Opinion
1818-19
05-14-2020
In the Matter of the Special Proceeding Application of TOYOTA LEASE TRUST, Petitioner, v. ALL COUNTY TOWING and the New York State Department of Motor Vehicles, Respondents.
Meola Law Firm (Rudolph J. Meola, Esq., of Counsel), 1822 Western Avenue, Albany, New York 12203, Attorneys for Petitioner Letitia James, Attorney General of the State of New York (David J. Fruchter, Assistant Attorney General, of Counsel), The Capitol, Albany, New York 12224-0341, Attorney for Respondent The New York State Department of Motor Vehicles Quatela Chimeri, PLLC (Alexander E. Sendrowitz, Esq., of Counsel), 888 Veterans Memorial Highway, Suite 530, Hauppauge, New York 11788, Attorneys for Respondent All County Towing
Meola Law Firm (Rudolph J. Meola, Esq., of Counsel), 1822 Western Avenue, Albany, New York 12203, Attorneys for Petitioner
Letitia James, Attorney General of the State of New York (David J. Fruchter, Assistant Attorney General, of Counsel), The Capitol, Albany, New York 12224-0341, Attorney for Respondent The New York State Department of Motor Vehicles
Quatela Chimeri, PLLC (Alexander E. Sendrowitz, Esq., of Counsel), 888 Veterans Memorial Highway, Suite 530, Hauppauge, New York 11788, Attorneys for Respondent All County Towing
L. Michael Mackey, J.
In this motion for summary judgment petitioner Toyota Lease Trust seeks damages and attorney's fees from respondent All County Towing for conversion of a 2015 Toyota Rav 4 (the "vehicle"). Respondent opposes.
The petition/complaint also names the New York State Department of Motor Vehicles as a defendant/respondent, solely in its administrative capacity for purposes of restraining title on the vehicle pending a determination. All references to "respondent" are to All County Towing.
Petitioner commenced this hybrid action/proceeding by Order to Show Cause on March 29, 2019, seeking an order declaring a garage lien asserted by respondent against the vehicle to be null and void and directing respondent to immediately turn it over to petitioner. The petition set forth causes of action for declaratory relief, replevin, conversion and violation of General Business Law ("GBL") § 349. Respondent answered and asserted that it had complied with the requirements of the Lien Law and was entitled to a $2,880.00 garagekeeper's lien for storage fees and towing charges. In a Decision and Order dated October 15, 2019, this court (Melkonian, J.) declared that respondent had a valid lien in the amount of $749.51 only, for towing and for storage from January 2, 2019 to January 25, 2019. The court held that respondent thereafter improperly refused to release the vehicle to petitioner, wrongfully demanding that it first provide a release and "hold harmless" agreement (see Lien Law 184 ; Matter of Ally Financial, Inc. v. All County Towing and Recovery , 166 AD3d 1442 [3rd Dept 2018], lv denied 33 NY3d 910 [2019] ). Petitioner now brings the instant motion for summary judgment for damages caused by respondent's wrongful detention of its vehicle for the period of January 25, 2019 through June 24, 2019. As determined in the court's October 15, 2019 Decision and Order, petitioner has established its claim for conversion against respondent. Conversion takes place when someone "intentionally and without authority, assumes or exercises control over personal property belonging to someone else, interfering with that person's right of possession" ( Colavito v. New York Organ Donor Network, Inc., 8 NY3d 43, 50 [2006] ). A cause of action for conversion of property accrues when the owner demands its return and the person in possession, without legal authority, refuses (see State v. Seventh Regiment Fund , 98 NY2d 249, 260 — 261 [2002] [holding that a conversion claim did not accrue against a bona fide purchaser until demand and refusal occurred]; see also Colavito, supra at 50 [key elements of conversion are plaintiff's possessory right and defendant's unauthorized dominion over the property in derogation of plaintiff's rights] ).Here, respondent's refusal to release the vehicle after due demand gave rise to a cause of action for conversion, and respondent is liable to petitioner for such damages as resulted (see Matter of BMW Bank of N. Am. v. G & B Collision Ctr., Inc., 46 AD3d 875, 877 [2nd Dept 2007] [finding that a garage is guilty of conversion and is liable for damages if it asserts an improper lien]; see also Grant St. Constr., Inc. v. Cortland Paving Co., Inc., 55 AD3d 1106, 1107 [3rd Dept 2008] [action for conversion may be supported by assertion of an improper lien]; Phillips v. Catania , 155 AD2d 866, 866 [4th Dept 1989] [same] ).
Upon the posting of a bond, respondent released the vehicle to petitioner on June 26, 2019.
Petitioner has the burden on its motion to "tender sufficient evidence to demonstrate the absence of any material issues of fact" on its damages calculation (see Alvarez v. Prospect Hosp., 68 NY2d 320, 324 [1986] ). If petitioner meets that initial burden, then the burden shifts to respondent to raise a triable issue of fact ( id. at 326—327 ).
On a cause of action for conversion a party may recover only for such loss as flowed from the wrongful withholding of the property (see Silverstein v. Marine Midland Trust Co. of New York, 1 AD2d 1037, 1038 [2nd Dept 1956] ). The injured party is entitled to "full indemnity and no more" ( Michalowski v. Ey. , 7 NY2d 71, 74 [1959] ) and to apply the proper measure of damages the court must first determine whether that party intended the property for use or for sale. ( id . at 74-75 ). If the injured party intended the property for use, then "the value of the use should be the measure of damage" but if that party intended the property for sale, then the measure of damages for it having been withheld is "interest on the value from the time of the wrongful taking ... [plus any] depreciation" ( id . at 74 ). Here, petitioner claims $10,092 in damages for loss of use of the vehicle for 150 days. Indeed, where an injured party is in the rental car business, the proper measure of damage is the rental value of the detained vehicle (see National Car Rental Sys. v. Villano , 63 AD2d 1088 [3rd Dept 1978] ). However, there is nothing in the record to demonstrate that petitioner intended to rent the vehicle or use it in any way. To the contrary, based upon oral argument it appears that petitioner intended simply to sell the vehicle after obtaining possession. If that is the case, then petitioner would be made whole by an award of interest on the value of the vehicle for the period of time that it was detained, plus any depreciation in value. In any event, petitioner has not met its initial burden on its claim for conversion damages and its motion for summary judgment on that issue must, therefore, be denied.
Petitioner claims that the cost of renting a replacement vehicle, had it chosen to do so, would have been $67.28 per day.
Petitioner also moves for summary judgment on its cause of action alleging a violation of GBL § 349, which prohibits deceptive business practices and acts. The elements of a claim for violation of section 349 are: (1) a deceptive consumer-oriented act or practice which is misleading in a material respect, and (2) injury resulting from such act (see Stutman v. Chemical Bank, 95 NY2d 24, 29 [2000] ). An act is deceptive if it is likely to mislead a consumer acting reasonably under the circumstances (see Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 NY2d at 26 ). The act need not constitute common-law fraud to be actionable (see Stutman v. Chemical Bank, 95 NY2d at 29 ). Consumers may recover actual damages in any amount and, in the court's discretion, treble damages up to $1,000 and attorney's fees ( General Business Law § 349[h] ; see Teller v. Bill Hayes, Ltd., 213 AD2d 141, 147 [2nd Dept 1995] ). Claims under section 349 may be brought by business entities as well as individuals, so long as the underlying deceptive conduct is consumer oriented (see Oswego Laborers' Local 214 Pension Fund, supra ).
Here, petitioner seeks treble damages of $1,000 and attorney's fees of $6,375 for respondent's alleged violation of GBL § 349. Petitioner asserts that respondent habitually misrepresents to consumers that police authorization and a hold-harmless agreement are required to redeem a vehicle that has been towed at the request of law enforcement, when nothing in the Lien Law permits a garagekeeper to impose such conditions. Petitioner alleges that respondent does this simply to rack up storage fees.
In support of its motion petitioner submits, inter alia , an affirmation of counsel, an affidavit of petitioner's authorized representative Nicholas McCullough, and six affidavits of Marisol Salgado, a secretary employed by respondent, filed by respondent in various other cases before this court. Petitioner asserts that what happened in this case was not an isolated incident, but rather part of a deliberate and purposeful pattern and practice that applies to all consumers in the public at large who may have a vehicle towed by respondent. In her affidavits Ms. Salgado repeatedly asserts that respondent refuses redemption because "it [is] necessary for petitioner to obtain a release from Nassau County Police Department (NCPD) before the vehicle could be released."
Petitioner alleges that respondent was well aware that its practice was unlawful and cites decisions from the New York State Appellate Division, Third Department, specifically condemning it. In both Matter of Ally Fin., Inc. v. All County Towing & Recovery, 166 AD3d 1442 (3rd Dept 2018) and Matter of HVT, Inc. v. All County Towing & Recovery, 166 AD3d 1441, 1442 (3rd Dept 2018) the court held that nothing in Lien Law § 184 authorized respondent to condition the release of a vehicle upon the provision of a release authorization from law enforcement officials or the execution of a hold-harmless agreement in its favor. Despite these decisions, which predated respondent's conduct herein, it sent a letter to petitioner on January 7, 2019 stating:
"YOU WILL NOT BE ALLOWED TO REMOVE YOUR VEHICLE BEFORE THE IMPOUND ORDER IS OFFICIALLY RELEASED BY THE POLICE and storage charges will continue to accrue until then."
Petitioner also argues that respondent's conduct and practices are "consumer oriented" and have injured petitioner. In this regard, petitioner cites to Ms. Salgado's affidavits in which she admits that respondent holds contracts to tow vehicles on a regular basis for several municipalities on Long Island and that respondent tows over 1,000 motor vehicle per year under such contracts. Petitioner argues that a consumer would know that his/her vehicle had been towed by respondent with the authority of law enforcement and, thus, would reasonably believe that respondent's instructions as to what must be done to redeem it are accurate. With respect to damages, petitioner submits Mr. McCullough's affidavit in which he states that petitioner was required to commence the instant lawsuit to retrieve its vehicle. Mr. McCullough states that "[respondent's] act of detaining the vehicle has caused [petitioner] damages for the period [petitioner] was unable to use the vehicle and also damages for its attorney's fees and costs that would have been avoided if [respondent] released the Vehicle when [petitioner] tried to reclaim it on January 25, 2019. The total amount of legal fees paid by [petitioner] the The Meola Law Firm to recover this vehicle is $3,960.00."
Petitioner has demonstrated entitlement as a matter of law to judgment on its GBL § 349 claim. Accordingly, "the burden shifts to [respondent] to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action" (see Alvarez v. Prospect Hosp., 68 NY2d at 324 ).
In opposition, respondent submits only the affirmation of its counsel who has no personal knowledge of the facts. Tellingly, respondent does not deny that its standard practice is to refuse release of vehicles absent police authorization and a hold-harmless agreement. Nor does respondent deny having knowledge of the fact that it lacked authority to make those demands. Respondent has failed to demonstrate the existence of a material issue of fact and, accordingly, petitioner's motion for summary judgment on its GBL § 349 claim is granted, as is its motion for attorney's fees and treble damages thereunder. Because respondent objects to the attorney fee claim as excessive, however, the court must hold a hearing regarding the same (see Bell v. White , 77 AD3d 1241 [3rd Dept 2010] ), which will be conducted in conjunction with trial of petitioner's damages claim.
Finally, although petitioner is entitled to treble damages (up to $1,000) under GBL § 349, the amount thereof must also be decided within the context of the damages trial. Accordingly, it is
ORDERED and ADJUDGED that respondent is liable to petitioner for conversion of the vehicle from January 25, 2019 to June 24, 2019; and it is further
ORDERED that petitioner's motion for summary judgment awarding it $10,092 in conversion damages is DENIED ; and it is further
ORDERED and ADJUDGED that respondent is liable to petitioner for treble damages (up to $1,000) and reasonable attorney's fees for violation of GBL § 349 ; and it is further
ORDERED that the matter be set down for trial, upon filing of a trial term note of issue, for determination of petitioner's claims for damages and attorney's fees.
This constitutes the Decision and Order of the Court. This Decision and Order is returned to the attorneys for the petitioner. All other papers are delivered to the County Clerk. The signing of this Decision and Order shall not constitute entry or filing under CPLR 2220. Counsel is not relieved from the applicable provisions of this rule with regard to filing, entry and Notice of Entry.
Papers Considered:
(1) Notice of Motion dated November 11, 2019;
(2) Affirmation of Rudolph J. Meola, Esq., dated November 11, 2019, with exhibits annexed;
(3) Affirmation of Alexander E. Sendrowitz, Esq., dated December 12, 2019, with exhibit annexed;
(4) Affirmation of Rudolph J. Meola, Esq., dated December 18, 2019.
(5) Petitioner's Memorandum of Law, dated March 18, 2020.