ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Wednesday, December 14, 2005

More on Coin-Op Laundry Contracts

200pxwasher600pixA previous post discussed Inwood Park Apts., Inc. v. Coinmach Indus. Co., which involved a coin-op laundry room company, Coinmach, and an apartment building in New York City.  In that case, a New York appellate court invalidated Coinmach's “right of first refusal” clause, which retained the indefinite right to remain in the building past the expiration of the lease until presented with the right to match the competitor’s offer.  (Image Source: Wikipedia).

Well, Coinmach is in the news again over a laundry contract, but this time it is on the offensive.  Coinmach has sued the Marion County Housing Authority in the Southern District of Illinois, apparently claiming "it had a contract to occupy the laundry rooms of 13 residential properties containing 281 units pursuant to the lease signed in 1994 for the operation of coin-operated clothes washing and drying equipment."  Apparently, the Housing Authority sent Coinmach a notice of cancellation of the lease, but Coinmach claims that it was entitled to two 7-year renewal periods.  The Madison Record reports:

The suit claims that the lease did not provide MCHA the ability to cancel the lease on a six-month notice and the only provision which allowed cancellation would be if Coinmach failed to correct service problems within 30 days of notice.

According to Coinmach, it notified MCHA that it did not possess the power to cancel the lease and stated the cancellation was void and without effect. However, in the first part of August, MCHA forcibly and without legal right disconnected its equipment and removed it from the laundry rooms, dispossessing them from its leasehold.

Coinmach is seeking the loss of net laundry revenues it would have received from consumer use if it was not removed, plus future revenues it would have received, an amount they claim to be in excess of $75,000.

It is not certain whether the right of first refusal clause which was invalidated in the New York case is being invoked by Coinmach in the Illinois case.

[Meredith R. Miller]

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