Northern Leasing Systems announced the New York Supreme Court has ruled in favor of the company, granting the company’s motion to decertify a class of hundreds of thousands of merchants in a breach of contract class action brought against the company by four lessees. Judge Martin Shulman had previously certified the class in April 2009. Last week’s ruling by Judge Shulman follows a New York State Appellate Division’s September 2011 decision to reverse summary judgment as to liability on the breach of contract claim.

“Northern Leasing has always prided itself on the fairness of our business practices and the open dialogue we strive to maintain with our merchants,” said Jay Cohen, chairman and chief executive officer of Northern Leasing Systems.

“This opinion, like the Appellate Division’s decision in 2011, has vindicated our confidence in a favorable outcome to our case,” Cohen continued. “We have always felt that the plaintiffs’ claims were without merit.”

Northern Leasing said the plaintiff’s claim was essentially that the lessees thought the four-page lease in the form of a booklet was, in reality, only one page long and therefore Northern Leasing Systems’ enforcement of the terms on the other three pages constituted a breach of the contract. In March 2010 Judge Shulman granted summary judgment to the plaintiffs under that theory.

However, in September 2011 the New York State Appellate Division unanimously reversed that decision stating that “questions of fact exist that preclude granting plaintiffs summary judgment on the breach of contract claim.”

“It will now be necessary to determine what each plaintiff’s lease is comprised of and whether it was reasonable for any plaintiff to believe the document consisted of only one page,” read the decision, handed down July 13 by Judge Martin Shulman.

“Again, this necessarily entails individual inquiries into the circumstances of each plaintiff’s lease execution. Clearly, this fact-specific inquiry cannot be determined from a review of the lease’s language. And as a result of the Summary Judgment of the Appellate Division decision, individual issues now predominate over common questions of fact or law. As such, the motion to decertify the class must be granted,” he said.

The court also ruled against the plaintiff’s motion for summary judgment on a previously unpleaded unconscionability claim as to breach of contract.

“This court cannot help but conclude that this claim is ‘coming from out of nowhere’ in an attempt to prevent class decertification,” said Judge Shulman.

Northern Leasing Systems, founded in 1991, is a provider of third-party equipment leasing services that enable business owners to finance point-of-sale and other key equipment components of their business operations. The company’s primary focus is to provide financing for the credit card authorization equipment market for small- and medium-sized businesses by financing the leasing of equipment selected by its customers from independent equipment suppliers.

Previously on monitordaily.com NY Attorney General Sues Northern Leasing Systems, Published April 24, 2012