What do you get when you mix tort defenses with a breach of contract action?  The defendant lessee in American Express Equip. Fin. Corp. v.  Mercado found out.   The defendant leased certain medical equipment from plaintiff and agreed to make 60 monthly payments in the amount of approximately $1,680.   After making some payments, the defendant defaulted and, in defense of an action commenced against her, claimed that she was defrauded.

After joinder of issue, defendant served various discovery demands related to plaintiff’s business practices generally.  As a result of motion practice, the trial court held that the discovery was improper.  On appeal, the defendant argued that the discovery was relevant  to her defense that plaintiff’s alleged "lax" business practices evidenced its intent to "assume the risk" of a fraudulent transaction such as that purportedly perpetrated on her. 

The Appellate Division, Third Department concluded that the assumption of risk doctrine was intertwined with tort law principles and had no application to a breach of contract action.  The Court further rejected the applicability of the defendant’s defense that the plaintiff shared culpable conduct in the breach.