10523. (a) If a lessee wrongfully rejects or revokes acceptance of
goods or fails to make a payment when due or repudiates with respect
to a part or the whole, then, with respect to any goods involved, and
with respect to all of the goods if under an installment lease
contract the value of the whole lease contract is substantially
impaired (Section 10510), the lessee is in default under the lease
contract and the lessor may:
(1) Cancel the lease contract (subdivision (a) of Section 10505);
(2) Proceed respecting goods not identified to the lease contract
(Section 10524);
(3) Withhold delivery of the goods and take possession of goods
previously delivered (Section 10525);
(4) Stop delivery of the goods by any bailee (Section 10526);
(5) Dispose of the goods and recover damages (Section 10527), or
retain the goods and recover damages (Section 10528), or in a proper
case recover rent (Section 10529);
(6) Exercise any other rights or pursue any other remedies
provided in the lease contract.
(b) If a lessor does not fully exercise a right or obtain a remedy
to which the lessor is entitled under subdivision (a), the lessor
may recover the loss resulting in the ordinary course of events from
the lessee's default as determined in any reasonable manner, together
with incidental damages, less expenses saved in consequence of the
lessee's default.
(c) If a lessee is otherwise in default under a lease contract,
the lessor may exercise the rights and pursue the remedies provided
in the lease contract, which may include a right to cancel the lease.
In addition, unless otherwise provided in the lease contract:
(1) If the default substantially impairs the value of the lease
contract to the lessor, the lessor may exercise the rights and pursue
the remedies provided in subdivisions (a) and (b); or
(2) If the default does not substantially impair the value of the
lease contract to the lessor, the lessor may recover as provided in
subdivision (b).
10524. (a) After a default by the lessee under the lease contract
of the type described in subdivision (a) of, or paragraph (1) of
subdivision (c) of, Section 10523 or, if agreed, after other default
by the lessee, the lessor may:
(1) Identify to the lease contract conforming goods not already
identified if at the time the lessor learned of the default they were
in the lessor's or the supplier's possession or control; and
(2) Dispose of goods (subdivision (a) of Section 10527) that
demonstrably have been intended for the particular lease contract
even though those goods are unfinished.
(b) If the goods are unfinished, in the exercise of reasonable
commercial judgment for the purposes of avoiding loss and of
effective realization, an aggrieved lessor or the supplier may either
complete manufacture and wholly identify the goods to the lease
contract or cease manufacture and lease, sell, or otherwise dispose
of the goods for scrap or salvage value or proceed in any other
reasonable manner.
10525. (a) If a lessor discovers the lessee to be insolvent, the
lessor may refuse to deliver the goods.
(b) After a default by the lessee under the lease contract of the
type described in subdivision (a) of, or paragraph (1) of subdivision
(c) of, Section 10523 or, if agreed, after other default by the
lessee, the lessor has the right to take possession of the goods. If
the lease contract so provides, the lessor may require the lessee to
assemble the goods and make them available to the lessor at a place
to be designated by the lessor which is reasonably convenient to both
parties. Without removal, the lessor may render unusable any goods
employed in trade or business, and may dispose of goods on the lessee'
s premises (Section 10527).
(c) The lessor may proceed under subdivision (b) without judicial
process if it can be done without breach of the peace or the lessor
may proceed by action.
10526. (a) A lessor may stop delivery of goods in the possession of
a carrier or other bailee if the lessor discovers the lessee to be
insolvent and may stop delivery of carload, truckload, planeload, or
larger shipments of express or freight if the lessee repudiates or
fails to make a payment due before delivery, whether for rent,
security, or otherwise under the lease contract, or for any other
reason the lessor has a right to withhold or take possession of the
goods.
(b) In pursuing its remedies under subdivision (a), the lessor may
stop delivery until:
(1) Receipt of the goods by the lessee;
(2) Acknowledgment to the lessee by any bailee of the goods,
except a carrier, that the bailee holds the goods for the lessee; or
(3) Such an acknowledgment to the lessee by a carrier via
reshipment or as a warehouse.
(c) (1) To stop delivery, a lessor shall so notify as to enable
the bailee by reasonable diligence to prevent delivery of the goods.
(2) After notification, the bailee shall hold and deliver the
goods according to the directions of the lessor, but the lessor is
liable to the bailee for any ensuing charges or damages.
(3) A carrier who has issued a nonnegotiable bill of lading is not
obliged to obey a notification to stop received from a person other
than the consignor.
10527. (a) After a default by a lessee under the lease contract of
the type described in subdivision (a) of, or paragraph (1) of
subdivision (c) of, Section 10523 or after the lessor refuses to
deliver or takes possession of goods (Section 10525 or 10526), or, if
agreed, after other default by a lessee, the lessor may dispose of
the goods concerned or the undelivered balance thereof by lease,
sale, or otherwise.
(b) Except as otherwise provided with respect to damages
liquidated in the lease agreement (Section 10504) or otherwise
determined pursuant to agreement of the parties (Sections 1302 and
10503), if the disposition is by lease agreement substantially
similar to the original lease agreement and the new lease agreement
is made in good faith and in a commercially reasonable manner, the
lessor may recover from the lessee as damages (1) accrued and unpaid
rent as of the date of the commencement of the term of the new lease
agreement, (2) the present value, as of the same date, of the total
rent for the then remaining lease term of the original lease
agreement minus the present value, as of the same date, of the rent
under the new lease agreement applicable to that period of the new
lease term which is comparable to the then remaining term of the
original lease agreement, and (3) any incidental damages allowed
under Section 10530, less expenses saved in consequence of the lessee'
s default.
(c) If the lessor's disposition is by lease agreement that for any
reason does not qualify for treatment under subdivision (b), or is
by sale or otherwise, the lessor may recover from the lessee as if
the lessor had elected not to dispose of the goods and Section 10528
governs.
(d) A subsequent buyer or lessee who buys or leases from the
lessor in good faith for value as a result of a disposition under
this section takes the goods free of the original lease contract and
any rights of the original lessee even though the lessor fails to
comply with one or more of the requirements of this division.
(e) The lessor is not accountable to the lessee for any profit
made on any disposition. A lessee who has rightfully rejected or
justifiably revoked acceptance shall account to the lessor for any
excess over the amount of the lessee's security interest (subdivision
(e) of Section 10508).
10528. (a) Except as otherwise provided with respect to damages
liquidated in the lease agreement (Section 10504) or otherwise
determined pursuant to agreement of the parties (Sections 1302 and
10503), if a lessor elects to retain the goods or a lessor elects to
dispose of the goods and the disposition is by lease agreement that
for any reason does not qualify for treatment under subdivision (b)
of Section 10527, or is by sale or otherwise, the lessor may recover
from the lessee as damages for a default of the type described in
subdivision (a) of, or paragraph (1) of subdivision (c) of, Section
10523, or, if agreed, for other default of the lessee, (1) accrued
and unpaid rent as of the date of default if the lessee has never
taken possession of the goods, or, if the lessee has taken possession
of the goods, as of the date the lessor repossesses the goods or an
earlier date on which the lessee makes a tender of the goods to the
lessor, (2) the present value as of the date determined under
paragraph (1) of the total rent for the then remaining lease term of
the original lease agreement minus the present value as of the same
date of the market rent at the place where the goods are located
computed for the same lease term, and (3) any incidental damages
allowed under Section 10530, less expenses saved in consequence of
the lessee's default.
(b) If the measure of damages provided in subdivision (a) is
inadequate to put a lessor in as good a position as performance would
have, the measure of damages is the present value of the profit,
including reasonable overhead, the lessor would have made from full
performance by the lessee, together with any incidental damages
allowed under Section 10530, due allowance for costs reasonably
incurred and due credit for payments or proceeds of disposition.
10529. (a) After default by the lessee under the lease contract of
the type described in subdivision (a) of, or paragraph (1) of
subdivision (c) of, Section 10523 or, if agreed, after other default
by the lessee, if the lessor complies with subdivision (b), the
lessor may recover from the lessee as damages:
(1) For goods accepted by the lessee and not repossessed by or
tendered to the lessor, and for conforming goods lost or damaged
after risk of loss passes to the lessee (Section 10219), (A) accrued
and unpaid rent as of the date of entry of judgment in favor of the
lessor, (B) the present value as of the same date of the rent for the
then remaining lease term of the lease agreement, and (C) any
incidental damages allowed under Section 10530, less expenses saved
in consequence of the lessee's default; and
(2) For goods identified to the lease contract where the lessor
has never delivered the goods or has taken possession of them or the
lessee has tendered them to the lessor, if the lessor is unable after
reasonable effort to dispose of them at a reasonable price or the
circumstances reasonably indicate that effort will be unavailing, (A)
accrued and unpaid rent as of the date of entry of judgment in favor
of the lessor, (B) the present value as of the same date of the rent
for the then remaining lease term of the lease agreement, and (C)
any incidental damages allowed under Section 10530, less expenses
saved in consequence of the lessee's default.
(b) Except as provided in subdivision (c), the lessor shall hold
for the lessee for the remaining lease term of the lease agreement
any goods that have been identified to the lease contract and are in
the lessor's control.
(c) The lessor may dispose of the goods at any time before
collection of the judgment for damages obtained pursuant to
subdivision (a). If the disposition is before the end of the
remaining lease term of the lease agreement, the lessor's recovery
against the lessee for damages is governed by Section 10527 or 10528,
and the lessor will cause an appropriate credit to be provided
against a judgment for damages to the extent that the amount of the
judgment exceeds the recovery available pursuant to Section 10527 or
10528.
(d) Payment of the judgment for damages obtained pursuant to
subdivision (a) entitles the lessee to the use and possession of the
goods not then disposed of for the remaining lease term of and in
accordance with the lease agreement.
(e) After default by the lessee under the lease contract of the
type described in subdivision (a) of, or paragraph (1) of subdivision
(c) of, Section 10523 or, if agreed, after other default by the
lessee, a lessor who is held not entitled to rent under this section
must nevertheless be awarded damages for nonacceptance under Section
10527 or 10528.
10530. Incidental damages to an aggrieved lessor include any
commercially reasonable charges, expenses, or commissions incurred in
stopping delivery, in the transportation, care and custody of goods
after the lessee's default, in connection with return or disposition
of the goods, or otherwise resulting from the default.
10531. (a) If a third party so deals with goods that have been
identified to a lease contract as to cause actionable injury to a
party to the lease contract (1) the lessor has a right of action
against the third party, and (2) the lessee also has a right of
action against the third party if the lessee:
(A) Has a security interest in the goods;
(B) Has an insurable interest in the goods; or
(C) Bears the risk of loss under the lease contract or has since
the injury assumed that risk as against the lessor and the goods have
been converted or destroyed.
(b) If at the time of the injury the party plaintiff did not bear
the risk of loss as against the other party to the lease contract and
there is no arrangement between them for disposition of the
recovery, his or her suit or settlement, subject to his or her own
interest, is as a fiduciary for the other party to the lease
contract.
(c) Either party with the consent of the other may sue for the
benefit of whom it may concern.
10532. In addition to any other recovery permitted by this division
or other law, the lessor may recover from the lessee an amount that
will fully compensate the lessor for any loss of or damage to the
lessor's residual interest in the goods caused by the default of the
lessee.
10523. (a) If a lessee wrongfully rejects or revokes acceptance of
goods or fails to make a payment when due or repudiates with respect
to a part or the whole, then, with respect to any goods involved, and
with respect to all of the goods if under an installment lease
contract the value of the whole lease contract is substantially
impaired (Section 10510), the lessee is in default under the lease
contract and the lessor may:
(1) Cancel the lease contract (subdivision (a) of Section 10505);
(2) Proceed respecting goods not identified to the lease contract
(Section 10524);
(3) Withhold delivery of the goods and take possession of goods
previously delivered (Section 10525);
(4) Stop delivery of the goods by any bailee (Section 10526);
(5) Dispose of the goods and recover damages (Section 10527), or
retain the goods and recover damages (Section 10528), or in a proper
case recover rent (Section 10529);
(6) Exercise any other rights or pursue any other remedies
provided in the lease contract.
(b) If a lessor does not fully exercise a right or obtain a remedy
to which the lessor is entitled under subdivision (a), the lessor
may recover the loss resulting in the ordinary course of events from
the lessee's default as determined in any reasonable manner, together
with incidental damages, less expenses saved in consequence of the
lessee's default.
(c) If a lessee is otherwise in default under a lease contract,
the lessor may exercise the rights and pursue the remedies provided
in the lease contract, which may include a right to cancel the lease.
In addition, unless otherwise provided in the lease contract:
(1) If the default substantially impairs the value of the lease
contract to the lessor, the lessor may exercise the rights and pursue
the remedies provided in subdivisions (a) and (b); or
(2) If the default does not substantially impair the value of the
lease contract to the lessor, the lessor may recover as provided in
subdivision (b).
10524. (a) After a default by the lessee under the lease contract
of the type described in subdivision (a) of, or paragraph (1) of
subdivision (c) of, Section 10523 or, if agreed, after other default
by the lessee, the lessor may:
(1) Identify to the lease contract conforming goods not already
identified if at the time the lessor learned of the default they were
in the lessor's or the supplier's possession or control; and
(2) Dispose of goods (subdivision (a) of Section 10527) that
demonstrably have been intended for the particular lease contract
even though those goods are unfinished.
(b) If the goods are unfinished, in the exercise of reasonable
commercial judgment for the purposes of avoiding loss and of
effective realization, an aggrieved lessor or the supplier may either
complete manufacture and wholly identify the goods to the lease
contract or cease manufacture and lease, sell, or otherwise dispose
of the goods for scrap or salvage value or proceed in any other
reasonable manner.
10525. (a) If a lessor discovers the lessee to be insolvent, the
lessor may refuse to deliver the goods.
(b) After a default by the lessee under the lease contract of the
type described in subdivision (a) of, or paragraph (1) of subdivision
(c) of, Section 10523 or, if agreed, after other default by the
lessee, the lessor has the right to take possession of the goods. If
the lease contract so provides, the lessor may require the lessee to
assemble the goods and make them available to the lessor at a place
to be designated by the lessor which is reasonably convenient to both
parties. Without removal, the lessor may render unusable any goods
employed in trade or business, and may dispose of goods on the lessee'
s premises (Section 10527).
(c) The lessor may proceed under subdivision (b) without judicial
process if it can be done without breach of the peace or the lessor
may proceed by action.
10526. (a) A lessor may stop delivery of goods in the possession of
a carrier or other bailee if the lessor discovers the lessee to be
insolvent and may stop delivery of carload, truckload, planeload, or
larger shipments of express or freight if the lessee repudiates or
fails to make a payment due before delivery, whether for rent,
security, or otherwise under the lease contract, or for any other
reason the lessor has a right to withhold or take possession of the
goods.
(b) In pursuing its remedies under subdivision (a), the lessor may
stop delivery until:
(1) Receipt of the goods by the lessee;
(2) Acknowledgment to the lessee by any bailee of the goods,
except a carrier, that the bailee holds the goods for the lessee; or
(3) Such an acknowledgment to the lessee by a carrier via
reshipment or as a warehouse.
(c) (1) To stop delivery, a lessor shall so notify as to enable
the bailee by reasonable diligence to prevent delivery of the goods.
(2) After notification, the bailee shall hold and deliver the
goods according to the directions of the lessor, but the lessor is
liable to the bailee for any ensuing charges or damages.
(3) A carrier who has issued a nonnegotiable bill of lading is not
obliged to obey a notification to stop received from a person other
than the consignor.
10527. (a) After a default by a lessee under the lease contract of
the type described in subdivision (a) of, or paragraph (1) of
subdivision (c) of, Section 10523 or after the lessor refuses to
deliver or takes possession of goods (Section 10525 or 10526), or, if
agreed, after other default by a lessee, the lessor may dispose of
the goods concerned or the undelivered balance thereof by lease,
sale, or otherwise.
(b) Except as otherwise provided with respect to damages
liquidated in the lease agreement (Section 10504) or otherwise
determined pursuant to agreement of the parties (Sections 1302 and
10503), if the disposition is by lease agreement substantially
similar to the original lease agreement and the new lease agreement
is made in good faith and in a commercially reasonable manner, the
lessor may recover from the lessee as damages (1) accrued and unpaid
rent as of the date of the commencement of the term of the new lease
agreement, (2) the present value, as of the same date, of the total
rent for the then remaining lease term of the original lease
agreement minus the present value, as of the same date, of the rent
under the new lease agreement applicable to that period of the new
lease term which is comparable to the then remaining term of the
original lease agreement, and (3) any incidental damages allowed
under Section 10530, less expenses saved in consequence of the lessee'
s default.
(c) If the lessor's disposition is by lease agreement that for any
reason does not qualify for treatment under subdivision (b), or is
by sale or otherwise, the lessor may recover from the lessee as if
the lessor had elected not to dispose of the goods and Section 10528
governs.
(d) A subsequent buyer or lessee who buys or leases from the
lessor in good faith for value as a result of a disposition under
this section takes the goods free of the original lease contract and
any rights of the original lessee even though the lessor fails to
comply with one or more of the requirements of this division.
(e) The lessor is not accountable to the lessee for any profit
made on any disposition. A lessee who has rightfully rejected or
justifiably revoked acceptance shall account to the lessor for any
excess over the amount of the lessee's security interest (subdivision
(e) of Section 10508).
10528. (a) Except as otherwise provided with respect to damages
liquidated in the lease agreement (Section 10504) or otherwise
determined pursuant to agreement of the parties (Sections 1302 and
10503), if a lessor elects to retain the goods or a lessor elects to
dispose of the goods and the disposition is by lease agreement that
for any reason does not qualify for treatment under subdivision (b)
of Section 10527, or is by sale or otherwise, the lessor may recover
from the lessee as damages for a default of the type described in
subdivision (a) of, or paragraph (1) of subdivision (c) of, Section
10523, or, if agreed, for other default of the lessee, (1) accrued
and unpaid rent as of the date of default if the lessee has never
taken possession of the goods, or, if the lessee has taken possession
of the goods, as of the date the lessor repossesses the goods or an
earlier date on which the lessee makes a tender of the goods to the
lessor, (2) the present value as of the date determined under
paragraph (1) of the total rent for the then remaining lease term of
the original lease agreement minus the present value as of the same
date of the market rent at the place where the goods are located
computed for the same lease term, and (3) any incidental damages
allowed under Section 10530, less expenses saved in consequence of
the lessee's default.
(b) If the measure of damages provided in subdivision (a) is
inadequate to put a lessor in as good a position as performance would
have, the measure of damages is the present value of the profit,
including reasonable overhead, the lessor would have made from full
performance by the lessee, together with any incidental damages
allowed under Section 10530, due allowance for costs reasonably
incurred and due credit for payments or proceeds of disposition.
10529. (a) After default by the lessee under the lease contract of
the type described in subdivision (a) of, or paragraph (1) of
subdivision (c) of, Section 10523 or, if agreed, after other default
by the lessee, if the lessor complies with subdivision (b), the
lessor may recover from the lessee as damages:
(1) For goods accepted by the lessee and not repossessed by or
tendered to the lessor, and for conforming goods lost or damaged
after risk of loss passes to the lessee (Section 10219), (A) accrued
and unpaid rent as of the date of entry of judgment in favor of the
lessor, (B) the present value as of the same date of the rent for the
then remaining lease term of the lease agreement, and (C) any
incidental damages allowed under Section 10530, less expenses saved
in consequence of the lessee's default; and
(2) For goods identified to the lease contract where the lessor
has never delivered the goods or has taken possession of them or the
lessee has tendered them to the lessor, if the lessor is unable after
reasonable effort to dispose of them at a reasonable price or the
circumstances reasonably indicate that effort will be unavailing, (A)
accrued and unpaid rent as of the date of entry of judgment in favor
of the lessor, (B) the present value as of the same date of the rent
for the then remaining lease term of the lease agreement, and (C)
any incidental damages allowed under Section 10530, less expenses
saved in consequence of the lessee's default.
(b) Except as provided in subdivision (c), the lessor shall hold
for the lessee for the remaining lease term of the lease agreement
any goods that have been identified to the lease contract and are in
the lessor's control.
(c) The lessor may dispose of the goods at any time before
collection of the judgment for damages obtained pursuant to
subdivision (a). If the disposition is before the end of the
remaining lease term of the lease agreement, the lessor's recovery
against the lessee for damages is governed by Section 10527 or 10528,
and the lessor will cause an appropriate credit to be provided
against a judgment for damages to the extent that the amount of the
judgment exceeds the recovery available pursuant to Section 10527 or
10528.
(d) Payment of the judgment for damages obtained pursuant to
subdivision (a) entitles the lessee to the use and possession of the
goods not then disposed of for the remaining lease term of and in
accordance with the lease agreement.
(e) After default by the lessee under the lease contract of the
type described in subdivision (a) of, or paragraph (1) of subdivision
(c) of, Section 10523 or, if agreed, after other default by the
lessee, a lessor who is held not entitled to rent under this section
must nevertheless be awarded damages for nonacceptance under Section
10527 or 10528.
10530. Incidental damages to an aggrieved lessor include any
commercially reasonable charges, expenses, or commissions incurred in
stopping delivery, in the transportation, care and custody of goods
after the lessee's default, in connection with return or disposition
of the goods, or otherwise resulting from the default.
10531. (a) If a third party so deals with goods that have been
identified to a lease contract as to cause actionable injury to a
party to the lease contract (1) the lessor has a right of action
against the third party, and (2) the lessee also has a right of
action against the third party if the lessee:
(A) Has a security interest in the goods;
(B) Has an insurable interest in the goods; or
(C) Bears the risk of loss under the lease contract or has since
the injury assumed that risk as against the lessor and the goods have
been converted or destroyed.
(b) If at the time of the injury the party plaintiff did not bear
the risk of loss as against the other party to the lease contract and
there is no arrangement between them for disposition of the
recovery, his or her suit or settlement, subject to his or her own
interest, is as a fiduciary for the other party to the lease
contract.
(c) Either party with the consent of the other may sue for the
benefit of whom it may concern.
10532. In addition to any other recovery permitted by this division
or other law, the lessor may recover from the lessee an amount that
will fully compensate the lessor for any loss of or damage to the
lessor's residual interest in the goods caused by the default of the
lessee.
10523. (a) If a lessee wrongfully rejects or revokes acceptance of
goods or fails to make a payment when due or repudiates with respect
to a part or the whole, then, with respect to any goods involved, and
with respect to all of the goods if under an installment lease
contract the value of the whole lease contract is substantially
impaired (Section 10510), the lessee is in default under the lease
contract and the lessor may:
(1) Cancel the lease contract (subdivision (a) of Section 10505);
(2) Proceed respecting goods not identified to the lease contract
(Section 10524);
(3) Withhold delivery of the goods and take possession of goods
previously delivered (Section 10525);
(4) Stop delivery of the goods by any bailee (Section 10526);
(5) Dispose of the goods and recover damages (Section 10527), or
retain the goods and recover damages (Section 10528), or in a proper
case recover rent (Section 10529);
(6) Exercise any other rights or pursue any other remedies
provided in the lease contract.
(b) If a lessor does not fully exercise a right or obtain a remedy
to which the lessor is entitled under subdivision (a), the lessor
may recover the loss resulting in the ordinary course of events from
the lessee's default as determined in any reasonable manner, together
with incidental damages, less expenses saved in consequence of the
lessee's default.
(c) If a lessee is otherwise in default under a lease contract,
the lessor may exercise the rights and pursue the remedies provided
in the lease contract, which may include a right to cancel the lease.
In addition, unless otherwise provided in the lease contract:
(1) If the default substantially impairs the value of the lease
contract to the lessor, the lessor may exercise the rights and pursue
the remedies provided in subdivisions (a) and (b); or
(2) If the default does not substantially impair the value of the
lease contract to the lessor, the lessor may recover as provided in
subdivision (b).
10524. (a) After a default by the lessee under the lease contract
of the type described in subdivision (a) of, or paragraph (1) of
subdivision (c) of, Section 10523 or, if agreed, after other default
by the lessee, the lessor may:
(1) Identify to the lease contract conforming goods not already
identified if at the time the lessor learned of the default they were
in the lessor's or the supplier's possession or control; and
(2) Dispose of goods (subdivision (a) of Section 10527) that
demonstrably have been intended for the particular lease contract
even though those goods are unfinished.
(b) If the goods are unfinished, in the exercise of reasonable
commercial judgment for the purposes of avoiding loss and of
effective realization, an aggrieved lessor or the supplier may either
complete manufacture and wholly identify the goods to the lease
contract or cease manufacture and lease, sell, or otherwise dispose
of the goods for scrap or salvage value or proceed in any other
reasonable manner.
10525. (a) If a lessor discovers the lessee to be insolvent, the
lessor may refuse to deliver the goods.
(b) After a default by the lessee under the lease contract of the
type described in subdivision (a) of, or paragraph (1) of subdivision
(c) of, Section 10523 or, if agreed, after other default by the
lessee, the lessor has the right to take possession of the goods. If
the lease contract so provides, the lessor may require the lessee to
assemble the goods and make them available to the lessor at a place
to be designated by the lessor which is reasonably convenient to both
parties. Without removal, the lessor may render unusable any goods
employed in trade or business, and may dispose of goods on the lessee'
s premises (Section 10527).
(c) The lessor may proceed under subdivision (b) without judicial
process if it can be done without breach of the peace or the lessor
may proceed by action.
10526. (a) A lessor may stop delivery of goods in the possession of
a carrier or other bailee if the lessor discovers the lessee to be
insolvent and may stop delivery of carload, truckload, planeload, or
larger shipments of express or freight if the lessee repudiates or
fails to make a payment due before delivery, whether for rent,
security, or otherwise under the lease contract, or for any other
reason the lessor has a right to withhold or take possession of the
goods.
(b) In pursuing its remedies under subdivision (a), the lessor may
stop delivery until:
(1) Receipt of the goods by the lessee;
(2) Acknowledgment to the lessee by any bailee of the goods,
except a carrier, that the bailee holds the goods for the lessee; or
(3) Such an acknowledgment to the lessee by a carrier via
reshipment or as a warehouse.
(c) (1) To stop delivery, a lessor shall so notify as to enable
the bailee by reasonable diligence to prevent delivery of the goods.
(2) After notification, the bailee shall hold and deliver the
goods according to the directions of the lessor, but the lessor is
liable to the bailee for any ensuing charges or damages.
(3) A carrier who has issued a nonnegotiable bill of lading is not
obliged to obey a notification to stop received from a person other
than the consignor.
10527. (a) After a default by a lessee under the lease contract of
the type described in subdivision (a) of, or paragraph (1) of
subdivision (c) of, Section 10523 or after the lessor refuses to
deliver or takes possession of goods (Section 10525 or 10526), or, if
agreed, after other default by a lessee, the lessor may dispose of
the goods concerned or the undelivered balance thereof by lease,
sale, or otherwise.
(b) Except as otherwise provided with respect to damages
liquidated in the lease agreement (Section 10504) or otherwise
determined pursuant to agreement of the parties (Sections 1302 and
10503), if the disposition is by lease agreement substantially
similar to the original lease agreement and the new lease agreement
is made in good faith and in a commercially reasonable manner, the
lessor may recover from the lessee as damages (1) accrued and unpaid
rent as of the date of the commencement of the term of the new lease
agreement, (2) the present value, as of the same date, of the total
rent for the then remaining lease term of the original lease
agreement minus the present value, as of the same date, of the rent
under the new lease agreement applicable to that period of the new
lease term which is comparable to the then remaining term of the
original lease agreement, and (3) any incidental damages allowed
under Section 10530, less expenses saved in consequence of the lessee'
s default.
(c) If the lessor's disposition is by lease agreement that for any
reason does not qualify for treatment under subdivision (b), or is
by sale or otherwise, the lessor may recover from the lessee as if
the lessor had elected not to dispose of the goods and Section 10528
governs.
(d) A subsequent buyer or lessee who buys or leases from the
lessor in good faith for value as a result of a disposition under
this section takes the goods free of the original lease contract and
any rights of the original lessee even though the lessor fails to
comply with one or more of the requirements of this division.
(e) The lessor is not accountable to the lessee for any profit
made on any disposition. A lessee who has rightfully rejected or
justifiably revoked acceptance shall account to the lessor for any
excess over the amount of the lessee's security interest (subdivision
(e) of Section 10508).
10528. (a) Except as otherwise provided with respect to damages
liquidated in the lease agreement (Section 10504) or otherwise
determined pursuant to agreement of the parties (Sections 1302 and
10503), if a lessor elects to retain the goods or a lessor elects to
dispose of the goods and the disposition is by lease agreement that
for any reason does not qualify for treatment under subdivision (b)
of Section 10527, or is by sale or otherwise, the lessor may recover
from the lessee as damages for a default of the type described in
subdivision (a) of, or paragraph (1) of subdivision (c) of, Section
10523, or, if agreed, for other default of the lessee, (1) accrued
and unpaid rent as of the date of default if the lessee has never
taken possession of the goods, or, if the lessee has taken possession
of the goods, as of the date the lessor repossesses the goods or an
earlier date on which the lessee makes a tender of the goods to the
lessor, (2) the present value as of the date determined under
paragraph (1) of the total rent for the then remaining lease term of
the original lease agreement minus the present value as of the same
date of the market rent at the place where the goods are located
computed for the same lease term, and (3) any incidental damages
allowed under Section 10530, less expenses saved in consequence of
the lessee's default.
(b) If the measure of damages provided in subdivision (a) is
inadequate to put a lessor in as good a position as performance would
have, the measure of damages is the present value of the profit,
including reasonable overhead, the lessor would have made from full
performance by the lessee, together with any incidental damages
allowed under Section 10530, due allowance for costs reasonably
incurred and due credit for payments or proceeds of disposition.
10529. (a) After default by the lessee under the lease contract of
the type described in subdivision (a) of, or paragraph (1) of
subdivision (c) of, Section 10523 or, if agreed, after other default
by the lessee, if the lessor complies with subdivision (b), the
lessor may recover from the lessee as damages:
(1) For goods accepted by the lessee and not repossessed by or
tendered to the lessor, and for conforming goods lost or damaged
after risk of loss passes to the lessee (Section 10219), (A) accrued
and unpaid rent as of the date of entry of judgment in favor of the
lessor, (B) the present value as of the same date of the rent for the
then remaining lease term of the lease agreement, and (C) any
incidental damages allowed under Section 10530, less expenses saved
in consequence of the lessee's default; and
(2) For goods identified to the lease contract where the lessor
has never delivered the goods or has taken possession of them or the
lessee has tendered them to the lessor, if the lessor is unable after
reasonable effort to dispose of them at a reasonable price or the
circumstances reasonably indicate that effort will be unavailing, (A)
accrued and unpaid rent as of the date of entry of judgment in favor
of the lessor, (B) the present value as of the same date of the rent
for the then remaining lease term of the lease agreement, and (C)
any incidental damages allowed under Section 10530, less expenses
saved in consequence of the lessee's default.
(b) Except as provided in subdivision (c), the lessor shall hold
for the lessee for the remaining lease term of the lease agreement
any goods that have been identified to the lease contract and are in
the lessor's control.
(c) The lessor may dispose of the goods at any time before
collection of the judgment for damages obtained pursuant to
subdivision (a). If the disposition is before the end of the
remaining lease term of the lease agreement, the lessor's recovery
against the lessee for damages is governed by Section 10527 or 10528,
and the lessor will cause an appropriate credit to be provided
against a judgment for damages to the extent that the amount of the
judgment exceeds the recovery available pursuant to Section 10527 or
10528.
(d) Payment of the judgment for damages obtained pursuant to
subdivision (a) entitles the lessee to the use and possession of the
goods not then disposed of for the remaining lease term of and in
accordance with the lease agreement.
(e) After default by the lessee under the lease contract of the
type described in subdivision (a) of, or paragraph (1) of subdivision
(c) of, Section 10523 or, if agreed, after other default by the
lessee, a lessor who is held not entitled to rent under this section
must nevertheless be awarded damages for nonacceptance under Section
10527 or 10528.
10530. Incidental damages to an aggrieved lessor include any
commercially reasonable charges, expenses, or commissions incurred in
stopping delivery, in the transportation, care and custody of goods
after the lessee's default, in connection with return or disposition
of the goods, or otherwise resulting from the default.
10531. (a) If a third party so deals with goods that have been
identified to a lease contract as to cause actionable injury to a
party to the lease contract (1) the lessor has a right of action
against the third party, and (2) the lessee also has a right of
action against the third party if the lessee:
(A) Has a security interest in the goods;
(B) Has an insurable interest in the goods; or
(C) Bears the risk of loss under the lease contract or has since
the injury assumed that risk as against the lessor and the goods have
been converted or destroyed.
(b) If at the time of the injury the party plaintiff did not bear
the risk of loss as against the other party to the lease contract and
there is no arrangement between them for disposition of the
recovery, his or her suit or settlement, subject to his or her own
interest, is as a fiduciary for the other party to the lease
contract.
(c) Either party with the consent of the other may sue for the
benefit of whom it may concern.
10532. In addition to any other recovery permitted by this division
or other law, the lessor may recover from the lessee an amount that
will fully compensate the lessor for any loss of or damage to the
lessor's residual interest in the goods caused by the default of the
lessee.
