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Continental Ins. Co. v. Consumer Towing And Collision, Inc.

Other Lower Courts

March 5, 2001

Continental Insurance Company, Plaintiff,
v.
Consumer Towing and Collision, Inc., Defendant.

COUNSEL

Speyer & Perlberg, Melville, for plaintiff.

Christopher Marengo, Bronx, for defendant.

OPINION

Mary Ann Brigantti-Hughes, J.

Plaintiff, an insurance company, seeks to recover damages

Page 173

from defendant, a repairer of automobiles, for the wrongful withholding of a vehicle. Defendant counterclaims for foreclosure of a garage lien obtained pursuant to repairs performed on the automobile. Thus, the dispositive issue arising in this dispute is the validity of the garage lien, which depends on whether the exclusion of the benefits of the " Garage Keeper's" Lien Law from unregistered repair shops should be extended to a registered repair car shop that performed car repairs pursuant to a contract assignment from a business not registered to perform such type of work.

Background

In a bench trial presided over by this Court, the following facts were adduced: in 1996, Toyota Motor Credit Company leased a 1994 Toyota Land Cruiser to Dr. Richard Geltman. The car was insured by Continental Insurance Company (Continental). On March 31, 1996, Dr. Geltman reported the 1994 Toyota stolen and the police recovered it on April 2, 1996. The next day, Jem Towing Company towed the 1994 Toyota to its Bronx location.

Jem Towing Company was not registered with the State to perform car repairs. Nevertheless, on April 3, 1996, it entered into a contract with Dr. Geltman for the repair of the 1994 Toyota. The contract specifically stated: " I, Richard Geltman authorize Jem Towing to have my 1994 Toyota Landcruiser repaired as per insurance estimate. Car will be restored back to new condition." At the time, Continental had not sent a claim adjuster to view the car and prepare an " appraisal" of the cost of damages of the car.

On April 6, 1996, a " claim adjuster" for Continental went to Jem Towing's Bronx location to examine the 1994 Toyota. The claim adjuster, however, was refused access to the car reportedly because the adjuster had not made a prior appointment for an examination of the car and because the location where the car was being held was not a registered auto repair station.

By the time Jem Towing Company allowed Continental access to the 1994 Toyota, it had assigned the contract to repair the car to Consumer Towing and Collision (Consumer), which was registered as a business to do such repairs. Specifically, on April 11, 1996, a claim adjuster for Continental was permitted to examine the 1994 Toyota and prepared a written report containing an estimated cost of repairs of $3,239. An owner of Consumer, however, claims that the claim adjuster verbally informed him that the estimated cost of repairs was $20,000.

Page 174

By the time the claim adjuster for Continental examined the car, Consumer had begun the repairs of the car. The claim adjuster observed that the car had been " stripped and parts were missing." The adjuster complained about the " excessiveness" of the car repairs and warned Consumer that " the car will be declared a total loss" unless the repairs were scaled down. A few days later, Consumer discovered that Continental had carried out its warning; it declared ...


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