EXHIBIT
2
Supreme
Court of the State of New York
County Of New York
Kevin
Pluderman, Chris Hanzsek d/b/a Hanzek
Audio,
Sarah Jane Hush, Ozark Mountain Granite
&
Tile Co., and Dennis E. Lauchman, on behalf of
themselves
and all others similarly situated,
Plantiffs
V.
Northern
Leasing Systems, Inc., Jay Cohen,
Steve
Bernardone, Rich Hahn, and Sara Krieger
Defendants
Index
No. 04/101059
(Hon.
Sherry Heitler,
J.S.C)
First Amended Complaint
Nature
of the Action
1) In this class
action, plaintiffs assert a racketeering scheme to entrap small
Businessmen
fraudulently into equipment leases with undisclosed charges and onerous
terms. Defendants, through their own
representatives or third party salesman, deceptively sell these leases to small
businessmen through what appears to be a standard-form one-page lease, complete
with signatures, and a personal guaranty (“Lease and Personal Guaranty”). Thereafter, defendants (through the
corporate defendant) routinely charge and collect much more than what is
specified in the first page, and foist several other liabilities on the
unsuspecting small businessmen. When
questioned, defendants finally reveal the existence of 3 additional pages which
make the Lease and Personal Guaranty irrevocable, onerous, and virtually
indefinite. Routinely, these pages and
their contents are never disclosed to the small businessmen at the inception,
and are not incorporated into the Lease and Personal Guaranty. Nevertheless, defendants saddle small
businessmen with all these terms and enforce them strictly.
2) On these and
related grounds, Class plaintiffs assert claims under the federal racketeering
statute, 18 U.S.C. §1962, the Electronic Funds Transfer Act, 15 U.S.C §1693,
the Fair Debt Collection Practices Act, 15 U.S.C. §1692, Fruad, Negligent
Misrepresentation, Breach of the Implied Covenant go Good Faith and Fair
Dealing, Breach of Contract, Unjust Enrichment, and Money Had and Received, and
seek equitable and injunctive relief, and compensatory, treble and/or punitive
damages, together with attorneys’ fees and expenses.
Parties
3) Mr. Pludeman
is a resident of Dallas, Texas. Mr.
Hanzsek is a resident of Seattle, Washington.
Ms. Sarah Jane Hush is a resident of Ozark, Missouri, and her company,
Ozark Mountain Granite & Tile Co., is a Missouri corporation in good
standing. Mr. Lauchman is a resident of
Gilbertsville, New York.
4) Defendants
Northern Leasing Systems, Inc., is a New York corporation with its registered
offices at 333 Seventh Avenue, New York, New York 10001, and principal
executive offices at 132 West 31 Street, 14th Floor, New York, NY
10001. Northern Leasing is a
micro-ticket leasing company located in New York City that claims to specialize
in financing credit card point of sale (POS) terminals and other business
equipment.
5) Defendant Jay
Cohen is and has been at all relevant times the President of the defendant
Northern Leasing.
6) Defendant
Steve Bernardone is and has been at all relevant times the Vice President and
Chief Information Officer of the defendant Northern Leasing.
7) Defendant Rich
Hahn is and has been at all relevant times the Vice President for Sales of the
defendant Northern Leasing.
8) Defendant Sara
Krieger is and has been at all relevant times the Vice President for Operations
of the defendant Nrothern Leasing.
Class Action Allegations
9) Plaintiffs
bring this actions pursuant to Article IX, CPLR, on behalf of a Class
consisting of themselves and all other persons in the United States who are
lessees or guarantors under leasing or financing contracts with the defendant
Northern Leasing whereunder the defendant Northern Leasing (as lessor)
purported to lease business equipment.
The Class excludes defendants, or any parent, subsidiary, affiliate,
accountant, agent, attorney, employee, officer, representative, servant, and/or
any person acting on behalf of defendants or any of them.
10) Northern
Leasing has been in business since 1991.
According to its own website, it “lead[s] the industry with innovative
plans, high technology and outstanding service.” www.northernleasing.com. It does business throughout the United
States, and enters into the Lease and Personal Guaranty by itself directly as
well as through third party vendors.
Thus, it is clear that thousands of persons have signed the Lease and
Personal Guaranty with defendants and continue to do so. Clearly, the Class is so numerous that
joinder of all the members is impracticable.
11) Plaintiffs’
claims are typical of the claims asserted on behalf of the Class.
12) Plaintiffs do
not have any interests that are adverse or antagonistic to those of the Class.
13) Plaintiffs
will fairly and adequately protect the interests of the members of the
Class. Plaintiffs are committed to the
vigorous prosecution of this action and have retained counsel competent and
experienced in this type of litigation.
14) Northern
Leasing’s leasing and financing contracts, according to its own website,
involve financing of items that sell for under $10,000. Thus, individual compensatory damages of most
Class members are likely to be relatively small and hence, the burden and
expense of prosecuting litigation of this nature makes it unlikely that members
of the Class would prosecute individual actions. And if they did, such individual prosecution would be
impracticable as well as inefficient.
15) Plaintiffs are
not aware of any pending litigation concerning the claims herein.
16) This court is
the most appropriate forum for adjudicating the claims at issue, which arise
under federal statutes and common law.
The Lease and Personal Guaranty designates New York as a forum State
(although Northern Leasing or its successor-in-title has the unilateral
prerogative to change that). Northern
Leasing is a New York corporation. The
principal offices of all defendants are in this judicial district, and hence,
the State of New York has a paramount interest in supervising and monitoring
their activities at issue.
17) Plaintiffs do
not anticipate any difficulty in the management of this action as a Class
action.
18) There are many
questions of law and fact common to the Class which predominate over any
questions which may affect individual members.
The predominant common questions of law and fact include, among others:
a) Whether
defendants violated the federal racketeering statute, 18 U.S.C. §1962;
b) Whether
defendants violated The Electronic Funds Transfer Act, 15 U.S.C. §1693;
c) Whether
defendants violated the Fair Debt Collection Practices Act, 15 U.S.C §1692;
d) Whether
defendants are liable for Fraud;
e) Whether
defendants are liable for Negligent Misrepresentation;
f)
Whether defendants are liable for Breach of the Implied
Covenant of Good Faith and Fair Dealing;
g) Whether
defendants are liable for Breach of Contract;
h) Whether
defendants are liable for Unjust Enrichment;
i)
Whether defendants are liable for Money Had and Received;
j)
Whether plaintiffs are entitled to equitable and injunctive
relief against defendants; and
k) Whether
plaintiffs are entitled to damages, and if so the measure of damages.
19) A class action
is superior to all other available methods for the fair and efficient
adjudication of this controversy.
20) Plaintiffs
seek declaratory, equitable, and injunctive relief. They also seek compensatory, treble and/or punitive damages,
together with reasonable attorneys’ fees and expenses as permitted by law, on
behalf of themselves and the Class.
Plaintiffs do not seek any damages prohibited by any law.
Factual Allegations
21) Defendants
claim to be in the business of financing equipment for small businesses through
so called “equipment finance lease” contracts, the Lease and Personal
Guaranty. Typically, these transactions
involve equipment such as point-of-sale credit card swiping machines,
Internet-based online payment systems (“virtual terminals”), and/or software
for processing credit card payments over the phone.
22) Defendants
designed and perpetrated, and continue to perpetrate, a fraudulent scheme to
defraud small businessmen (Class members) by willfully concealing, and/or
orchestrating the concealment of, 3 of the 4 pages of the standard form Lease
and Personal Guaranty which contain extremely material but highly onerous
terms, and by charging and collecting significantly higher amounts than those
represented to Class members.
23) Defendants,
through their own representatives or third party salesmen, approach Class
members interested in leasing small business equipment. After making a successful sales pitch, these
representatives or salesmen obtain Class members’ signatures, with personal
guarantees, on the Lease and Personal Guaranty which has been drafted and
prepared by defendants.
24) To facilitate
this fraudulent scheme, defendants drafted the Lease and Personal Guaranty such
that Class members have to sign on the very first page of the Lease And
Personal Guaranty. Since the signature
of parties to a document is always at the end of the document, Class
members are led to believe that the Lease and Personal Guaranty is a one page
document containing all the terms of the lease.
25) Moreover, the
first page of defendants’ Lease and Personal Guaranty appears to be a complete
document. It contains all the material
information usually expected in a small business transaction (name, address,
bank preauthorization, amount, equipment information, term, bank information)
and signature blocks for both parties.
26) The first page
of defendants’ Lease And Personal Guaranty contains nothing
incorporating the remaining three pages, or even alerting Class members to the
existence of additional pages that may be part of the lease terms. It says expressly:
Lessee has
read and agrees to all terms and conditions
Contained in
this Equipment Finance Lease.
This
statement appears in a box under the caption “Lease Acceptance”, which box
also
contains the space for Class members’ signature.
27) That “Lease
Acceptance” box is followed by two other boxes in the same page. One provides for Class members’ personal
guaranty, and the other is for signature of acceptance by defendants.
28) Thus, the
first page effectively conveys that the Lease and Personal Guaranty is a
one-page document. Class members
uniformly believe that all their Lease obligations were contained in that page.
29) A fineprint –
nay, microprint – at the bottom of that page, tucked away in the far left
corner of the page reads “page 1 of 4”.
Obviously, the placement and size of the print, which is difficult to
read even if noticed, does nothing to enable Class members detect or inquire
about additional terms. This is
obviously a part of the defendants’ fraudulent scheme: when Class members complained
about not ever having been aware of the existence of the additional three
pages, defendants routinely relied on this microprint, flatly disclaimed their
representatives’ or salesmen’s representations, and self-righteously blamed
Class members for allegedly not having read the microprint.
30) Obviously, the
microprint is legally inconsequential.
Nothing incorporates the terms contained in the undisclosed three pages
into the Lease and Personal Guaranty.
31) Consistent
with this fraudulent scheme, defendants’ representatives or salesmen selling defendants’
Lease and Personal Guaranty never discuss, mention, or even refer to the
remaining three pages. Irrespective of
the time spent by defendants’ representatives or salesmen selling defendants’
Lease – whether it is four minutes or four hours – the Lease and Personal
Guaranty is routinely presented for signature at the very last minute, just
before the salesmen have “to run”. No
copy of the Lease And Personal Guaranty is ever left with Class members at the
time of signing; instead, they are simply told that Northern Leasing would mail
them a copy.
32) The Lease and
Personal Guaranty document itself is purportedly a four page document in
booklet form, printed on both sides of the paper. Hence, to avoid inconvenient questions, defendants’
representatives and third party salesmen routinely present the Lease And
Personal Guaranty for signature, in a hurry at the last minute, while it is
still clipped in a clip-board. Thereby,
they successfully keep the Class members completely unaware of even the
existence of any printed material on the back of the signature page or on
additional pages. This is the
consistent practice employed by defendants’ representatives and/or third party
salesmen all over the county.
33) Defendants are
well aware of this routine concealment of 3 of the 4 pages of the Lease And
Personal Guaranty. Defendants are also
aware that their representatives and salesmen routinely do not give a copy of
the Lease to Class members.
34) In fact,
defendants have a special hotline for Class members requesting copies of the
Lease. Indeed, in Northern Leasing’s
own website, defendants expressly advise Class members:
2.
Q. How can I
obtain a copy of the lease
Agreement?
A. Just call the lease request hotline at
888-275-3247
35) Thus, the
first page of the Lease is the only one seen by the plaintiffs(1) and Class
members.
36) Accordingly,
the terms contained in the remaining 3 pages cannot be said to have been agreed
to by the Class members. They are not
incorporated into the Lease and Personal Guaranty, they appear after the
signatures of Class members, and hence, may not be enforced against them.
37) In the
aforesaid manner, defendants’ representatives and salesmen fraudulently sell
Class members an alleged lease for extortionately overpriced items at extremely
onerous terms. These items are
typically available in the market for outright purchase, free and clear, at a
fraction of the price of defendants’ “lease” prices. Worse, defendants routinely charge significantly higher prices
than
(1)This was the uniform experience of the five
plaintiffs, who are from New York, Missouri, Texas, and Washington. In addition, plaintiffs’ attorneys have been
contacted and/or retained by other small businessmen from all over the country,
including for example, from Connecticut, California, Oklahoma, and
Mississippi. Obviously, none of these
small businessmen and plaintiffs know each other; but ever one of them had the
same experience, abundantly proving defendants’ intentional orchestration of
the suppression of the 3 pages of its standard form Lease and Personal Guaranty
and the terms contained therein.
those
specified in the first page. When
challenged, they refer to provisions in the hitherto undisclosed 3 pages.
38) By routinely
concealing the additional pages of the Lease and Personal Guaranty, defendants
has been willfully causing, enabling, permitting, and encouraging its
representatives/salesmen to misrepresent the terms and effects of the lease,
and the obligations being personally guaranteed by the Class members. Such representatives/salesmen routinely give
an innocuous picture of the Lease And Personal Guaranty, pointing to the only
page disclosed to the Class member and not saying one word about the grossly
inequitable and oppressive terms therein.
Defendants routinely disclaim all such representations at lease
inception, and point to the merger clause in the undisclosed pages; this
enables defendants’ representatives and salesmen to make misrepresentations
with abandon – anything to clinch the sale.
39) Defendants and
their salesmen fail to disclose to Class members the harsh terms of the
transaction contained in the 3 undisclosed pages.(2) Thus, defendants conceal from Class members.
a) That the Lease
and Personal Guaranty entitled Northern Leasing to charge sums which were
significantly higher than those specified in the first page;
(2)Defendants’ reasons for concealment of these
terms is obvious: Class members would
simply not agree to the transaction if they knew of these terms.. As Class plaintiff Hanzsek stated in a
letter to defendants dated June 23, 2003, “I am not a reckless or stupid
individual and would not, under any circumstances, ever consider agreeing to
the harsh and prohibitive nature of this agreement.”
b) That the
automatic electronic deductions from Class members’ bank accounts, and Class
members’ other lease obligations, would continue indefinitely unless Class
members gave specific advance 60-day notice of cancellation, with a buyout
balloon payment, at the end of the specified term;
c) That the Lease
and Personal Guaranty purport to immunize Northern Leasing from any warranties
for the equipment;
d) That although
Northern Leasing retained title to the equipment leased, it was not answerable
for failure or malfunction of the equipment;
e) That the Class
member’s obligation to pay Northern Leasing was absolute and based solely on
acceptance of the item leased;
f)
That the Class member had insurance obligations to Northern
Leasing with respect to the equipment leased;
g) That in case
of an alleged default, Northern Leasing could “without demand or legal process
enter into the premises where the equipment may be found and take possession of
and remove the equipment without liability for such retaking;”
h) That the
charges for late payment of monthly dues were an extortionate 15%, with a minimum
of five dollars;
i)
That in case of litigation, the Class member was obligated
to pay Northern Leaseing’s attorney’s fees and expenses but Northern Leasing
had no such obligation even if the Class member prevailed;
j)
That any litigation would be in a forum far away from Class
members’ homes and which forum was chosen and could be changed by Northern
Leasing or its successor-in-title to the Lease and Personal Guaranty; and
k) That Northern
Leasing – but not the Class member – could effect service of process for a
legal proceeding by certified mail, return receipt requested.
40) Moreover, the
Lease and Personal Guaranty does not require Northern Leasing to proceed
against the business first in the event of default. In fact, defendants routinely proceed against the guarantor
personally, not against the business which is usually the primary lessee.
41) Defendants’
approach to collection is aggressive.
They use the undisclosed provisions described above to the fullest
extent possible to obtain payment from Class members, including sending them
phony “summons” and complaints, dunning them with collection letters, and
obtaining judgments against those who refuse to pay.
42) Defendants’
representatives uniformly intimidate Class members with endless phone calls,
and expressly telling them that it would be more expensive for such Class
members to litigate defendants’ claims in New York than it would be to pay off
defendants.
43) And when
defendants commence legal proceedings, Class members rarely have the
opportunity to raise any defenses.
Defendants have hitherto been regularly filing their collection suits in
New York, despite the fact that most of the Class members reside in far away
states. Few if any can afford the
expense of litigation in a distant forum, and obviously, most cases would end
in default judgments. Thus, Class
members have no real opportunity to raise defenses to the lawsuit.
44) Even Class
members who do obtain counsel are hampered by the misleading Lease and Personal
Guaranty. Courts typically take
individual contracts at face value unless there is evidence that the Lease is
part of a pattern and practice of fraud and deception. Given the amounts and controversy, typically
under $5,000, it would be extremely difficult for consumer protection lawyers
to develop the requisite evidence.
Finally, the potential witnesses for Class members are likely to be in
his/her local area, and quite far from the New York court.
45) Obviously,
once a judgment is entered in the New York courts, it is almost impossible for
Class members to challenge defendants in the subsequent judgment enforcement
actions. Had defendants filed the suits
in the Class members’ home location to enforce its claims, they might have been
able to present a defense, either through an attorney or by themselves.
46) Defendants add
to the injury by imposing outrageous fees for late payments, as well as for
attorney’s fees and expenses. Upon
information and belief, these fees provide significant profits to defendants. In many cases, by the time the defendants
commence collection, these charges substantially increase the total payments
due.
47) Defendants are
totally unconcerned and unresponsive to class members’ complaints concerning
fraudulent misrepresentations of their representatives or salesmen, undisclosed
terms of the Lease and Personal Guaranty, nonfunctioning equipment, or anything
else. Instead, they rely heavily on the
wording of the undisclosed 3 pages of the Lease and Personal Guaranty to slam
complaining Class members that no defense exists to defendants’ demand for
payment.
Mr. Pludeman’s Transactions
48) In October
1999, defendants’ representative contacted Mr. Pludeman and his then-company,
Challenger Depp Imports, Inc., in connection with their intent to accept credit
cards from his vendees.
49) Defendants’
representative or salesman did not explain any terms of the lease to Mr.
Pludeman. The equipment leased was a
credit card terminal, Verifone Tranz 330.
50) On or about
November 9, 1999, defendants’ representative or salesman obtained Mr.
Pludeman’s signature on the first page of the Lease and Personal Guaranty on
behalf of himself and his business, Challenger Deep Imports, Inc. Mr. Pludeman never received a copy of that
document, and was unaware of the existence of the additional three pages. The Lease and Personal Guaranty remained
unsigned by or on behalf of Northern Leasing.
51) This Lease and
Personal Guaranty, purportedly with an Illinois resident at the time (Mr.
Pludeman) and an Illinois entity (Challenger Deep Imports, Inc.) as lessees,
and entered into in Illinois for the conduct of business there, nevertheless
contained a forum selection clause specifying New York and permitting
defendants to change the forum unilaterally.
It provided for a 48 month “lease” at $39.95 per month, or a total of
$1,917.60; Unknown to Mr. Pludeman,
this terminal was available for outright purchase in retail for about $200.
52) Defendants
commenced automatic debits to Mr. Pludeman’s bank account for $48.30 per month
– about 21% higher than the specified $39.95.
Several months later, Mr. Pludeman realized defendants’ scam. Thereupon, he promptly returned the
equipment (June 2000) and sought to terminate the Lease and Personal Guaranty.
53) As usual,
defendants demanded that Mr. Pludeman pay the entire sum due for the balance of
the lease in a lump sum as premature cancellation penalty. When he refused, defendants repeatedly
threatened him with deceptive notices, and even went to the extent of sending
phony “summons”, purporting to be from the Civil Court of the City of New York
ordering Mr. Pludeman to appear in court.
54) Defendants
repeatedly sent such phony summons and other official looking documents in a
bid to intimidate Mr. Pludeman. They
continued with their dunning letters and collection calls, demanding that Mr.
Pludeman personally [fulfill] his guaranty and pay the entire sum demanded.
55) Mr. Pludeman
refused to succumb to this extortion, and defendants have commenced a lawsuit
against him personally in the New York City Civil Court, County of New York, Northern
Leasing Systems Inc., v. Pludeman, Index Number 067900/2003. Defendants seek to recover $1,917.60
(including attorney’s fees) together with the costs of the proceeding from Mr.
Pludeman. Defendants have not made his
company, Challenger Deep Imports, Inc., even a party to the proceeding.
Mr. Hanzsek’s Transactions
56) Mr. Hanzsek
and his business, Hanzsek Audio, had a substantially similair experience. In February 1999, defendants’ representative
or salesman contacted Mr. Hanzsek purportedly for enabling Mr. Hanzsek’s
business accept payments by credit card.
57) As with Mr.
Pludeman, defendants’ representative or salesman did not explain the terms of
the lease to Mr. Hanzsek, which were substantially the same as that with Mr.
Pludeman’s lease. Unknown to Mr.
Hanzsek, this equipment could be purchased in retail for less than $200. But the lease was for 48 months at the rate
of $42 per month, a total of $2016.
58) On or about
February 11, 1999, defendants’ representative or salesman obtained Mr.
Hanzsek’s signature on the first page of the Lease and Personal Guaranty. As with Mr. Pludeman, Mr. Hanzsek also never
received a copy of that document, which also remained unsigned by or on behalf
of the defendants.
59) Defendants
commenced automatic debits to Hanzsek’s bank account immediately. As with Mr. Pludeman, these deductions were
significantly in excess of the amount specified in the Lease and Personal
Guaranty: $50.65, or about 21% higher than the $42 specified in the Lease and
Personal Guaranty.
60) As with Mr.
Pludeman, Mr. Hanzsek was unaware of the very existence of the 3 additional
pages of the Lease and Personal Guaranty.
61) This lease and
Personal Guaranty, which was entered into in Seattle, Washington by a Seattle,
Washington resident, for the conduct of business in Seattle, Washington,
nevertheless contained a forum selection clause specifying New York County and
permitting defendants to change the forum unilaterally.
62) Defendants
continued the automatic debit even after 48 months, the term of the Lease and
Personal Guaranty. When Mr. Hanzsek
inquired of defendants about the reasons for continued withdrawal, defendants
informed him for the first time of the hitherto undisclosed three additional
pages of the Lease and Personal Guaranty.
According to defendants, Mr. Hanzsek’s lease was to continue indefinitely
unless he were to pay a buyout fee and give a 60 day written notice for
termination. And when Mr. Hanzsek
inquired whether it was defendants’ standard procedure not to provide a copy of
the Lease and Personal Guaranty to Class members, defendants’ representative
categorically stated, “Yes, you have to call us and ask for one.”
63) Shocked at
this revelation, Mr. Hanzsek closed the bank account to stop defendants’
automatic debit. Thereupon, defendants
commenced its dunning letters and collection calls, demanding that Mr. Hanzsek
pay the entire sum demanded.
64) Mr. Hanzsek
refused to succumb to this extortion, and defendants have threatended their
usual lawsuit in New York.
Ms. Hush’s and Ozark Mountain’s Transactions
65) Ms. Hush has
the same experience in Ozark, Missouri.
In October 2000, defendants’ representative or salesman contacted Ms.
Hush purportedly for enabling her business, Ozark Mountain, accept payments by
credit card.
66) As with Mr.
Pludeman, defendants’ representative or salesman did not explain the salient
terms of the lease to Ms. Hush. A
credit card swipe machine, Talento, constituted the “equipment” leased. Unknown to Ms. Hush, this equipment could be
purchased in retail for less than $350.
But the lease was for 48 months at the rate of $99.90 per month, a total
of $4,795.
67) On or about
October 18, 2000, defendants’ representative or salesman obtained Ms. Hush’s
signature on the first page of the Lease and Personal Guaranty. As with Mr. Pludeman, Ms. Hush also never
received a copy of that document, which also remained unsigned by or on behalf
of defendants.
68) As with Mr.
Pludeman, Ms. Hush was also unaware of the very existence of the 3 additional
pages of the Lease and Personal Guaranty.
69) This Lease and
Personal Guaranty, which was entered into in Ozark, Missouri, by an Ozark,
Missouri, resident, for the conduct of business in Ozark, Missouri,
nevertheless contained a forum selection clause specifying New York County and
permitting defendants to change the forum unilaterally.
70) Defendants
commenced automatic debits to Ozark Mountain’s bank account. As with Mr. Pludeman, these deductions were
significantly in excess of the amount specified in the Lease and Personal
Guaranty: $112.07, or about 12% higher than the specified $99.90.
71) Ms. Hush and
Ozark Mountain faced repeated problems due to equipment malfunction, and the
uncooperative and unreliable bank with which they were placed by the
defendants. Finally, Ms. Hush stopped
using the equipment and informed Northern Leasing.
72) Subsequently,
Ms. Hush received the defendants’ usual demand for payment. When she called defendants in response to
that demand, defendants informed her of the terms contained in the additional 3
pages of the Lease and Personal Guaranty.
73) Ms. Hush
rejected defendants’ demand. Thereupon,
defendants sent their ususal deceptive notices, and phony “summons” and
“Verified Complain” to Ms. Hush, purporting to be from the Civil Court of the
City of New York ordering Ms. Hush to appear in court.
74) Ms. Hush
refused to succumb to this extortion, and defendants have commenced a lawsuit
against her personally in the New York City Civil Court, Count of New York, Northern
Leasing Systems Inc., V. Sarah Hush, Index Number 23212/2004. Defendants seeks to recover $4555.44
(including attorneys’ fees) together with the costs of the proceeding from Ms.
Hush. Once again, defendants have not
made Ozark Mountain even a party to that proceeding.
75) Mr. Luachman
had the same experience in Gilbertsville, New York. In November 2003, defendants’ representative or salesman
contacted Mr. Luachman purportedly for enabling his business accept payments by
credit card.
76) As with Mr.
Pludeman, defendants’ representative or salesman did not explain the salient
terms of the lease to Mr. Lauchman. A
credit card swipe machine, Nurit 2080, constituted the “equipment” leased. Unknown to Mr. Lauchman this equipment could
be purchased in retail for less than $200.
But the lease was for 48 months at the rate of $32 per month, a total of
$1,536.
77) On or about
November 19, 2003, defendants’ representative or salesman obtained Mr.
Lauchman’s signature on the first page of the Lease and Personal Guaranty. As with Mr. Pludeman, Mr. Lauchman also
never received a copy of that document, which also remained unsigned by or on
behalf of defendants.
78) As with Mr.
Pludeman, Mr. Lauchman was also unaware of the very existence of the 3
additional pages of the Lease and Personal Guaranty.
79) This Lease and
Personal Guaranty, which was entered into in Gilbertsville, New York by a
Gilbertsville, New York resident, for the conduct of business in Gilbertsville,
New York, nevertheless contained a forum selection clause specifying New York
County and permitting defendants to change the forum unilaterally.
80) Defendants
commenced automatic debits to Mr. Lauchman’s bank account. As with Mr. Pludeman, these deductions were
significantly in excess of the amount specified in the Lease and Personal
Guaranty: $39.19, or about 22% higher than the specified $32.
81) When Mr.
Lauchman inquired of defendants about the reasons for excessive withdrawal,
defendants informed him for the first time of the hitherto undisclosed three
additional pages of the Lease and Personal Guaranty. According to defendants, these pages entitled them to charge in
excess of the sum specified in the first page.
82) Shocked at
this revelation, Mr. Hanzsek [transcription note: Weren’t we talking about Mr. Luachman here?] stopped using the
machine and sought to cancel the Lease and Personal Guaranty.
83) Thereupon,
defendants commenced their usual collection calls demanding that Mr. Lauchman
pay the entire sum demanded. They have
threatened the usual lawsuit in New York County.
Class Plaintiff’s and Class Members’ Injuries
84) Class
plaintiffs and Class members were directly injured and damaged by defendants’
debit of sums much higher than those specified in the Lease and Personal
Guaranty.
85) In addition,
Class plaintiffs are saddled or threatened with liability and/or with legal
proceedings for lease obligations that they were never aware of. They have had to retain attorneys, and
expend time and resources for responding to these threats and proceedings.
86) Furthermore,
Class plaintiffs’ credit ratings have been adversely affected by the
defendants’ reports to the credit rating agencies for failure to pay
defendants’ unwarranted demands.
Count I
(RICO, 18
U.S.C. §1962( c))
87) The contents
of the above paragraphs are incorporated herein by reference as if fully set
forth herein.
88) The
association of defendants, certain attorneys retained by defendants, salesmen
and others whose identities are known only to defendants at this time
(cumulatively, the “Conspirators”), constituted an enterprise within the
meaning of 18 U.S.C. §1961(c), which enterprise was engaged in, and whose
activities affected, interstate and foreign commerce. This enterprise was continuous in that it lasted for more than
two years, had an ascertainable structure, and was distinct from the predicate
offenses alleged here.
89) Each defendant
is a person within the meaning of 18 U.S.C §1961(3) and separate from the enterprise.
90) Defendants
participated, and conspired with others (including their attorneys and others
whose identities are known only to defendants at this time) to participate, in
the affairs of the aforementioned enterprise through a pattern of racketeering
activity, as more fully set forth below, an all in violation of 18 U.S.C. §§
1962(c).
Mail Fraud, Violations of 18 U.S.C. §1341
91) Defendants and
the other members of the enterprise, having devices or intending to devise the
scheme or artifice to defraud, and/or for obtaining money or property by means
of false of fraudulent pretenses, representations, or promises, for the purpose
of executing such scheme or artifice or attempting so to do, placed in past
office(s) or authorized depository for mail matter, several letters and/or
packages to be sent or delivered by the Postal Service, and/or took or received
therefrom, letters and/or packages, or knowingly caused to be delivered by mail
or such carrier according to the direction thereon, or at the place at which it
was directed to be delivered by the addressee such letters and/or
packages. Specifically,
a) On or about
September 21, 2000, defendants in New York, through the use of interstate mail,
mailed a letter to Mr. Pludeman in Texas;
b) On or about
January 4, 2001, defendants in New York, through the use of interstate mail,
mailed a letter to Mr. Pludeman in Texas;
c) On or about
February, 2001, defendants in New York, through the use of interstate mail,
mailed a letter to Mr. Pludeman in Texas;
d) On or about
October 31, 2003 defendants in New York, through the use of interstate mail,
mailed a letter to Mr. Hanzsek in Washington;
e) On or about
October 16, 2003, defendants in New York, through the use of interstate mail,
mailed a letter to Mr. Hanzsek in Washington;
f)
On or about September 2, 2003, defendants in New York,
through the use of interstate mail, mailed a letter to Mr. Hanzsek in
Washington;
g) On or about
February 18, 2004, defendants in New York, through the use of interstate mail,
mailed a letter to Mr. Hanzsek in Washington. (3)
h) On or about
January 22, 2004, defendants in New York, through the use of interstate mail,
mailed a letter to Ms. Hush in Missouri.
92) Each
participant knew, expected, and intended that the facilities of interstate mail
would be used in furtherance of the racketeering scheme, and that such use was
an essential part of the scheme.
Wire Fraud, Violations of 18 U.S.C. §1343
93) Defendants and
other members of the enterprise, having devices or intending to devise the
scheme or artifice to defraud, and/or for obtaining money or property by means
of false or fraudulent pretenses, representations, or promises, transmitted or
caused to be transmitted by means of wire communication in interstate commerce,
sounds, phone calls and messages for the purpose of executing such scheme or
artifice. Speficially,
a) On January 10,
2001, at about 7:00 p.m., defendants in New York had a phone conversation with
Mr. Pludeman in Texas in furtherance of their scheme; and
b) On May 7,
2003, at about 11:00 a.m., defendants in New York had a phone converstation
with Mr. Hanzsek in Washington in furtherance of their scheme;
c) On or about
January 9, 2004, defendants in New York had a phone conversation with Ms. Hush
in Missouri. (4)
94) Each
participant knew, expected, and intended that the facilities of interstat
telecommunication and phones would be used in furtherance of the racketeering
scheme, and that such use as an essential part of the scheme.
95) The
Conspirators, willfully and with intent to mislead Class plaintiffs and Class
members referred to above, including without limitation, the very existence of
3 additional pages of the Lease and Personal Guaranty and/.or the terms
contained therein.
96) The material
misrepresentations were made by Conspirators to Class plaintiffs Mr. Pludeman
in Illinois and Texas, Ms. Hush in Missouri, Mr. Lauchman in New York, and Mr.
Hanzsek in Washington.
97) Class
plaintiffs relied upon such information, and were unaware of the facts
conceasled by defendants. Class
plaintiffs’ reliance was, under the circumstances, reasonable.
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*While
defendants made scores of such calls, and foreseeably caused Class plaintiffs
and Class members to make hundreds, if not thousands, of such interstate phone
calls, we have refrained from detailing every such call.
Pattern of Racketeering Activity
98) The aforesaid
acts had the same or similar purposes, results, participants, victims, and/or
methods of commission, and were otherwise interrelated by distinguishing
characteristics and were not isolated events.
The pattern of racketeering activity engaged in by defendants consisted
of a scheme executed by the aforementioned conspirators from January 1998, and
continuing to date, to mislead Class plaintiffs and others into entering and
continuing to enter into onerous leases and/or to charge them sums
significantly in excess of that specified in the lease, and/or to personally
guaranty performance thereunder. That
pattern included multiple predicate acts of mail fraud and wire fraud.
99) The
racketeering acts identified hereinabove were related to one another and formed
a pattern of racketeering activity in that they: (a) were in a furtherance of a
common goal, including the goal of profiting illegally by improperly concealing
material terms of the Lease and Personal Guaranty; (b) used similar methods (c)
had similar participants; and (d) had similar or related victims.
100)
Acts of racketeering activity extended over a substantial
period of time from January 1998, and continue to this day. They were sufficiently continuous to form a
pattern of racketeering activity.
101)
Defendants participated in the scheme through themselves,
and, in the case of Northern Leasing, its representatives, salesmen, employees
and officers, and others whose identities are known only to defendants at this
time. Defendants benefited enormously
by the profits they made, and the various fees derived through defrauding,
bullying, and intimidating Class members.
The Conspirators knew, enabled, and actively participated in the
racketeering scheme.
102)
Defendants engaged in a pattern of racketeering activity
consisting of wire and mail fraud, aiding and abetting wire and mail fraud, and
bank fraud. The predicate acts occurred
over a period of well over 6 years.
Defendants received income from these patterns in the form of
extortionate lease rentals, transaction fees and service charges to the
accounts, interest, and late fees, attorneys’ fees and disbursements. Defendants disbursed these funds amongst
themselves in a manner known only to them.
103)
Defendants’ participation was critical to the racketeering
scheme. They enabled, conducted,
maintained, aided, and abetted the racketeering scheme by:
a) Drafting and
preparing the Lease and Personal Guaranty document in a misleading manner to
convey that the entire document was a one-page document, and misleading and/or
orchestrating Class plaintiffs and Class members to believe that the one page
contained all the lease obligations;
b) Supervising,
conducting, and monitoring the conduct of the fraudulent scheme;
c) Concealing the
scheme, or, alternatively, consciously avoiding discovery of the scheme;
d) Encouraging
third parties to participate in the fraudulent scheme;
e) Willfully
violating, or being recklessly indifferent to, mandatory requirements of
federal law and procedure concerning racketeering, debt collections, electronic
debit of bank accounts, mail fraud, wire fraud, and the common law of fraud;
f)
Willfully violating or being recklessly indifferent to their
legal obligations to very the legality of the alleged Lease and Personal Guaranty
to ensure that they were not fraudulently procured; and
g) Willfully
violating or being recklessly indifferent to its legal obligations to conduct
“due diligence” with respect to the accounts at issue.
104)
The precise role played by each defendant is known only to
defendants at this time. Such
information, and evidence concerning their participation, is exclusively within
the possession and knowledge of defendants.
105)
Class plaintiffs have been injured in their business or
property by reason of defendants’ violation of 18 U.S.C. §1962(c). As a direct and proximate result of these
violations, Class plaintiffs have been injured in that, inter alia, they
paid sums they should never had paid, have been saddled with unwarranted
liabilities, and have had to expend time and resources in responding to
defendants’ dunning calls, threats, and/or lawsuit in New York. In addition, Class plaintiffs’ credit rating
has also been adversely affected.
106)
By reason of this violation of 18 U.S.C §1964(c), Class
plaintiffs and the Class members are entitled to recover from defendants three
times their damages plus pre- and post- judgment interest, costs and attorneys’
fees. In addition, Class plaintiffs and
the Class are also entitled to the equitable remedies of rescission, and injunctive
and declaratory reliefs.
Count II
(Violation of
18 U.S.C. §1962(d))
107)
The contents of the above paragraphs are incorporated herein
by reference as if fully set forth herein.
108)
In violation of 18 U.S.C. § 1962(d), defendants and others
whose identities are known only to defendants at this time conspired to violate
the provisions of 18 U.S.C. §1962(c) in that, beginning no later than January
1998 and continuing through today, they knowingly agreed and conspired to
conduct or participate, directly or indirectly, in the affairs of an enterprise
through the pattern of racketeering activity described above. The volume and frequency of the
transactions, and the continuance of the scheme at issue for over 6 years,
could not have occurred without the consent and knowing connivance of
defendants and other Conspirators.
109)
As part of and in furtherance of their conspiracy, each
defendant agreed to and conspired in the commission of the many predicate acts
described above, with the knowledge that they were in furtherance of that
pattern of racketeering activity. As
part of and in furtherance of their conspiracy, each defendant agreed to and
did commit at least two predicate acts of racketeering.
110)
Class plaintiffs and Class members have been injured in
business or property by reason of defendants’ violations of 18 U.S.C. §1962(d).
111)
As a direct and proximate result of each defendants’
violations, Class plaintiffs have been injured as aforesaid.
112)
By reason of defendants’ violation of 18 U.S.C. §1964(d),
Class plaintiffs are entitled to three times their damages plus interest, costs
and attorneys’ fees. In addition, Class
plaintiffs and the Class are also entitled to the equitable remedies of
rescission, and injunctive and declaratory reliefs.
Count III
(Excess
Deductions, Electronic Funds Transfer Act, 15 U.S.C §1693)
113)
The contents of the paragraphs hereinabove are reiterated.
114)
Mr. Lauchman is a consumer under the Eletronic Funds
Transfer Act, 15 U.S.C. §1693a(5).
115)
Nothern Leasing obtained preauthorization for a monthly
electronic transfer of a specified amount, $32.00, from a specific bank account
of Mr. Lauchman.
116)
Nevertheless, Northern Leasing electronically deducted
$39.19, which was much more than the specified amount.
117)
Northern Leasing deducted sums in excess of its preauthorization. The other defendants knowingly and willfully
encouraged, aided, and abetted Northern Leasing’s illegal acts. Thereby, defendants violated The Electronic
Funds Transfer Act, 15 U.S.C. §1693e, and regulations promulgated thereunder,
for which violation defendants are liable to pay damages, including attorneys’
fees and costs, to Class members.
118)
In addition, Class plaintiffs and the Class are also
entitled to the equitable remedies of rescission, and injunctive and
declaratory reliefs.
Count IV
(Failure to
Provide Copy of Preauthorization,
The Electronic
Funds Transfer Act, 15 U.S.C. §1693)
119)
Class plaintiffs reiterate the contents of the paragraphs
hereinabove.
120)
Northern Leasing obtained preauthorization for a monthly
electronic transfer from a specified bank account of Mr. Luachman.
121)
Northern Leasing was obligated to give a copy of the
preauthorization to Mr. Lauchman, 15 U.S.C. §1693e; Reg. E, 12 C.F.R.
§205.10(b).
122)
Northern Leasing never gave a copy of Mr. Lauchman’s
preauthorization to him at the time it was made. The other defendants knowingly and willfully encouraged, aided,
and abetted Northern Leasing’s illegal acts.
These actions were in violation of the Electronic Funds Transfer Act, 15
U.S.C §1693e, and regulations promulgated thereunder, for which violation it is
liable to pay damages, including attorneys’ fees and costs, to Class members.
123)
In addition, Class plaintiffs and the Class are also
entitled to the equitable remedies of rescission, and injunctive and
declaratory reliefs.
Count V
(Illegal
Omnibus preauthorization, Electronic Funds Transfer Act, 15 U.S.C. §1693)
124)
Class plaintiffs reiterate the contents of the paragraphs
hereinabove.
125)
Northern Leasing obtained preauthorization for a monthly
electronic transfer from a specified bank account of Mr. Lauchman “to withdraw
any amounts including any and all sales and property taxes now due or
herinafter imposed owed by [Mr. Lauchman] . . . by initiating debit entrees to
[Mr. Lauchman’s] account at the financial institution . . . indicated above or
at such other bank has [Mr. Lauchman] may from time to time use.”(5)
126)
The Electronic Funds Transfer Act, 15 U.S.C. §1693e,
requires that a preauthorization may be only sought for a specific account from
a specific financial institution.
127)
Northern Leasing’s omnibus preauthorization for any and all
accounts that Mr. Lauchman may use at any time is in violation of The
Electronic Funds Transfer Act, 15 U.S.C. §1693e, and regulations promulgated
thereunder, for which violation it is liable to pay damages, including attorneys’
fees and costs, to Class members.
128)
In addition, Class plaintiffs and the Class are also
entitled to the equitable remedies or rescission, and injunctive and
declaratory reliefs.
Count VI
(Illegal
Condition, Electronic Funds Transfer Act, 15 U.S.C. §1693)
129)
Class plaintiffs reiterate the contents of the paragraphs
hereinabove.
130)
Defendants conditioned the extension of credit to Mr.
Lauchman upon his repayment by means of preauthorized electronic transfers.
131)
Thereby, defendants violated The Electronic Funds Transfer
Act, 15 U.S.C. §1693k, and regulations promulgated thereunder, Reg. E, 12
C.F.R. §205.10(e)(1), for which violation they are liable to pay damages,
including attorneys’ fees and costs, to Class members.
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(5) All emphasis in quotations are
supplied unless specified otherwise.
132)
In addition, Class plaintiffs and the Class are also
entitled to the equitable remedies of rescission, and injunctive and
declaratory reliefs.
Count VII
(Failure to
Notify Varying Deductions, Electronic Funds Transfer Act, 15 U.S.C. §1693)
133)
Class plaintiffs reiterate the contents of the paragraphs
hereinabove.
134)
Northern Leasing obtained preauthorization for a monthly
electronic transfer from a specified bank account or Mr. Luachman “to withdraw
any amounts including any and all sales and property taxes now due or
hereinafter imposed or owed by [Mr. Luachman] . . . by initiating debit entrees
to [Mr. Luachman’s] account . . .”
135)
Thereunder, Nothern Leasing enabled itself to, and did,
deduct varying amounts from Mr. Lauchman’s account every month.
136)
The Electronic Funds Transfer Act, 15 U.S.C. §1693e, and the
regulations promulgated thereunder require defendants to “send [Mr. Lauchman]
written notice of the amount and date of the transfer at least 10 days before
the scheduled date of the transfer.”
Reg. E, 12 C.F.R. §205.10(d)(1).
137)
Northern Leasing routinely does not provide any such notice
prior to deduction.
138)
Northern Leasing’s conduct is in violation of The Electronic
Funds Transfer Act, 15 U.S.C. §1693e, and regulations promulgated
thereunder. The other defendants
knowingly and willfully encouraged, aided, and abetted Northern Leasing’s
illegal acts. Defendants are liable to
pay damages, including attorney’s fees and costs, to Class members.
139)
In addition, Class plaintiffs and the Class are also
entitled to the equitable remedies of rescission, and injunctive and
declaratory reliefs.
Count VII
(Illegal
Waiver, Electronic Funds Transfer Act, 15 U.S.C §1693)
140)
Class plaintiffs reiterate the contents of the paragraphs
hereinabove.
141)
Defendants insisted and obtained from Mr. Lauchman a
purported waiver of several rights including, without limitation, the right to
jury trial, the right to sue at a forum of his choice, and the rights specified
above.
142)
Thereby, defendants violated The Electronic Funds Transfer
Act, 15 U.S.C. §1693I, and regulations promulgated thereunder, for which
violation it is liable to pay damages, including attorneys’ fees and costs, to
Class members.
143)
In addition, Class plaintiffs and the Class are also entitled
to the equitable remedies of rescission, and injunctive and declaratory
reliefs.
Count IX
(Deceptive
Notice, Fair Debt Collection Practices Act, 15 U.S.C. §1692)
144)
Class plaintiffs reiterate the contents of the paragraphs
hereinabove.
145)
Mr. Pludeman is a consumer under The Fair Debt Collection
Practices Act, 15 U.S.C. §1692(3).
146)
Defendants delivered to Mr. Pludeman an official looking
document called “Summons”, dated September 21, 2000, and an allegedly “Verified
Complaint.” The Summons purported to
require Mr. Pludeman to appear in the New York City Civil Court and file an
answer within 30 days. It threatended
that if he didn’t do so, a default judgement would be entered against him for
the entire alleged debt as well as attorneys’ fees and costs.
147)
In fact, the Summons
and Verified Complaint were false.
Defendants had not commenced any proceeding in the New York City Civil
Court, and had no intention of doing so when they the letter and phony court
papers.(6)
148)
Mr. Pludeman was unaware of the above facts, and had to wast
time, energy, and resources in investigating and determining the phony nature
of the Summons and the fact that defendants had not commenced any proceeding at
all.
149)
Defendants repeatedly threatened action that they did not
intent to take.(7)
150)
Moreover, defendants used false representation or deceptive
means to collect or attempt to collect the debt from Mr. Pludeman.
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(6)While the
New York City Civil Court Act permitted defendants, through attorneys, to serve
a Summons before filing it with the clerk, N.Y. City Civ. Ct. Act §401, it also
required that proof of service be filed “within fourteen days after service
outside the city of New York.” NY City
Civ. Ct. Act § 409. Defendants did not
file any such proof of service concerning this Summons and Verified Complaint
at any time, conclusively establishing that they never intended to commence
those proceedings, and thereby, the intentional violation at issue.
(7)In fact,
defendants actually commenced the proceeding only in December 2003 in the New
York City Civil Court, with a Summons dated March 21, 2003. Defendants did not effect service as
required by the CPLR. Mr. Pludeman
filed an Answer and counterclaim therein, pro se, before retaining counsel and
commencing this action.
151)
Thereby, defendants violated the Fair Debt Collection
Practices Act, 15 U.S.C. §1692e, for which violation they are liable to pay
damages, including attorneys’ fees and costs, to Class members.
152)
In addition, Class plaintiffs and the Class are also
entitled to the equitable remedies of injunctive and declaratory reliefs.
Count X
(Fraud)
153)
Class plaintiffs incorporate the contents of the paragraphs
hereinabove.
154)
Defendants conducted a fraudulent scheme to entrap Class
members into highly overpriced leases with extremely onerous terms. They willfully and knowingly made, or caused
to be made, affirmative misrepresentations of material facts in the furtherance
of this scheme. They also willfully and
knowingly concealed material facts from Class plaintiffs and other Class
members, and routinely failed to give them a copy of the lease or even real the
existence of more than the first page of the lease. Defendants knew of the falsity of the misrepresentations at the
time these misrepresentations were made.
Defendants also knew the material nature of the facts that they
willfully concealed from Class members, and that defendants ought to have
disclosed these facts at that time to the Class members. Defendants had superior knowledge not
available to Class plaintiffs and other Class members; as such, they had the
duty to disclose the facts. Class
plaintiffs and other Class members relied upon defendants’ representations, and
were unaware of the falsity or misleading nature of the representations. Class plaintiffs and other Class members’
reliance was reasonable under the circumstances. As a result of such reliance, Class plaintiffs and other Class
members sustained damages.
155)
By engaging in the conduct described above, defendants
committed a fraud upon Class plaintiffs and other Class members.
156)
Moreover, defendants’ wanton conduct was systematic, in
reckless disregard of their statutory and other duties, tantamount to criminal
indifference to civil obligations, and unconscionable.
157)
Defendants are therefore liable to pay Class plaintiffs and
other Class members compensatory and punitive damages in such amount as may be
proven at trial, together with attorneys’ fees and expenses and such other
amounts as may be appropriate. In
addition, Class plaintiffs and the Class are also entitled to the equitable
remedies of rescission, and injunctive and declaratory reliefs.
Count XI
(Negligent
Misrepresentation)
158)
Class plaintiffs incorporate the contents of the paragraphs
hereinabove.
159)
Defendants conducted a fraudulent scheme to entrap Class
plaintiffs and class members into highly overpriced leases with extremely
onerous terms. They made or caused to
be made, affirmative misrepresentations of material facts in furtherance of
this scheme. They also concealed
material facts from Class plaintiffs and other Class members, and routinely
failed to give them a copy of the Lease and Personal Guaranty. Defendants ought to have known the falsity
of the misrepresentations. Defendants
had superior knowledge not available to Class plaintiffs and other Class
members; as such, they had the duty to disclose the facts. Class plaintiffs and other Class members
relied upon defendants’ representations, and were unaware of the falsity or
misleading nature of the representations.
Class plaintiffs and other Class members’ reliance was reasonable under
the circumstances. As a result of such
reliance, Class plaintiffs and other Class members sustained damages.
160)
By engaging in the conduct described above, defendants
committed the tort of negligent misrepresentation upon Class plaintiffs and
other Class members.
161)
Defendants are therefore liable to pay Class plaintiffs and
other Class members damages in such amount as may be proven at trial, together
with attorneys’ fees and expenses and such other amounts as may be
appropriate. In addition, Class
plaintiffs and the Class are also entitled to the equitable remedies of
rescission, and injunctive and declaratory reliefs.
Count XII
(Breach of
Implied Covenant of Good Faith and Fair Dealing)
162)
Class plaintiffs incorporate the contents of the paragraphs
hereinabove.
163)
By its conduct aforesaid, Northern Leasing breached the
implied covenant of good faith and fair dealing underlying the contracts at
issue. As a result of such breach,
Class plaintiffs and the Class sustained damages.
164)
Northern Leasing is therefore liable to pay Class plaintiffs
and other Class members compensatory damages in such amount as may be proven at
trial, together with attorneys’ fees and expenses and such other amounts as may
be appropriate. In addition, Class
plaintiffs and the Class are also entitled to the equitable remedies or
rescission, and injunctive and declaratory reliefs.
Count XIII
(Breach of
Contract)
165)
Class plaintiffs incorporate the contents of the paragraphs
hereinabove.
166)
By charging and collecting sums in excess of those specified
in the first page of the Lease and Personal Guaranty, and by imposing
undisclosed amounts towards alleged taxes and insurance coverage, Northern
Leasing breached the contracts at issue.
As a result of such breach, Class plaintiffs and the Class sustained
damages.
167)
Northern Leasing is therefore liable to pay Class plaintiffs
and other Class members compensatory damages in such amount as may be proven at
trial, together with attorneys’ fees and expenses and such other amounts as may
be appropriate. In addition, Class
plaintiffs and the Class are also entitled to the equitable remedies of
rescission, and injunctive and declaratory reliefs.
Count XIV
(Money Had and
Received)
168)
Class plaintiffs reiterate the contents of the paragraphs
hereinabove.
169)
By the aforesaid unlawful acts, Northern Leasing unlawfully
billed and collected money that is was not entitled to. It received money belonging to Class
plaintiffs and class members. Northern
Leasing benefited from the receipt of money, and under principles of equity and
good conscience, it should not be permitted to keep the money.
170)
Northern Leasing must not be permitted to take advantage of
its own wrong and retain, collect, or continue collecting such money.
171)
Moreover, Northern Leasing is liable to pay Class plaintiffs
and other Class members compensatory and punitive damages in such amount as may
be proven at trial, together with attorneys’ fees and expenses and such other
amounts as may be appropriate.
Count XV
(Unjust
Enrichment)
172)
Class plaintiffs reiterate the contents of the paragraphs
hereinabove.
173)
By collecting the excessive charges aforesaid, Northern
Leasing benefited at the expense of Class plaintiffs and other class
members. Equity and good conscience
require that Northern Leasing be ordered to repay these sums to Class
plaintiffs and other Class members towards restitution.
174)
Northern Leasing must not be permitted to take advantage of
its own wrong and retain, collect, or continue collecting these illegal charges
hereon.
175)
Moreover, Northern Leasing is liable to pay Class plaintiffs
and other Class members compensatory and punitive damages in such amount as may
be proven at trial, together with attorneys’ fees and expenses and such other
amounts as may be appropriate.
WHEREFORE, Class
plaintiffs demand judgment against defendants on each Count aforesaid:
a) Determining
that the instant action be maintained as a Class action under Article IX, CPLR,
and that Mr. Pludeman, Mr. Hanzsek, Ms. Hush, Ozark Mountain Granite & Tile
Co., and Mr. Lauchman are adequate representatives of the Class;
b) Declaring that
every lease and financing agreement under Northern Leasing’s standard form
Lease and Personal Guaranty is voidable at the option of the individual lessees
thereof (Class members herein) for fraud in the inducement;
c) Declaring that
pages 2-4 of all leases under Northern Leasing’s standard form Lease and
Personal Guaranty are unenforceable against Class plaintiffs and the Class
members;
d) Ordering
defendants to refund to Class plaintiffs and to individual Class members all
sums collected in excess of the amount specified in the first page of the Lease
and Personal Guaranty;
e) Ordering
defendants to refund to individual Class members all sums collected on account
of any judgment obtained by defendants in a New York court (or in a court other
than that of the individual Class members’ place of residence), based upon
alleged breaches of the Lease and Personal Guaranty by such individual Class
members, and forthwith enter a satisfaction of all such judgments in the court
wherein were entered;
f)
Awarding compensatory, punitive, and/or treble damages to
Class plaintiffs and Class members in such amount, not less than $100 million,
as may be determined after discovery and trial;
g) Awarding Class
plaintiffs and Class members the costs of this action, including reasonable
attorneys’ fees and expenses, experts’ fees and other disbursements;
h) for such
further and other reliefs as may be just and proper.
Dated: New York, New York Chittur & Associates, P.C.
April 28, 2004
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By:
Krishnan Chittur, Esq.
The
Lincoln Building 15th Floor
60
East 42nd Street 1501
New
York, NY 10165
Tel:
(212) 370-0447
Attorneys for Class plaintiffs and the
Class(8)
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(8)
Class plaintiffs will not accept service by fax or any electronic means.
