Jaz, Inc. v. Foley
Hawaii Intermediate Court of Appeals
85 P.3d 1099 (2004)
Jaz, Inc. and related plaintiffs bought a photo-processing machine from Richard Foley (defendant), financed through a lease with First Hawaiian Leasing (First HI) (defendant). The lease said the lessee bore risk of loss from the date risk passed from the vendor, but didn't say when that transfer occurred. Jaz signed an undated acceptance certificate, but Foley never actually delivered the machine. After Jaz paid nearly $14,000 under the lease, it sued Foley and First HI; First HI counterclaimed against Jaz and cross-claimed against Foley. The trial court entered default against Foley and ruled for First HI against Jaz. Jaz appealed.
Whether risk of loss passes to a lessee under a finance lease involving a merchant-vendor when the lease does not specify the timing and the lessee has not received the goods.