This site is for providing information concerning the class action against Northern Leasing Systems, Inc., which has its offices in New York.  

Supreme Court of the State of New York, County of New York

BRIEF DESCRIPTION OF ALLEGATIONS AND PROCEEDINGS 

This class action against Northern Leasing Systems, Inc., of New York City was commenced in 2004, asserting a fraudulent scheme to entrap small businesspersons fraudulently into equipment leases with undisclosed charges and onerous terms. Plaintiffs, small businesses from all over the country, assert that Northern Leasing deceptively sells these leases to small businessmen through what appears to be a standard form one page lease, complete with bank information, merger clause, signatures for both parties, and a personal guaranty. Thereafter, it routinely charges and collects much more than what is specified in the first page, and foists several other liabilities on the unsuspecting small businesses. When small businesses raise questions, Northern Leasing finally reveals the existence of 3 additional pages which make the lease irrevocable, onerous, and virtually indefinite. Routinely, these pages and their contents are never disclosed to the small businesses at the inception, and are not incorporated into the lease. Nevertheless, Northern Leasing saddles small businesses with all these terms and enforces them strictly. Moreover, Northern Leasing imposes charges which were never disclosed in the lease. The trial court upheld the claim for fraud and punitive damages, ruling that the "allegations address more than a private wrong contending that defendants engaged in a course of conduct throughout the United States with such wanton dishonesty as to imply a criminal indifference to civil obligations." Pludeman v. Northern Leasing.  On appeal, the the Appellate Division of the Supreme Court of New York has upheld the claims for fraud against Northern Leasing and its senior management, as well as the claim for breach of contract against Northern Leasing. In addition, the Court also held that "defendants' fraudulent motive and tortious conduct aimed at the public generally suffice to plead a claim for punitive damages under both the breach of contract and common-law fraud causes of action." Pludeman v. Northern Leasing. The individual Defendants, i.e., senior management of Northern Leasing, appealed to the Court of Appeals (New York's highest court) seeking dismissal of the fraud claims against them. The United States Chamber of Commerce filed an Amicus brief in their support. However, the Court affirmed the decision of the Appellate Division, and in a landmark ruling relaxing the pleading standards for fraud in New York, upheld the fraud claims against Northern Leasing's top management Pludeman v. Northern Leasing. 

Meanwhile, the trial court had denied class certification.  Pludeman v. Northern Leasing.  After the Appellate Division modified the trial court's order to reinstate the claim for breach of contract, Pludeman v. Northern Leasing, Plaintiffs renewed their motion for class certification.  The trial court then certified the class for the claim that Northern Leasing breached its contract with class members. Pludeman v. Northern Leasing.  The Appellate Division modified the class certification order to expand the class for that claim, as requested by Plaintiffs, and rejected Northern Leasing's appeal.  Pludeman v. Northern Leasing.  

Meanwhile, the trial court has granted partial summary judgment holding Northern Leasing liable to the class for breach of contract Pludeman v. Northern Leasing Systems, Inc.  The Court has held that only the first page of Northern Leasing's standard form lease was valid and enforceable, and the remaining three pages were invalid.  That decision is now under appeal before the Appellate Division.  
Further, the trial court severed the claims, granted declaratory judgment to the Plaintiffs, and entered a permanent injunction restraining Northern Leasing from enforcing the remaining three pages of the lease.  Pludeman v. Northern Leasing.  The Appellate Division has stayed enforcement of this judgment pending decision on the appeal from the earlier order granting summary judgment.

The case will now go to trial against Northern Leasing Systems, Inc., for punitive damages on the class claim for breach of contract, and on the individual Plaintiffs' claims against Northern Leasing and its senior managers for determining liability for fraud and for punitive damages.
 A Class Notice has been issued to all class members.  This site also provides answers to a list of frequently asked questions.