|
|
Twenty State AGs Can't Be Wrong
The Receiver is now in the position to decide the fate of all Preferred Capital customers, subject to court decisions by the Ohio 8 th and 9 th Appellate Districts (and the US Court of Appeals for the 6 th Circuit [ Ohio] -- another pending PC case). Reportedly following the court's order, neither Huntington Bank nor other PC lenders have any right to collect, reject, or enforce the contracts. The issue of venue is most important, not only from a cost standpoint to the lessor, but the prevailing laws that are different from state to state, bringing many other issues into the dispute that are not in favor of the lessor, especially with the reportedly poorly written NorVergence private label “Equipment Leasing Agreement.” The decision may also influence other courts by setting a precedent for this particular leasing contract language. It may have other repercussions in future lessor venue disputes. In the first brief, thirteen state attorneys general, including California, Colorado, Connecticut, Florida, Illinois, Massachusetts, Michigan, Missouri, New Jersey, New York, North Carolina, Pennsylvania and Texas have filed another appellate brief against Preferred Capital in Ohio. Even though the Summit County Court appointed a Receiver for Preferred Capital, the Receiver still has to decide whether the contracts have any value. Hence, the attached brief and motion. Karlen J. Reed, assistant Attorney General, Massachusetts Office of the Attorney General, filed the amici brief “...acting under their respective consumer protection statues to protect customers of Preferred Capital, NorVergence and/or other financing companies against unfair trade and deceptive practices committed by these companies in their financing and collection activities.” The issue regards venue, meaning which state court will hear the dispute. A summation of the argument surrounds “the floating forum selection clause fails to provide appellees with adequate notice of where they may be sued.” New Jersey, Missouri, North Carolina and Colorado did not join on the second brief, while Arizona, Louisiana, Maryland, Michigan, Ohio, Rhode Island, and South Dakota did. In the second brief, similar but separate, filed along with Scott D. Schafer and Geoffrey G. Why, of the Massachusetts office along with Karlen J. Reed, and on the “amici curia” including the attorneys generals of Arizona, California, Connecticut, Florida, Illinois, Louisiana, Maryland, Massachusetts, Michigan, New York, Ohio, Pennsylvania, Rhode Island, South Dakota and Texas “...Forum selection clauses are enforceable unless they are unfair or unreasonable. To be reasonable and fair a forum selection clause must eliminate uncertainty by permitting the parties to agree in advance on a specified forum acceptable to both of them and be clear and conspicuous. Because the NorVergence floating forum selection clause fails these tests, it is unfair and unreasonable and was properly held to be unenforceable.” The states that joined on both briefs are: California, Connecticut, Florida, Illinois, Louisiana, Massachusetts, Michigan, New York, Ohio, Pennsylvania, Rhode Island, South Dakota, and Texas. Reportedly Karlen J. Reed acted as the vehicle for getting everyone. All the AGs filed the brief to protect their customers. They are continuing to follow legal action in their states. Certain states perhaps have not joined this brief as the consumer and commercial statutes have other issues, meaning the business user is not considered a “consumer” and other commercial laws may apply in that state, such as Missouri, where Popular Leasing USA has over 300 such suits pending. Here are copies of the two most recent briefs: http://leasingnews.org/PDF/AG_Amici_Brief_4-22-05.pdf |
|
