Coin op laundry sues Marion County Housing Authority for contract cancellation

By Steve Gonzalez | Dec 13, 2005

A provider of coin operated laundry machines filed suit in U.S. District Court for the Southern District of Illinois Dec. 2 against the Marion County Housing Authority (MCHA) claiming it is in breach of contract.

Marion County's seat is Centralia.

Coinmach Corporation of New York claims 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.

According to Coinmach, the lease was for seven years and provided them with two renewal periods for seven years each.

The first renewal was in 2001 and will run until July of 2008.

Coinmach claims it anticipated exercising an option again when the current renewal option ended, however on Jan. 5, MCHA sent a "Notice of Cancellation" which terminated the lease effective midnight July 31, 2005.

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.

Coinmach is represented by Joe Jacobson of Green Schaff and Jacobson of Clayton.

The case has been assigned to District Judge William Stiehl.


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