CHICAGO – A Rogers Park lakefront condominium association has filed a class action lawsuit against a New York-based company that leases laundry machines for commercial use for allegedly charging previously not-agreed-to administration fees.
The condo association, 1050 West Columbia Condominium Association, filed a lawsuit June 18 in Cook County Circuit Court against CSC Service Works Inc. alleging breach of contract and violations of the Illinois Consumer Fraud Act.
"Starting in May 2017, CSC disregarded the actual terms of the existing leases it acquired and had itself entered into and imposed a 9.75 percent 'administrative fee,' thereby systematically shortchanging condominium associations and building owners on contracted-for revenue shares," the lawsuit said. "Plaintiff and members of the class never agreed to have the so-called administrative fee taken from the revenue to be shared with plaintiff and class members, and such a fee was never included in leases with CSC or the companies acquired by CSC."
CSC, based in Plainview, N.Y., offers multifamily residential and commercial laundry solutions in addition to tire inflation and vacuum vending services at convenience stores and gas stations nationwide, according to its website.
"CSC is the largest provider of leased laundry machines to commercial and residential customers in the United States. Defendant provides laundry equipment, including washers and dryers, to condominium associations, apartment buildings, and colleges and universities," the lawsuit said.
"CSC has continued to expand its market dominance by acquiring commercial laundry leasing companies around the country," the lawsuit said. "In so doing, CSC has reduced competition and limited the options available in the market."
During those acquisitions, CSC and the acquired companies maintained long-term agreements to install laundry machines in buildings to be used by residents with CSC and the acquired companies maintaining the machines, collecting and processing refunds. In return, 1050 West Columbia and other class members received a share of gross revenue generated by the laundry machines, according to the lawsuit.
"Plaintiff and class members are, therefore, dependent on CSC to properly account for collections and properly make timely payments to them," the lawsuit said.
Once CSC consolidated its market share, CSC began to charge the administrative fee that had not been previously provided for or allowed under the existing leases. CSC told lessors that the fee would amount to only 10 cents per machine per day but the amount does not matter, according to the lawsuit.
"Given the administrative fee is not an allowable charge to the lessors, it does not matter whether it is characterized as large or small, no amount should have been imposed on the lessors," the lawsuit said.
The lawsuit asks the court to certify a class of lessors and to award actual damages, attorney fees and costs and other relief.
The lawsuit was filed on behalf of 1050 West Columbia Condominium Association by Chicago attorneys Michael R. Karnuth and Edward M. Burnes.