Abele Tractor & Equip. Co. v. Schaeffer

• Decision Date: 25 November 2020
• Docket Number: 529637
• Parties: ABELE TRACTOR & EQUIPMENT CO., INC., Appellant, v. Charles SCHAEFFER Sr., Doing Business as Auto Solutions, Also Known as Auto Solutions of New York, Inc., Formerly Known as Auto Solutions of Glenville, Inc., et al., Defendants, and Trustco Bank Corp., NY, Respondent.
• Court: New York Supreme Court — Appellate Division

188 A.D.3d 1500
137 N.Y.S.3d 174

ABELE TRACTOR & EQUIPMENT CO., INC., Appellant,
v.
Charles SCHAEFFER Sr., Doing Business as Auto Solutions, Also Known as Auto Solutions of New York, Inc., Formerly Known as Auto Solutions of Glenville, Inc., et al., Defendants,
and
Trustco Bank Corp., NY, Respondent.

529637

Supreme Court, Appellate Division, Third Department, New York.

Calendar Date: October 22, 2020
Decided and Entered: November 25, 2020

137 N.Y.S.3d 175

Bailey, Johnson & Peck, PC, Albany (John W. Bailey of counsel), for appellant.

Mandel Clemente, PC, East Greenbush (Linda Mandel Clemente of counsel), for respondent.

Before: Garry, P.J., Clark, Devine, Aarons and Reynolds Fitzgerald, JJ.

MEMORANDUM AND ORDER

Devine, J.

188 A.D.3d 1500

Appeal from an order of the Supreme Court (McGrath, J.), entered June 6, 2019 in Rensselaer County, which, among other things, denied a motion by defendant Trustco Bank Corp., N.Y. for partial dismissal of the complaint.

A more detailed recitation of the facts may be found in our prior decision in this matter ( 167 A.D.3d 1256, 91 N.Y.S.3d 548 [2018] ). Briefly, defendant Trustco Bank Corp., N.Y. lent significant sums of money to defendant John A. Paige, Jr., Contracting, Inc. (hereinafter Paige), which pledged all of its goods, machinery and equipment "now owned or hereafter acquired" as collateral. As default on the loans threatened in 2013, Paige's president advised Trustco that he intended to sell Paige's motor vehicles and construction equipment to plaintiff and use the proceeds to cover Paige's debts to subcontractors and suppliers. Trustco's consent to the sale was not obtained and, in a November 2013 bill of sale, the machinery and equipment was sold to plaintiff for $342,500.

Trustco thereafter hired defendant Charles Schaeffer Sr. to repossess the vehicles and equipment, which occurred in December 2013. In January 2014, Trustco advised that it would release its lien and allow plaintiff to take possession of the vehicles and equipment upon receipt of $210,000, as well as repossession and storage charges. Plaintiff commenced this action the same month, after which it paid the purchase price in full and acquired possession of the vehicles and equipment.

137 N.Y.S.3d 176

Trustco and Schaeffer thereafter separately moved for summary judgment, and those motions were granted in part by Supreme Court. Upon appeal, we agreed with Supreme Court that Trustco was empowered to repossess the vehicles and equipment, but noted that Trustco had failed to perfect its security interest in those vehicles, requiring a certificate of title under the Vehicle and Traffic Law, and that it remained potentially liable "to any party that may have ultimately been

188 A.D.3d 1501

able to establish a superior claim" ( id. at 1259, 91 N.Y.S.3d 548 ).¹ Moreover, inasmuch as the bill of sale granted plaintiff an ownership interest in all but "the titled vehicles," we determined that plaintiff was a debtor to whom Trustco owed duties pursuant to UCC article 9 ( id. at 1260, 91 N.Y.S.3d 548 ). We accordingly found "an issue of fact that preclude[d] the grant of summary judgment to [any] party regarding plaintiff's claim for damages, pursuant to UCC article 9, based on the manner of repossession and disposition of the equipment" ( id. at 1260, 91 N.Y.S.3d 548 ).

Motion practice came in the wake of our decision. As is relevant here, Trustco moved to dismiss the claims against it insofar as they related to the titled vehicles, arguing that plaintiff did not acquire certificates of title for those vehicles until after commencement of this action and, as a result, lacked any ownership interest that could have been impacted by the pre-commencement repossession of them. Trustco further moved to strike plaintiff's supplemental expert disclosure statement and to preclude expert testimony on plaintiff's alleged lost profits and sales. Supreme Court denied Trustco's motions in their entirety, and Trustco appeals.²

To begin, although Trustco styled its motion as one to dismiss pursuant to CPLR 3211(a)(1), it was made long after issue was joined and "should have been treated as a CPLR 3212 summary judgment motion" ( Kavoukian v. Kaletta , 294 A.D.2d 646, 646, 742 N.Y.S.2d 157 [2002] ; see CPLR 3211[a][1] ; [e]; Rich v. Lefkovits , 56 N.Y.2d 276, 278, 452 N.Y.S.2d 1, 437 N.E.2d 260 [1982] ). We treat the motion in that fashion and, in doing so, observe that prior notice of that treatment "is unnecessary here given that ‘it is clear from the papers that no prejudice [will] result[ ] from omission of notice’ " ( Brown v. Midrox Ins. Co. , 108 A.D.3d 921, 922 n, 970 N.Y.S.2d 108 [2013], quoting Matter of Nassau BOCES Cent. Council of Teachers v. Board of Coop. Educ. Servs. of Nassau County , 63 N.Y.2d 100, 103, 480 N.Y.S.2d 190, 469 N.E.2d 511 [1984] ; see Rich v. Lefkovits , 56 N.Y.2d at 283, 452 N.Y.S.2d 1, 437 N.E.2d 260 ).

As for the merits, Trustco may be liable to specified individuals for its failure to comply with the statutory requirements for "the manner of repossession and disposition of [

188 A.D.3d 1502

Paige's] equipment" (167 A.D.3d at 1260, 91 N.Y.S.3d 548 ; see UCC 9–625[b] ). Those individuals include, as is relevant here, any person who "was a debtor, was an obligor, or held a security

137 N.Y.S.3d 177

interest in or other lien on" those items at the time that plaintiff departed from statutory requirements ( UCC 9–625[c][1] ). Plaintiff claims that it is a debtor, defined as one with "an interest, other than a security interest or other lien, in...