Grant v. Leasecomm Corp.

14 Mass. L. Rptr. 225
CourtMassachusetts Superior Court
DecidedDecember 4, 2001
DocketNo. 20011837C
StatusPublished

This text of 14 Mass. L. Rptr. 225 (Grant v. Leasecomm Corp.) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grant v. Leasecomm Corp., 14 Mass. L. Rptr. 225 (Mass. Ct. App. 2001).

Opinion

Lauriat, J.

Alex Grant ("Grant”), individually and as president of Organic Zone, Inc. (“Organic Zone”), has brought this action against defendant Leasecomm Corporation (“Leasecomm”) to recover damages for violations of G.L.c. 93A (Count I), unjust enrichment (Count II), conspiracy (Count III), fraudulent debt collection practices (Count IV), breach of the covenant of good faith and fair dealing (Count IV), unfair debt collection practices (Count VI), fraud (Count VII) and usury (Count VIII). In addition, Grant seeks certification of a plaintiff class and a declaration by the court that leases executed in favor of Leasecomm are void.

Leasecomm has now moved to dismiss this action pursuant to Mass.R.Civ.P. 9(b), 12 (b)(1) and 12(b)(6). Leasecomm asserts that the Superior Court does not have subject matter jurisdiction in this case because Grant’s claim falls below the $25,000 jurisdictional threshold set by St. 1996, c. 358, §4 as amended by St. 2000, c. 142. In addition, Leasecomm contends that Grant’s other claims are substantively deficient and fail to state claims upon which relief could be granted. For the following reasons, Leasecomm’s Motion to Dismiss is allowed without prejudice.

BACKGROUND

Leasecomm, a Massachusetts corporation headquartered in Waltham, operates nationwide as a lessor of business equipment.

On June 26, 1998, Grant, as president of Organic Zone, signed Leasecomm‘s standard form Equipment Lease Agreement (“the Lease”). Grant also executed a Personal Guaranty of all obligations contained in the Lease. The Lease provided Grant with three credit card machines for a forty-eight (48) month term at a total cost of $49.95 per month. At oral argument, Grant advised the court that Organic Zone had gone out of business. At some point, Grant stopped paying Leasecomm, and Leasecomm sued Grant in district court for $2,902.73.

Grant’s complaint alleges that Leasecomm “actively solicits individuals . . . engaged in, or starting, their own small business to sign non-cancelable long-term leases . . . knowing that a large number of these businesses will not last the lease term.” Grant further alleges that these vendors intentionally omit and misrepresent terms of the contract, including the term whereby any vendor’s representations contrary to the lease’s written terms are expressly disclaimed. Grant contends that the contract is one of adhesion, using non-negotiable, technical language in varying degrees of small print which bind customers to the contract even after their business has ceased to operate. Further, the contract contains a forum selection clause requiring that any action on the Lease be brought in a Massachusetts court. Grant alleges that this clause is unconscionable because “Massachusetts, [is] an inconvenient forum for the vast majority of lessees, [who] neither reside nor conduct business in Massachusetts.”

Grant further asserts that customers inevitably fail to pay Leasecomm and that when that happens, Leasecomm brings suit in Massachusetts to obtain an uncontested default judgment, which it in turn en[226]*226forces in the customer’s home state. In this regard, Grant contends that Leasecomm improperly serves process on its delinquent customers, thus depriving them of their ability to challenge the underlying judgment, and perpetrates a fraud on the Court. Grant alleges that Leasecomm refers to itself and its leases as “commercial” in order to bypass statutory regulation of consumer transactions. According to Grant, this fraudulent conduct allegedly allows Leasecomm to “miscalculate interest and amounts due to which it adds illegal and unjustified charges in order to increase the size of its judgments.” Grant argues that this is a premeditated scheme to take advantage of inexperienced small business entrepreneurs who do not have the resources to defend a suit in Massachusetts.

DISCUSSION

I.

“Whenever it appears by suggestion of a party or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action.” McCracken v. Sears, Roebuck & Company, 51 Mass.App.Ct. 184, 188 (2001), citing Mass.R.Civ.P. 12(h)(3), 365 Mass. 757 (1974). “When subject matter jurisdiction is lacking, it ‘cannot be conferred by consent, conduct or waiver.’ ” Jamgochian v. Dierker, 425 Mass. 565, 567 (1997), quoting Litton Business Systems v. Commissioner of Revenue, 383 Mass. 619, 622 (1981). Additionally, although the factual allegations of the complaint are taken as true for purposes of evaluating Leasecomm’s motion, see Cross v. Commissioner of Correction, 27 Mass.App.Ct. 1154, 1154 rev. den. (1989), “[characterizations and conclusions of law warrant no such consideration and may be disregarded.” See Boston & M.R.R. v. County Commissioners of Middlesex County, 239 Mass. 127, 131 (1921).

The Court must evaluate Leasecomm's motion to dismiss for lack of subject matter jurisdiction under Mass.R.Civ.P. 12(b)(1) in the context of the statute confirming jurisdiction on the Court, in this instance, St. 1996, c. 358, as amended by St. 2000, c. 142.1

The plain language of the statute is clear. [Section] 4 grants exclusive original jurisdiction to the District Courts in Norfolk and Middlesex counties, for all civil actions otherwise subject to G.L.c. 231, §§97-107,2 if there is a reasonable likelihood that the plaintiffs recovery will not exceed $25,000; it grants exclusive original jurisdiction to the Superior Court for all civil actions otherwise subject to G.L.c. 231, §§97-107, if there is a reasonable likelihood that the plaintiffs recovery will exceed $25,000. There are no exceptions stated in the statute.

Ropt Ltd. Partnership v. Katin, 431 Mass. 601, 603 (2000). See Commonwealth v. Egleson, 355 Mass. 259, 262 (1969); Kravitz v. Director of the Div. Of Employment Sec., 326 Mass. 419, 421-22 (1950).

Furthermore, “when an action is filed in either the Superior or District Court, the complaint must be accompanied by a statement specifying ‘in full and itemized detail the facts on which the plaintiff then relies to determine money damages.’ ” Mitchell v. Kucmas, Civil Action No. 00-3770, 13 Mass. L. Rptr. 485 (Mass. Superior. Ct., July 13, 2001). “If it appears to the court, in Middlesex. .. county, from the statement of damages by the plaintiff that there is no reasonable likelihood that the estimated damages will be consistent with the jurisdictional limits of the court. . . [the court] may dismiss the case without prejudice for want of jurisdiction.” Id.

Here, Leasecomm asserts that the Superior Court lacks subject matter jurisdiction under St. 1996, c. 358 to adjudicate the matter because Grant has failed to satisfy the $25,000 threshold requirement. Grant has not enumerated his actual damages, but this court will presume a claim of approximately $2,000 to $3,000 based on Leasecomm’s claim against him for $2,902.73. Ropt Ltd. Partnership v. Katin, 431 Mass. 601, 605 (2000). However, Grant contends that since he is filing this case as a class action on behalf of “thousands of Leasecomm customers,” their aggregate claims will surpass the $25,000 threshold. Grant concludes that this court’s jurisdiction is proper based on this hypothetical aggregated total. ,

The trial court is vested with broad discretion to determine whether an action may be maintained as a class action. See Fletcher v. Cape Cod Gas Co., 394 Mass. 595, 605 (1985); Sniffin v. Prudential Ins.

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Related

Commonwealth v. Egleson
244 N.E.2d 589 (Massachusetts Supreme Judicial Court, 1969)
Fletcher v. Cape Cod Gas Co.
477 N.E.2d 116 (Massachusetts Supreme Judicial Court, 1985)
Massachusetts General Hospital v. Rate Setting Commission
359 N.E.2d 41 (Massachusetts Supreme Judicial Court, 1977)
Boston & Maine Railroad v. County Commissioners
131 N.E. 283 (Massachusetts Supreme Judicial Court, 1921)
Litton Business Systems, Inc. v. Commissioner of Revenue
383 Mass. 619 (Massachusetts Supreme Judicial Court, 1981)
Jamgochian v. Dierker
425 Mass. 565 (Massachusetts Supreme Judicial Court, 1997)
ROPT Ltd. Partnership v. Katin
729 N.E.2d 282 (Massachusetts Supreme Judicial Court, 2000)
Sniffin v. Prudential Insurance Co. of America
11 Mass. App. Ct. 714 (Massachusetts Appeals Court, 1981)
Cross v. Commissioner of Correction
539 N.E.2d 74 (Massachusetts Appeals Court, 1989)
McCracken v. Sears, Roebuck & Co.
744 N.E.2d 102 (Massachusetts Appeals Court, 2001)
Clark v. Leasecomm Corp.
12 Mass. L. Rptr. 267 (Massachusetts Superior Court, 2000)
Mitchell v. Kucmas
13 Mass. L. Rptr. 485 (Massachusetts Superior Court, 2001)

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Bluebook (online)
14 Mass. L. Rptr. 225, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grant-v-leasecomm-corp-masssuperct-2001.