Matter of Mercedes-Benz Credit Corp. v Reliable Auto Body & Towing

[*1] Matter of Mercedes-Benz Credit Corp. v Reliable Auto Body & Towing 2004 NY Slip Op 51067(U) Decided on July 15, 2004 Supreme Court, Albany County Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on July 15, 2004
Supreme Court, Albany County

Special Proceeding Application of MERCEDES-BENZ CREDIT CORPORATION, Petitioner,

against

RELIABLE AUTO BODY & TOWING, Respondent.



1563-04



MILLER & MEOLA

(Rudolph J. Meola, Esq.)

Attorneys for Petitioner

14 Corporate Woods Boulevard

Albany, New York 12211

RANDALL G. LAWRENCE & ASSOCIATES, P.C.

(Donald Diamond, Esq.)

Attorneys for Respondent

135 Bedford Road

Katonah, New York 10536

Joseph R. Cannizzaro, J.

Petitioner commenced this proceeding pursuant to Lien Law §201-a to obtain an order cancelling the purported garageman's lien asserted by respondent and directing respondent to turn over a certain 2002 Mercedes-Benz automobile bearing Vehicle Identification Number 4JGAB75E92A293188 that is owned by petitioner. Petitioner also simultaneously moved for an order permitting the undertaking it secured to be approved by the Court and substituted as [*2]collateral in the place of the Mercedes and directing respondent to turn over the Mercedes during the pendency of the proceeding. Petitioner's motion was made returnable prior to the petition. Respondent then cross moved for an order pursuant to CPLR 3211 dismissing the proceeding on grounds that there is no authority for the institution of the proceeding and the petition is legally insufficient. In the alternative, respondent opposed the motion and sought an order transferring the proceeding to Westchester County and/or declaring the undertaking inadequate and improper and/or permitting respondent to assert a third party claim against Majid Khrisat, Feras H. Khrisat, State Farm Insurance Company, and Mugahed A.M. Obei, who were all involved with the subject vehicle due to an accident and adding them as third party respondents. Respondent's cross motion was also made returnable prior to the petition.

There is no dispute that petitioner is the title owner to the subject vehicle. There is also no dispute that respondent has possession of the subject vehicle. What is in dispute is whether respondent has a valid garageman's lien, the only real issue in this case. However, this Court cannot reach this issue for determination since respondent has raised a myriad of other issues in its cross motion that must be addressed first. To this end, the Court conducted a conference call with counsel for both parties on June 29, 2004, within 60 days of the May 3, 2004 return date of the petition, in order to hear further argument on certain specific issues raised by respondent, including in particular, the issue of whether the petitioner could institute this proceeding pursuant to Lien Law §201-a, even though petitioner was never served with a notice of sale. The parties were then given until July 7, 2004, to submit in letter format the brief points they wanted to make concerning these specific issues.[FN1]

Now, upon review of the entire record, including the July 7, 2004 submissions, the Court finds as follows:

Despite petitioner's well stated arguments to the contrary, the Court finds that Lien Law §201-a makes it clear on its face that service of a notice of sale on the owner of a vehicle is a condition precedent to the owner commencing a special proceeding to determine the validity of a garageman's lien pursuant to Lien Law §201-a. See e.g. Jones v. Marcy, 135 A.D.2d 887 (3rd Dep't 1987); Nachman v. Crawford, 114 A.D.2d 672 (3rd Dep't 1985); CBS Transportation, Inc. v. Borderline Collision, Inc., 231 A.D.2d 715 (2nd Dep't 1996). In fact, to find that Lien Law §201-a does not require that an owner of a vehicle be served with a notice of sale prior to commencing a special proceeding to determine the validity of a garageman's lien would be contrary not only to the plain language of Lien Law §201-a, but also to the entire statutory [*3]scheme set forth in Lien Law Article 9, §200 - §211. Hence, unless and until a notice of sale is served, the owner of a vehicle purportedly subject to a lien cannot utilize Lien Law §201-a to determine the validity of the lien.

Here, it is undisputed that respondent never served petitioner with a notice of sale. In addition, there is no proof in this record at all from a party with knowledge that demonstrates that a lien even exists or could be properly asserted against the subject vehicle. Rather, from this record it appears that petitioner commenced the instant proceeding based only upon respondent's refusal to turn over the vehicle unless petitioner paid respondent $20,000. Consequently, there is no basis for petitioner to have commenced the instant proceeding pursuant to Lien Law §201-a. To the extent that respondent's counsel now asserts that respondent has a proper lien on the subject vehicle, this issue, as mentioned above, remains to be determined once issue is joined in a proper proceeding or action.

This brings the Court to the issue of whether this proceeding should be converted pursuant to CPLR 103(c) to an action for replevin or conversion in the interests of justice since it is well settled that such remedies are available to petitioner. See Champion v. Wilsey, 114 A.D.2d 630 (3rd Dep't 1985); Ukryn v. Morgan Marine Base, Inc., 100 A.D.2d 649 (3rd Dep't 1984). Based on this record, the Court finds that the interests of justice require that the petition be dismissed.

In particular, there are deficiencies, as respondent points out, in what petitioner contends is the petition, but is in actuality only an affidavit of petitioner's employee that is improperly notarized. See CPLR 3015(b), 3020(d)(1); and 3021. In addition, although petitioner submitted a second undertaking in a higher amount to remedy any deficiencies the first undertaking had and to cover any lien that respondent's counsel alleges respondent has, there is nothing in this record which indicates what the value of the subject vehicle is so that the Court can determine whether the undertaking is at least twice the value of the subject vehicle and, therefore, whether to approve the undertaking. See CPLR 7102(e).

Accordingly, inasmuch as there is no basis to commence this proceeding pursuant to Lien Law §201-a and the petition is legally insufficient, respondent's cross motion to dismiss the petition is granted on such grounds. The petition is dismissed and the motion seeking approval of the undertaking and transfer of the subject vehicle is denied. To the extent that respondent's cross motion sought any alternative relief, it is denied since it is unnecessary for the Court to address any such requests.

This memorandum shall constitute both the decision and the order of the Court. All papers, including this decision and order, are being returned to respondent's counsel. 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 that section relating to filing, entry and notice of entry.

IT IS SO ORDERED!

________________________________

Dated:July 15, 2004.JOSEPH R. CANNIZZARO,

Albany, New YorkJUSTICE, SUPREME COURT

The Court considered the following papers:

[*4]By Petitioner:

Order to Show Cause dated March 19, 2004;

Petition of Scott Brown sworn to March, 2004, with exhibit;

Order to Show Cause dated March, 19,2004;

Affidavit in Support of Rudolph J. Meola, Esq., dated March 19, 2004, with exhibits;

Affirmation of Rudolph J. Meola, Esq., dated, April 8, 2004, with exhibits;

Affidavit of Scott E. Brown sworn to April 8, 2004, with exhibit;

Undertaking dated April 7, 2004:

Memorandum of Law dated April 8, 2004, with exhibits;

Letter of Rudolph J. Meola, Esq., dated April 22, 2004, with attachments;

By Respondent:

Notice of Cross-Motion dated April 5, 2004;

Affirmation of Donald Diamond, Esq., dated April 5, 2004;

Reply Affirmation of Randall G. Lawrence, Esq., dated April 12, 2004;

Objection of Randall G. Lawrence, Esq., dated April 29, 2004. Footnotes

Footnote 1:Although respondent's counsel remarks that the Court's conference call was held beyond 60 days since the return date for the motion for the undertaking was set before the May 3, 2004 return date of the petition, the Court notes that the return date for the motion was improperly set and could not be entertained prior to the return date of the petition. See CPLR 406. In addition, the Court notes that the return date of respondent's cross motion was also improperly set, [See CPLR 406, 2214(b) and 2215,] and that respondent submitted a reply affirmation dated April 12, 2004, and an Objection in Point of Law dated April 29, 2004, well after the return date of its own cross motion and that all of respondent's papers were in fact primarily in response to the petition, and not just the motion for the undertaking. The Court, therefore, could not address the motion or the cross motion until the petition papers were returnable on May 3, 2004.