira M. Berger, New York City, of counsel) for plaintiff, United States Leasing Corp.
Berger, Kramer & Levinson, New York City (Donald S. Hecht, New York City, of counsel) for defendant, Franklin Plaza Apartments, Inc. EDWARD GOODELL, Judge.
This is a motion for summary judgment in the sum of $4,615.08 and, in addition, a counsel fee of $500. based upon an agreement between the plaintiff and the defendant described as a 'lease' of equipment and executed by the defendant as lessee on July 16, 1968.
The incidents giving rise to this litigation began in June 1968 when representatives of Pitney-Bowes, Inc. discussed with a representative of the defendant, a non-profit Housing Corporation, the purchase of a No. 736 Addressor-Printer to be supplied by Pitney-Bowes, Inc. Two alternative methods of acquisition were presented to the defendant. One was an outright purchase and the other an arrangement described by the defendant as a lease 'for a period of five years' at the end of which 'the machine would become our property.'
The defendant alleges in its opposing affidavit that the representatives of Pitney-Bowes, Inc. stated that 'it would set up the machine, make the plates for same and arrange the plates by buildings for us and insert flip tabs and other identification strips, instruct our office staff how to operate the machine and also service the machine for five years.'
The items of equipment which the defendant claims it agreed to acquire were the 736 addressor-printer, 1 lister, 1--7835 12 tray nodular cabinet, 1--7961 embossing machine and '1 set of embossed plates bearing the names and addresses of defendant's tenant-cooperators.'
The claimed source of the problem in this case is the last item, namely the embossed plates bearing the names and addresses of tenants, which the defendant alleges were not delivered to it as promised by Pitney-Bowes, Inc. with the claimed consequence that it has never been able to use the addresser printer.
While the defendant's negotiations were conducted with the representatives of Pitney-Bowes, Inc., when the agreement with respect to the equipment was presented to the defendant by Pitney-Bowes, the latter was not named a party to the agreement. Instead, the named contracting party in addition to the defendant was the plaintiff, a California corporation engaged in the business of leasing property with which the defendant had no prior contact. Pitney-Bowes, Inc., while not a party to the agreement was referred to in the agreement as the 'Supplier of Equipment.'
The agreement, as noted, is termed a lease, describes the plaintiff as lessor and the defendant as lessee and provides for sixty monthly payments of 'rent' for an 'initial term of lease' of sixty months. The 'terms and conditions of lease' include a disclaimer by the plaintiff of any warranty, express or implied, a disclaimer of any responsibility for improper installation or operation and provides that any claim by the lessee must be asserted against the supplier. It also requires that despite any claims against the Supplier, the lessee must 'nevertheless pay Lessor all rents payable under the lease.' The lessor also 'agrees to assign to lessee * * * all of the rights which Lessor has against Supplier for breach of warranty or other representations respecting equipment.'
Based on this agreement the plaintiff claims it is entitled to summary judgment for the 58 unpaid installments of 'rent' and, in addition under a 'default' provision in the agreement, the sum of $500 for attorney's fees incurred in connection with the enforcement of its rights under the lease.
The answer pleads a general denial, and several affirmative defenses including lack of mutuality of obligation and consideration, breach of warranty, unconscionability and failure of consideration and a counterclaim to recover payments made by the defendant to the plaintiff amounting to $158.
In substance the plaintiff's position is that it has a right to recover the unpaid balance of the installments regardless of the defendant's claims which, the plaintiff argues, should be asserted against Pitney-Bowes.
In determining the question of whether there is merit in the defenses interposed by the defendant, consideration should be given to the provisions of Article 10 of the Personal Property Law relative to Retail Instalment Sales in view of the similarity of the agreement in the present case and a 'retail instalment contract' as defined by section 401(6) of Article 10. There it is provided that 'the term includes * * * a contract for the bailment or leasing of goods by which the bailee or lessee contracts to pay as compensation for their use a sum substantially equivalent to or in excess of their value and by which it is agreed that the bailee or lessee is bound to become, or has the option of becoming, the owner of the goods upon full compliance with the terms of the contract.'
In the present case the amount agreed to be paid by the defendant is substantially 'equivalent to or in excess' of the value of the equipment since the payments provided to be made over a 60-month period are $4,740 in relation to a 'total list' of the equipment amounting to $3,426.
The difference between the agreement here and a 'retail instalment contract' as defined by section 401 is that the agreement in this case does not provide for the vesting of title in the defendant to the equipment upon payment of the final instalment. I note, although I do not predicate my opinion on this point, that the defendant's manager asserts in his affidavit in opposition that the representation made by Pitney-Bowes, Inc. was that the defendant would become the owner of the property at the end of the five year period. As he avers, referring to the Pitney-Bowes representatives, 'They explained that we could purchase the machine outright or lease it for a period of five years and at the end of that time the machine would be become our property.' Again, in the same affidavit he states that 'In August 1968 Franklin Plaza Apartments, Inc. decided to purchase the No. 736 Addressor-Printer on the five year plan.'
While this may raise an issue of fact as to whether the agreement in suit correctly reflects the defendant's understanding with Pitney-Bowes, Inc. relative to the vesting of title to the equipment, the question considered here is whether, assuming that it does, there is merit in the defenses of unconscionability and failure of consideration.
Section 403 of Article 10 of the Personal Property Law prior to February 1, 1971 conferred upon the assignee of a retail instalment contract the right to 'cut off' claims of the buyer, if the assignee...
To continue reading
Request your trial
-
Vicksburg Partners, L.P. v. Stephens, No. 2004-CA-01345-SCT.
...or breach. Bank of Indiana v. Holyfield, 476 F.Supp. 104, 110 (S.D.Miss.1979) (citing United States Leasing Corp. v. Franklin Plaza Apartments, Inc., 65 Misc.2d 1082, 319 N.Y.S.2d 531 (1971)). ¶ 36. In Buraczynski, the Tennessee Supreme Court recognized substantive unconscionability in the ......
-
Frankel v. Citicorp Ins. Serv., Inc.
...should be declared unconscionable" ( Durham v. Ciba-Geigy Corp., 315 N.W.2d 696, 700 [S.D.], citing United States Leasing Corp. v. Franklin Plaza Apts., 65 Misc.2d 1082, 319 N.Y.S.2d 531; see Mobile Elec. Serv. v. FirsTel, Inc., 649 N.W.2d at 606). This sentiment is rooted in the Constituti......
-
Barco Auto Leasing Corp. v. PSI Cosmetics, Inc.
...rev'd on other grounds, 64 Misc.2d 910, 316 N.Y.S.2d 585 (App.T. 1st Dept.1970); United States Leasing Corp. v. Franklin Plaza Apts., 65 Misc.2d 1082, 319 N.Y.S.2d 531 (Civ.Ct.N.Y.Co.1971). Judicial approaches to the applicability of Article 2 to leases has been "placed along a spectrum mea......
-
Funding Systems Leasing Corp. v. King Louie Intern., Inc.
...fact that the leased equipment has proved to be useless. King Louie derives this argument from United States Leasing Corp. v. Franklin Plaza Apts., Inc., 65 Misc.2d 1082, 319 N.Y.S.2d 531 (1971). 12 That opinion was by a civil court of the City of New York, a court of inferior and limited j......