Sharrock v. Dell Buick-Cadillac, Inc.

• Citation: 45 N.Y.2d 152,408 N.Y.S.2d 39,379 N.E.2d 1169
• Decision Date: 11 July 1978
• Docket Number: BUICK-CADILLA,INC
• Parties: , 379 N.E.2d 1169 Joan SHARROCK, Individually and on behalf of all others similarly situated, Respondent, v. DELL, et al., Appellants, Louis J. Lefkowitz, Attorney-General, Intervenor.
• Court: New York Court of Appeals

Page 39

408 N.Y.S.2d 39

45 N.Y.2d 152, 379 N.E.2d 1169

Joan SHARROCK, Individually and on behalf of all others

similarly situated, Respondent, v. DELL BUICK-CADILLAC, INC., et al., Appellants, Louis J. Lefkowitz, Attorney-General, Intervenor.

Court of Appeals of New York.

July 11, 1978.

James K. Levin and Daniel G. Levin, Ossining, for appellants

Martin A. Schwartz, White Plains, and Alan Steiner, Peekskill, for respondent.

Louis J. Lefkowitz, Atty. Gen. (A. Seth Greenwald, Samuel A. Hirshowitz and John M. Farrar, New York City, of counsel), in his statutory capacity under section 71 of the Executive Law.

OPINION OF THE COURT

COOKE, Judge.

Challenged here as violative of the due process clauses of the State Constitution (N.Y.Const. art. I, § 6) and the Fourteenth Amendment of the Federal Constitution is the statutory authorization afforded a garageman to foreclose his possessory statutory lien for repair and storage charges (Lien Law, § 184), by means of a public sale of the vehicle in his possession. We hold that sections 200, 201, 202 and 204 of the Lien Law, insofar as they empower a garageman to conduct an ex parte sale of a bailed automobile, fail to comport with traditional notions of procedural due process embodied in the State Constitution, as they deprive the owner of the vehicle of a significant property interest without providing any opportunity to be heard.

On October 12, 1975, plaintiff's husband took her 1970 Cadillac to Dell Buick-Cadillac, Inc. (Dell), for installation of a replacement engine he had purchased elsewhere. The husband signed a work authorization wherein it was agreed that Dell was to remove the defective engine and install its replacement for the sum of $225. The affidavits of plaintiff and her husband recite that the work authorization form contained no provisions with respect to storage charges which were subsequently unilaterally imposed by Dell. Approximately one week later, plaintiff's husband offered to pay the $225 to Dell, but was advised by its service manager to withhold payment until the engine was installed.

Unfortunately, the replacement engine proved to be defective and had to be removed. Delivery of a replacement engine was then arranged. When the new replacement engine arrived, Dell informed plaintiff's husband that it would not be installed until Dell was paid the $225 due for the installation of the original defective engine. Although he agreed to pay this sum, plaintiff's husband did not have that amount of money with him at the time and soon thereafter was hospitalized, rendering him incapable of continuing his business dealings with Dell.

On January 14, 1976 plaintiff received a "Notice of Lien and Sale" by certified mail, informing her that pursuant to section 184 of the Lien Law Dell had imposed a possessory lien against the Cadillac in the amount of $304.95. That notice further advised that if plaintiff did not tender this sum within 30 days, the automobile would be sold at public auction on March 15, 1976 (see Lien Law, § 200). Plaintiff was subsequently informed by one of the auctioneers listed on the notice of sale that, her belief to the contrary notwithstanding, included in the lien was the sum of $79.95, representing storage charges. However, the auctioneer did agree to contact Dell in order to ascertain whether they would "take off" the storage charge from the amount due.

Several days later, the auctioneer informed plaintiff that Dell refused to waive its storage charge and that the amount now due had been increased to $545. He also advised her that since the book value of the car was appreciably greater than $545, it would be to plaintiff's advantage to pay the charges since Dell "had her over a barrel" because her husband had taken the car there for repair. On the day of the auction, March 15, 1976, Dell again modified its claim and informed plaintiff that the amount due had been reduced to $502. Later that day, plaintiff's 1970 Cadillac, having an established resale value of between $1,200 and $1,400, was sold to Dell for the sum of $502.

Plaintiff then commenced the instant action for declaratory and injunctive relief, as well as damages, claiming that the sale provisions of the Lien Law are violative of her due process rights as they authorize public sale of her automobile without affording the opportunity for a hearing. Plaintiff's motion for summary judgment was denied by Special Term on the ground that the affidavits submitted presented triable issues of fact. The Appellate Division modified, granting judgment to plaintiff declaring sections 200, 201, 202 and 204 of the Lien Law unconstitutional and granted leave to appeal to this court, certifying the following question for our review: "Was the order of this court, dated March 28, 1977, properly made?" We affirm, and answer the certified question in the affirmative.

The threshold question in any judicial inquiry into conduct claimed to be violative of the due process clause of the Fourteenth Amendment is whether the State has in some fashion involved itself in what, in another setting, would otherwise be deemed private activity (see U.S.Code, tit. 42, § 1983; Jones v. Mayer Co., 392 U.S. 409, 422-424, 88 S.Ct. 2186, 20 L.Ed.2d 1189). That much is made plain by the express terms of the amendment which specifies that "nor shall Any State deprive any person of life, liberty, or property without due process of law" (emphasis added). Purely private conduct, however egregious or unreasonable, does not rise to the level of constitutional significance absent a significant nexus between the State and the actors or the conduct (see Civil Rights Cases, 109 U.S. 3, 11, 3 S.Ct. 18, 27 L.Ed. 835). This nexus has been denominated "State action" and is an essential requisite to any action grounded on violation of equal protection of the laws or a deprivation of due process of law. Further, it is settled that where the impetus for the allegedly unconstitutional conduct is private, the State must have "significantly involved itself" in order for that action to fall within the ambit of the Fourteenth Amendment (Reitman v. Mulkey, 387 U.S. 369, 380, 87 S.Ct. 1627, 18 L.Ed.2d 830).

Despite its outward simplicity as a concept, State action is in fact an elusive principle, one which cannot be easily discerned by resort to ritualistic incantations or precise formalisms (see Burton v. Wilmington Parking Auth., 365 U.S. 715, 722, 81 S.Ct. 856, 6 L.Ed.2d 45). Instead, a number of factors must be considered in determining whether a State is significantly involved in statutorily authorized private conduct. These factors include: the source of authority for the private action; whether the State is so entwined with the regulation of the private conduct as to constitute State activity; whether there is meaningful State participation in the activity; and whether there has been a delegation of what has traditionally been a State function to a private person (Melara v. Kennedy, 9 Cir., 541 F.2d 802, 805). As the test is not simply State involvement, but rather significant State involvement, satisfaction of one of these criteria may not necessarily be determinative to a finding of State action. ¹

We need not address plaintiff's contention that the actions taken by Dell are attributable to the State of New York for purposes of the due process clause of the Fourteenth Amendment. Recently, in Flagg Bros. v. Brooks (436 U.S. 149, 98 S.Ct. 1729, 56 L.Ed.2d 185), the Supreme Court rejected the argument that a private sale of property subject to a warehouseman's possessory lien pursuant to section 7-210 of the Uniform Commercial Code constitutes State action. The similarities between section 7-210 and the statutes at issue here might preclude any contrary finding by this court. ²

But the mere fact that an activity might not constitute State action for purposes of the Federal Constitution does not perforce necessitate that the same conclusion be reached when that conduct is claimed to be violative of the State Constitution (see Ives v. South Buffalo Ry. Co., 201 N.Y. 271, 317, 94 N.E. 431, 449; Oregon v. Hass, 420 U.S. 714, 719, 95 S.Ct. 1215, 43 L.Ed.2d 570; Sibron v. New York, 392 U.S. 40, 60-61, 88 S.Ct. 1889, 20 L.Ed.2d 917; Minnesota v. National Tea Co., 309 U.S. 551, 556-557, 60 S.Ct. 676, 84 L.Ed. 920). Indeed, on innumerable occasions this court has given our State Constitution an independent construction, affording the rights and liberties of the citizens of this State even more protection than may be secured under the United States Constitution (see, e. g., People v. Isaacson, 44 N.Y.2d 511, 406 N.Y.S.2d 714, 378 N.E.2d 78; People ex rel. Walsh v. Vincent, 40 N.Y.2d 1049, 392 N.Y.S.2d 240, 360 N.E.2d 919; People v. Hobson, 39 N.Y.2d 479, 483-484, 384 N.Y.S.2d 419, 421-422, 348 N.E.2d 894, 897; People v. Donovan, 13 N.Y.2d 148, 151, 243 N.Y.S.2d 841, 842, 193 N.E.2d 628, 629; Ives v. South Buffalo Ry. Co., 201 N.Y. 271, 317, 94 N.E. 431, 449, Supra ). This independent construction finds its genesis specifically in the unique language of the due process clause of the New York Constitution as well as the long history of due process protections afforded the citizens of this State and, more generally, in fundamental principles of federalism (see Johnson v. Louisiana, 406 U.S. 356, 376, 92 S.Ct. 1620, 32 L.Ed.2d 152; New State Ice Co. v. Liebmann, 285 U.S. 262, 311, 52 S.Ct. 371, 76 L.Ed. 747 (Brandeis, J., dissenting)).

In contrast to the due process clause of the Fourteenth Amendment, which is phrased in terms of State deprivation of life, liberty or property, section 6 of article I of the New York Constitution guarantees that "(n)o person shall be deprived of life, liberty or property without due process of law." Conspicuously absent from the State Constitution is any language requiring State action before an individual may find refuge in its protections. That is not to say, of course, that the due...