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Pludeman v. Northern Leasing Systems, Inc.

Sup Ct, New York County

February 16, 2012

KEVIN PLUDEMAN, CHRIS HANZSEK d/b/a HANZSEK AUDIO, SARA JANE HUSH, OZARK MOUNTAIN GRANITE & TILE CO. and DENNIS E. LAUCHMAN, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
NORTHERN LEASING SYSTEMS, INC, JAY COHEN, STEVEN BERNARDONE, RICH HAHN and SARA KRIEGER, Defendants. Index No. 101059/04

Unpublished Opinion

DECISION & ORDER

Hon. Martin Shulman, J.S.C.

By decision and order dated March 25, 2010 (the "SJ decision"), this court granted plaintiffs' motion for partial summary judgment against defendant Northern Leasing Systems, Inc. ("NLS") with respect to liability on plaintiffs' breach of contract/overcharge claim (Pludeman v Northern Leasing Systems, Inc., 27 Misc.3d 1203A [Sup Ct NY Co 2010] ["SJ decision"]), thereby construing the form leases at issue in this class action lawsuit to be one page contracts as a matter of law. Thereafter plaintiffs, relying upon the SJ decision, moved inter alia for a judgment declaring that the form leases between class members and NLS are comprised of only the first page and all remaining pages are unenforceable against class members, together with related injunctive relief.[1]

By decision, order and judgment dated June 17, 2011 (the "6/17 order"), this court granted those portions of plaintiffs' foregoing motion seeking declaratory and injunctive relief solely as to those plaintiff class members whose leases: 1) contain all material terms on the first page above the merger clause and signature line; 2) lack any provision for or reference to the LDW clause on the first page thereof; and 3) do not specifically incorporate or refer to the terms and conditions contained on the remaining pages. The 6/17 order inter alia went on to declare that such leases were comprised of only the first page and all remaining pages were unenforceable and to enjoin defendants from enforcing the lease terms contained in pages 2 through 4 of such leases.[2]

Defendants now move for renewal of the 6/17 order based upon the September 15, 2011 decision in Pludeman v Northern Leasing Systems, Inc., 87 A.D.3d 881 (1stDept 2011) (the "AD SJ decision"), which reversed the SJ decision. In opposition, plaintiffs request that this court deny this motion without prejudice to renew upon determination of plaintiffs' motion for leave to appeal the AD SJ decision to the Court of Appeals. The Appellate Division subsequently denied that motion by decision dated December 20, 2011.

Plaintiffs have not opposed this motion on the merits and upon denial of their motion for leave to appeal, they exhausted their appellate remedies and the AD SJ decision became the law of this case. There can be no serious dispute that the reversal of the SJ decision's finding that the subject form leases were one page contracts as a matter of law renders the 6/17 order a nullity. Accordingly, defendants' motion for renewal must be granted, and upon granting renewal, the 6/17 order must be vacated to the extent that it granted plaintiffs declaratory and injunctive relief.

As a final matter, plaintiffs' opposition correctly notes that defendants' motion to renew fails to proffer any reason why the portion of the 6/17 order directing disclosure of NLS's lease database should be vacated. In reply, defendants argue that "considerations of judicial economy" warrant this court holding the discovery issue in abeyance until this court decides defendants' simultaneously pending motion to decertify the class, which is also predicated upon the AD SJ decision. However, it is well settled that it is improper for the court to consider arguments raised for the first time on reply. Wal-Mart Stores, Inc. v U.S. Fid. & Guar. Co., 11 A.D.3d 300, 301 (1stDept 2004) (motion court properly declined to reach argument improperly raised for the first time in reply). Accordingly, upon granting renewal, this court adheres to the portion of the 6/17 order directing disclosure. Accordingly, it is hereby

ORDERED that defendants' motion for renewal is granted and upon granting renewal, the portion of this court's June 17, 2011 decision, order and judgment granting plaintiffs declaratory and injunctive relief is vacated.

The foregoing constitutes this court's decision and order. Courtesy copies of this decision and order have been provided to counsel for the parties.


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