Court Rules on Preferred Capital Jurisdiction

Attorney Generals from 13 states file friend of court brief for defendants in Preferred Capital cases. Attorneys general from Massachusetts, Ohio, Illinois, Michigan, Connecticut, Florida, Louisiana, Pennsylvania, New York, Rhode Island, South Dakota, Texas, and California have signed and filed an amici brief (friend of court brief) on behalf of appellees in cases consolidated for appeal before the Eighth District Ohio Court of Appeals in Cleveland. The appellate court consolidated a dozen appeals filed by Preferred Capital in cases where trial court judges granted motions to dismiss based on lack of personal jurisdiction.

The Ohio 8th District Appellate Court found that it has no jurisdiction to hear an appeal from a determination that the trial court lacks personal jurisdiction over the defendant, which the Appeals Court said is "not a final appealable order." This decision then allows venue to stand in the county.

It was a “procedural judgment,” not an actual decision on the merits.

Judge Kenneth A. Rocco ruled:

“ We have no jurisdiction to review the common pleas court's decisions in these consolidated cases. Accordingly, we dismiss these appeals.

“ Appellant Preferred Capital, Inc. (“Preferred”) is the assignee of the lessor's rights under a series of commercial equipment rental agreements. It filed these actions to recover rental payments it alleges are due from the lessees. Preferred, whose own offices are located in Brecksville, Ohio, filed these actions in the Cuyahoga County Common Pleas Court. The defendants are variously located in other states and commonwealths.

“ In each case, the defendants filed a motion to dismiss for lack of personal jurisdiction. They all contended that the forum selection clause contained in the rental agreement was unenforceable. The common pleas court granted these motions and dismissed the cases for lack of personal jurisdiction.

“ Preferred appealed each of those judgments. The cases were consolidated for briefing, hearing and disposition before this court.”

The other two judges of the panel were Frank D. Celebrezze,Jr, P.J.

who “concurs,” and Sean C. Gallahger, J. “concurs in judgment only.”

Here is a copy of the Appeals Court's order:

http://leasingnews.org/PDF/8th_Distri ct_Appeals_Order.pdf

The Court did not discuss the merits of this issue or any other aspect of the case, preferring instead to dismiss the consolidated appeals based on the procedural issue (not an appealable order).

Remaining, though, is what happens to the 600 pending Preferred Capital cases filed in Cuyahoga and Summit counties, Ohio. Leasing News is told the customers' counsel are still discussing the ramifications of the Court's order.

There are also over reportedly 550 suits filed by IFC Credit Corporation in Morton Grove, Illinois

Popular Leasing USA in Baldwin, Mo has almost 400 such cases.

Preferred Capital, Inc. has been sued by several banks in the Cuyahoga County, Ohio Court of Common Pleas. The lawsuits appear to be related to loans used by Preferred Capital to acquire equipment rental agreements from the now-defunct NorVergence. Preferred Capital sold some of its NorVergence equipment rental agreements which are the subject of litigation. Huntington National Bank is a purchaser. The company is now in receivership and it will be up to the receiver to make the next determination regarding the Preferred Capital leases.