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March 21, 1994


The opinion of the court was delivered by: I. LEO GLASSER

 GLASSER, United States District Judge:

 This is a motion by plaintiff Hudson Motors Partnership t/a Hudson Toyota ("Hudson Toyota"), for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure against defendants Crest Leasing Enterprises, Inc. ("Crest") and Metro Auto Leasing, Inc. ("Metro") (collectively, the "Defendants"), on plaintiff's breach of contract and Uniform Commercial Code ("UCC") causes of action. In connection therewith plaintiff moves to dismiss Defendants' antitrust counterclaims. Plaintiff also seeks punitive damages on its breach of contract and UCC causes of actions and attorneys' fees and costs pursuant to 28 U.S.C. ┬ž 1927, and the court's inherent power, against Defendants and their attorney.


 The material facts are not in dispute. Between July 22, 1993, and October 22, 1993, Hudson Toyota delivered a total of eight Toyota automobiles to Defendants. Defendants took possession of all eight vehicles and then refused to either pay for or return the automobiles. Defendants then sold seven of the eight vehicles to third parties even though they did not have valid title. Pl.'s 3(g) Statement, PP 6-64. See Complaint, P 1. Specifically, Defendants tendered to plaintiff three checks which were returned for insufficient funds and three checks which were returned and marked "payment stopped." Because one of the eight vehicles involved in this action had not been sold to a third party, Hudson Toyota moved ex parte for a seizure of this car.

 A. The Ex Parte Order

 On December 13, 1993, this court signed an ex parte order of seizure (the "Order") directing the United States Marshal for the Eastern District of New York to seize a 1994 Toyota Camry, white exterior, grey interior, vehicle identification number 4T1SK12E4RU326466 (the "Chattel"). The court issued the Order based on, among other things, the allegations contained in the papers submitted by Hudson Toyota that it had sold the Chattel to Metro on or about October 18, 1993, in exchange for the promise of payment of $ 17,557.00, as evidenced by Invoice No. 6315, dated October 18, 1993. Affidavit of Gayle Epstein, December, 1993, P 4, Ex. A. Ms. Epstein, who is responsible for fleet sales of Toyota automobiles for Hudson Toyota, stated that despite numerous attempts to procure payment for the automobile, Hudson Toyota had not received the $ 17,557.00. Id., P 6.

 Based on this conduct, plaintiff argued that "there is every reason to believe that Metro will sell, at the earliest possible moment, the one and only car it still possesses [and] . . . based on defendants' previous conduct, unless this order is granted without notice to Metro, Metro will sell, transfer, conceal or otherwise dispose of the car." Pl.'s Mem. in Support of Ex Parte Order, at 12. In this regard, plaintiff also brought to the court's attention the order of Justice Shainswit of the Supreme Court of the State of New York, Index No. 43145/90-001, July 24, 1990, in an action by the State of New York against Michael Silverstein ("Silverstein"), President of Crest and Metro, and several of his other companies. In this order, Justice Shainswit granted the Attorney-General's petition for an order (i) permanently enjoining the respondents from engaging in the business of selling or leasing motor vehicles unless a $ 2,000,000 performance bond was filed with the Department of Insurance; (ii) enjoining respondents from engaging in any fraudulent or illegal activity; and (iii) directing the non-bankrupt respondents to make restitution to consumers injured by the fraudulent or illegal conduct, and to pay $ 2,000 in costs to the State of New York. A copy of Justice Shainswit's order is attached as Exhibit 4 to the Affidavit of Marjorie E. Berman, December 30, 1993. In granting the People's petition, Justice Shainswit noted that,

The petition alleges, in essence, that respondent Michael Silverstein operated the three corporate respondents, each claiming to be an authorized dealer for several makes of foreign and domestic cars. The petition sets forth a litany of fraudulent practices directed at consumers. Submitted in support of these allegations are a selection (several dozen) of the hundreds of complaints received by the State Bureau of Consumer Frauds and

 protection against the three respondents. Id. at 1-2. *fn1"

 Based on plaintiff's submissions, the court agreed that unless the Order was granted without notice it was probable that the Chattel would become unavailable for seizure by reason of being transferred, concealed, disposed of, or removed from the state. The court also concluded that seizure was warranted because Defendants had failed to either pay for or return the Chattel and therefore plaintiff enjoyed a superior possessory right to the Chattel.

 B. The Attempted Seizure

 On December 16, 1993, the United States Marshal for the Eastern District of New York unsuccessfully attempted to seize the Chattel from Defendants' place of business. In his affidavit, Deputy Marshal Steven C. Tocci stated that he had arranged to meet with a representative of plaintiff's, Mr. Scott Malzer, at the corner of 27th Street and 42nd Avenue in Long Island City, who was there to assist him in identifying the Chattel. Affidavit of Steven C. Tocci, undated, P 3. As Deputy Marshal Tocci circled the block looking for Mr. Malzer, "we noticed we were being followed by a white Mercedes with New Jersey license plates. I was told by Mr. Malzer that a similar vehicle belonged to Michael Silverstein, the president of Metro Auto Leasing, Inc." Id., P 5. When Deputy Marshal Tocci, his partner Ray Wasson, and Mr. Malzer entered Defendants' showroom, "there were three spaces for vehicles and the middle space was noticeably empty. In addition, the showroom smelled of gasoline fumes." Id., P 7. Deputy Marshal Tocci contacted Silverstein's attorney ("Counsel") on the telephone and instructed him to instruct his client to return the car. Id., P 9. Counsel reported to Deputy Marshal Tocci that he could not get in touch with his client but had left messages for him. Id., P 11.

 In his affidavit, Scott Malzer, a driver for the fleet sales division of Hudson Toyota, stated that while waiting at the corner of 27th Street and 42nd Avenue for the Deputy Marshal, he was asked by a driver employed by Silverstein what he was doing. Affidavit of Scott Malzer, December, 1993, P 6. Malzer replied that he was "making a delivery." Id. Approximately fifteen minutes later he went to a telephone booth to call his employer and "I heard a car behind me and turned around. Silverstein stood in front of me holding a camera trying to take my picture. I went to another phone booth and called my employer." Id., P 7. Malzer states that as he and the Marshal approached the showroom, "we saw Silverstein's car, a white Mercedes with New Jersey license plates, drive away." Id., P 9. As stated above, when Malzer and the Marshal entered the showroom to seize the Chattel, it was gone.

 C. Order of Confirmation

 On January 14, 1994, Defendants moved to quash the ex parte order and consolidate this action with Defendants' antitrust action currently pending before Judge Korman in the Eastern District of New York. *fn2" Plaintiff cross-moved to confirm the Order. Defendants based their motion on three grounds: (i) the invoice attached to plaintiff's papers in support of its ex parte order was a "fraud"; (ii) plaintiff failed to report that a "related case" was pending before Judge Korman; and (iii) by bringing its ex parte motion plaintiff breached an agreement with Defendants to retain the status quo pending the filing of plaintiff's answer in the antitrust action. The court rejected these assertions and confirmed the Order in an order dated January 14, 1994. The court also denied Defendants' consolidation motion. The Chattel was eventually surrendered to plaintiff on or about January 17, 1994. In its Answer dated January 26, 1994, Defendants admitted the essential and material allegations of Hudson Toyota's complaint and asserted as a "set-off" the allegations contained in their antitrust complaint.

 Plaintiff now moves to dismiss Defendants' set-off and seeks summary judgment and punitive damages on its breach of contract and UCC causes of action. Defendants offer no opposition to the appropriateness of summary judgment and the dismissal of the set-off. See Affidavit of Counsel, February 24, 1994, P 3 (". . . defendants offer no opposition to plaintiff's motion for summary judgment on the non-payment claim relative to the sale of eight (8) cars . . . ."). Defendants also offer no opposition to plaintiff's claim that damages total $ 127,305.00, plus interest. Defendants, however, do oppose the application for attorneys' fees and costs; they also argue that punitive damages are inappropriate in this situation.


 I. Punitive Damages

 The general rule under New York law is that punitive damages are not available in breach of contract actions because they deal with wrongs between private parties. Hutton v. Klabal, 726 F. Supp. 67, 73 (S.D.N.Y. 1989) ("Under New York law, punitive damages cannot be awarded in breach of contract cases which involve private wrongs and where no public rights are involved."); Payne-Hayden, Inc. v. Loews Theatre Management Corp., 789 F. Supp. 1257, 1267 (S.D.N.Y. 1992) ("New York courts, the Second Circuit and courts within this district are virtually unanimous that punitive damages may not be awarded in breach of contract cases, unless the wrong is aimed at the public generally."). *fn3"

 The court in Payne-Hayden, however, may have overstated the case. If the wrong associated with the breach is not aimed at the public, but the actions of the breaching party "involve that degree of bad faith evincing a disingenuous or dishonest failure to carry out a contract," Aero Garage Corp. v. Hirschfeld, 185 A.D.2d 775, 777, 586 N.Y.S.2d 611, 613 (1st Dep't) (punitive damages appropriate where defendant was obligated to obtain an extension of certificate of occupancy, did not do so, and thwarted plaintiff's attempts to obtain said certificate) (internal quotations omitted), leave to appeal denied, 81 N.Y.2d 701, 610 N.E.2d 388, 594 N.Y.S.2d 715 (1992), then punitive damages are appropriate. See also Williamson, Picket, Gross, Inc. v. Hirschfeld, 92 A.D.2d 289, 295, 460 N.Y.S.2d 36, 41 (1st Dep't 1983) (no punitive damages if the offending conduct merely constitutes breach of contract, but punitive damages are appropriate if offending conduct involves a high degree of bad faith); Jackson v. Kump, No. 93 Civ. 3519, 1994 WL 9691 at * 6 (S.D.N.Y. Jan. 13, 1994) ("In New York . . . even where a public right is not at issue, punitive damages might be available for breach of contract.") (citing Aero Garage). In the leading tort case involving the propriety of punitive damages, New York's Court of Appeals stated that,

 Walker v. Sheldon, 10 N.Y.2d 401, 404-05, 179 N.E.2d 497, 498, 223 N.Y.S.2d 488, 490-91 (1961) (citations omitted) (in fraud and deceit action where defendant induced plaintiff to enter into a contract by means of false and fraudulent representations and such activities were the means by which it did business, punitive damages are appropriate). Given this standard of review, punitive damages will not be awarded in a breach of contract action unless to do so would deter "morally culpable conduct." Werner, Zaroff, Slotnick, Stern & Askenazy v. Lewis, 155 Misc.2d 558, 561, 588 N.Y.S.2d 960, 961-62 (N.Y. Ct. Cl. 1992) (where plaintiff's computer crashes due to a conditional statement that defendant had secretly put into plaintiff's program, punitive damages are appropriate in part because defendant's action were arguably criminal). Punitive damages are not appropriate in a Straightforward breach of contract action. Geler v. National Westminster Bank USA, 770 F. Supp. 210 (S.D.N.Y. 1991) (no punitive damages for failure to release funds allegedly owed pursuant to a certificate of deposit).

 Applying these general criteria to this case, punitive damages are appropriate because the actions of Defendants evidence a "degree of bad faith evincing a disingenuous or dishonest failure to carry out a contract." Aero Garage, 185 A.D.2d at 777, 586 N.Y.S.2d at 613 (internal quotations omitted). *fn4" To begin, there is no dispute that Defendants intentionally and willfully breached their contractual obligations under the sales contracts. Defs.' 3(g) Statement, PP 6-64. If that were all Defendants did punitive damages would not be available. However, Defendants went beyond a mere breach of their contracts and embarked on a course to thwart at every turn plaintiff's contractual rights. Moreover, these efforts were performed in bad faith. For example, in connection with the motion to quash the ex parte order of seizure, Silverstein stated under oath as follows:

As defendants' attorneys inform me, the crux of plaintiffs' [sic] argument that they are entitled to possession of the subject automobile rests upon their contention that the car in question was "sold" to Metro Auto Leasing, Inc. Such a contention by plaintiffs is an outright lie!

 Affidavit of Michael Silverstein, December 23, 1993 ("Silverstein Aff'd,") P 5. However, Defendants now admit that the car was in fact sold to them by virtue of the fact that they are not opposing the motion for summary judgment and by the fact that they have left unanswered Paragraph 51 of plaintiff's 3(g) statement ("On or about October 18, 1993, plaintiff and Metro entered into a contract of sale for delivery of a 1994 Toyota Camry . . . ."). *fn5" Silverstein, therefore, was demonstrating bad faith (and perhaps perjury) in his statement to the court that the Chattel had not been sold and that an order of seizure was unwarranted.

 Punitive damages are also appropriate in this case because the actions of Defendants are similar to those steps taken by the defendants in Aero Garage; namely, a campaign to thwart plaintiff's contractual rights. Whereas in Aero Garage the defendants affirmatively sought to block plaintiff's contractual rights by, among other things, defying a court injunction and renewing their request that the certificate awarded to plaintiff be revoked, Defendants in this case failed to honor this court's order of seizure. As the discussion above demonstrates, it is more probable than not that Defendants moved the Chattel just prior to the arrival of the Marshal. However, it is uncontroverted that Defendants knew of the order of seizure as early as December 23, 1993 (the Order is attached to Silverstein's affidavit in support of Defendants' motion to quash) but did not surrender the automobile until on or about January 17, ...

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