Pludeman v Northern Leasing Sys., Inc.

[*1] Pludeman v Northern Leasing Sys., Inc. 2009 NY Slip Op 51290(U) [24 Misc 3d 1206(A)] Decided on April 24, 2009 Supreme Court, New York County Shulman, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on April 24, 2009
Supreme Court, New York County

Kevin Pludeman, CHRIS HANZSEK d/b/a HANZSEK AUDIO, SARA JANE HUSH, OZARK MOUNTAIN GRANITE & TILE CO. and DENNIS E. LAUCHMAN, on behalf of themselves and all others similarly situated, Plaintiffs,

against

Northern Leasing Systems, Inc., JAY COHEN, STEVEN BERNARDONE, RICH HAHN, and SARA KRIEGER, Defendants.



101059/04



Krishnan Chittur, Esq.

Chittur & Associates, P.C.

Attorneys for Plaintiffs

Abraham Skoff, Esq.

Moses & Singer LLP

Attorneys for Defendants

Martin Shulman, J.

Plaintiffs renew their motion for an order: (1) granting class certification (solely with respect to their breach of contract claim); (2) designating Kevin Pludeman ("Pludeman"), Chris Hanzsek d/b/a Hanzsek Audio ("Hanzsek"), Sara Jane Hush ("Hush"), Ozark Mountain Granite & Tile Co. ("Ozark") and Dennis E. Lauchman ("Lauchman")(collectively, "Plaintiffs") to adequately represent the class; (3) appointing Krishnan S. Chittur, Esq., of Chittur & Associates, P.C. ("Chittur"), as counsel for the class; and (4) directing defendant, Northern Leasing Systems, Inc. ("NLS" or "Corp. Defendant"), to serve the court-approved notice to all members of the class and bear the costs thereof. NLS and the individually named defendants, Jay Cohen, Steve Bernardone, Rich Hahn and Sara Krieger (collectively, "Defendants") oppose this CPLR 2221 renewal motion.

[*2]Brief Background and Relevant Appellate History [FN1]

NLS is a New York-based company "in the business of micro-ticket leasing, finances credit card point-of-sale (POS) terminals and other business equipment. Specifically, NLS, as lessor, enters into finance lease agreements with small businesses (lessees) for certain equipment. Under the terms of these leases, NLS purchases the equipment from third-party vendors solely for the purpose of leasing it." (See Pludeman CtApp Decision, 10 NY3d at 489, n.1). The Pludeman CtApp Decision succinctly describes the pleaded nature of the transactions that are at the heart of this case (10 NY3d at 489-490): According to plaintiffs, defendants' sales representatives presented them with what appeared to be a one-page contract on a clipboard, thereby concealing three other pages below. This single page appeared to cover all of the material terms of a contract, including name, address, schedule of payments, bank and equipment authorizations, the lease term amount and a signature block for both parties. The first page, however, did not contain information plaintiffs later discovered in the other three pages. Among such concealed items was the requirement that the lessee insure the equipment against all risk of loss or damage and provide NLS with proof of insurance. In the absence of such proof, lessees were deemed to have purchased a loss and damage waiver ["LDW"] (of their obligation to insure) for a fee that NLS could change from time to time. In addition, the undisclosed pages provided for automatic electronic deductions of potentially unlimited duration. The concealed pages also contained the following terms: a no cancellation clause, a no warranties clause, absolute liability for insurance obligations, a late charge clause, and provisions for attorneys' fees and New York as the chosen forum.

Renewal Motion for Class Certification

Recognizing that certification of a class action is inapplicable in fraud claims because the individualized proofs of fraud as to each putative class member would overwhelm any common issues to the putative class, Plaintiffs now claim their "expired" application for class certification which the 2006 Decision properly denied was resuscitated when the First Department reinstated their previously dismissed breach of contract cause of action (see First Amended Complaint at ¶¶ [*3]165-167 as Exhibit 7 to Renewal Motion),[FN2] viz., Corp. Defendant breached the Form Lease Plaintiffs respectively executed by collecting an unauthorized $4.95 LDW charge not expressly reflected on their perceived one-page contract (Exhibit 2 to Renewal Motion). Thus, Plaintiffs now contend that the language, structure and format of the Form Lease(s) Plaintiffs and putative class members entered into with NLS since 1999 and the routine manner in which NLS breached the leases by collecting these $4.95 LDW overcharges (Exhibit 3 to Renewal Motion) are uniform to Plaintiffs and the class justifying their renewal motion for class certification.

Plaintiffs' counsel reminds the court of certain governing case law principles to advance. Plaintiffs' renewed application for certification of the class pursuant to CPLR §901(a)[1]-[5] ("certification provision"): liberal construction of the certification provision with allowances for any cautionary error in favor of same; limited inquiry for assurance claims of the class are not a sham; numerosity requirement met rendering joinder of hundreds of thousands of NLS form lease(s) signatories impractical; commonality of questions of law and fact predominant over questions affecting individual putative class members (uniform overcharge in collection of monthly $4.95 LDW fee and easily computable compensatory/punitive damages); Plaintiffs' claims typical of those of the class (same type of form lease, similar transactional facts and the same legal theory of liability against NLS); Plaintiffs, represented by qualified, experienced counsel in the prosecution of class actions (see Exhibit 9 to Renewal Motion), are fair and adequate protectors of the class' interests; class action superior to any other methods for the fair and efficient disposition of these claims; and individualized litigation burdensome and expensive when weighed against each potential prevailing class member's modest damage award.

Finally, because Plaintiffs and putative class members are persons of modest means, Plaintiffs request an order directing Corp. Defendant to serve the court-

approved notice of class certification to all affected members of the class and bear the costs thereof, because this multi-million dollar company can more easily bear the financial burden of this mass-mailing.

Defendants' Opposition

In opposition to Plaintiffs' renewal motion for class certification, Defendants generally challenge this second application as a rehash of Plaintiffs' first class certification motion made three years ago, namely, Plaintiffs now rely on the same fraud claim, albeit disguised in purported breach of contract "clothing," to circumvent the bar

to class certification of fraud claims. And Plaintiffs are doing so, NLS claims, utilizing the exact same record developed underlying the 2006 decision and an attorney's affirmation rife with conclusory allegations. Furthermore, Defendants argue that because Plaintiffs' overcharge claim [*4]is dependent on the success of their fraud claim [FN3] (see Krieger Opp. Aff at VI 12-13), Plaintiffs' breach of contract claim cannot be independently certifiable (see Memorandum in Opposition to Renewal Motion at p. 3).

Defendants again point out that Plaintiffs still have not competently shown how 300,000 putative class members were uniformly aggrieved by the purported

. unauthorized collection of the $4.95 LDW fee, if at all, especially when 198,000 pages of documents and electronically-filed leases, among other information, will reveal that the putative class members did not sign the same version of the equipment finance lease (i.e., NLS uses 157 different equipment lease forms; these lease forms had 6 different versions of the LDW provision; among these versions, some leases contained a fixed charge of $2.95/month "per equipment set" [Exhibit D to Krieger Opp. Aff.][a lessee could have leased more than one set of equipment], a fixed charge of $3.50/month [Exhibit E to Krieger Opp. Aff.], a fixed charge of $4.95 per month "per equipment set" [Exhibit F to Krieger Opp. Aff.], a charge NLS set at the "price in effect" for the LDW with the right to adjust the fee from time to time [Exhibit G to Krieger Opp.

Aff.] and/or a negotiated fixed monthly LDW fee set when NLS accepts the lease [Exhibit H to Krieger Opp. Aff.]; some leases did include the LDW fee on the first page of the lease form above the signature line [Exhibit I to Krieger Opp. Aff.]; and some leases did not include an LDW provision, but rather imposed on the lessee the obligation to produce a certificate of insurance for the equipment [Krieger Opp. Aff.

at ¶ 15]).

In addition to asserting the foregoing to counter Plaintiffs' claim of a uniformity in the collection of the purported $4.95 LDW overcharge, Defendants further point out that among the more than 300,000 equipment leases executed between 1999 and 2004 (the year Plaintiffs commenced this action), more than 23,000 lessees never paid the LDW charge or ceased paying same after their lease commenced when they presented NLS with proof of equipment insurance (Krieger Opp. Aff. at 7; see also, 2006 Decision as Exhibit A to Krieger Opp. Aff. at p. 10). Defendants expand on this point, viz., if these lessees were shown a rigged "one page" contract without any reference to an insurance coverage provision, how did so many manage to presciently opt out of paying the LDW fee by procuring the appropriate insurance coverage as required pursuant to a provision found on another page of their leases?[FN4] As to particular [*5]infirmities to defeat class certification, Defendants apprise the court of the following:

The proposed class is overbroad because not every putative member was aggrieved by NLS's conduct;

In any event, this case otherwise requires one to individually examine the circumstances surrounding each of the approximately 300,000 leases these merchants-lessees throughout the country executed with NLS since 1999;

Despite Plaintiffs potentially satisfying the numerosity requirement of the certification provision, the mandated examination of these lease files would reveal that the individual issues predominate and foreclose Plaintiffs from meeting all of the sine qua non criteria set forth in the certification provision;

Notwithstanding a claimed common pattern of conduct salespersons (employed by thousands of independent equipment vendors) allegedly may have engaged in with over 300,000 merchants to induce them to sign varied equipment lease forms, there is no commonality or predominance of common questions of law/fact among the putative class members as individualized inquiries will be required to resolve liability issues;[FN5]

Parenthetically, many merchants benefitted from the LDW program which required NLS inter alia to replace damaged leased equipment at considerable cost (Krieger Opp. Aff. at 1128); [*6]

The gravamen of Plaintiffs' claim is that NLS had no legal right to charge and collect any LDW fee from any merchant-lessee because the insurance/LDW provision was a contractual term and condition fraudulently concealed from Plaintiffs which will be dependent on proof of their fraud claim, a claim not certifiable as a class action;

Even if there was an issue common to the putative class, the sheer enormity of the potential class (more than 300,000 lessees), especially when individual inquiries are necessary, renders its management insurmountable;

As gleaned from their depositions (see Exhibits D-G to Glassman Opp. Aff.) and the court files, Plaintiffs have not shown they can fairly and adequately protect the interests of the class because they inter alia have failed to demonstrate a basic understanding of the scope and breadth of their lawsuit against Defendants (e.g., unfamiliarity with the term LDW, the class representative criteria, etc.), to communicate with each other to advance, settlement negotiations or take other steps in their best interests and that of the putative class, to submit current affidavits attesting to their capability to serve as class representatives and/or to exhibit their active participation in the litigation process (e.g., their actual awareness of this pending renewal motion for class certification);

Rather, Plaintiffs' counsel apparently rests on Plaintiffs' stale, identically crafted affidavits which conclusorily attested to their purported compliance with the requisite criteria to be qualified class representatives;

Nor have Plaintiffs currently shown they can act competently and independently in the best interests of the class over the interests of their attorneys;

Regardless of his qualifications and experience, Plaintiffs' counsel's self- interest disqualifies Chittur from representing the putative class;[FN6] and [*7]

Before directing Defendants to bear the full costs of notice to the class pursuant to CPLR §904(d) if the renewal motion is ultimately granted, the court must determine whether Plaintiffs have a real likelihood of success on the merits and not merely impose such costs because Corp. Defendant has deeper pockets.

Plaintiffs' Reply in Further Support

The following was gleaned from Chittur's reply on behalf of Plaintiffs: (1) when, the First Department in the Pludeman AD Decision sustained Plaintiffs' pleaded breach of contract claim of overcharge, the Court did so upholding a claim independent of Plaintiffs' fraudulent concealment claim [FN7] and grounded on "well-settled law that contract claims cannot be duplicative of fraud claims (citations omitted). . ." (Plaintiffs' reply memorandum of law at p.5); (2) because the first page of each Plaintiff's form lease appeared to be the whole contract and made no mention of the $4.95 LDW charge, its collection was unauthorized and constitutes an overcharge in breach of the contract;[FN8] (3) the merger clause contained on the first page of each form lease states that the terms contained on that page "represent the final expression of the agreement" between NLS and the lessee and renders the lease a one-page contract; (4) since there was no LDW charge inserted on the first page of Plaintiffs' form leases [FN9] as well as those of other putative class members, the collection of any type of LDW charge, including the predominantly imposed $4.95 LDW fee uniformly collected from Plaintiffs and the class was unauthorized and an overcharge; (5) any ambiguity as to whether the merger clause is limited to the first page of the form lease as Plaintiffs contend or referable to the entire four pages of the form lease as Defendants argue must be construed against NLS, its sole drafter; (6) the Pludeman AD Decision further recognized the independence of the breach of contract cause of action when it dismissed Plaintiffs' cause of action for breach of the covenant of good faith and fair dealing as "duplicative of the reinstated contract cause of action." 40 AD3d at 368; (7) because the form lease contained [*8]a clearly worded merger clause with a "no oral modification" provision, there is no need to resort to extrinsic evidence to construe the language of the form lease or impermissibly resort to hearsay information regarding NLS's purported telephone verification of any lessee's acknowledgment of the $4.95 LDW charge at or about the time of delivery/acceptance of the equipment; (8) even assuming thousands of independent vendors made oral misrepresentations or omissions in promoting the leasing of their credit card point-of-sale terminals and other related business equipment to 300,000 lessees and deceptively obtained their signatures on the equipment lease forms, still, the merger clause on the first page of

these lease forms makes it unnecessary for the court to decide the fraudulent concealment issue as the court can independently determine that the electronically deducted LDW charge was unauthorized as a matter of law; (9) that NLS may have used 157 different versions of the form leases does not defeat commonality as Defendants have not shown how any of these 157 versions are materially different from the form leases Plaintiffs executed; (10) that some NLS lease forms contained a provision for an LDW charge to be set at "price in effect" or at the time the lease is accepted neither vitiates Plaintiffs' contract breach/overcharge claim nor defeats commonality because Pludeman, Hush and Lauchman were still charged the $4.95 LDW fee despite the fact that their form leases contained this open-ended LDW fee provision; (11) significantly, except for about 15,357 lessees who managed to learn about the need for procuring equipment insurance at the time they accepted their leases, NLS never denied it uniformly collected the $4.95 LDW fee from more than 280,000 lessees; (12) even without a discrete damages claim, these same lessees as well as an additional 8,452 lessees who discontinued paying the LDW fee after their leases started could still be part of the class to ascertain their rights to declaratory and injunctive relief; (13) the $4.95 charge was actual and uniform among the class and any individual lessee's awareness of the charge after a lease execution would be irrelevant; (14) absent express lessee consent, Corp. Defendant's required furnishing of replacement equipment as a "valuable service" does not justify the unauthorized electronic deduction of the LDW fee;[FN10] (15) there are no insurmountable difficulties to managing the class because individualized inquiries into over 300,000 leases are unnecessary and Defendants' own records could easily provide quick calculations of the LDW fees Corp. Defendant actually collected from about 285,000 lessees;[FN11] (16) a proposed class representative's ignorance about the intricacies of a class action is not a bar to his or her assumption of class representative duties; (17) among other factors, Plaintiffs' likelihood of success on this breach of contract claim compels Corp. Defendant to bear the cost of serving the class notice; and (18) ad hominem attacks against counsel for the putative class is "unbecoming of counsel of the stature of Moses and Singer . . ." (Plaintiffs' Reply Memorandum of Law at p. 31) and allegations challenging Chittur's ethical conduct are total fabrications.

[*9]The Gagasoules Decision

In April 2009, the court received dueling letters from the parties' counsel after the issuance of a Decision and Order disposing of a dismissal motion in Gagasoules, et al. v. MBF Leasing, LLC, n.o.r.,F. Supp.2d, Index No. 08-CV-2409 (E.D.NY 2009) ("Gagasoules Decision"). In dismissing plaintiffs' claim for breach of the implied covenant of good faith and fair dealing ("good faith covenant"), U.S. District Court Judge Spatt reasoned as follows: Plaintiffs also allege that Defendants violated the implied . . . [good faith covenant] by concealing material terms in the lease agreement. "New York law imposes an implied . . . [good faith covenant] in all contracts, 'pursuant to which neither party to a contract shall do anything which has the effect of destroying or injuring the right of the other party to receive the fruits of the contract" (citations omitted).Here, the Plaintiffs have failed to allege that the Defendants deprived them of rights under the contract; their argument is rather that lease terms were either concealed or misrepresented. While such allegations may be alleged in support of a fraud cause of action, they do not form the basis of a viable claim for breach of the implied . . . [good faith covenant]. Accordingly, the Plaintiffs may not maintain a cause of action for breach of the implied . . . [good faith covenant] under Count X.

Defendants now claim the Gagasoules Decision supports their contention that since the dismissed cause of action for breach of the good faith covenant is duplicative of the reinstated breach of contract claim, then the latter really sounds in fraud and forecloses certification for the reasons stated in the 2006 Decision. Plaintiffs contend the Gagasoules Decision, which addressed the sufficiency of pleadings in deciding a dismissal motion, is irrelevant for several reasons: (a) the U.S. District Court expressly refused to follow the Pludeman AD Decision addressing a similarly worded complaint (and arguably involving similarly situated parties) which sustained Plaintiffs' breach of contract cause of action at the pleading stage, however, the Pludeman AD Decision is controlling on this court; (b) both the First Department in the Pludeman AD Decision and the Court of Appeals in the Pludeman CtApp Decision sustained Plaintiffs' breach of contract claim; and ( c ) any lessee's awareness of any type of LDW charge is irrelevant to the breach of contract claim, which simply rests the formation of these form lease(s) and the routine manner NLS electronically deducted the $4.95 LDW overcharges, which are claims common to the class warranting certification.

Discussion

Although the ultimate decision to grant class certification is within the court's sound discretion (see Lauer v. New York Telephone Co., 231 'AD2d 126, 130 [3rd Dept. 1997]), still, Plaintiffs have the burden of meeting the prerequisites of the certification provision, i.e.: (1) the class must be so numerous that joinder of all members is impracticable; (2) common questions of law or fact must predominate; (3) the claims of the representative plaintiff must be typical of all members of the class; (4) the representative party must fairly and adequately protect the interests of the class; and (5) a class action must be the most fair and efficient means of resolving the controversy (see CPLR §901[(a][1]-[5]). Further, the prerequisites of the certification provision should "be liberally construed . . . [and] 'any error should be resolved in favor of allowing the [*10]class action'. . .". Wilder v. May Dep't Stores Co., 23 AD3d 646, 649 (2nd Dept. 2005).

It is essentially undisputed that between 1999 and 2004, about 300,000 small business merchants signed form leases/guarantees with NLS, which are the subject of this dispute. Thus, Plaintiffs have clearly met the threshold burden of establishing numerosity.

For class certification, the predominance prerequisite must be met, that is to say, Plaintiffs must establish the commonality of their issue in dispute and that this common issue predominates over issues which otherwise require individual inquiries. It "involves the adjudication of similar, but not necessarily identical claims for which uniformity of

decision is important; indeed, 'the [commonality] rule requires predominance, not identity or unanimity, among class members' . ." Freeman v. Great Lakes Energy Partners, L.L.C., 12 AD3d 1170, 1171 (4th Dept. 2004).

As clearly articulated in the 2006 Decision, Plaintiffs' common law fraud claim clearly requires individualized, fact-intensive analysis and "the need for particularized proof of [class members'] reliance and resulting injury upon . . . [NLS's vendors'] alleged misrepresentations . . ." (bracketed matter added). Hazelhurst v. Brita Prods. Co., 295 AD2d 240, 241 (1st Dept. 2002).

Defendants insist Plaintiffs' breach of contract claim is merely a homogenized version of their fraudulent concealment claim alleging the deceptive nature of the form lease as presented, conduct of the point-of-sale vendors, etc. However, the Pludeman AD Decision, as the law of case on this issue, makes it clear that Plaintiffs have plead sufficient facts to establish a prima facie cause of action for breach of contract against NLS for allegedly overcharging, viz., the unauthorized collection of the $4.95 LDW fee. In modifying the lower court decision to reinstate this claim, the Appellate Division (obviously viewing Plaintiffs' pleaded claim differently than the U.S. District Court in the Gagasoules Decision, supra) implicitly determined that the breach of contract claim is independent of Plaintiffs' fraudulent concealment claim. Otherwise, if the former was truly duplicative of the latter resting on the same alleged facts, the modification to reinstate the breach of contract claim would have been unnecessary. See Richbell Info. Servs., Inc. v. Jupiter Partners, L.P., 309 AD2d 288, 305 (1st Dept. 2003).

Against the foregoing backdrop, the nature of Plaintiffs' breach of contract claim involves the first page of a typical equipment form lease NLS utilized [FN12] with over 300,000 lessees which facially depicts the whole contract including monthly payment terms for the leased equipment, bank information for the electronic deduction of fees, the guaranty and a merger clause (Exhibit 2 to Chittur Aff. in Support of Renewal Motion). Relevant to this discussion, in the "Schedule of Payments Section" on the first page of Plaintiffs' form leases, there is absolutely no insertion of the $4.95 LDW fee or any printed legend of any type size about the "Loss & Destruction Waiver fee (see section 13) . ." (see illustratively, Exhibits H and I to Krieger Opp. Aff.). Nor has NLS [*11]proffered any of its other 157 versions with an identically printed legend in the body of the first page of such form leases.

At this stage, it appears that Plaintiffs have demonstrated they are likely to succeed on the merits of their breach of contract claim without any need for individualized inquiries because the first page of the typical NLS form lease Plaintiffs and the putative class members executed contained all the material terms of the contract without an insertion of any LDW fee or printed legend referable thereto and a clearly worded merger clause above the signature lines which states, in relevant part: THE TERMS OF THIS LEASE REPRESENT THE FINAL EXPRESSION OF THE AGREEMENT BETWEEN LESSOR AND LESSEE AND MAY NOT BE WAIVED ALTERED MODIFIED REVOKED OR RESCINDED AND ALL PRIOR AND/OR CONTEMPORANEOUS ORAL AND WRITTEN REPRESENTATIONS ARE MERGED HEREIN. ANY AGREEMENTS TO MODIFY THIS LEASE MUST BE BY A SIGNED WRITING EXECUTED BY LESSOR AND LESSEE AND NO ATTEMPT AT ORAL MODIFICATION OR RECISION OF THIS LEASE OR ANY TERM HEREOF WILL BE BINDING . . .

Generally, a contract must be interpreted and enforced according to the plain meaning of its unambiguous terms including its boilerplate provisions. Under these circumstances, the court could ultimately determine that the form lease(s) in issue, reasonably perceived as a one-page contract, is "complete, clear and unambiguous on its face [and] must be enforced according to the plain meaning of its terms . . ." Greenfield v. PhiIles Records, Inc., 98 NY2d 562, 569 (2002). The court would also conclude based on the form lease's language, format and structure that "'[e]vidence outside the four corners of the document as to what was really intended . . . is generally inadmissible to add to or vary the writing. . .' (citations omitted)." Vision Dev. Group of Broward County, L.L.C. v. Chelsea Funding L.L.C., 43 AD3d 373, 374 (1st Dept. 2007). And with the existence of a clearly worded merger clause above the signature line,[FN13] there would be no need to resort to extrinsic evidence (especially hearsay information) to construe the language of the form lease(s). See also, Jarecki v. Shung Moo Louie, 95 NY2d 665, 669 (2001)(merger clause bars parole evidence). In this vein, it is also undisputed that during the period 1999-2004, except for about 23,000 lessees who opted to provide certificates of insurance at, or shortly after their leases commenced, NLS routinely, electronically deducted the $4.95 LDW fee from the remaining 277,000 lessees. Thus, each class member's damages can easily be calculated without the need for individualized inquiries. See Broder v. MBNA Corp., 281 AD2d 369, 371 [1st Dept. 2001]) (commonality for class certification involved alleged "deceptive acts based on identically [*12]worded solicitations . ." in violation of GBL § 349).

Based on the foregoing, Plaintiffs have met "the predominance requirement that 'questions of law or fact common to the class . . . predominate over any questions affecting only individualized members' (CPLR 901[a][2]) . . ." Weinberg v. Hertz Corp., 116 AD2d 1, 6 (1st Dept. 1986). "To the extent that there may be variations among the class members as to the degree in which they were damaged [e.g., $2.95 LDW fee, $3.95 LDW fee, etc.] the court may . . . create subclasses." Godwin Realty Assocs. v. CATV Enters., Inc., 275 AD2d 269, 270 (1st Dept. 2000).

Based on the foregoing, Plaintiffs have also satisfied the typicality prerequisite (CPLR §901 [a][3]) for class certification as Plaintiffs' breach of contract claim is "typical of the claims of other members of the class since it arises out of the same course of conduct as the class member's claim[ ] and is based on the same cause of action . . ." Pruitt v. Rockefeller Center Properties, Inc., 167 A.D.2d 14, 22 (1st Dept. 1991).

As to the adequacy of representation, Defendants' attorneys have not competently demonstrated how Chittur is unfit to serve as class counsel. Contrarily, on this developed record as well as the record of this litigation from its inception, this court concludes that Chittur is more than qualified, is very experienced in prosecuting class actions and will be actively engaged in this action to its ultimate conclusion. As noted, supra, Defendants apparently highlight Plaintiffs' inability to be class representatives based upon their lack of detailed knowledge of the procedural and substantive issues in this action. The court's perusal of their affidavits Shows they have a "general awareness of the nature of the underlying dispute, the ongoing litigation, and the relief sought on behalf of the class (citations omitted)" Wilder, supra, 23 AD3d at 648-649; Ackerman v. Price Waterhouse, 252 AD2d 179, 202 (1" Dept. 1998); see also, Pesantez v. Boyle Envtl. Servs., Inc., 251 AD2d 11, 12 (1" Dept. 1998).

As to the final prerequisite, this court concludes that "a class action is superior to other available methods for the fair and efficient adjudication of the controversy" (CPLR §901[a][5]) since the damages each small business merchant in the class suffered "would likely be insufficient to warrant their institution of separate suits . . ." Englade v. HarperCollins Publishers, Inc., 289 AD2d 159, 160 (1st Dept. 2001); Godwin, supra, 275 AD2d at 269-270; see also, Super Glue Corp. v. Avis Rent a Car Sys., Inc., 132 AD2d 604, 608 (2nd Dept. 1987).

Finally, after considering the resources of the parties and Plaintiffs' likelihood of success (CPLR §904[d]), this court exercises its discretion to direct that Corp. Defendant bear the costs of class notification. Cf., Drizin v. Sprint Corp., 7 Misc 3d 1018(A) (Sup. Ct. NY Co., 2005).

Accordingly, for the foregoing reasons, it is hereby

ORDERED that Plaintiffs' motion is granted in its entirety, and it is further

ORDERED that Plaintiffs' counsel is directed to settle an order on notice in accordance with CPLR Article 9 certifying the class and providing for appropriate notice to the class, and it is further

ORDERED that Corp. Defendant shall serve the court-approved notice of class certification to all affected members of the class and bear the costs thereof.

Counsel for the parties are directed to appear for a status conference on June 2, 2009, at 9:30 a.m. at 111 Centre Street, Room 1127B, New York, New York.

The foregoing constitutes this court's Decision and Order. Courtesy copies of this [*13]Decision and Order have been provided to counsel for the parties.

Dated: New York, New York

April 24, 2009 Footnotes

Footnote 1: For purposes of this renewal motion, many of the underlying facts can be gleaned from the not officially reported August 29, 2006 Decision and Order of the Hon. Sherry Klein-Heitler, J.S.C. ("2006 Decision")(Exhibit A to Krieger Opp. Aff.), Pludeman v. Northern Leasing Systems, Inc., 40 AD3d 366 (1' Dept., 2007)("Pludeman AD Decision") and Pludeman v Northern Leasing Systems, Inc., 10 NY3d 486 (2008)("Pludeman CtApp Decision").

Footnote 2: In the court's April 7, 2005 Decision and Order, Justice Klein-Heitler inter alia granted the branch of Corp. Defendant's CPLR 3211 motion dismissing the breach of contract cause of action for factual/legal insufficiency (i.e., a failure to plead how NLS breached Plaintiffs' leases). In modifying the April 7, 2005 Decision and Order, the Appellate Division, First Department referred to the pleaded allegations of overcharges against NLS for collecting the LDW charges as sufficient to sustain the breach of contract claim (see Pludeman AD Decision, 40 AD3d at 368).

Footnote 3: As noted in the 2006 Decision, Plaintiffs' affidavits in the first certification motion uniformly describe a transactional scenario where independent vendors presented a lease form as a one-page document, concealed the remaining three pages of the lease form without mentioning or referring to the other three pages of the document inter alia containing an insurance provision with the LDW charge in issue, rushed the lessees-Plaintiffs to execute same and mislead them "into believing that the lease was a single page document . ." (Exhibit A to Krieger Opp. Aff).

Footnote 4: As an additional challenge to Plaintiffs' claim of uniformity among the putative class members affected by NLS's collection of a purportedly hidden LDW overcharge, Defendants reiterated that it was Corp. Defendant's practice to verify a lessee's acknowledgment of the $4.95 LDW charge at or about the time of delivery/acceptance of the equipment and many of the 300,000 lessees may have actually paid this fee after giving such acknowledgment (Krieger Opp. Aff. at ¶ 24). Defendants also highlight that Hush-Ozark and Lauchman, two of Plaintiffs proposed to be representatives of the class, confirmed the requirements of their leases including the obligation to pay the LDW fee at the time they accepted the equipment (see Krieger Opp. Aff at ¶ 17).

Footnote 5: Illustratively, Defendants claim these questions need to be answered: "[W]as the lessee fraudulently induced to sign, believing the lease was only one page and had no LDW clause; did the lessee provide oral or documented acknowledgment after delivery of the equipment; did the lessee provide a certificate of insurance at the inception of the lease term; did NLW collect for the LDW program; did the merchant provide a certificate of insurance after the inception of the lease term? . . ." (Defendants' Memorandum of Law in Opposition to Renewal Motion at p. 22).

Footnote 6: During Plaintiffs' depositions, Defendants learned that the former were wholly unaware that the parties' counsel had participated in mediation sessions and that Plaintiffs' attorney had rejected certain settlement offers and made counter-offers (Glassman Opp. Aff. at ¶ 12). Thui, Defendants have inferred that Chittur has breached his duty to effectively communicate with Plaintiffs about these settlement negotiations, calling into question his adequacy to serve as counsel to the class (see also, Defendants' Memorandum of Law in Opposition to Renewal Motion at p. 31).

Footnote 7: Plaintiffs point out that the record on appeal underlying the Pludeman AD Decision contained the sampling of form leases Defendants rely on to defeat the commonality prong for class certification, the entire four page lease form in issue and Corp. Defendants' defensive explanation for the $4.95 LDW fee not being an overcharge.

Footnote 8: Presumably after viewing the form lease in issue in the record on appeal, Plaintiffs further claim the Pludeman AD Decision lends support to Plaintiffs' "first page only" construction when the Court observed: "The alleged concealment finds support in the first page of the lease, which contains all of the elements that would appear to form a binding contract, including the signature line, a personal guaranty, and forum selection, jury waiver and merger clauses, with the only references to the additional pages of the lease being in very small print . . ." 40 AD3d at 367.

Footnote 9: In this context, Plaintiffs do point out that Defendants' sampling of varied executed lease forms did include two leases which contained a printed reference to a required payment of an LDW fee on the first page (see Exhibits H and I to Krieger Opp. Aff.). However, Plaintiffs contend these are not NLS leases, involve lessees who are not part of the putative class and are irrelevant to the issues at bar.

Footnote 10: Plaintiffs further contend it is irrelevant that NLS actually provided replacement equipment to about 2,700 out of 300,000 lessees.

Footnote 11: Plaintiffs urge the court to bear in mind that Corp. Defendant has used this same information as a "sword" to prosecute thousands of LDW fee collection actions against lessees throughout the country and to adversely affect these lessees with credit reporting agencies.

Footnote 12: Accepting as true Defendants' claim that NLS used 157 different versions of this four- page equipment form lease, nonetheless, Defendants' sampling of leases with its varied LDW fee arrangements does not convincingly demonstrate that 157 leases are materially different from Plaintiffs' form lease(s) as to content regarding language, format and structure to counter Plaintiffs' claim that their form leases are typical of the form leases the putative class members executed.

Footnote 13: Parenthetically, the court has imposed liability for the terms and conditions of a contract above the signature line (illustratively see, Gillman v. Chase Manhattan Bank, N.A., 73 N.Y2d 1 1 [19881) and in certain circumstances have not imposed personal liability under a contract for printing below the signature line (see Yellow Book of New York, L.P. v. Platt, 2003 NY Slip Op 50578 [Dist. Ct. Nassau Co. 2003] citing toYellow Book Co., Inc. v. Green, 1993 WL 603209, N.Y.L. J., February 8, 1994, p. 27, col. 1 [Dist. Ct. Nassau Co.]).