SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1978-18T1

HIGHLAND CAPITAL CORP.,

Plaintiff-Respondent,

v.

SASSAN KAFAYI, DDS, a 

Professional Corporation, and

SASSAN KAFAYI,

Defendants-Appellants.

_____________________________

Argued February 4, 2020 – Decided February 26, 2020

Before Judges Yannotti and Hoffman.

On appeal from the Superior Court of New Jersey, Law 

Division, Passaic County, Docket No. L-4094-17.

Philip Louis Guarino argued the cause for appellants 

(Guarino & Co. Law Firm, LLC, attorneys; Philip Louis

Guarino, on the briefs).

Robert L. Hornby argued the cause for respondent 

(Chiesa Shahinian & Giantomasi, PC, attorneys; Robert 

L. Hornby, Elisa Marie Pagano, and Brigitte M. Gladis, 

on the brief).

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the 

internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
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PER CURIAM

Defendants Sassan Kafayi and his dental practice, Sassan Kafayi D.D.S., 

appeal from the January 16, 2019 amended Law Division order granting 

summary judgment in favor of plaintiff Highland Capital Corp. (Highland), a 

commercial lender which financed dental equipment purchased by defendants. 

The order awarded Highland $164,964.04, plus attorney's fees and costs, for 

defendants' breach of the parties' financing agreement. We affirm.

I

On October 20, 2016, defendant purchased two pieces of dental equipment 

from Henry Schein Dental: I-CAT and TRIOS (the equipment). Defendant 

sought to finance the purchase of the equipment through Highland. On October 

13, 2016, Highland and defendants executed an "Equipment Finance 

Agreement" (the finance agreement), whereby defendants financed the purchase 

of, and granted Highland a security interest in, the equipment. The finance 

agreement listed Dr. Kafayi's professional corporation as the customer and 

Henry Schein Dental as the "equipment supplier." It required defendants to pay 

eighty-four monthly installments of $2,271.92. 

The relevant paragraphs contained in the finance agreement provide: 

AGREEMENT: We agree to finance for you and you 

agree to finance from us the equipment described herein. 
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You promise to pay us the payments as shown above. The 

parties intend this Agreement to be a Finance Lease under 

Article 2A of the Uniform Commercial Code [(UCC)] 

THIS AGREEMENT IS NOT CANCELABLE.

. . . . 

Customer's obligation shall be absolute and unconditional

without any abatement, set-off, defense or claim for any 

reason.[

1

]

. . . .

NO WARRANTIES: We are financing the Equipment for 

you "AS IS." WE MAKE NO WARRANTIES, EXPRESS 

OR IMPLIED, INCLUDING WARRANTIES OF 

MERCHANTABILITY, OR FITNESS FOR A 

PARTICULAR PURPOSE. We transfer to you for the 

term of this Agreement any warranties made by 

manufacturer or supplier to us. NEITHER SUPPLIER 

NOR ANY AGENT OF SUPPLIER IS AN AGENT OF 

LENDER OR IS AUTHORIZED TO WAIVE OR 

MODIFY ANY TERM OR CONDITION OF THIS 

AGREEMENT. All of your obligations to make software 

license payments shall be absolute and unconditional 

regardless of any breach by the licensor.

. . . .

OWNERSHIP: We have title to the Equipment until such 

time that all obligations are satisfied hereunder. If this 

Agreement is deemed to be a security agreement, you 

grant us a security interest in the Equipment and all 

proceeds therefrom. You hereby authorize us to file UCC 

Financing Statements, to sign such statements, grant us the 

1

 The parties and the court refer to this clause as a "hell-or-high-water" clause.
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right to execute your name thereto and agree to pay for 

such filings.

 

The finance agreement also contained a continuing guaranty, whereby Dr. Kafayi 

personally guaranteed the obligations of his professional corporation.

On January 13, 2017, upon delivery and installation of the equipment, 

Highland and defendants executed a second form entitled, "Acknowledgement & 

Acceptance of Delivery By Borrower." Defendants acknowledged they agreed "that 

any rights we may have against the supplier or manufacturer of the equipment will 

not be asserted as a counterclaim or defense against Lender." Defendants further 

authorized Highland "to make payment to the supplier(s) of the equipment . . . ."

Defendants immediately began making untimely payments, eventually failing 

to make payments altogether. As a result, on September 12, 2017, Highland referred 

the account for collection to its outside counsel, who sent defendants a demand letter 

on September 19, 2017. 

In response, Dr. Kafayi contacted Highland to discuss the collection of past 

due amounts and arrange a payment plan going forward. Dr. Kafayi asserted that he 

and Ross Juliano, an assistant vice president with Highland, came to an agreement 

whereby Highland would forbear on collecting past due amounts and, going forward, 

accept payments on the first and fifteenth of each month. Highland certified no such 

agreement was reached. The record reflects, in a September 29, 2017 email 
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discussing defendant's arrears, that Juliano told Dr. Kafayi to begin thinking "about 

how we will catch this up and what payment plan [he] would agree to . . . ."

On October 3, 2017, Highland attempted to repossess the equipment, without

success. Dr. Kafayi refused to allow the repossession of the equipment, which 

remains at his dental practice.

On December 18, 2017, Align Technology, Inc., the makers of "Invisalign,"2

notified defendants that scans made using TRIOS – one of the two pieces of 

equipment defendant financed through Highland – would no longer be accepted for 

"Invisalign treatment" due to an ongoing patent infringement lawsuit.

That same day, Highland filed a three-count complaint against defendants in 

the Law Division, alleging breach of the finance agreement, conversion of the 

equipment, and unjust enrichment. On March 23, 2018, defendants answered the 

complaint, asserting fourteen separate defenses and an eleven-count counterclaim. 

Among other claims, defendants asserted that Highland breached its implied 

warranties, alleging that Highland was the actual seller of the equipment;

fraudulently induced the finance agreement; and defamed and damaged defendants'

business reputation. By the close of discovery, defendants failed to serve any 

2

Invisalign, an orthodontic product, is a clear aligner system used for 

straightening teeth through a series of custom-made aligners.
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discovery requests upon Highland, nor did they respond to discovery requests served 

by Highland. On October 12, 2018, Highland filed the motion for summary 

judgment under review.

On November 30, 2018, the motion court heard oral argument and then 

delivered an oral opinion granting Highland's motion. The court found the 

transaction at issue constituted a three-party secured commercial transaction 

governed by Article 9 of the UCC; that Highland is a lender and "in no way, shape 

or manner, a seller of the equipment [nor] held [itself] out to be." As a result, the 

court held that defendants' claims concerning problems with the equipment are 

against the seller of the equipment, Henry Shine Dental, not against Highland. 

Although the motion court noted Article 9 of the UCC "does not impute 

certain protections to a third-party lender by statute like Article 2A does to a lessor 

in a true lease transaction," it found Highland was afforded such protections under 

the "hell-or-high-water" clause contained in the finance agreement. The court 

further noted, the "unconditional promise to make payments and not assert a defense 

to payments is valid under New Jersey Law. The courts have acknowledged that the 

enforcement of a hell-or-high-water provision is essential to the equipment leasing 

industry." Accordingly, the court found defendants "absolutely barred from raising 
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the defenses and counter-claims" asserted against Highland because the clause is 

unambiguously set forth in the finance agreement.

Regarding defendants' fraudulent inducement claim, the motion court found 

the finance agreement contained a clear, express provision, "in all capital letters, 

stating that [Highland] makes no warranties about the equipment." Further, absent 

the warranty provision, the court noted defendants admitted that neither party had 

knowledge of any potential infringement issues at the time they executed the finance 

agreement.

As to the parties' purported forbearance agreement, the motion court found 

the agreement as alleged by defendants unenforceable under New Jersey's Statute of 

Frauds, N.J.S.A. 25:1-5f. The court also found defendants' defamation and 

commercial disparagement claims meritless, as Highland properly exercised both its 

contractual and statutory rights. N.J.S.A. 12A:9-609.

After stating its findings and conclusions of law, the motion court granted 

summary judgment in favor of Highland and against defendants, and dismissed their 

answer, affirmative defenses and counterclaims with prejudice. On November 30, 

2018, the court entered an order for summary judgment against defendants, jointly 

and severally, for $164,964.04, plus attorney's fees in the amount of $11,075.04, for 

a total of $176,389.29. It also awarded Highland immediate and permanent title and 
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possession of the equipment. On January 16, 2019, the motion court entered an 

amended order, awarding Highland additional attorney's fees and costs of 

$13,698.80, which increased the total amount awarded to $189,738.09.

On appeal, defendants argue the motion court erred by failing to recognize the 

validity of the alleged oral debt forbearance agreement, which Highland purportedly 

breached. Defendants also contend the court erred by finding Highland was solely 

a financier or lender and that defendants' remedies lie elsewhere.

Defendants further argue the provision of the finance agreement that 

essentially requires them to pay the amounts due come "hell-or-high-water" does not 

bar their defenses and claims, claiming Highland fraudulently induced defendants'

execution of the finance agreement. Accordingly, they contend Highland is not 

entitled to possession of the equipment or a money judgment.

 II

We review a decision granting summary judgment de novo, using the same 

standard the motion court applied. Townsend v. Pierre, 221 N.J. 36, 59 (2015) 

(citing Davis v. Brickman Landscaping, Ltd., 219 N.J. 395, 405 (2014)). We will 

affirm a court's grant of summary judgment if the record establishes there is "no 

genuine issue as to any material fact challenged and that the moving party is entitled 

to a judgment or order as a matter of law." R. 4:46-2(c). 
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"An issue of material fact is 'genuine only if, considering the burden of 

persuasion at trial, the evidence submitted by the parties on the motion, together with 

all legitimate inferences therefrom favoring the non-moving party, would require 

submission of the issue to the trier of fact.'" Grande v. Saint Clare's Health Sys., 230 

N.J. 1, 23-24 (2017) (quoting Bhagat v. Bhagat, 217 N.J. 22, 38 (2014)). "If there 

exists a single, unavoidable resolution of the alleged disputed issue of fact, that issue 

should be considered insufficient to constitute a 'genuine' issue of material fact for 

purposes of Rule 4:46-2." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 

(1995).

Defendants' contentions on appeal are entirely without merit. The finance 

agreement is just that – a finance agreement. It clearly and unambiguously states 

that Highland made no warranties, express or implied, regarding the merchantability 

of the equipment or its fitness for a particular purpose.

The finance agreement defendants executed falls under the purview of Article 

9 of the UCC. Article 2 of the UCC applies to "transactions in goods" and does not 

apply "to any transaction which although in the form of an unconditional contract to 

sell or present sale is intended to operate only as a security transaction . . . ." N.J.S.A. 

12A:2-102. A transaction, "regardless of its form, that creates a security interest in 

personal property or fixtures by contract" is a secured transaction and is instead 
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subject to Article 9 of the UCC. N.J.S.A. 12A:9-109. A security interest is an 

interest in property which "secures payment or performance of an obligation." 

N.J.S.A. 12A:1-201(35). Whether title of the secured collateral is in the secured 

party or the debtor is immaterial. N.J.S.A. 12A:9-202.

Consequently, the alleged breach of warranties is not a defense to Highland's 

claims under the finance agreement. As the motion court correctly found, 

defendants' obligation to make the payments required under the clear, express terms

of the finance agreement is unconditional. Furthermore, the record is devoid of any 

evidence supporting defendants' claim that Highland fraudulently induced them into 

entering into the finance agreement.

In addition, defendants' claim that Highland entered into, and was bound by, 

an oral forbearance agreement fails because the alleged oral agreement cannot vary 

the clear and unambiguous terms of the written financing agreement. N.J.S.A. 25:1-

5f. Further, the record contains no evidence, even if the oral agreement were not 

subject to a writing requirement, that defendants suffered an injustice requiring an 

equitable solution. See Mazza v. Scoleri, 304 N.J. Super. 555, 560 (App. Div. 1997). 

Any arguments not specifically addressed lack sufficient merit to warrant 

discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.