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Next Gen Capital, LLC v. Consumer Lending Associates, LLC

Court of Appeals of Arizona, First Division

December 19, 2013

NEXT GEN CAPITAL, LLC, Plaintiff/Appellee,
v.
CONSUMER LENDING ASSOCIATES, LLC, dba "Loan 'N Go" or "American Loan 'N Go", Defendant/Appellant.

Appeal from the Superior Court in Maricopa County No. CV2011-051916 The Honorable Michael R. McVey, Retired Judge.

COUNSEL

Polsinelli Shughart, P.C., Phoenix By Andrew S. Jacob, Andrew B. Turk Counsel for Defendant/Appellant.

Molever Conelly PLLC, Scottsdale By Loren Molever Counsel for Plaintiff/Appellee.

Presiding Judge Maurice Portley delivered the opinion of the Court, in which Judge John C. Gemmill and Judge Kent E. Cattani joined.

OPINION

PORTLEY, Judge.

¶1 Consumer Lending Associates, L.L.C. ("CLA") challenges the summary judgment granted in favor of Next Gen Capital, L.L.C. ("Next Gen") on a breach of lease claim. Finding no genuine dispute of material fact or legal error, we affirm the judgment.

BACKGROUND

¶2 CLA, a Nevada company, is engaged in the business of transferring money, whether by cashing checks or making short-term loans. CLA entered into a commercial lease in Arizona in June 2007 with the predecessor to Next Gen.[1] The five-year lease contained a provision that limited CLA's primary use of the premises to short-term loans and check cashing, and its ancillary use to money transfers.

¶3 CLA was operating under statutes authorizing "deferred presentment companies, " colloquially known as "payday loans" pursuant to Arizona Revised Statutes ("A.R.S.") sections 6-1251 to -1263.[2] The statutes authorizing payday loans, however, expired on July 1, 2010, by its sunset provision. 2000 Ariz. Sess. Laws, ch. 141, § 3 (2d Reg. Sess.); A.R.S. § 6-1263 ("The deferred presentment licensing program established by this chapter ends on July 1, 2010 pursuant to § 41-3102."). Upon expiration of the authorizing statute, CLA promptly vacated the premises. Next Gen demanded that CLA pay rent due through the end of the lease term, but CLA refused and claimed the lease had terminated "by operation of Arizona law."

¶4 Next Gen sued CLA for breach of contract and claimed damages. CLA answered and asserted defenses, including frustration of purpose and failure to mitigate damages. Next Gen subsequently moved for summary judgment and argued that CLA was liable for unpaid rent and related charges until the end of the lease term. After briefing and argument, the superior court granted the summary judgment motion.

¶5 CLA then filed a motion for new trial and argued that factual issues precluded summary judgment and Next Gen had the burden to establish mitigation of damages. The court denied the motion[3] and entered judgment awarding Next Gen $144, 899.06 in damages, plus interest, attorneys' fees and costs.

DISCUSSION


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