that De Pasquale had owned the tables and chairs and gave or sold them to Office Outfitters so that they could be leased back to Creative.
Kamens admitted at his deposition that the tables and chairs were not delivered by Office Outfitters. He claimed that they were "installed" because, when his employees laid the carpeting, they had to remove the furniture and then return it. There is no evidence that Office Outfitters ever purchased the property or delivered and installed it.
The conflict of ownership goes to the heart of Count II. If De Pasquale owned the tables and chairs, then the lease may have been valid and the motion for summary judgment would have to be denied. If, in fact, Kimberton owned the tables and chairs, then the lease would be invalid and the motion would have to be granted. We find that there exists a genuine issue of material fact, to wit, whether or not Office Outfitters had actual or constructive ownership of the tables and chairs when the lease and assignment were made. Therefore, the motion for summary judgment as to Count II is denied.
III. MOTION FOR SUMMARY JUDGMENT AS TO COUNT IV
Count IV involves a second assignment to the plaintiff of another lease between defendant and Creative. Both the lease and assignment are dated March 17, 1976. The property leased included new tables, chairs, oil paintings, draperies, desks and rugs.
Office Outfitters made certain express warranties to plaintiff which included the assertions that the assigned account would be free of all liens and that Office Outfitters would have a first lien on all account property.
Plaintiff alleges that, pursuant to the April 15, 1974, lease agreement between Creative and Kimberton, lessor [Kimberton] reserved in § 13(g) a security interest under the Uniform Commercial Code "in all of Lessee's [Creative's] goods and property in and about the demised premises."
Plaintiff concludes that, in the absence of a waiver by Kimberton of the landlord's lien, Office Outfitters is in breach of its warranty. The evidence is clear that Kimberton has never waived its lien. Paul's two affidavits state that Kimberton never executed a waiver of its lien. Kamens, at his deposition, and in his affidavit did not directly contradict Paul's allegations. Kamens claims that plaintiff was responsible for all paperwork and that he executed each document given to him. Kamens argues that, if no waiver was obtained, then it was plaintiff's fault because plaintiff supplied all assignment forms.
This position must be rejected. The March 17, 1976, assignment states "the Account instruments evidence a valid reservation of title or first lien to the Account property effective as against all persons; the Account is and will be free from any liens, setoffs, counterclaims and other defenses; Assignor has properly and timely filed and recorded all Account instruments as required under all applicable filing and recording statutes."
There is no evidence that defendants took any steps to comply with these requirements. Office Outfitters had financed many transactions through plaintiff, according to Kamens. Defendants can hardly argue that they were unfamiliar with the meaning of the terms of the assignment.
Kimberton's reservation of a security interest is a "lien" on that property as that word is used in the assignment. The assignment does not require that the lien had to be perfected, nor does it require that the forbidden lien must have first priority over all other potential lienors. We find that Office Outfitters' failure to obtain a landlord's waiver was a breach of the warranty in the assignment and that plaintiff is entitled to judgment as a matter of law.
There are no genuine issues of material fact. Accordingly, the motion for summary judgment as to Count IV is granted.
An appropriate order will issue.
BY THE COURT:
HERBERT A. FOGEL, J. United States District Court
[EDITOR'S NOTE: The following court-provided text does not appear at this cite in 449 F. Supp.]
AND NOW, this 28th day of April, 1978, in accord with the attached Memorandum, it is
ORDERED that defendants' motion to strike Louis Paul's affidavit is Denied; plaintiff's motion for partial summary judgment as to Count II is denied; plaintiff's motion for partial summary judgment as to Count IV is granted.
IT IS FURTHER ORDERED that the parties shall submit a final pre-trial order no later than July 11, 1978; trial shall commence on September 11, 1978, at 10:00 A.M. in a courtroom to be listed.
BY THE COURT:
HERBERT A. FOGEL, J. UNITED STATES DISTRICT COURT
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