AUTO – TOWING/STORAGE CHARGES – STORAGE LIEN – LIEN LAW § 184(5)
Matter of Nissan Motor Acceptance Corp. v All County Towing
(3rd Dept., 5/18/2018)
On December 22, 2015, at the direction of local law enforcement, respondent All County Towing towed a vehicle to its facility. Shortly thereafter, respondent mailed a notice to the vehicle's owner and to petitioner, the vehicle's lienholder, advising that respondent had taken custody of the vehicle as a result of police impound, that storage fees were accruing daily and that once the vehicle was released from police impound it could be retrieved "upon full payment of all charges accrued" as of the date of release.
In April 2016, by order to show cause and petition, petitioner commenced this special proceeding to declare respondent's lien null and void. Upon petitioner's posting of a $10,000 bond, respondent released the vehicle to petitioner, joined issue and asserted, as an affirmative defense, that it had fully complied with the requirements of the Lien Law and was entitled to a lien in the amount of $6,501.51, which included $200 for towing, $5,750 for 115 days of storage, an administrative fee and taxes.
Supreme Court granted the petition to the extent of adjudging that the purported lien for storage was invalid, dismissed the petition to the extent of declaring that respondent had a valid lien for towing and ordered that, upon petitioner paying respondent the $200 charge for towing, the asserted lien would be satisfied, all stays terminated and the bond released. Respondent appealed.
In AFFIRMING Supreme Court's finding that the storage lien was invalid, the Appellate Division, Third Department, held:
Matter of Nissan Motor Acceptance Corp. v All County Towing
(3rd Dept., 5/18/2018)
On December 22, 2015, at the direction of local law enforcement, respondent All County Towing towed a vehicle to its facility. Shortly thereafter, respondent mailed a notice to the vehicle's owner and to petitioner, the vehicle's lienholder, advising that respondent had taken custody of the vehicle as a result of police impound, that storage fees were accruing daily and that once the vehicle was released from police impound it could be retrieved "upon full payment of all charges accrued" as of the date of release.
In April 2016, by order to show cause and petition, petitioner commenced this special proceeding to declare respondent's lien null and void. Upon petitioner's posting of a $10,000 bond, respondent released the vehicle to petitioner, joined issue and asserted, as an affirmative defense, that it had fully complied with the requirements of the Lien Law and was entitled to a lien in the amount of $6,501.51, which included $200 for towing, $5,750 for 115 days of storage, an administrative fee and taxes.
Supreme Court granted the petition to the extent of adjudging that the purported lien for storage was invalid, dismissed the petition to the extent of declaring that respondent had a valid lien for towing and ordered that, upon petitioner paying respondent the $200 charge for towing, the asserted lien would be satisfied, all stays terminated and the bond released. Respondent appealed.
In AFFIRMING Supreme Court's finding that the storage lien was invalid, the Appellate Division, Third Department, held:
As to the merits, we agree with Supreme Court that respondent's purported lien for storage was invalid. Pursuant to Lien Law § 184 (5), where an entity seeks to assert a lien for the storage of a motor vehicle that it has towed and stored at the direction of a law enforcement agency, such entity must "mail by certified mail, return receipt requested, a notice ... to every person who has perfected a security interest in such motor vehicle or who is listed as a lienholder upon the certificate of title ... within [20] days of the first day of storage." Under the statute, which must be strictly construed (see Matter of Ally Fin. Inc. v Oakes Towing Serv., Inc., 130 AD3d 1355, 1356 [2015]; Grant St. Constr., Inc. v Cortland Paving Co., Inc., 55 AD3d 1106, 1107 [2008]; Phillips v Catania, 155 AD2d 866, 866 [1989]), the "notice shall include the name of the [entity] providing storage of the motor vehicle, the amount being claimed for such storage, and [the] address and times at which the motor vehicle may be recovered" (Lien Law § 184 [5]). In addition, "[t]he notice shall also state that the [entity] providing such notice claims a lien on the motor vehicle and that such motor vehicle shall be released upon full payment of all storage charges accrued on the date the motor vehicle is released" (Lien Law § 184 [5]).
Here, the notice—which was mailed to petitioner by certified mail, return receipt requested—included respondent's name, address and regular business hours, as well as the total amount being claimed for storage. The notice further stated that the vehicle would "be released to the owner thereof, or his or her lawfully designed [sic] representative upon full payment of all charges accrued to the date that the said motor vehicle is released." Fatally, however, the notice did not state, as required, that respondent "claim[ed] a lien" on the vehicle (Lien Law § 184 [5]). The word "lien" does not appear in the notice at all. Moreover, we are not persuaded by respondent's contention that the requirement was satisfied by the language indicating that the vehicle would be released "upon full payment of all charges." Strictly construed, Lien Law § 184 (5) requires that the notice state both that respondent "claims a lien on the motor vehicle and that such motor vehicle shall be released upon full payment of all storage charges accrued on the date the motor vehicle is released" (emphasis added). Accordingly, as the notice failed to state that respondent claimed a lien on the vehicle, Supreme Court properly found that respondent failed to comply with all of the essential statutory requirements of Lien Law § 184 (5) and, thus, that the purported notice of lien was invalid (see Lien Law § 184 [5]; compare Matter of Ally Fin. Inc. v Oakes Towing Serv., Inc., 130 AD3d at 1357).What a difference a word -- or lack thereof -- can make.