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FAIRFIELD LEASE CORPORATION v. MARSI DRESS CORP. ET AL. (05/13/69)

CIVIL COURT OF THE CITY OF NEW YORK, SPECIAL TERM, NEW YORK COUNTY 1969.NY.41502 <http://www.versuslaw.com>; 303 N.Y.S.2d 179; 60 Misc. 2d 363 May 13, 1969 FAIRFIELD LEASE CORPORATION, PLAINTIFF,v.MARSI DRESS CORP. ET AL., DEFENDANTS Harold N. Kaufman for plaintiff. Gartenberg & Ellenoff for defendants. Allen Murray Myers, J. Author: Myers


Allen Murray Myers, J.

Author: Myers

 Plaintiff, the assignee of a lease, moves for summary judgment in its action against defendants for rents due plus attorneys' fees.

The essential facts are as follows: Plaintiff's assignor, U-Vend, Inc., leased a coffee-vending machine to the defendant Marsi Dress Corp. for 36 months at a monthly rental of $39.50, commencing on September 1, 1968. Performance of the written lease was guaranteed by defendant Martin Friedland, the president of Marsi Dress Corp.

On August 28, 1968, the lease was assigned to plaintiff and on January 1, 1969, defendants defaulted in the payment of the rent due.

The instant action was instituted on February 19, 1969 to recover not only the rent earned for January and February, 1969 but also for the 30 months' rent not yet earned plus attorneys' fees of $252.80, equal to 20% of 32 months' rent.

Plaintiff's motion for summary judgment is grounded on the following perfunctory statement: "The defendants failed to make the payment due on January 1, 1969. Thereafter, the defendants were mailed notice of default and advised that they had the prescribed five days to make the account current, otherwise, pursuant to Clause 13 of the contract * * * we would declare all payments for the entire term of the contract due and payable. The defendants did not respond, nor have they made any subsequent payments to date."

In response, defendants' attorney states that: "Tender has been made to the plaintiff of rentals owing for the months claimed to be in default. However, the plaintiff has refused to accept such tender unaccompanied by payment of an additional sum of $252.80 for the plaintiff's attorneys' fees."

Plaintiff bases its claim upon Clauses 13, 14 and 15 of the lease, which provide in pertinent part as follows:

"13. In case the Lessee's failure to pay the rentals provided for above or to fulfill or perform the conditions imposed upon the Lessee by this lease, for a period of five (5) days after written notice of such default shall have been given to the Lessee the Lessor shall have the right to declare all rentals (both accrued and unaccrued) for the entire term of the lease, to be past due and payable. At any time that the Lessee is in default as provided herein * * * the Lessor may take possession of the leased equipment * * * and after such possession is taken, all Lessee's rights in said equipment * * * shall thereupon cease and terminate.

"14. The Lessor's remedies in case of Lessee's default shall be cumulative * * *

"15. * * * the Lessee shall be liable for all expenses Lessor may incur in connection with the enforcement of its remedies, including legal expenses and attorneys' fees, equal to twenty (20%) per cent of the total unpaid balance".

Although plaintiff's motion for summary judgment would have to be denied because of its failure to allege that it exercised its right under Clause 13 to declare all rentals on the entire lease to be past due and payable, the court chooses not to rest its decision on so restricted a foundation.

The papers raise the more serious issue as to whether Clause 13 is a penal forfeiture which the law will not recognize.

The validity of the clause under scrutiny must be determined as of the date of the contract and not the date of the breach (Seidlitz v. Auerbach, 230 N. Y. 167, 172). While parties to contracts have the right to insert any stipulations they may agree to, they will not be enforced if they are unconscionable and against ...


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