B & L Auto Group, Inc. v. Zelig

188 Misc. 2d 851, 730 N.Y.S.2d 400, 2001 N.Y. Misc. LEXIS 292
CourtCivil Court of the City of New York
DecidedJune 12, 2001
StatusPublished
Cited by1 cases

This text of 188 Misc. 2d 851 (B & L Auto Group, Inc. v. Zelig) is published on Counsel Stack Legal Research, covering Civil Court of the City of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
B & L Auto Group, Inc. v. Zelig, 188 Misc. 2d 851, 730 N.Y.S.2d 400, 2001 N.Y. Misc. LEXIS 292 (N.Y. Super. Ct. 2001).

Opinion

OPINION OF THE COURT

Mary Ann Brigantti-Hughes, J.

In this action, plaintiff, an automobile dealership, seeks to recover $2,500 of a $4,000 down payment from defendant, the purchaser of a secondhand car.

In a pretrial motion, defendant moves to dismiss this case in its entirety on grounds that the automobile dealership was not licensed as a secondhand automobile dealer at the time it purported to sell to defendant the used car at issue in this action and, consequently, according to defendant the contract of sale is void, and plaintiff lacks standing to sue for relief in connection with the purported sale.

Defendant further moves to dismiss this case on the grounds that plaintiff did not have title to the used car at the time it purported to sell it to defendant and, consequently, the purported sale is therefore void.1

In plaintiffs opposing papers, it concedes that its New York City Department of Consumer Affairs (NYCDCA) secondhand automobile dealers’ license expired on July 31, 1999 and it did not timely renew until October 18, 1999. Plaintiff, however, argues that the two-month lapse in its license should be excused because it has been in business for more than 20 years and has always met its obligation of being a fully licensed business and because the delay was purportedly caused by its business moving to a different address.

Moreover, plaintiff argues that even if it did not have a valid New York City license2 at the time it entered into contract with defendant, it nevertheless has standing to recover its down payment from the defendant because it is a certified [853]*853dealer registered with the New York State Department of Motor Vehicles (NYSDMV). Specifically, plaintiff argues that the NYCDCA license is contingent upon compliance with the laws of the State of New York and therefore it is licensed and controlled by the NYSDMV. Hence, plaintiff alleges that its failure to be licensed by NYCDCA is not a basis to preclude it from bringing this action or declare the sale contract null and void.

Plaintiff additionally argues that as a certified dealer it had title of the vehicle when it acquired ownership of the vehicle and need not apply for a New York State certificate of title.

The determining issue before this Court, therefore, is whether a secondhand dealer who sues a “consumer” may circumvent New York City’s licensing requirement by complying solely with New York State’s certification and be allowed to amend its complaint to plead its State certification. The Court finds it cannot.

Factual Background

By lease dated September 18, 1996 between plaintiff as lessor and defendant as lessee, defendant leased a 1997 Toyota Avalon sedan from plaintiff. As the conclusion of the three-year lease term approached, the parties agreed to extend the lease for an additional month, that is, through October 18, 1999, and to meet to work out terms for defendant Zelig to lease or purchase a car. Defendant mailed the additional month’s lease payment on September 16, 1999.

The meeting between plaintiff and defendant took place at plaintiffs dealership on September 28, 1999. At that time, the parties agreed that defendant would purchase from plaintiff the 1997 Toyota Avalon sedan that defendant had, for the prior three years, leased from plaintiff. The parties are in agreement that this contract of sale was signed on September 28, 1999. Pursuant to the sales contract defendant was obligated to pay a down payment of $4,000.

Plaintiff “rolled over” defendant’s $1,500 security deposit on her automobile lease to pay a portion of the $4,000 down payment allegedly due on the purchase of the car. The $1,500 security deposit was applied by plaintiff to the $4,000 down payment, leaving a $2,500 down payment due. It was agreed by and between plaintiff and defendant that the defendant would return the next day with the $2,500 balance due on the down payment and that defendant could remain in possession of the vehicle. The defendant never returned and kept possession of the vehicle.

[854]*854Discussion

The business and licensing provisions of title 20 of the Administrative Code of the City of New York and title 6 of the Rules of the City of New York were enacted to safeguard and protect consumers against fraudulent practices. Specifically, Administrative Code § 20-265 provides that it is unlawful for any person to act as a secondhand automobile dealer without a license. Moreover, applicants for a dealer in secondhand articles license and a secondhand automobile dealers’ license must consent to being fingerprinted and submit a photograph so that their criminal history may be checked (Administrative Code § 20-266 [c]; 6 RCNY 1-01). These stringent regulations came as a result of the historical connection to trafficking in and the sale of stolen property in the automobile dealership industries (New York Shredding Corp. v New York City Dept. of Investigation, 184 Misc 2d 174 [Sup Ct, NY County 2000]).

Once a license is granted, the licensee is subject to regulations requiring, inter alia, the display of signs, the labeling of articles, furnishing a bond to the City, maintaining accurate records of purchase and sales and maintaining a “police book” which contains information subject to inspection without notice. (Administrative Code § 20-273; 6 RCNY 2-101, 2-103.) The license is valid for a two-year term and an application for renewal requires the submission of additional information concerning the licensee and the business. (6 RCNY 1-02.) However, if the license renewal is filed 60 days or more after the expiration date of such license the renewal shall be treated as a new license application. (6 RCNY 1-09.) Furthermore, the City ordinance also provides that when the licensee moves its business to a different location, it is required to notify NYC-DCA in writing within 10 days of the change of address. (6 RCNY 1-08.) Failure to abide by these rules and to continue to operate as an unlicensed business in New York City is a misdemeanor. (Administrative Code § 20-401 [1].)

In the instant case, plaintiff does not dispute that its NYC-DCA secondhand automobile dealers’ license operating as B & L Toyota, Inc., expired on July 31, 1999 nor does it dispute that its business was unlicensed by NYCDCA at the time it entered into the sales contract, i.e., September 28, 1999, or that it took defendant 79 days to renew.

Plaintiff’s plea to this Court is to excuse its unlicensed status for the two-month lapse by judicially administering retroactive application of the alleged renewal license which became effective October 18, 1999.

[855]*855The Administrative Code speaks to the issue of retroactive application of late renewals3 only to the extent that if an applicant attempts to renew its expired license more than 60 days after the expiration date, the renewal application is considered a new application. The basis for plaintiffs contention here is that NYCDCA kept the original expiration date that the previous license had, as if the renewal was timely. This Court finds plaintiffs arguments unpersuasive.

Plaintiffs late renewal, by operation of law, automatically converted the renewal application to an application for a new license since more than 60 days had lapsed from the date of expiration.

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Bluebook (online)
188 Misc. 2d 851, 730 N.Y.S.2d 400, 2001 N.Y. Misc. LEXIS 292, Counsel Stack Legal Research, https://law.counselstack.com/opinion/b-l-auto-group-inc-v-zelig-nycivct-2001.