Opinion
9465/06.
Decided July 26, 2006.
Biedermann, Hoenig Ruff, New York, New York, Attorneys for Petitioner.
Carton Rosoff, P.C., Harrison, New York, Attorneys for Respondent.
Upon the foregoing papers, it is Ordered and adjudged that this petition is disposed of as follows:
Respondent had commenced an arbitration proceeding against petitioner under the New York State Lemon Law Statute, embodied in Section 198-a of Article 11-A of the General Business Law. Petitioner herein has commenced this special proceeding seeking an Order permanently staying said arbitration as time-barred. Specifically, petitioner contends that because the original retail sale and delivery of the subject vehicle took place on February 11, 2002, more than four years prior to the commencement of the arbitration proceeding, respondent's arbitration is time-barred under Section 198-a, subdivision (j). Petitioner notes that while the sale of the subject vehicle to respondent had occurred on September 9, 2003, there is no statutory toll for the purchase of used vehicles.
This date is provided on the subject vehicle's Motor Vehicle History Report.
Respondent opposes the petition, arguing that there are questions of fact related to whether the subject vehicle is in fact a new or used vehicle, which properly are addressed by the arbitrator. Moreover, respondent notes that the immediate previous owner of the subject vehicle had been a dealership in Maryland, which apparently had obtained ownership just four months after the original sale, which change in ownership is otherwise unexplained and, respondent argues, raises questions about whether the vehicle was a dealer demonstration vehicle, and thus outside of the definition of a consumer to which the four-year statute of limitations applies. Respondent also argues that if the subject vehicle previously had been rejected by any original consumer as defective, the first delivery could be determined to be null and void since respondent had been misled about the car's history and its being free of defects, and thus equity requires that the issue of vehicle's status be construed against petitioner. Finally, respondent argues that petitioner repeatedly had promised to resolve respondent's car problem by providing respondent with a new vehicle, and thereafter had avoided respondent when it came time to actually effect their agreement, eventually resulting in petitioner's withdrawing its promise exactly four years after the asserted original delivery date. Since the timing of petitioner's actions demonstrate that it purposefully had lulled respondent into non-action so that the statute of limitations would run, respondent urges that petitioner should be estopped from pleading the statute of limitations.
By way of reply, petitioner argues that there is no issue as to whether this subject vehicle was new or used, as claimed by respondent. Petitioner concedes that the New Car Lemon Law applies to the vehicle although it was sold used because the vehicle was purchased within 2 years from the date of the original delivery.
Further, petitioner has submitted an affidavit from Marianne Caulfield, a managing attorney in the Consumer Litigation Department of BMW of North America, LLC, wherein she states that she has researched the vehicle's history, a copy of which Customer History report is submitted along with her affidavit, and she has determined that the original purchaser was an individual and that the vehicle never was used as a demonstration vehicle. According to Ms. Caulfield, it is custom and practice for title of a vehicle to be transferred to a dealership when a vehicle is traded in, as here had occurred. Therefore, since the date of the original delivery of the vehicle was February 11, 2006, petitioner reasserts that respondent's demand for arbitration must be deemed time-barred.
Finally, petitioner argues that respondent's estoppel argument should be rejected because the alleged misrepresentations upon which said defense is predicated were made by Westchester BMW, an independent dealership, and not by BMW of North America, LLC, petitioner herein. In any event, petitioner argues that what transpired merely occurred within the context of trade-in negotiations, "which do not rise to the level of fraud as a matter of law."It is settled law that in arbitration proceedings, questions of law and fact are for the arbitrators to determine. See Korein v. Rabin, 29 AD2d 351, 355 (1st Dept. 1968). It previously has been held that the issue of whether a party has established the criteria necessary to qualify as a consumer under the Lemon Law is for the arbitrator to determine, see Chrysler Motors Corp. v. Schachner, 138 Misc 2d 501, 508 (1988), revd. on other grnds., 166 AD2d 683 (2nd Dept. 1990), and that whether a vehicle is "new" is also an issue for the arbitrator. See Matter of Subaru (Mckelvey), 141 Misc 2d 41, 42 (Sup.Ct. 1988). Similarly, questions of procedural arbitrability, i.e., those concerning whether conditions precedent to an obligation to arbitrate have been met, such as, but not limited to, time limits, notice, waiver, laches, estoppel and like defenses to arbitrability, also are generally for the arbitrators to decide. See Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84-85 (2002), quoting Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 (1983); Diamond Waterproofing Systems, Inc. v. 55 Liberty Owners Corp., 4 NY3d 247 (2005). Further, it has been held that where there is a broad arbitration agreement between the parties, statute of limitation issues and issues regarding whether or not a contract was induced by fraud are to be determined by the arbitrator. See Diamond Sys. v. 55 Liberty, 4 NY3d 247, 252 (2005); May v. Anspach, 24 AD3d 671 (2nd Dept. 2005); Matter of Merritt Eng'g Consultants, P.C. v. 55 Liberty Owners' Corp., 18 AD3d 210 (2005); Kidder, Peabody Co., Inc. v. Weiner, 269 AD2d 119 (1st Dept. 2000). However, where, as here, there are statutory time limitations, the issue of whether a proceeding is time-barred should be decided by the Courts in the first instance. See Matter of Smith Barney v. Luckie, 85 NY2d 193, 201 (1995).
Nevertheless, respondent herein has raised the issue of the applicability of the doctrine of equitable estoppel. With respect to said doctrine, same is applicable only:
when the actions of the defendant lulled the Plaintiff into inaction to allow the statute of limitations to expire. Incorporated Village of Rockville Centre v. Town of Hempstead, 278 AD2d 279 (2nd Dept. 2000); and East Midtown Plaza Housing Co., Inc. V. City of New York, 218 AD2d 628 (1st Dept. 1995). "[D]efendant may be estopped to plead the Statute of Limitations where Plaintiff was induced by fraud, misrepresentation or deception to refrain from filing a timely action (citations omitted)." Simcuski v. Saeli, 44 NY2d 442, 448, 449 (1978). "[T]he doctrine of estoppel is only available to a Plaintiff who commences an action within a reasonable time after the facts giving rise to the estoppel have ceased to be operational (citations omitted)." Campbell v. Chabot, 189 AD2d 746 (2nd Dept. 1993). The Plaintiff asserting equitable estoppel must establish the Defendant's specific actions kept Plaintiff from timely commencing the action. Zumpano v. Quinn, ___ N.Y.3d ___, 2006 WL 395229 (2006).
Wiesel v. Rubinstein, 12 Misc 3d 1168 (A) (Sup.Ct. Nass. Co. 2006); see, also Doe v. Holy See (State of Vatican City), 17 AD3d 793, 794 (3rd Dept. 2005).
Based upon the application of the foregoing principles of law to the record at bar and upon consideration of the parties' respective arguments, the Court denies the petition to permanently stay arbitration finding that the issue of whether petitioner is equitably estopped from asserting a statute of limitations defense is one for the arbitrator to determine after presentment of all of the facts. This Court is not persuaded by petitioner's argument that any misrepresentations made to respondent cannot serve to equitably estop petitioner from invoking a statute of limitations defense since respondent's unrefuted averment is that Tom McDonagh at Westchester BMW had told him that BMW of North America had instructed McDonagh to negotiate with respondent "in the best interest of BMW, Westchester BMW and [him]self," arguably rendering Westchester BMW an agent of BMW of North America and thus ultimately responsible for any wrongdoing chargeable to Westchester BMW.
The Temporary Restraining Order set forth in the May 19, 2006, Order to Show Cause is hereby vacated and this matter shall proceed to arbitration.