Matter of People of the State of New York v. Northern Leasing Sys., Inc.


Matter of People of the State of New York v Northern Leasing Sys., Inc. (2021 NY Slip Op 00914) Matter of People of the State of New York v Northern Leasing Sys., Inc. 2021 NY Slip Op 00914 Decided on February 11, 2021 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports. Decided and Entered: February 11, 2021 SUPREME COURT, APPELLATE DIVISION First Judicial Department Troy K. Webber,J.P., Angela M. Mazzarelli Lizbeth González Saliann Scarpulla JJ. Index No. 450460/16 Appeal No. 12898,12899,12900,12901 Case No. 2020-02755, 2020-02756, 2020-02757, 2020-02758, 2020-02791 [*1]In the Matter of The People of the State of New York, by Letitia James, etc et al. Petitioners-Respondents-Appellants, vNorthern Leasing Systems, Inc., et al., Respondents-Appellants-Respondents. Respondents appeal from the orders of the Supreme Court, New York County (Lucy Billings, J.), entered on or about June 8, 2020, which, insofar as appealed from as limited by the briefs, granted petitioners' motion for summary determination of the petition pursuant to Executive Law § 63(12), Business Corporation Law § 1101(a)(2) and CPLR 5015(c), denied the Northern Respondents' motions for discovery and a trial or evidentiary hearing, and denied the Attorney Respondents' motion for summary judgment dismissing the petition as against them. Rottenberg Lipman Rich, P.C., New York (Robert A. Freilich and Mark M. Rottenberg of counsel), for Joseph I. Sussman, Joseph I. Sussman, P.C. and Eliyahu R. Babad, appellants-respondents. Dechert LLP, New York (Andrew J. Levander, Neil Steiner and Patrick Andriola of counsel) and Moses & Singer LLP, New York (Robert D. Lillienstein and Scott E. Silberfein of counsel) for Northern Leasing Systems, Inc., Lease Finance Group LLC, MBF Leasing LLC, Lease Source-LSI, LLC, Golden Eagle Leasing LLC, Pushpin Holdings LLC, Jay Cohen and Neil Hertzman, respondents-appellants. Letitia James, Attorney General, New York (Ester Murdukhayeva and Steven C. Wu of counsel), for the State of New York and Letitia James, respondents-appellants. WEBBER, J.P. In April 2016, petitioners, the Attorney General (AG) and the Deputy Chief Administrative Judge for New York City Courts, commenced the instant proceeding against respondents Northern Leasing Systems, Inc., Lease Finance Group LLC, MBF Leasing LLC, Lease Source—LSI, LLC, Golden Eagle Leasing LLC, Pushpin Holdings LLC, Jay Cohen, and Neil Hertzman (Northern Respondents), alleging that they engaged in repeated and persistent fraud in that they tricked individuals, many of whom were small business owners, into entering into unconscionable equipment finance leases (EFLs) for credit card processing equipment.[FN1] Although the action was commenced in 2016, the acts complained of date from 2010. The following is drawn from an extensive and lengthy record, which includes the petition and sworn affirmations by some 873 individuals who have filed complaints with the AG's office, as well as affidavits by the then Deputy Chief Administrative Judge and New York Civil Court employees, documentary materials, respondents' answers, affidavits by respondents' officers and employees, and other records.Factual Background According to petitioners, banks would hire ...

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