| Commerce Commercial Leasing, LLC v PIO Enters., Inc. |
| 2010 NY Slip Op 08891 [78 AD3d 1105] |
| November 30, 2010 |
| Appellate Division, Second Department |
| Commerce Commercial Leasing, LLC, Respondent, v PIOEnterprises, Inc., et al., Appellants. |
—[*1] Platzer, Swergold, Karlin, Levine, Goldberg & Jaslow, LLP, New York, N.Y. (Steven D.Karlin of counsel), for respondent.
In an action, inter alia, to recover damages for breach of a lease of equipment, the defendantsPIO Enterprises, Inc., and Angelo Ingrassia, also known as Angelo J. Ingrassia, appeal, and thedefendant Giuseppe Faraci, also known as Joe Faraci, appeals, from a judgment of the SupremeCourt, Nassau County (Brandveen, J.), entered August 18, 2009, which, upon an order of thesame court dated June 22, 2009, granting those branches of the plaintiff's motion which were, ineffect, for summary judgment on the issues of liability and damages, is in favor of the plaintiffand against them jointly and severally in the total sum of $70,118.83.
Ordered that the appeal by the defendant Giuseppe Faraci, also known as Joe Faraci, isdismissed, and the judgment and the order insofar as they apply to that defendant are vacated;and it is further,
Ordered that the judgment is reversed insofar as appealed from by the defendants PIOEnterprises, Inc., and Angelo Ingrassia, also known as Angelo J. Ingrassia, on the law, thatbranch of the plaintiff's motion which was, in effect, for summary judgment on the issue ofdamages against those defendants is denied, and the order is modified accordingly; and it isfurther,
Ordered that one bill of costs is awarded to the defendants PIO Enterprises, Inc., and AngeloIngrassia, also known as Angelo J. Ingrassia.
The plaintiff and the defendant PIO Enterprises, Inc. (hereinafter PIO), entered into aself-described "finance lease" with respect to certain equipment. The defendants AngeloIngrassia, also known as Angelo J. Ingrassia (hereinafter Ingrassia), and Giuseppe Faraci, alsoknown as Joe Faraci (hereinafter Faraci), personally and unconditionally guaranteed PIO'spayment obligations under the lease.
After all of the defendants defaulted on the payments due under the lease, the plaintiffcommenced the instant action, inter alia, to recover damages for breach of the lease and torecover on the guarantees. Subsequently, after regaining possession of the equipment, theplaintiff sold the [*2]equipment to a third party at an auction.Thereafter, in their amended answer to the complaint, the defendants asserted as an affirmativedefense that the sale of the equipment was not effected in a commercially reasonable manner.Ultimately, the plaintiff moved, inter alia, in effect, for summary judgment on the issues ofliability and damages. The Supreme Court granted those branches of the plaintiff's motion whichwere, in effect, for summary judgment on the issues of liability and damages, after which ajudgment was entered in favor of the plaintiff and against the defendants, jointly and severally, inthe total sum of $70,118.83.
As a preliminary matter, the record reflects that Faraci died before the order was issued andthe judgment was entered, and no substitution has since taken place, as required by CPLR 1015.Accordingly, the judgment and the order insofar as they apply to Faraci are nullities and must bevacated, and the appeal purportedly taken by Faraci must be dismissed (see Golia vGolia, 286 AD2d 368, 369 [2001]; Bluestein v City of New York, 280 AD2d 506[2001]; Kelly v Methodist Hosp., 276 AD2d 672, 673 [2000]; Cooper v Volk,157 AD2d 766, 767 [1990]; Catalfamo v Flushing Natl. Bank, 124 AD2d 624, 625[1986]).
The plaintiff demonstrated its prima facie entitlement to judgment as a matter of law on theissue of liability (see Key Equip. Fin., Inc. v South Shore Imaging, Inc., 39 AD3d 595,596 [2007]; Advanta Leasing Servs. v Laurel Way Spur Petroleum Corp., 11 AD3d 571,571 [2004]; Terminal Mktg. Co. v Murphy, 296 AD2d 399, 400 [2002]; see also FordMotor Credit Co., Inc. v Racwell Constr., Inc., 24 AD3d 500, 501 [2005]). In opposition,PIO and Ingrassia (hereinafter together the appellants) failed to raise a triable issue of fact as toliability. Instead, their arguments were limited to issues concerning the alleged commercialunreasonableness of the equipment sale, and deficiencies in the notice of disposition of theequipment relative to the subject sale, both of which are relevant only to the issue of damages(see UCC 9-626 [a] [3], [4]; Ford Motor Credit Co., Inc., 24 AD3d at 501).
With respect to the issue of damages, although self-described as a "finance" lease, the leaseprovides that part of the consideration PIO was to pay the plaintiff for the right to possession anduse of the equipment was an obligation, for the term of the lease, to refrain or forbear fromterminating the lease; the lease further provides that PIO has an option, upon its compliance withthe lease, to purchase the equipment for nominal additional consideration (see Citipostal, Inc.v Unistar Leasing, 283 AD2d 916, 916-918 [2001]; Leasing Serv. Corp. v Carbonex,Inc., 522 F Supp 79, 79-80 [1981] [applying New York law]; National Equip. Rental,Ltd. v Priority Elecs. Corp., 435 F Supp 236, 238 [1977] [applying New York law]). Undersuch circumstances, the lease is, in fact, a secured transaction governed by Uniform CommercialCode (hereinafter UCC) article 9 (see UCC 1-201 [37] [a] [iv]; Citipostal, Inc. vUnistar Leasing, 283 AD2d at 918).
In that regard, since the lease is a secured transaction governed by UCC article 9, and theappellants raised the issue of commercial reasonableness of the plaintiff's sale of the equipmentin their amended answer to the complaint, the plaintiff "bore the burden of establishing that allaspects of the sale of the [equipment] were commercially reasonable" (Ford Motor CreditCo., Inc., 24 AD3d at 501, citing UCC 9-626 [a] [2]; see Associates Commercial Corp. vLiberty Truck Sales & Leasing, 286 AD2d 311, 312 [2001]; see also UCC 9-610 [a]).The plaintiff did not meet its burden. There are issues of fact as to whether the sale of theequipment was accomplished in a commercially reasonable manner and, therefore, the SupremeCourt should have denied that branch of the plaintiff's motion which was, in effect, for summaryjudgment on the issue of damages (see Ford Motor Credit Co., Inc., 24 AD3d at 501).
We note that, contrary to the appellants' contention, the plaintiff complied with the relevantprovisions of the UCC regarding the notification of disposition of the equipment (seeUCC 9-611 [b]; 9-613 [a]). Covello, J.P., Dickerson, Belen and Lott, JJ., concur. [PriorCase History: 2009 NY Slip Op 31428(U).]