Toyota Lease Tr. v. Vill. of Freeport
| Decision Date | 24 January 2023 |
| Docket Number | 20-CV-2207 (DG) (SIL) |
| Parties | TOYOTA LEASE TRUST, Plaintiff, v. VILLAGE OF FREEPORT, ALL COUNTY HOOK UP TOWING, INC. d/b/a ALL COUNTY TOWING & RECOVERY AND JOSEPH CALVAGNO, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
REPORT AND RECOMMENDATION
Presently before the Court in this civil rights action, on referral from the Honorable Diane Gujarati for report and recommendation are: (i) Plaintiff Toyota Lease Trust's (“Plaintiff” or “Toyota”) motion for partial summary judgment as to (a) its first cause of action against Defendant Village of Freeport (“Defendant” or “Freeport” or the “Village”) for deprivation of property by unreasonable seizure and without due process of law in violation of the Fourth and Fourteenth Amendments of the United States Constitution, and (b) as to its third cause of action seeking a declaratory judgment that the Village's policy of conducting warrantless seizures of “Scofflaw” vehicles is unconstitutional; and (ii) Freeport's cross-motion for summary judgment as to all of Plaintiff's claims. See Motion for Summary Judgment by Toyota Lease Trust (“Plaintiff's Motion” or “Pl. Mot.”), Docket Entry (“DE”) [58]; Response in Opposition and Cross-Motion for Summary Judgment by Village of Freeport (“Defendant's Motion” or “Def Mot.”), DE [59].
By way of Complaint dated May 15, 2020, Toyota commenced this action against Freeport, All County Hook Up Towing, Inc. d/b/a All County Towing & Recovery (“All County”) and Joseph Calvagno (“Calvagno”) pursuant to 42 U.S.C. Section 1983 (“Section 1983”) for: (i) deprivation of property by unreasonable seizure and without due process of law in violation of the Fourth and Fourteenth Amendments; (ii) deprivation of property by unreasonable seizure and without due process in violation of New York Constitution Article I Sections 6 and 12; (iii) declaratory relief against all Defendants that New York State Vehicle and Traffic Law (“NYVTL”) § 1224 as applied by Freeport through its “Scofflaw” policy is unconstitutional under the United States and New York State Constitutions and that Defendants are liable under Section 1983 for all damages and attorneys' fees incurred; (iv) replevin; and (v) violation of New York State General Obligations Law § 349 against All County and Calvagno. See Complaint (“Compl.”), DE [1]. The claims against All County and Calvagno were dismissed by stipulation, which was so ordered by Judge Gujarati on June 13, 2022. See DE [55], June 13, 2022 Electronic Order. On July 8, 2022, the parties filed their motions for summary judgment. See Memorandum of Law in Support of Plaintiff's Motion for Summary Judgment (“Pl Mem.”), DE [58-1]; Memorandum of Law in Opposition to Plaintiff's Motion for Summary Judgment and in Support the Cross-Motion of Defendant Freeport (“Def Mem.”), DE [59-1]. Judge Gujarati referred the motions to this Court on October 28, 2022. See October 28 2022 Electronic Order. For the reasons set forth below, the Court respectfully recommends: (i) granting Plaintiff's Motion as to its first and third causes of action and declaratory relief, but denying it as to compensatory damages; (ii) denying Defendant's Motion in its entirety; (iii) entering Toyota's proposed declaratory judgment; (iv) ordering Freeport to submit proposed legislation within 60 days; and (v) permitting Plaintiff to request an inquest on damages within 60 days.
The following facts are taken from the parties' pleadings, declarations, exhibits and respective Local Rule 56.1 statements. See Rule 56.1 Statement of Material Facts by Toyota (“Pl. 56.1”), DE [58-2]; Defendant Freeport's Response to Toyota's Rule 56.1 Statement and Counter Statement of Material Facts (“Def. 56.1” and “Def. Counter 56.1”), DE [59-2]; Toyota's Response to Freeport's Counter Statement of Material Facts (“Pl. Counter 56.1”), DE [60-1]. Unless otherwise noted, these facts are not in dispute.
Plaintiff is a Delaware business trust and holds titles to leased vehicles in the United States. Pl. Counter 56.1 ¶ 2. Toyota Motor Credit Corporation (“TMCC”) is a California corporation wholly owned by Toyota Financial Services International Corporation (“TFSIC”) and is Plaintiff's parent company which services its lease contracts. Id. ¶ 1. Freeport is a duly organized municipal corporation under New York state law. Id. ¶ 5. All County is a towing company that has a contractual agreement with Freeport for towing and impounding services. Def. 56.1 ¶¶ 39-40. Calvagno is the owner of All County. Compl. ¶ 15.
On or about October 6, 2018, Millennium Super Store, LLC d/b/a Millennium Toyota Scion (the “Dealership”) leased a 2018 Toyota Camry bearing VIN 4T1B11HK2JU149713 (the “Vehicle”) to non-party customers Dorothy Kinsey and Sandra D. Kinsey (the “Lessees”). Def. 56.1 ¶¶ 1-2. The lease (“Lease Agreement”) provided for monthly payments of $369.00 beginning on October 6, 2018, and the Dealership assigned the agreement to Plaintiff. Id. ¶¶ 2-3. It further provided that a default included a failure to make a payment or a seizure of the Vehicle, which triggered a right to possession by Toyota among other remedies. Declaration of Adam Davis (“Davis Decl.”), DE [58-19], Ex. A; Declaration of Helen Benzie Esq. (“Benzie Decl.”), DE [59-9], Exhibit (“Ex.”) E (“Lease Agreement”) ¶ 29. On or about November 5, 2018, the New York State Department of Motor Vehicles (“NYSDMV” or “DMV”) issued a title with Toyota Lease Trust as the owner of the Vehicle. Def. 56.1 ¶ 4; Davis Decl. Ex. B. At all relevant times, Plaintiff remained the titled owner and lessor of the Vehicle. Def. 56.1 ¶ 5.
Dorothy and Sandra Kinsey defaulted on the Vehicle's payments beginning in on December 6, 2019, although Freeport claims that the lease was “in arrears from the date the second payment was due” as shown by late charges on the account. Id. ¶ 7; Pl. Counter ¶ 24; see also Benzie Decl. Ex. F. As of February 5, 2020, the Vehicle had an odometer reading of 26,269 miles. Pl. Counter ¶ 16.
On February 5, 2020, All County towed the Vehicle at Freeport's direction. Def. 56.1 ¶¶ 9-10. The Village sought to impound the Vehicle under its “Scofflaw” policy because Sandra Kinsey had over $1,000 in unpaid tickets, and the Village “followed its standard practice for impounding” in relation to the Vehicle. Id. ¶¶ 15-17. Freeport's Scofflaw policy includes: (i) keeping an updated “list of all Scofflaws” which are individuals owing more than $1,000.00 in outstanding tickets associated with the vehicle; (ii) locating such a vehicle through a license plate reader (“LPR”) system; and (iii) impounding the vehicle, located via a “hit” by the LPR system on a public road. Id. ¶ 16, 29; Declaration of Nicholas A. Duston, Esq. (“Duston Decl.”), DE [58-3], Ex. E.
All County towed and kept the Vehicle in its lot pursuant to a contractual agreement with Freeport. Def. 56.1 ¶ 24; see also Duston Decl. Ex. O; Declaration of Pamela Walsh Boening (“Boening Decl.”) Ex. A. The contract provides that All County is to pay Freeport $451 per tow, a qualified employee is available by phone 24 hours per day and seven days per week without exception, all calls for towing services must be responded to within 30 minutes, and All County will only charge vehicle owners, not Freeport, for towing and impound services at a rate specified by the Village pursuant to Village Code § 191, which regulates towing charges. Def. 56.1 ¶ 40. In sum, Freeport provides no monetary compensation to All County for towing and impounding vehicles, and All County charges to car owners $25 per pay for storage of a “disabled vehicle” and $50 per day for an impounded vehicle. Id. ¶¶ 4043. Freeport, however, maintains control of all vehicles impounded and held by All County, and the Village does not permit the release of an impounded vehicle to anyone until all tickets associated with that vehicle are paid. Id. ¶¶ 44-45.
The Village claims that on the day of impoundment, February 5, 2020, the Vehicle was given a ticket for failure to display a current registration sticker as indicated in DMV records. Id. ¶¶ 17-19a, . Toyota disputes this claiming that Freeport's documents show that a “DMV Registration Detail” run on the date of impoundment indicated that the registration status was “valid,” and on All County's form under “Reason for Tow,” the “unregistered” box is not checked. Def. 56.1 ¶¶ 17-19a (citing Duston Decl. ¶¶ 4, 12, Exs. C and K). Freeport further claims that the Vehicle lacked a valid inspection sticker, no insurance code was on file and that it had been deemed abandoned and was blocking traffic, which Toyota disputes. Def. 56.1 ¶ 19. The Village does not dispute, however, that the Vehicle was impounded pursuant to its Scofflaw policy. Def. 56.1 ¶¶ 15-17, 19b-c; Pl. Counter 56.1 ¶¶ 11-12; see also Duston Decl. Exs. E-J. On March 3, 2020, a Lessee of the Vehicle paid the February 5, 2020 expired registration ticket. Pl. Counter ¶ 13.
Freeport did not obtain a warrant either before or after impounding the Vehicle or arrange a hearing concerning its impoundment as with other Scofflaw vehicles. Def. 56.1 ¶¶ 21-23. Similarly, Toyota failed to request a hearing or send a written notice of claim to the Village or the New York State Attorney General, of the alleged unconstitutional Scofflaw policy. Pl. Counter 56.1 ¶¶ 6, 8. Freeport holds hearings regarding a claimant's liability as to the ticket(s) associated with a vehicle if requested by a person claiming the vehicle, Pl. Counter ¶¶ 33-34, but the...
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