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Siemens Financial Services, Inc. v. Stonebridge Equipment Leasing, LLC

Supreme Court of Rhode Island

June 6, 2014

Siemens Financial Services, Inc., et al.
v.
Stonebridge Equipment Leasing, LLC, et al

(PB 09-1677).

Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

OPINION

Page 818

Flaherty, Justice.

When a medical imaging center in Woonsocket proved to be unsuccessful shortly after it opened, the resulting fallout spawned this suit, based on the lessee's failure to make lease payments for the center's medical equipment. The defendants and counterclaimants, Stonebridge Equipment Leasing, LLC, New England Radiology & Lab Services, P.C. (NERLS), Muhammad M. Itani, and Bisher I. Hashem, appeal from a final judgment entered by a justice of the Superior Court following the granting of summary judgment in favor of the plaintiffs, Siemens Financial Services, Inc. and Siemens Medical Solutions

Page 819

USA, Inc.[1] The trial justice found that summary judgment was appropriate in favor of the plaintiffs on both their claims as well as the defendants' counterclaims. On appeal, the defendants contend that there are four material factual issues that should have precluded summary judgment. On April 8, 2014, this case came before the Supreme Court pursuant to an order directing the parties to show cause why the issues in this appeal should not summarily be decided. We have considered the record and the written and oral submissions of the parties, conclude that cause has not been shown, and proceed to decide the appeal without further briefing or argument. For the reasons set forth in this opinion, we affirm the judgment of the Superior Court.

I

Facts and Travel

In 2005, a group of physicians and businessmen, including Itani and Hashem, began working on an idea for a medical imaging center in Woonsocket. The group contacted Siemens about obtaining medical equipment and financing for the venture. According to defendants, in 2006, plaintiffs provided a business-plan template to Itani and his partners. Siemens also provided defendants with a report entitled " A Demographic and Economic Profile of the Area Surrounding Woonsocket, RI" (the Demographic Profile). That report contained census data and forecasts for the potential demand for health-care services in Woonsocket and the surrounding area. Significantly, the Demographic Profile included a disclaimer on its inside cover that said that the information contained in the report was " based upon best available data but should not be taken as a prediction of the future," and it further " encourage[d] the customer to seek independent verification[.]"

In 2007, plaintiffs agreed to lease medical diagnostic imaging equipment to defendants, including magnetic-resonance-imaging (MRI) machines, computerized-tomography (CT) machines, and radiography machines.[2] The defendants created two different entities to operate the imaging center: one entity, Stonebridge, was to lease the equipment from Siemens and then sublease both the equipment and office space to another entity, NERLS, which in turn would operate the center. Stonebridge entered into a " Master Equipment Lease Agreement" and six leasing schedules with Siemens on March 29, 2007, and subsequently entered into a sublease agreement with NERLS. As part of the transaction, Itani and Hashem executed personal guarantees in which they promised to satisfy any obligations that Stonebridge might fail to meet under the leases.

The imaging center opened in June 2007, but apparently it was spectacularly unsuccessful. As a result, NERLS made

Page 820

only one payment to Stonebridge under the terms of the sublease agreement. In November 2008, Stonebridge stopped making payments to Siemens. On December 16, 2008, plaintiffs notified defendants that they were in default of their obligations, and they demanded the return of all the leased equipment and payment of the stipulated loss value of the equipment, as defined ...


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