Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Illegal Use of Equipment

By Steven N. Lippman
March 27, 2007

A Florida intermediate-level appellate court has held that a lessee is not relieved of its payment obligations when it discovers that it cannot lawfully utilize the leased equipment in the manner it intended. De Lage Landen Financial Services, Inc. v Cricket's Termite Control, Inc., 942 So. 2d 1001 (Fla. 5th DCA 2006). While the writer is aware of similar results reached in other unreported Florida actions, this decision, the first reported decision in Florida, not only will provide assistance in dealing with similar scenarios but also exhibits the strength of standard lease clauses.

Factual Background

Cricket's Termite Control, Inc. ('Cricket's') entered into a lease with U.S. Bancorp for a Pro Lead PMC Computer Marketing System, which 'is essentially a computer and a program that randomly selects and dials the telephone numbers of potential customers and plays a pre-recorded message when a phone is answered.' The lease was assigned to De Lage Landen Financial Services, Inc. ('DLL'). More than two years after entering into the lease, Cricket's received notice from the Florida Department of Agriculture and Consumer Services of complaints received about telephone sales calls Cricket's had been making utilizing the leased equipment in violation of Florida Statute '501.059(7)(a), which prohibits calls involving 'an automated system for the selection or dialing of telephone numbers or the playing of a recorded message when a connection is completed to a number called.' The notice ordered Cricket's to cease making the calls and apprised Cricket's of the civil penalties for making calls in violation of this law. Upon receipt of this notice, Cricket's ceased using the leased equipment and stopped making lease payments to DLL.

Read These Next
Major Differences In UK, U.S. Copyright Laws Image

This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.

The Article 8 Opt In Image

The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

Legal Possession: What Does It Mean? Image

Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.

The Anti-Assignment Override Provisions Image

UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?