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Some Active Cases

A class action against Northern Leasing Systems, Inc., of New York City, 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 signatures, 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 Appellate Division of the Supreme Court of New York 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.”  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. The Court then certified the class.  The class claims were that (a) the lease was reasonably understood to be comprised only of the first page, and the remaining three pages were unenforceable; and (b) Northern Leasing breached the lease by collecting undisclosed amounts towards “LDW charges.”  Pludeman v. Northern Leasing. The Appellate Division modified the class certification order, at Chittur’s request, to expand the class, and rejected Northern Leasing’s appeal. Pludeman v. Northern Leasing. Thereafter, the trial court granted summary judgment to Plaintiffs and the Class with respect to compensatory damages. Pludeman v. Northern Leasing. That decision was reversed on appeal. Pludeman v. Northern Leasing. The trial court then reversed itself, and decertified the class. Pludeman v. Northern Leasing Systems, Inc. Plaintiffs appealed that decision, which was reversed, once again.  The trial court then commenced an evidentiary hearing limited to three class issues.  That hearing is incomplete.  Meanwhile, Defendants sought decertification on the same grounds as had been previously rejected by the Appellate Division.  Plaintiffs appealed that decision, and the appeals court reversed the trial court and reinstated certification.  The trial is expected to resume in the near future.

A related action challenges Northern Leasing’s practice of unlawfully accessing and/or making adverse entries in credit reports of small businesspersons in order to coerce payments of unwarranted sums to Northern Leasing, even where small businesspersons did not have any account with Northern Leasing. Further, Plaintiffs assert that Northern Leasing’s repeated, misleading, and deceptive dunning telephone calls violated the Fair Credit Reporting Act and New York law. The Court denied Defendants’ motion to dismiss the case, and upheld the claims. Aldrich v. Northern Leasing Systems, Inc.  Plaintiffs’ motion for class certification was denied by the trial court. Plaintiffs have appealed that decision.

Two racketeering actions against Northern Leasing Systems, Inc., alleging a racketeering scheme to intimidate out-of-state individuals into paying unwarranted sums of money by commencing fraudulent lawsuits in New York City Civil Court. Claiming to be financiers under alleged equipment finance leases, Northern Leasing brought actions seeking to recover relatively small sums, typically under $3,000. However, Northern Leasing was aware well before bringing such actions that the out-of-state individuals’ signatures on such leases had been forged. Nevertheless, Northern Leasing commenced these small claims proceedings and even obtained fraudulent default judgments in order to harass, intimidate, and thereby extort money from out-of-state individuals through threats of expensive long distance litigation, of damage to credit rating, and/or entry of default judgments. The Court has denied Defendants’ motion to dismiss, and upheld all the claims. Angermeir v. Northern Leasing Systems, Inc. However, the Court subsequently dismissed the claims of six of the Plaintiffs as a discovery sanction, which order is under appeal.  In the second such action, the Court upheld the claims, and discovery is to commence.  Aghaeepour v. Northern Leasing Systems, Inc.

Defending the ISKCON, Inc., temple in Freeport, Long Island, and prosecuting counterclaims on its behalf, in an action by the ISKCON Governing Body Commission Society of West Bengal, India, to takeover that temple. After a week-long evidentiary hearing, the trial court denied the Society’s motion for a preliminary injunction for immediate takeover, which was largely upheld on appeal, Kelley v. Garuda. The ISKCON, Inc., temple in Freeport has asserted 7 counterclaims against the West Bengal Society for Passing Off, Fraudulent Interference With Goodwill; Conversion; Aiding and Abetting Breach of Fiduciary Obligations; Aiding and Abetting Conversion; Concerted Action; and Civil Conspiracy. The counterclaims center on allegations that the West Bengal Society converted millions of dollars by misrepresenting itself as the ecclesiastical authority of the Krishna Consciousness movement, contrary to the founder’s instructions and will. These millions rightfully belong to ISKCON, Inc., of Freeport, Long Island, which is the sole beneficiary under the trust founded by ISKCON founder, His Holiness Srila Prabhupada, which trust was called the Bhaktivedanta Book Trust. In May 2010, the Referee supervising discovery censured the Plaintiff GBC for dilatory tactics, Kelley v. Doaman.  One of the defendants, Bonomo, passed away, and that action is stayed.  Plaintiffs’ first action has now been restored to the trial calendar, and the Court has denied Plaintiffs’ motion for summary judgment.  Kelley v. Garuda