On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-419-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted October 5, 2010
Before Judges Payne and Koblitz.
Defendant, MicroBilt Corporation, appeals from a verdict, following a bench trial, in the amount of $128,435.91 entered in favor of plaintiff, CIT Communications Finance Corporation, in a collection action seeking past-due lease payments for telecommunications equipment, late charges and counsel fees.
The trial record discloses that the parties entered into a five-year agreement, dated October 30, 2001, for the lease of Definity Prologix Solutions telecommunications equipment that CIT, a finance company, had purchased for the sum of $309,372.20. The lease provided for monthly payments in the amount of $5,298.44, with a $10,596.88 total advance lease payment.*fn1 Additionally, the lease provided for payment of a five-percent late charge if any payment was delayed more than ten days after its due date.
Paragraph 8 of the lease specified as a default event any failure "to pay any Lease Payment or any other payment within 10 days of its due date." Paragraph 9 provided that in the event of a default, "[y]ou agree to pay all our costs in enforcing our rights against you, including reasonable attorneys' fees."
Paragraph 12 of the lease, which MicroBilt's trial counsel conceded was the focus of the litigation,*fn2 stated:
12. PURCHASE OPTION, AUTOMOTIC RENEWAL.
If no Default exists under this Lease, you will have the option at the end of the original or any renewal term to purchase all (but not less than all) of the Equipment at the Purchase Option price shown on Page 1 of this Lease plus any additional taxes. . . .
[Y]ou must give us at least 30 days written notice before the end of the original term that you will purchase the Equipment or that you will deliver the Equipment to us. If you do not give such written notice or if you do not purchase or deliver the Equipment in accordance with the terms and conditions of this Lease, this Lease will automatically renew for successive three month periods and thereafter renew for successive one month terms until you deliver the Equipment to us. During such renewal(s) the Lease Payments will remain the same. . . . If the Fair Market Value Purchase Option has been selected, we will use our reasonable judgment to determine the Equipment's fair market value. If you do not agree with our determination of the Equipment's fair market value, the fair market value (on a rental basis) will be determined at your expense by an independent appraiser selected by us.
MicroBilt selected the fair market value purchase option.
Paragraph 3 of the lease stated in relevant part: "Unless this Lease is renewed or you purchase the Equipment in accordance with this Lease, at the end of this Lease you will immediately deliver the Equipment to us . . . ...