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Colonial Leasing Co. of New England v. Pugh Bros. Garage

735 F.2d 380 (1984)

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Colonial Leasing Co. of New England v. Pugh Bros. Garage

United States Court of Appeals for the Ninth Circuit
735 F.2d 380 (1984)

Facts

Colonial Leasing Company of New England, Inc. (Colonial) (plaintiff) was a Massachusetts company that bought equipment from manufacturers and leased it to other businesses. Pugh Brothers Garage, Eugene Pugh, and John Pugh (Pugh Bros.) (defendants), operators of an auto-repair business in Georgia, wanted to obtain a pipe-bending machine and other equipment from Major Muffler, Inc., a New York corporation. Pugh Bros. submitted a standard-form lease application at the request of Major Muffler, which, unbeknownst to Pugh Bros., submitted it to Colonial for approval. Pugh Bros. was unaware that Colonial was involved in the transaction and did not know that the back of the lease had a provision containing language, in small print, that required Pugh Bros. to consent to jurisdiction in Oregon in any case arising from the lease. Pugh Bros. did not negotiate or discuss this provision with Colonial. Colonial approved the application, bought the equipment from Major Muffler, leased it to Pugh Bros., and billed Pugh Bros. from Oregon. Colonial sued Pugh Bros. in Oregon, claiming that Pugh Bros. was in default of the lease. Pugh Bros. moved to dismiss the action for lack of jurisdiction. The district court granted the motion. Colonial appealed.

Rule of Law

Issue

Holding and Reasoning (Ferguson, J.)

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