Societe Generale Financial Corp. v. Graphics Leasing Corp.

2 Mass. L. Rptr. 462
CourtMassachusetts Superior Court
DecidedAugust 5, 1994
DocketNo. 91-1258-D
StatusPublished

This text of 2 Mass. L. Rptr. 462 (Societe Generale Financial Corp. v. Graphics Leasing 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
Societe Generale Financial Corp. v. Graphics Leasing Corp., 2 Mass. L. Rptr. 462 (Mass. Ct. App. 1994).

Opinion

Neel, J.

This is a breach of contract claim involving the sale of an equipment lease. Plaintiff, Societe Generale Financial Corp. (SGFC), purchased from defendant, Graphics Leasing Corporation (Graphics), a lease between Graphics and dismissed defendant National Investor News, Inc. (“National”). The purchase agreement between SGFC and Graphics included a [463]*463buy-back provision, requiring Graphics to repurchase the lease in the event National defaulted on its payments to SGFC. National defaulted, and SGFC now claims that Graphics breached the purchase agreement by failing to repurchase the lease.

The claim against Graphics was tried without jury on August 3, August 5 and November 18, 1993, and the parties’ proposed findings and rulings were complete on December 21, 1993. For the reasons stated below, the Court rules that defendant Graphics breached its obligation to repurchase, and orders judgment for SGFC on Count I of the complaint.

FINDINGS OF FACT

On the basis of the credible evidence presented at trial, the Court makes the following findings.

On January 12, 1989, SGFC and Graphics executed a “Purchase of Paper Agreement” (“Agreement”), which set forth the terms under which SGFC would purchase from Graphics chattel paper evidencing approximately thirty of Graphics’ equipment leases with third parties. One such lease, between Graphics, as lessor, and National, as lessee (the “Lease”), is the subject of this litigation.

The Agreement provides that lessees would make their monthly lease payments to SGFC. National’s first periodic payment to SGFC, following the purchase of the Lease, was due December 1, 1989. National failed to make that payment, and on December 31,1990 was in “Early Default,” as defined by the Agreement, triggering SGFC’s repurchase option.1 If the Lease is “New Paper,” as defined by the Agreement, Graphics is required to repurchase it, upon request, if the first payment is thirty days late. As previously ruled by the Court (Memorandum of Decision and Order on Plaintiffs and Defendant’s Motions for Summary Judgment (Neel, J.) January 29, 1993), and as now stipulated by the parties, the Lease is New Paper.

By letter dated December 20, 1989, SGFC gave Graphics notice that National had failed to make its December installment.

After National’s Early Default on December 31, 1989, Domenica Simone, Portfolio Services Officer of SGFC, sent another letter by regular first class mail on January 8, 1990, requesting that Graphics repurchase the Lease as required by Article 6.1(b) of the Agreement. That letter complied with the “Notices” provision of the Agreement, which requires at Article 10.2 that “(a]ll notices, requests and other communications hereunder shall be in writing . . .”

Article 10.2 further provides that such requests “shall be deemed to have been given when delivered, if sent by messenger, or five (5) business days after mailing, if sent by registered or certified, postage prepaid mail, return receipt requested ...” The Agreement is silent as to when requests sent by regular mail are deemed to have been given. There was no direct evidence to prove the date on which Graphics actually received the January 8, 1990 letter.

First class mail will usually be delivered within three days after mailing.

On January 9, 1990, Terri Ciochetti, a collections agent at SGFC’s San Francisco office, spoke with a representative of National regarding the late payment.

On January 12,1990, Norma Yacoubi, a collections agent at SGFC, spoke with “Debbie,” a representative of Graphics, regarding the late payment and National’s future ability to make its payments for December and January.

On January 16, 1990, Terri Ciochetti again spoke with a representative of National, who stated that National had sent payment to a Graphics agent, Irv Ellis in Phoenix, Arizona.

On January 17, 1990, SGFC received National’s check no. 1031 (drawn on the account of “I.T. Publications, Inc.,” an affiliate of National, on National’s behalf) in the amount of $2,116.28. That check was deposited and was dishonored on January 19, 1990, and again on January 25, 1990.

Check no. 1031 was automatically redeposited by SGFC’s depository bank after it first failed to clear on January 19. SGFC’s depository bank advised SGFC of check no. 1031’s failure to clear only after it had been returned for insufficient funds the second time on January 25. SGFC received that advice on January 31, 1991, on which date it entered a “payment reversal” on its internal record of National’s account, reversing the credit previously entered on January 17 for check no. 1031.

On January 17, 1990, Domenica Simone of SGFC sent a letter to Nelson Smith of Graphics, again via regular mail. That letter was sent after SGFC received check no. 1031. After thanking Graphics “for your assistance in collecting the lease payments from" National, Simone states:

However, due to customers (sic) inabilfiy to make timely payments from the point of inception of the lease, and the reasons leading to the lessee’s default, we would like to extend our right to request repurchase of this transaction for an additional 60 days.
... Should you not agree, our request of repurchase contained in my letter of January 8, 1990 remains in full force and effect.

Graphics did not agree to the proposed extension of SGFC’s right to request repurchase.

Also on January 17, 1990, Simone advised Debbie at Graphics by telephone that SGFC had received check no. 1031. Debbie told Simone that another payment would be sent the following week.

On January 23, 1990, Terri Ciochetti spoke by telephone with Debbie at Graphics, who said she would speak with the Graphics salesperson dealing [464]*464with National and “let [Ciochetti] know if payment has been sent yet.”

On January 25, 1990, Ciochetti spoke by telephone with Harold Gold, Graphics’ president. Gold told her that Hunter Brashier, president of National, was to “call [Gold] by tomorrow to let him know what the story is and Gold will then advise [Ciochetti].”

On January 30, 1990, Gold’s secretary left a message for Ciochetti advising that “customer [National] to send payments to Graphics, Graphics will remit to us. Doesn’t know when payment is forthcoming.”

On January 31, 1990, Simone sent a letter to Gold which states in part:

Further to my letter of January 17, 1990, please be advised that the above lessee still remains in default.
We recently received a check from the lessee for $2,116.28 representing payment of the December 1 installment. Same has now been returned from our bank for insufficient funds. Therefore, the account is now due for December, January and February. As no other payments have been received, it appears unlikely that [National] will honor their obligations. Therefore, I am respectfully requesting that Graphics Leasing buy this transaction back as soon as possible.

By letter dated February 12, 1990, and mailed by regular mail at an unknown time, Harold Gold sent to SGFC’s San Francisco office three checks, numbered 1036, 1037, and 1039, each dated February 9, 1990, and each drawn on the account of I.T. Publications, Inc., on behalf of National. Gold, located in Waltham, Massachusetts, had received the checks from Graphics’ agent, Irv Ellis, in Phoenix, Arizona.

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Bluebook (online)
2 Mass. L. Rptr. 462, Counsel Stack Legal Research, https://law.counselstack.com/opinion/societe-generale-financial-corp-v-graphics-leasing-corp-masssuperct-1994.