Opinion
124392
10-16-2018
HAMILTON LIVERY LEASING LLC, Claimant, v. The STATE of New York, Defendant.
For Claimant: Antar Law Firm, PLLC, By: Solomon E. Antar, Esq. For Defendant: Honorable Barbara D. Underwood, Attorney General, By: Michael T. Krenrich, Esq., Assistant Attorney General
For Claimant: Antar Law Firm, PLLC, By: Solomon E. Antar, Esq.
For Defendant: Honorable Barbara D. Underwood, Attorney General, By: Michael T. Krenrich, Esq., Assistant Attorney General
Francis T. Collins, J.
Claimant, Hamilton Livery Leasing LLC, moves for partial summary judgment on the issue of liability pursuant to CPLR 3212. Defendant cross-moves for summary judgment dismissing the claim.
Claimant seeks damages for an alleged ministerial error of the Department of Motor Vehicles (DMV) in issuing a Certificate of Title in the name of the lessee of a vehicle it owned. In an amended claim , claimant alleges it purchased a certain 2012 Chevrolet Suburban from Second Hand Used Cars III LLC on July 7, 2012, and on June 25, 2013 entered into a lease agreement with Henriquez Ramon (Ramon) permitting his use of the vehicle for the purpose of offering Taxi and Limousine services (claimant's Exhibit C, First Amended Verified Claim, ¶¶ 6-8). On July 7, 2013 claimant submitted to the DMV a Vehicle Registration/Title Application form and a MV-50 form entitled Retail Certificate of Sale indicating claimant as the owner of the vehicle and Ramon as the registrant (id. at ¶ 9). Ramon took possession of the vehicle soon thereafter, but ceased his weekly rental payments in January 2014 (id. at ¶¶ 10-11). On or about February 20, 2014, claimant "discovered that the [DMV] may have improperly issued clean title to Ramon" (id. at ¶ 12). "Having clean and clear title in his hands, Ramon in fact perpetrated a fraud by selling the vehicle, in which he had no ownership interest ... to DJ Signature LTD ..." (id. at ¶ 13). As a result of the foregoing, claimant seeks damages for the value of the vehicle and the loss of rental income.
This Court's decision denying leave to amend the claim on the ground the initial claim, filed on behalf of a limited liability company by an individual not licensed to practice law, was a nullity, was reversed by the Appellate Division, Third Department (see Hamilton Livery Leasing, LLC v State of New York , 151 AD3d 1358 [3d Dept 2017] ).
Claimant contends in support of its motion for partial summary judgment that a special relationship was formed between the parties herein by virtue of the State's obligation under the controlling statute and regulation to "issue a certificate of title (Form MV-999) to the owner of the vehicle" ( 15 NYCRR 20.7 [a]) and "mail[ ] [it] to the owner" ( Vehicle and Traffic Law § 2109 ). Claimant contends further that defendant's issuance of title to the lessee of the vehicle rather than the owner was a ministerial error for which it is entitled to partial summary judgment on liability. In opposition to claimant's motion and in support of its cross motion for summary judgment, defendant contends the claimant failed to allege the existence of a special relationship in the claim, and that the facts alleged therein do not give rise to such a relationship.
Although not cited or relied upon by the claimant, Vehicle and Traffic Law § 2117 (b) is the statutory source for the requirement that DMV "issue a new certificate of title in the name of the transferee as owner and mail it to the owner."
In maintaining records relating to the ownership and operation of motor vehicles, DMV is performing a purely governmental function ( Ford Motor Credit Co. v State of New York , 133 AD2d 980 [3d Dept 1987] ; Cobblah v State of New York , UID No. 2010-040-071 [Ct Cl, McCarthy, J., Dec. 16, 2010]; see generally Applewhite v Accuhealth, Inc. , 21 NY3d 420 [2013] ). Liability arising from the performance of a governmental function may only attach where a claimant establishes that the State breached not merely a duty owing to the public at large, but a special duty owing directly to him or to her ( Metz v State of New York , 20 NY3d 175 [2012] ; Valdez v City of New York , 18 NY3d 69, 75 [2011] ; Dinardo v City of New York , 13 NY3d 872 [2009] ; Lauer v City of New York , 95 NY2d 95, 100-101 [2000] ; Drever v State of New York , 134 AD3d 19 [3d Dept 2015] ). If a claimant is able to establish a special duty, dismissal may nevertheless result if a defendant, having engaged in a governmental function, establishes that the conduct for which recovery is sought was discretionary ( Valdez v City of New York , 18 NY3d at 75-76 ).
In McLean v City of New York (12 NY3d 194, 199 [2009] ), the Court of Appeals reiterated the ways in which a special duty may arise:
" ‘(1) when the municipality violates a statutory duty enacted for the benefit of a particular class of persons; (2) when it voluntarily assumes a duty that generates justifiable reliance by the person who benefits from the duty; or (3) when the municipality assumes positive direction and control in the face of a known, blatant and dangerous safety violation’ " ( id. at 199, quoting Pelaez v Seide , 2 NY3d 186, 199-200 [2004] ).
The claim here alleges only the breach of a general duty "to exercise a degree of care that a reasonably prudent person would exercise under the same or similar circumstances" (claimant's Exhibit C, First Amended Claim, ¶ 22). In support of its motion for summary judgment and in opposition to the defendant's cross motion, claimant contends that the facts alleged in the claim give rise to a special duty of care based upon defendant's violation of a statute and regulation enacted for the benefit of a particular class of persons. Claimant's contention in this regard is predicated upon an alleged violation of statutory and administrative requirements that a certificate of title be issued and mailed to the owner of the vehicle (citing Vehicle and Traffic Law § 2109 ; 15 NYCRR 20.7 [a]). Inasmuch as neither the statute nor the regulation expressly provide for civil damages, recovery may be had only if a legislative intent to create such a right of action may be fairly implied ( Cruz v TD Bank, N.A. , 22 NY3d 61, 70 [2013] ; McLean ,12 NY3d at 200 ). That determination turns on three essential factors: "(1) whether the [claimant] is one of the class for whose particular benefit the statute was enacted; (2) whether recognition of a private right of action would promote the legislative purpose; and (3) whether creation of such a right would be consistent with the legislative scheme" ( Sheehy v Big Flats Community Day , 73 NY2d 629, 633 [1989] ; see also Cruz , 22 NY3d at 70 ; Matter of Stray from the Heart, Inc. v Department of Health & Mental Hygiene of the City of NY , 20 NY3d 946 [2012] ; Metz , 20 NY3d 175 ; McLean , 12 NY3d at 200 ; Hammer v American Kennel Club , 1 NY3d 294, 299 [2003] ). "If one of these prerequisites is lacking, the claim will fail" ( McLean , 12 NY3d at 200 [internal quotation marks and citation omitted]). If such a private right of action is to be implied, there must be "clear evidence of the Legislature's willingness to expose the governmental entity to liability that it might not otherwise incur" ( Uhr v East Greenbush Cent. School Dist. , 94 NY2d 32, 42 [1999] ). No such clear evidence exists in this case. Assuming the truth of the allegations in the claim and giving the claimant the benefit of every favorable inference, the claim fails to allege facts upon which the existence of a special duty may be predicated ( Szydlowski v Town of Bethlehem , 162 AD3d 1188 [3d Dept 2018] [complaint contained no allegations from which the existence of a special duty could be inferred]).
Time and again the Court of Appeals has reiterated the rule that liability against the State or a municipality arising from the performance of a governmental function may not be sustained in the absence of " ‘a duty to use due care for the benefit of particular persons or classes of persons’ " ( Lauer , 95 NY2d at 101 ; quoting Motyka v City of Amsterdam , 15 NY2d 134, 139 [1965] ). Here, the statutory scheme and implementing regulations relied upon are not for the benefit of a particular class of persons. Article 46 of the Vehicle and Traffic Law, entitled Uniform Vehicle Certificate of Title Act, was enacted "to make uniform the law of those states which enact it" ( Vehicle and Traffic Law § 2133 ; see also People v City of Hornell , 256 AD 113 [4th Dept 1939], affd 282 NY 555 [1939] ). While Article 46 and the implementing regulations were clearly designed to provide procedural uniformity for the issuance of titles and registrations, such benefits inure to the members of the public generally, not the claimant or a member of any discrete class of persons in particular (see Bynum v Camp Bisco, LLC , 135 AD3d 1060, 1062 [3d Dept 2016] [regulations were intended to benefit claimant "but in the broad sense of protecting all members of the general public similarly situated"). Moreover, the statutory requirement for the issuance of a motor vehicle title with the names and addresses of the owner and any lienholders indicated thereon ( Vehicle and Traffic Law § 2108 ) benefits not only vehicle owners such as the claimant, but secured creditors and subsequent purchasers of the vehicle as well (cf. Flagstar Bank, FSB v State of New York , 114 AD3d 138 [2d Dept 2013] [claimant-creditor was not one of class for whose particular benefit the statutory scheme for docketing of judgments was intended since statutes benefitted both judgment creditors and innocent third party purchasers of the judgment debtor's property]). Under these circumstances, it cannot be said that claimant was a person or entity for whose special benefit the statute and regulation relied upon were enacted (see also Matter of Stray from the Heart, Inc., 20 NY3d 946 ; Metz , 20 NY3d 175 ; Rennix v Jackson , 152 AD3d 551 [2d Dept 2017] ).
Nor can it be said that creation of a private right of action would be consistent with the legislative scheme. Where the legislature provides either a comprehensive enforcement scheme or other avenues of redress for violations of a statute or regulation, recognition of a private right of action is inappropriate (Cruz v TD Bank , supra [Exempt Income Protection Act created no private right of action expressly or by implication because parallel statutes’ enforcement mechanism militated against new type of claim against banks]; Hammer v American Kennel Club , supra [recognition of a private right of action was incompatible with statutory enforcement scheme]; McLean v City of New York, supra [recognition of a private right of action was incompatible with comprehensive enforcement scheme and provision for criminal liability for willful violations of statute]; Uhr v East Greenbush Cent. School Dist., supra [recognition of private right of action was inconsistent with statutory enforcement scheme]). As the Court of Appeals explained in Sheehy v Big Flats Community Day , "the Legislature has both the right and the authority to select the methods to be used in effectuating its goals, as well as to choose the goals themselves" ( 73 NY2d at 634 ). As a result, the adoption of a statutory enforcement mechanism or the availability of criminal penalties militates strongly against the recognition of a private right of action. Moreover, the Appellate Division, Third Department, recently held that the availability of relief pursuant to CPLR Article 78 is inconsistent with the recognition of a private right of action premised upon an alleged violation of a statute pertaining to parole release determinations ( Franza v State of New York , 164 AD3d 971 [3d Dept 2018] ; see also T.T. v State of New York , 151 AD3d 1345 [3d Dept 2017] [private right of action was incompatible with statutory complaint procedure available to residents or their guardians of facility certified by the Office of Mental Retardation and Developmental Disabilities]). The Uniform Vehicle Certificate of Title Act at issue here is a detailed comprehensive statutory scheme that not only provides persons aggrieved by an act or omission with a right to a hearing ( Vehicle and Traffic Law § 2127 ), but subjects such administrative determinations to judicial review under CPLR Article 78 ( Vehicle and Traffic Law § 2128 ; see also 15 NYCRR 155.2 ). In addition, Vehicle and Traffic Law § 2130 designates as a felony various fraudulent uses of a Certificate of Title. Thus, the Court finds that creation of a private right of action would be inconsistent with the legislative scheme of Vehicle and Traffic Law, Article 46.
Claimant relies primarily on ( Ford Motor Credit Co. v State of New York , 133 AD2d 980 [3d Dept 1987] and Moretran Fin. Servs., LLC v State of New York , 75 AD3d 981 [3d Dept 2010] ) to support a contrary result. Ford held that the State is not immune from liability for ministerial acts negligently performed by the DMV. Following Ford , the State's liability for DMV errors turned on whether the conduct was discretionary, and therefore immune from liability, or ministerial, as to which a finding of negligence alone sufficed to impose liability (see e.g. Fontaine v State of New York , UID No. 2006-015-548 [Ct Cl, October 25, 2006] Collins, J.; Lobel Fin. Corp. v State of New York , 8 Misc 3d 662 [Ct Cl 2005] ; Davis v State of New York , UID No. 2004-028-504 [Ct Cl, February 3, 2004] Sise, J.; Sankara v State of New York , UID No. 2001-028-0534 [Ct Cl, June 5, 2001] Sise, J.). In McLean v City of New York (supra ), however, the Court of Appeals subsequently clarified that "[g]overnment action, if discretionary, may not be a basis for liability, while ministerial actions may be, but only if they violate a special duty owed to the plaintiff, apart from any duty to the public in general" (id. at 203). Thus, to the extent Ford stands for the proposition that ministerial acts of negligence, standing alone, may give rise to liability, it is no longer good law.
Moretran is similarly unavailing. In Moretran , the Court held that while the processing of registration and title applications is ministerial, DMV had no duty to inquire about lienholder information prior to issuing a clean Certificate of Title. Rather, the Court found that it was the lienholder's responsibility to perfect its lien through the submission of a particular form which it had failed to do. The Court stated in dicta that "[h]ad claimant taken the necessary steps to perfect its lien, the clean certificate of title would not have been issued; having failed to do so, claimant is responsible for its own loss" ( Moretran 75 AD3d at 983 ). Nothing in this language, relied upon by the claimant, supports its contention that the statute and regulation on which it relies gives rise to a special duty of care. While ministerial actions of the DMV may support a negligence cause of action, such acts must violate a special duty owed to the claimant, apart from any duty to the public in general (see Gonzalez v State of New York, 156 AD3d 764 [2d Dept 2017] ; Benjamin v State of New York , UID No. 2012-041-051 [Ct Cl, Milano, J., May 22, 2012] Palmer v State of New York , UID No. 2011-032-029 [Ct Cl, Hard, J., Sept. 30, 2011]; Goll v State of New York , UID No. 2011-040-049 [Ct Cl, McCarthy, J., Sept. 12, 2011]; Nuzzolo v State of New York , UID No. 2010-015-179 [Ct Cl, Collins, J., Oct. 14, 2010]). Nothing in Moretran states otherwise.
Unreported decision from the Court of Claims are available via the internet at www.nyscourtofclaims.state.ny.us.
According the claim the benefit of every possible favorable inference and accepting the facts alleged in the claim as true, it fails to state a cognizable cause of action ( Leon v Martinez , 84 NY2d 83 [1994] ; Chenango Contr., Inc. v Hughes Assoc. , 128 AD3d 1150, 1151 [3d Dept 2015] ; see also Merin v City of New York , 154 AD3d 928, 929 [2d Dept 2017], lv denied 31 NY3d 913 [2018] ; Rozell v Milby , 98 AD3d 960, 961 [2d Dept 2012] ; Ruiz v City of Buffalo , 100 AD3d 1388, 1388-1389 [4th Dept 2012] ; Blackstock v Board of Educ. of the City of NY , 84 AD3d 524, 524 [1st Dept 2011] ; Lewis v State of New York , 68 AD3d 1513, 1515 [3d Dept 2009] ). Absent facts giving rise to a special duty, liability may not be predicated upon the alleged ministerial errors of the DMV (see Escudero v State of New York, UID No. 2015-015-096 [Ct Cl, Collins, J., Nov. 20, 2015]; Rudolph v State of New York, UID No. 2013-015-446 [Ct Cl, Collins, J., Sept. 19, 2013]; Jamim v State of New York , UID No. 2012-015-393 [Ct Cl, Collins, J., Jan. 4, 2013]; Benjamin v State of New York , UID No. 2012-041-051 [Ct Cl, Milano, J., May 22, 2012]; Palmer v State of New York , UID No. 2011-032-029 [Ct Cl, Hard, J., Sept. 30, 2011]; Goll v State of New York , UID No. 2011-040-049 [Ct Cl, McCarthy, J., Sept. 12, 2011]; Zenteno v State of New York, UID No. 2011-041-029 [Ct Cl, Milano, J., August 16, 2011]; Nuzzolo v State of New York , UID No. 2010-015-179 [Ct Cl, Collins, J., Oct. 14, 2010]).
While defendant's cross motion was made pursuant to CPLR 3212, it argued, in essence, the absence of any legal viability of the alleged cause of action and the Court has therefore treated it "as a narrowly framed post-answer CPLR 3211 (a) (7) ground [for dismissal] asserted in a summary judgment motion" (Chenango Contr., Inc. v Hughes Assoc. , 128 AD3d 1150, 1151 [3d Dept 2015] ). Nothing submitted in opposition to defendant's motion demonstrates the viability of a cognizable cause of action (id. ; see also Guggenheimer v Ginzburg , 43 NY2d 268, 275 [1977] ).
Based on the foregoing, claimant's motion for partial summary judgment on the issue of liability is denied and defendant's cross motion for summary judgment dismissing the claim is granted. The claim is dismissed.
Papers Considered:
1. Notice of Motion, dated July 6, 2018;
2. Affirmation of Solomon E. Antar, Esq., dated July 6, 2018, with Exhibits A - H;
3. Notice of cross-motion, dated July 24, 2018;
4. Affirmation of Michael T. Krenrich, Esq., dated July 24, 2018, with Exhibits A - G;
5. Affirmation of Solomon E. Antar, Esq., dated August 1, 2018.