CN Funding, LLC v. Ensig Group, Ltd. , 860 N.Y.S.2d 34 ( 2008 )

Order, Supreme Court, New York County (Debra A. James, J.), entered December 14, 2007, which, in an action to recover sums due under an equipment lease, denied plaintiffs motion for summary judgment, and, upon a search of the record, awarded defendants summary judgment dismissing the complaint, unanimously modified, on the law, to vacate the award of summary judgment and to reinstate the complaint, and otherwise affirmed, without costs.

While the subject equipment lease did not qualify as a finance lease, the parties expressly agreed to treat it as such (see UCC 2-A-103 [1] [g], Comment). Further, because the lease required defendant Ensig Group, Ltd., as lessee, to pay the amounts due to plaintiff lessor, even if the vendor failed to deliver the equipment, the vendor’s failure to deliver the equipment did not render the lease void for lack of consideration. Indeed, plaintiffs only obligation under the lease was to advance funds to the vendor on Ensig’s behalf (see Wells Fargo Bank Minn., N.A. v CD Video, Inc., 22 AD3d 351 [2005]).

However, the record presents an issue of fact whether plaintiff was aware, before signing the equipment lease with Ensig, that the vendor had filed for bankruptcy, in which case Ensig may have a defense against plaintiffs claims. Concur—Lippman, EJ., Williams, Moskowitz and Acosta, JJ. [See 18 Misc 3d 214.]