Matter of Salerno v Commissioners of the NY State Dept. of Motor Vehicles

[*1] Matter of Salerno v Commissioners of the NY State Dept. of Motor Vehicles 2006 NY Slip Op 50950(U) [12 Misc 3d 1158(A)] Decided on May 19, 2006 Supreme Court, Westchester County Lippman, J. 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 May 19, 2006
Supreme Court, Westchester County

In the Matter of the Application of Frank Salerno, Petitioner,

against

Commissioners of the New York State Department Of Motor Vehicles, INDIVIDUALLY AND AS MEMBERS and ROBERT MENAK, Respondents.



6522/06



Elefante & Persanis, LLP

Attorneys for Petitioner

670 White Plains Road, Suite 321

Scarsdale, New York 10583

Eliot Spitzer

Attorney General of the State of New York

Attorneys for Respondents

Attn: Rachel Zaffrann, Assistant Attorney General

101 East Post Road

White Plains, New York 10601

Jonathan Lippman, J.

Petitioner, Frank Salerno, is the owner and sole officer of Ultimate Motors, Inc. (the dealership"). The dealership was issued a license to operate as a used car dealer by the New York State Department of Motor Vehicles ("DMV").

On December 14, 2004, a felony complaint was filed by the City of Yonkers Police Department accusing petitioner of committing the offenses of Grand Larceny in the Third Degree and Scheme to Defraud in the First Degree "on or about and between December 1, 2003 and July 9, 2004." The complaint alleged more particularly as follows: "The Defendant(s) engaged in a scheme constituting a systematic ongoing course of conduct with intent to defraud more than one person or to obtain property from more than one person by false or fraudulent pretenses, representations or promises, and so obtained such property with a value of one thousand dollars or more from one or more such persons.To wit: The defendant(s) at the above date, time and place, did steal a 1969 Chevrolet Corvette convertible from its owner and the approximate value of the vehicle was $28,000. In doing so Defendant obtained the vehicle from it's [sic] owner, Nicholas Barreira, by executing a consignment agreement to sell such vehicle. Defendant subsequently sold said vehicle and never gave any proceeds for the sale to the owner Nicholas Barreira. The execution of this consignment agreement' constituted an ongoing scheme to defraud as defendant obtained property from at least four other persons by the execution of at least four other such agreements during 2003 and 2004 and disposed of said vehicles as well giving the owners either no money or partial payment of the price agreed to in the consignment agreement" (Answer Exhibit A).

On December 16, 2005, petitioner pled guilty to the felony offense of Scheme to Defraud (Answer, Exhibit B).

By notice dated March 17, 2006 addressed to the dealership as respondent, DMV advised that a hearing would be held to "investigate the alleged violations of the Vehicle and Traffic Law and/or Commissioner's Regulations and to determine whether or not a suspension or revocation, finding of financial loss, and/or civil penalty be imposed against respondent" (Answer, Exhibit C). The April 14, 2006 notice provided that such hearing would be held on April 24, 2006.

On or about March 27, 2006, petitioner's attorney requested an adjournment of the hearing because of a prior engagement. By "notice of adjournment" dated April 4, 2006, DMV advised the dealership that the hearing had been adjourned. While the notice of adjournment provided no new date for the hearing, it stated that the dealership would be notified by mail when the hearing was rescheduled. It also listed the reason for the adjournment as "attorney unavailable" (Answer, Exhibit D).

On or about April 8, 2006, DMV issued an order addressed to petitioner and the dealership denominated as an "order of suspension pending a hearing of a dealership" in which [*2]DMV stated that "pursuant to Section 415-417 of the NYS Vehicle and Traffic Law, the above Dealership is hereby ordered suspended for an indefinite period pending a hearing resulting from charges arising from a Complaint Investigation commencing on or about 01/25/06" (Answer, Exhibit E). The order stated that "the seriousness of these violations and their impact on highway safety and/or consumer protection has resulted in a need to suspend this business pending a hearing to ensure that such violations do not continue" (Answer, Exhibit E). The order charged petitioner with two violations. Charge 1 alleged a violation of "Code 000, V And T Law 415-9(g)" relating to petitioner's conviction on December 16, 2005 of a Class E Felony. Charge 2 alleged a violation of "Code 249, V And T Law 415-9(c)" and Scheme to Defraud in the First Degree (Answer, Exhibit E). [FN1]

The order listed the suspension effective date as April 14, 2006 and the initial hearing date of April 24, 2006. Petitioner's counsel was first advised by a representative of DMV that the earliest date of the adjourned hearing would be in mid July 2006 (Petition at ¶ 12). However, DMV later offered petitioner a hearing date for the first week of May 2006 (Answer at ¶12). Respondents' counsel asserts that petitioner declined this offer and that consequently, the matter was scheduled for May 16, 2006 (Answer at ¶12). Petitioner's counsel states in his reply affirmation that petitioner has received notification from DMV that hearings would be held on May 16, 2006 and May 26, 2006 (Reply Affirmation at ¶3).[FN2] Although demanded by petitioner, DMV refused to lift the temporary suspension of the dealership's license pending the hearing of the matter. Therefore, petitioner commenced this proceeding to review the suspension imposed by respondents and for judgment annulling the suspension by respondents "until ten (10) days prior" to the hearing (Petition at ¶21).

LEGAL DISCUSSION

Petitioner alleges that respondents violated Vehicle and Traffic Law §415 by keeping the suspension of the used car dealership license in effect for more than 10 days (Petition at ¶14).

VTL §415 (9-a) provides as follows: Hearings; temporary suspension. (a) No registration shall be suspended or revoked, or renewal refused, except upon notice to the registrant and after an opportunity to be heard. Provided however, upon a written notice of temporary [*3]suspension delivered by certified mail to the registrant, a registration may be temporarily suspended pending a hearing. Any such notice of temporary suspension shall provide that the suspension is effective seventy-two hours after mailing of such notice and shall provide that a hearing be scheduled within ten days after the effective date of the temporary suspension.

Contrary to petitioner's contentions, the plain language of VTL §415 (9-a) authorizes DMV to temporarily suspend a registration pending a hearing and imposes no express limitation on the duration of the temporary suspension period. While the statute requires that DMV schedule a hearing within ten days after the effective date of the suspension, it does not require that a temporary suspension be lifted in the event that the hearing is not held within ten days due to a registrant's request for an adjournment. Such an interpretation would render the temporary suspension provisions of VTL §415 ineffectual by allowing violators to avoid suspensions simply by postponing the hearing on their cases.

Petitioner further contends that DMV's continuation of the temporary suspension of the dealership's license in the interim following the adjournment violated his procedural due process rights. More particularly, petitioner avers that by refusing to lift the temporary suspension until 10 days prior to the rescheduled hearing date, DMV imposed an indefinite suspension without a hearing in violation of the due process clause of the Fourteenth Amendment of the United States Constitution and Article I, §6 of the New York State Constitution, by taking away petitioner's right to earn a living without the necessity of a hearing (Petition at ¶20).

Petitioner's arguments to the contrary notwithstanding, DMV's right to temporarily suspend licenses prior to conducting a hearing has been upheld as constitutional (see New York Apple Tours, Inc. v Hoffman, 278 AD2d 70 [2000], appeals dismissed, lv denied, 96 NY2d 729 [2001]. While petitioner may have a property interest protected by the Due Process Clause, any deprivation of that property interest for a period in excess of the ten days prior to the scheduled hearing of April 24, 2006 was the result of petitioner's own actions. DMV had afforded petitioner a hearing within ten days of the effective date of the temporary suspension as prescribed by VTL §415 (9-a) and only postponed the hearing at petitioner's request. DMV then promptly rescheduled the hearing to be conducted just weeks thereafter on May 16, 2006 (and/or May 26, 2006). Such a minimal delay in the adjudication of the charges against petitioner and the brief extension of the temporary suspension period cannot be construed as a violation of petitioner's due process rights (see Matter of Wald v New York State Department of Motor Vehicles, 3/9/2000 NYLJ 30, col 2, Supreme Ct. Bronx Co.).

"The public relies upon the representations made by auto dealers and should clearly be protected from their deceitful practices" Holchuk v Passidomo, 101 AD2d 917, 917 [1984]. Given the severity of the charges pending against petitioner, DMV's temporary suspension of petitioner's license does not offend due process, particularly where DMV is adhering to statutory provisions designed to protect consumers from fraud and ensure that they are not victimized by unscrupulous dealerships (see Matter of Wald, id).

Consequently, respondents' determination to maintain the temporary suspension of the dealership's license in effect pending the adjourned hearing was not irrational, arbitrary or capricious and should not be disturbed (see Matter of Pell v Board of Educ., 34 NY2d 221, 231 [*4][1974]).

Wherefore, it is hereby ORDERED and ADJUDGED that the petition is hereby dismissed.

Dated: White Plains, New York

May 19, 2006

______________/S/___________________

HON. JONATHAN LIPPMAN, J.S.C.

To: Footnotes

Footnote 1:Respondents allege that petitioner has a history of violations. Between 2004 and 2006, DMV filed approximately twenty-nine administrative cases against the dealership for alleged violations, twenty five of which were recommended for hearing (Menak Affidavit at ¶3). The twenty-five cases involved charges against the dealership for failing to forward proceeds of sale to the owners of cars that it sold on consignment, selling vehicles that it did not own, and failing to deliver vehicles to purchasers after receiving payment for car sales (Menak Affidavit at ¶4 - 5).

Footnote 2:It is unknown whether the May 26, 2006 hearing date relates to a different case against the dealership or has been established to accommodate a continuation of the May 16, 2006 hearing.