Opinion ID: 1864901
Heading Depth: 1
Heading Rank: 1

Heading: Ten Day Termination Letter

Text: Each of the five contracts sued upon by National Leasing contained the following, or almost identical, language: DEFAULT. (a) The following acts shall each constitute a default: (1) Lessee's failure to pay any installment of rental when due   . Upon such default, Lessor may, at Lessor's option, by written notice to Lessee, terminate this lease. (Emphasis supplied.) [5] Default by Family Pools, Inc., the lessee, on payment of the monthly sums due under the contract was stipulated by the parties. In the closing months of 1972, considerable correspondence was exchanged, and a number of discussions were held between the parties regarding Family Pools' default. Then, on January 5, 1973, a letter bearing the notation, TEN DAY TERMINATION NOTICE, was sent by National Leasing's accounts manager to its attorney. [6] Copies of this letter were mailed to J. Stanley Middleton, Jr., Sherard Fabacher and Peter Fabacher. However, a copy of the letter was never mailed to the lessee, Family Pools, Inc. Moreover, the evidence is uncontroverted, and the fact conceded by all parties, that the letter sent to Mr. Middleton was never received by him, but was returned to National Leasing undelivered. The Fabachers contend that their receipt of this letter, as solidary sureties, coupled with the lessee's failure to make good the delinquent payments by January 19, 1973, as stated in the letter, effectively terminated each of the five contracts, on that date, and rendered applicable certain contract provisions requiring National Leasing to obtain the leased equipment as soon as practicable, sell it for the highest price available, and credit the lessee's account, in accordance with the final accounting provisions of the contracts. Having carefully examined the testimony and exhibits offered at the trial of this matter, and particularly in view of the clear language in each of the contracts, we are unable to accept appellants' theory. We do not find that the Fabachers' receipt of a copy of the January 5, 1973 letter from National Leasing to its attorney satisfied the contractual requisite that the lessor, electing to terminate the contracts upon lessee's default, so inform the lessee in writing. In the first place, the text of the letter evidences no intention on the part of National Leasing to exercise its optional right to terminate the contracts. The letter simply authorizes National Leasing's attorney to take necessary steps to obtain payment, and copies were mailed to Mr. Middleton and the Fabachers undoubtedly in the hope that they would take some action to bring the accounts current. Admittedly the letter bears the caption TEN DAY TERMINATION NOTICE. Nevertheless, we are not disposed, in considering the legal effect to be given this letter, to disregard its content, and place complete reliance upon its caption, which we regard as ambiguous. [7] Appellants emphasize certain testimony given at trial by National Leasing's accounts manager. They maintain that his testimony shows National Leasing actually intended the January 5, 1973 letter to serve as notice of its election to terminate the contracts. We regard as the best evidence of whether National Leasing intended to terminate the contracts, the text of the letter itself, which does not, in our view, demonstrate an election to terminate them. While the testimony of National Leasing's accounts manager some ten months after the letter was written certainly demonstrates some personal confusion in his mind regarding the legal effect of the letter, National Leasing's actions subsequent to the letter clearly reflect its intention to accelerate and collect payments for the full terms of each contract rather than to terminate them. Finally, as we previously noted, the letter was never received by the lessee, Family Pools, Inc., or its president, J. Stanley Middleton. [8] Cf. Southern Fleet Leasing Corporation v. McAndrew, 219 So.2d 215 (La.App. 1st Cir. 1969). Nor does the evidence establish that Mr. Middleton or the lessee was informed in any manner that National Leasing regarded the contracts terminated. Lessee remained in possession of the leased equipment, and continued to make sporadic payments on the accounts. In view of the foregoing, we conclude that National Leasing's letter of January 5, 1973, did not effect a termination of the five contracts. The Fabachers were not entitled to conclude, on the basis of having received a copy of the letter, that the contracts were terminated by National Leasing as of January 19, 1973.