Info. Leasing Corp. v. GDR Invs., Inc. - 2003-Ohio-1366, 152 Ohio App. 3d 260, 787 N.E.2d 652

Rule:

A finance lease is considerably different from an ordinary lease in that it adds a third party, the equipment supplier or manufacturer. In effect, the finance lessee is relying upon the manufacturer to provide the promised goods and stand by its promises and warranties; the lessee does not look to the lessor for these. The lessor is only a finance lessor and deals largely in paper, rather than goods. One notorious feature of a finance lease is its typically non-cancelable nature, which is specifically authorized by statute.

Facts:

The plaintiff-appellant, Information Leasing Corporation ("ILC"), appealed from the order of the trial court rendering judgment in favor of the defendants-appellees, GDR Investments, d/b/a Pinnacle Exxon, and Avtar S. Arora, in an action to recover $15,877.37 on a five-year commercial lease of an Automated Teller Machine ("ATM"). In its sole assignment of error, ILC argued that the trial court's judgment constituted "an abuse of discretion" because it failed to address the effect of R.C. 1301.01 on the issue of GDR's liability under the lease.

Issue:

Did the lease in question satisfy the definition of a finance lease under the Uniform Commercial Code (UCC)?

Answer:

Yes.

Conclusion:

The appeals court agreed that the lease in question satisfied the definition of a finance lease under the UCC. First, it rejected the trial court's analysis, which concluded the lessor did not satisfy its contractual obligations. Its only contractual obligation was to provide the ATM, which it did. The appeals court also rejected the trial court's doubts about whether the business owner had any obligations under the lease, as well as the court's assertion that he appropriately cancelled any obligations. The lease was not a consumer lease expressly excepted from Ohio Rev. Code Ann. § 1310.46(A). Moreover, the instant case required a much more elaborate presentation of evidence by the parties, and much more detailed findings than those actually made. The correct legal analysis was not applied, and the evidence did not mandate a judgment in the lessee's favor. Because of this, the matter was remanded for a new trial.