Am. Honda Fin. Corp. v. City of Revere

• Decision Date: 08 July 2020
• Docket Number: Civil Action No. 1:19-cv-10266-ADB
• Citation: 471 F.Supp.3d 399
• Parties: AMERICAN HONDA FINANCE CORPORATION, Plaintiff, v. The CITY OF REVERE, Defendant.
• Court: U.S. District Court — District of Massachusetts

471 F.Supp.3d 399

AMERICAN HONDA FINANCE CORPORATION, Plaintiff,

v.The CITY OF REVERE, Defendant.

Civil Action No. 1:19-cv-10266-ADB

United States District Court, D. Massachusetts.

Signed July 8, 2020

Michael Lushan, Lushan, McCarthy & Goonan, Newton, MA, Nicholas A. Duston, Pro Hac Vice, Norris McLaughlin, P.A., Bridgewater, NJ, for Plaintiff.

Stephen F. Reardon, Law Offices of Stephen F. Reardon, PC, Revere, MA, for Defendant.

MEMORANDUM AND ORDER ON PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND DEFENDANT'S CROSS MOTION FOR SUMMARY JUDGMENT

BURROUGHS, D.J.

Plaintiff American Honda Finance Corporation ("Honda"), initiated this action against the City of Revere ("Revere") alleging that Revere's policy of allowing towing companies to auction vehicle without notice to all interested parties deprived Honda of its Due Process rights under the Constitution. [ECF No. 1 ("Compl.") ]. Currently before the Court is Honda's motion for partial summary judgment on Counts I, II, and III of the complaint. [ECF No. 20-1 at 14]. Count I asserts that Revere's towing policy violated Honda's constitutional rights under the Fourth and Fourteenth Amendments; Count II alleges the same actions violated the Massachusetts Constitution, Article 10; and Count III requests declaratory relief under 28 U.S.C. § 2201 to the effect that Revere's towing policy is unconstitutional. [Compl. ¶¶ 30–54]. The Court is also presented with a cross motion for summary judgment from Revere. [ECF No. 21-1]. For the reasons set forth below, Honda's motion, [ECF No. 20], is GRANTED and Revere's cross motion, [ECF No. 21-1], is DENIED.

I. BACKGROUND

A. Factual Background

Honda regularly provides financing for the purchase of Honda-manufactured vehicles and other automobiles. [Compl. ¶ 6]. On November 2, 2016, Honda obtained a money security interest and lien on a 2016 Honda Civic registered to Shanasia Hackworth ("Hackworth") and titled in New York State ("the Vehicle"). [Id. ¶¶ 14–15]. On or about December 30, 2016, the Revere Police Department obtained possession of the Vehicle as part of an ongoing criminal investigation involving stolen property and the misuse of credit cards. [Id. ¶ 16; ECF No. 21 at 1].

To conduct its investigation, the Revere Police Department enlisted the help of Mario's Towing, a third-party service, to tow the Vehicle to police headquarters. [ECF No. 21 at 1]. After the police completed their investigation, Revere authorized Mario's Towing to detain and dispose of the Vehicle according to Massachusetts General Laws ch. 255, § 39A ("the Statute"). [Compl. ¶ 20]. Pursuant to the Statute, the Revere Police Department provided Mario's Towing with information about Hackworth, the Vehicle's registered owner. [ECF No. 21 at 2]. Mario's Towing contacted Hackworth to give her the opportunity to claim the Vehicle and pay the accrued charges for towing and storage, but she did not claim the Vehicle. [Id. ]. Following the procedure outlined in the Statute, Mario's Towing waited the required number of days, mailed an additional notice to Hackworth at her known address, and then put the Vehicle up for sale at auction. [Id. ]. The Statute did not require Revere or Mario's Towing to contact Honda, the lienholder, despite Honda's interest in the Vehicle. See generally Mass. Gen. Laws ch. 255, § 39A.

Mario's Towing advertised the vehicle for sale on May 18, 2017, and finally sold it on July 30, 2017 for $15,000. [ECF No. 20-2 ¶ 19; ECF No. 20-5]. According to the National Automobile Dealers Association Guide, on May 18, 2017 the high auction value of the Vehicle was $16,092, which means Honda could have received that amount had it been allowed to sell the Vehicle itself rather than Revere putting it up for auction and receiving a lower amount. [ECF No. 20-2 ¶ 21; ECF No. 20-3 ¶ 6].

Following the sale, Honda's perfected lien was not recorded with the Vehicle's new title through the Massachusetts Department of Transportation. [Compl. ¶¶ 23–24]. As a result, the sale and retitling of the Vehicle effectively extinguished Honda's property interest and ensured that Honda would not recoup any proceeds from the sale of the vehicle. [Id. ¶ 24]. According to the Statute, Mario's Towing was authorized to use the proceeds from the sale to compensate itself for any unpaid towing and storage charges. [ECF No. 20-2 ¶ 15; ECF No. 21-3]. Further, Mario's Towing had to pay Revere a $30 administration fee for the privilege of towing vehicles under its contract with the city. [ECF No. 20-2 ¶ 15].

At no point during the process was Honda, as a lienholder, notified of the Vehicle's status or given the opportunity to intervene in the proceedings with the Revere Police Department or Mario's Towing. [Compl. ¶¶ 25, 28–29]. The parties agree that Revere, the Revere Police Department, and Mario's Towing did not violate the Statute. [ECF No. 20-2 ¶¶ 12-14]. Instead, Honda argues that the Statute is unconstitutional under both the U.S. and Massachusetts constitutions because it fails to give notice or a hearing to lienholders of unclaimed vehicles detained by the Revere Police Department, thereby depriving lienholders of Due Process. [Compl. ¶¶ 10, 28–29].

B. Procedural Background

On February 12, 2019, Honda filed a complaint against Revere in United States District Court for the District of Massachusetts. [Compl.]. Honda filed a motion for partial summary judgment on January 31, 2020. [ECF No. 20]. Revere opposed Honda's motion and filed a cross motion for summary judgment on February 21, 2020. [ECF No. 21-1].

II. LEGAL STANDARD

Honda seeks summary judgment on the first three of four Counts alleged in the complaint. [ECF No. 20-1 at 14]. Summary judgment is appropriate where the moving party can show that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "[A]n issue is ‘genuine’ if it ‘may reasonably be resolved in favor of either party.’ " Robinson v. Cook, 863 F. Supp. 2d 49, 60 (D. Mass. 2012) (quoting Vineberg v. Bissonnette, 548 F.3d 50, 56 (1st Cir. 2008) ). "A fact is material if its resolution might affect the outcome of the case under the controlling law." Cochran v. Quest Software, Inc., 328 F.3d 1, 6 (1st Cir. 2003) (citation omitted). Thus, "[a] genuine issue exists as to such a fact if there is evidence from which a reasonable trier could decide the fact either way." Id. (citation omitted). By invoking summary judgment, "the moving party in effect declares that the evidence is insufficient to support the nonmoving party's case." United States v. One Parcel of Real Prop. (Great Harbor Neck, New Shoreham, R.I. ), 960 F.2d 200, 204 (1st Cir. 1992) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ).

"To succeed in showing that there is no genuine dispute of material fact," the moving party must " ‘affirmatively produce evidence that negates an essential element of the non-moving party's claim,’ or, using ‘evidentiary materials already on file ... demonstrate that the non-moving party will be unable to carry its burden of persuasion at trial.’ " Ocasio-Hernández v. Fortuño-Burset, 777 F.3d 1, 4–5 (1st Cir. 2015) (quoting Carmona v. Toledo, 215 F.3d 124, 132 (1st Cir. 2000) ).

Conversely, "[t]o defeat a properly supported motion for summary judgment, the nonmoving party must establish a trial-worthy issue by presenting enough competent evidence to enable a finding favorable to the nonmoving party." ATC Realty, LLC v. Town of Kingston, N.H., 303 F.3d 91, 94 (1st Cir. 2002) (internal quotations and citation omitted). That is, the nonmoving party must set forth specific, material facts showing that there is a genuine disagreement as to some material fact. One Parcel of Real Prop., 960 F.2d at 204 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256–57, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ).

In reviewing the record, the Court "must take the evidence in the light most flattering to the party opposing summary judgment, indulging all reasonable inferences in that party's favor." Cochran, 328 F.3d at 6 (citation omitted). The First Circuit has noted that this review "is favorable to the nonmoving party, but it does not give him a free pass to trial." Hannon v. Beard, 645 F.3d 45, 48 (1st Cir. 2011). "The factual conflicts upon which he relies must be both genuine and material[,]" Gomez v. Stop & Shop Supermarket Co., 670 F.3d 395, 396–97 (1st Cir. 2012), and the Court may discount "conclusory allegations, improbable inferences, and unsupported speculation." Cochran, 328 F.3d at 6 (quoting Medina-Muñoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990) ).

III. DISCUSSION

A. Revere Is a Proper Defendant

Honda relies on 42 U.S.C. § 1983 as a basis for its Due Process claim. [ECF No. 20-1 at 16]. At the outset, Revere, asserting that it is an improper defendant for Honda's challenge to the Statute's constitutionality, asks the Court to grant its cross motion for summary judgment because Honda has improperly implicated the city in this action, and should instead direct its claims at Mario's Towing. [ECF No. 21 at 2]; see also [ECF No. 7 at 6 ("[D]amages were caused by third parties who were not under direction or control of the city.") ]. The Court finds that Honda has properly brought a section 1983 claim against Revere.¹

A municipality may be held liable under section 1983 "if the governmental body itself subjects a person to a deprivation of rights or causes a person to be subjected to such deprivation." Haley v. City of Boston, 657 F.3d 39, 51 (1st Cir. 2011) (citation and internal quotation marks omitted). To prevail on a section 1983 claim against a municipality, a plaintiff must show that a specific government policy or custom directly caused a violation of the plaintiff's constitutional rights. Miller v. City of Boston, 586 F. Supp. 2d 5, 7–8 (D. Mass. 2008) (citing Monell v. Dept. of Soc. Servs. of City of New York, 436 U.S. 658, 690, ...