| Matter of Toyota Motor Credit Corp. v Impressive Auto Ctr.,Inc. |
| 2011 NY Slip Op 00081 [80 AD3d 861] |
| January 6, 2011 |
| Appellate Division, Third Department |
| In the Matter of Toyota Motor Credit Corporation, Respondent, vImpressive Auto Center, Inc., Appellant, et al., Respondent. |
—[*1] Law Office of Rudolph J. Meola, Latham (Rudolph J. Meola of counsel), forrespondent.
Garry, J. Appeal from an order of the Supreme Court (Egan, Jr., J.), entered December 16,2009 in Albany County, which, in a proceeding pursuant to Lien Law § 201-a, amongother things, denied a cross motion by respondent Impressive Auto Center, Inc. to vacate adefault judgment entered against it.
In November 2008, respondent Impressive Auto Center, Inc. (hereinafter respondent), aregistered motor vehicle repair shop in Queens, performed repair work on a vehicle. Upon theowner's failure to pay for these services and the vehicle's subsequent storage, respondent hiredRapid Liens, Inc. to prepare and serve a garagekeeper's lien. Petitioner, a foreign corporationauthorized to do business in New York, holds a duly perfected first priority purchase money lienin the vehicle. On January 7, 2009, petitioner was served by certified mail with a notice of lienand sale advising that the vehicle would be sold at public auction if not redeemed before January20, 2009. The vehicle was sold in February 2009, and a new title was issued.
In March 2009, petitioner commenced this special proceeding seeking, among other things, adeclaration that the garagekeeper's lien was null and void. Respondent did not appear, andSupreme Court issued a default judgment in petitioner's favor. Petitioner then moved to [*2]convert the proceeding into an action for conversion and forsummary judgment on the issue of liability. Respondent opposed the motion and cross-moved tovacate the default judgment and to dismiss the special proceeding. The court denied respondent'scross motion, declined to address its motion to dismiss the proceeding, converted the proceedinginto an action for conversion, and granted summary judgment to petitioner on the issue ofliability. Respondent appeals, contending that Supreme Court erred in denying its motion tovacate the default judgment.
Whether vacatur should be granted "is addressed to the sound discretion of the court" (F & K Supply, Inc. v Shean, 56 AD3d1076, 1077 [2008]). An applicant for such relief is required to "show a reasonable excuse forthe default and the existence of a meritorious defense" (Abel v Estate of Collins, 73 AD3d 1423, 1424 [2010]; seeCPLR 5015 [a] [1]). Supreme Court denied the cross motion on the ground that respondent didnot show the existence of a meritorious defense, as it failed to establish a valid garagekeeper'slien on the vehicle pursuant to Lien Law § 184. To sustain such a claim, respondent wasrequired to show that it was duly registered, that it was the bailee of the vehicle in question, thatthe owner had consented to the services and storage furnished by respondent, and that "there wasan agreed-upon price or, if no agreement on price had been reached, the charges are reasonablefor the services supplied" (Matter of National Union Fire Ins. Co. of Pittsburgh, Pa. v ElandMotor Car Co., 85 NY2d 725, 730 [1995]). Petitioner concedes that respondent was dulyregistered and a bailee. Respondent sought to demonstrate the remaining elements by submittinga writing, dated November 20, 2008 and apparently signed by the vehicle owner, purportedlyauthorizing respondent to complete "all repairs" on the vehicle for "the agreed price negotiatedupon signing this contract." The court found this document insufficient as it failed to specify thecost or the nature of the repairs to be completed.
We find the standard of proof thus imposed unduly stringent within the context of theunderlying application. "[T]he quantum of proof needed to prevail on a CPLR 5015 (a) (1)motion is less than that required when opposing a summary judgment motion" (Abel v Estateof Collins, 73 AD3d at 1425). At this stage, respondent was not required to prove its defensein full, but merely to set forth sufficient facts to demonstrate, on a prima facie basis, that adefense existed (see Dodge vCommander, 18 AD3d 943, 945-946 [2005]; Bergen v 791 Park Ave. Corp., 162AD2d 330, 331 [1990]). Respondent's writing included no specific figures, but it did state that anagreement had been reached.[FN1]Respondent supplemented this document with [*3]invoicesdetailing the costs of materials, labor and storage, and an employee's affidavit averring that theowner agreed to the amounts stated in the notice of lien and that these amounts constituted thefair and reasonable price of the services and materials provided. This was sufficient to establishrespondent's prima facie claim (see Matter of National Union Fire Ins. Co. of Pittsburgh, Pa.v Eland Motor Car Co., 85 NY2d at 730) and, thus, demonstrate the existence of ameritorious defense.[FN2]
We further find merit in respondent's contention that petitioner's failure to commence thespecial proceeding within 10 days after service of the notice of lien gives rise to a meritoriousdefense (see Lien Law § 201-a; Matter of Nachman v Crawford, 114 AD2d672, 673-674 [1985]). Supreme Court found the statutory 10-day limitations period inapplicablebecause the notice of lien and sale was mailed by Rapid Liens, rather than by respondent itself,resulting, in the court's view, in defective service. However, Lien Law § 201 does notprohibit a lienor from using an agent to serve a notice of lien and sale. Moreover, petitioneracknowledges that it received the notice in a timely fashion and makes no claim that respondent'suse of an agent interfered with petitioner's understanding of the nature of the mailing orotherwise caused its delay in commencing the proceeding (compare Parker v P & N Recoveryof N.Y., 182 Misc 2d 342, 345 [1999]; Hsu v Emerson Collision, 126 Misc 2d 385,387-388 [1984]).[FN3]Thus, respondent may have a meritorious defense as to that portion of the petition commencedpursuant to Lien Law § 201-a.
Having determined that respondent has shown the existence of meritorious defenses, wefurther conclude that it had a reasonable excuse for its default (see CPLR 5015 [a] [1]).Respondent proffered the affidavit of an employee who acknowledged receiving the papers bywhich the proceeding was commenced, but stated that he did not understand their significance.He alleged that he contacted the office of petitioner's counsel and was advised that, since thevehicle had already been sold, no response was necessary. Relying on this representation, theemployee did not advise respondent's owner of the action.[FN4]Petitioner submitted no evidence to refute these assertions. These submissions adequatelydemonstrate that respondent's failure to [*4]appear did not reflectwillfulness or an intent to ignore the action (see Abel v Estate of Collins, 73 AD3d at1424-1425). Further, there is no indication that any prejudice inured to petitioner as a result ofrespondent's relatively brief delay (seeAcker v VanEpps, 45 AD3d 1104, 1106 [2007]). Mindful of " 'the strong public policyin favor of resolving cases on the merits' " (Rickert v Chestara, 56 AD3d 941, 942 [2008], quoting Harcztark v Drive Variety, Inc., 21AD3d 876, 877 [2005]), we therefore find that respondent's cross motion to vacate thedefault should have been granted. Vacatur of the default judgment also requires reversal of theother relief granted by Supreme Court, which depended on the determination that the lien wasinvalid. Accordingly, we deny petitioner's motions to convert the proceeding to an action forconversion and for partial summary judgment as to liability, without prejudice to renew. Onremittal, Supreme Court is directed to consider respondent's previously-unaddressed crossmotion to dismiss the special proceeding.
Cardona, P.J., Mercure, Malone Jr. and Stein, JJ., concur. Ordered that the order is reversed,on the law, with costs, cross motion granted, default judgment vacated, motions to convertproceeding to an action for conversion and for partial summary judgment denied, and matterremitted to the Supreme Court for further proceedings not inconsistent with this Court's decision.
Footnote 1: Contrary to petitioner's claim,our prior decision in Matter of Hall v Barnes (225 AD2d 837 [1996]) does not indicatethat a statement of the amount of the agreed-upon cost of repairs is a prerequisite to the validityof a lien. The estimate at issue in Matter of Hall failed to reveal that the vehicle ownerhad agreed to any amount of repair costs (id. at 838); notably,"an estimate ofrepairs does not create a lien" (Grant St.Constr., Inc. v Cortland Paving Co., Inc., 55 AD3d 1106, 1107 [2008]; compareGeneral Motors Acceptance Corp. v Chase Collision, 140 Misc 2d 1083, 1085-1087 [1988]).Further, Matter of Hall involved a final determination of a lien's validity rather than thethreshold question of whether a prima facie showing had been made (Matter of Hall vBarnes, 225 AD2d at 837-839).
Footnote 2: We find no merit in petitioner'sclaim that the lien is invalid because of respondent's alleged failure to comply with certainregulations affecting motor vehicle repair shops (see Vehicle and Traffic Law §398-d; 15 NYCRR 82.5). Nothing in Lien Law § 184 or the associated case law mandatescompliance with these provisions as a prerequisite for a valid garagekeeper's lien.
Footnote 3: Contrary to petitioner's claim,service by certified mail did not violate Lien Law § 201, which requires personal serviceonly when the entity being served "can be found where such lien arose."
Footnote 4: Respondent's claim that theemployee was not its agent for service of process was not raised in its cross motion and, as such,was not preserved for our review (see e.g. Matter of Terminix Intl. Co. v Assistant Commr.for Hearings & Mediation Servs. for N.Y. State Dept. of Envtl. Conservation, 301 AD2d810, 812 [2003]).