Recitation, as required by CPLR 2219(a), of the papers considered in the review of defendant’s motion for summary judgment and plaintiff’s cross motion for partial summary judgment. Papers Numbered Notice of Motion & Affidavits Annexed 1 Notice of Cross-motion and Affidavits Annexed 2 Replying Affidavits 3 Memoranda of Law 4-5 BACKGROUND AND PROCEDURAL HISTORY Plaintiff commenced this action in Supreme Court New York County, pursuant to a summons and complaint dated July 16, 2018, seeking $16,558.61 in damages for defendant’s failure to make payments on a car loan. Defendant failed to answer or appear and a default judgment was entered against her. Defendant appeared and her motion to vacate the default judgment was granted on consent. Defendant interposed an answer with counterclaims.1 The action was transferred to Civil Court in September 2019. In October 2019, Defendant appeared by counsel and filed an amended answer with counterclaims. Seven affirmative defenses are asserted in the answer including fraud in the inducement, violation of the duty of good faith, failure to provide clear disclosures, failure to issue an adequate notice of redemption of rights, and failure to dispose of the car in a commercially reasonable manner. THE PENDING MOTIONS On January 31, 2020, defendant moved for summary judgment. On March 9, 2020, plaintiff cross-moved for partial summary judgment and related relief. On March 9, 2020, the court reserved decision on the motions. The motions are consolidated herein for disposition, and denied for the reasons stated below. ALLEGED FACTS In November 2013, defendant agreed to sign a loan for the purchase of a car for her exhusband Jose Benavides (JB). Defendant alleges that she was told by JB and the car sales and that she was to be the principal buyer and that her husband would be the secondary buyer, and defendant alleges she believed she was co-signing the loan, but in fact she alone sined for the loan not JB. Defendant signed the RIC for a 2011 BMW 325i. Defendant was an Assistant Teacher at the time with an annual salary of $40,000.00, JB’s income was lower. The sales man at Masterz Automotive International, Inc. submitted a loan application which falsely listed defendant’s title as Teacher and her salary as $90,000.00. The RIC contained language which immediately assigned the RIC to plaintiff. Defendant was not given a copy of the RIC. JB took sole possession of the vehicle. From December 2013 to August 2017, Defendant made the monthly payments with cash money given to her by JB. In July 2017, JB told defendant he could no longer afford the payments. At that time there was still $24,633.61 due on the RIC. In August 2017, defendant called plaintiff to make arrangements to return the vehicle. Defendant authorized plaintiff to speak directly with JB, whom she identified as her husband. JB told plaintiff they wanted to surrender the vehicle because he was no longer working and defendant’s hours had been cut. Plaintiff advised JB of alternative options including applying for a workout loan or trying to sell the vehicle themselves at a higher price. JB stated they were not interested in those options and wished to surrender the vehicle. Plaintiff received possession of the vehicle on August 17, 2017, and sent plaintiff combined notice of redemption rights and notice of disposition. The combined notices stated defendant could redeem the vehicle by paying $25,017.71, the entire remaining balance on the RIC plus repossession fees. After repossession plaintiff has the vehicle appraised for $12,225.00. Between September and December 2017, plaintiff received bids from $2,000 to $10,120.00, which it rejected. In January 2018, the vehicle was reappraised for $9,625.00. On January 5, 2018, the vehicle was sold at auction for $9,100.00. At no time did defendant indicate any interest in redeeming the vehicle. DISCUSSION CPLR 3212(b) provides that a motion for summary judgment “…shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law directing judgment in favor of any party.”…. (T)he proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact. Failure to make such prima facie showing requires a denial of the motion, regardless of the sufficiency of the opposing papers. Once this showing has been made, however, the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action. Alvarez v. Prospect Hosp., 68 NY2d 320, 32 (1986)(citations omitted). Defendant argues that plaintiff violated the Truth in Lending Act (TILA) by not clearly disclosing the terms of the sale. Defendant annexes a copy of the Retail Installment Contract (RIC) (Ex F) between the parties and alleges that the disclosures in the RIC are not legible, because lines on the RIC are overlapping disclosures. Plaintiff argues that the disclosures are clear and conspicuous as required by TILA, and that the exhibit relied upon by Defendant is not a true and accurate copy of the original and has been reduced in size. Plaintiff states it has the original RIC which is legible. Based on the foregoing, the court denies Defendant’s motion for summary judgment on this basis. The court finds that a determination as to whether the way the contract was printed violated applicable laws should be based on the court’s examination of the original document at trial. In addition to the fact that the size of the exhibit relied upon by defendant was altered, the exhibits to the motion papers are scanned versions of photocopies and this impacts on legibility. Defendant next argues that plaintiff violated New York Personal Property Law and General Obligations Law and that such violations preclude plaintiff from recovering the deficiency. NY Pers. Prop. Law §302(13)(g) provides that no retail installment contract shall contain any provision by which: the maturity of any part or all of the amount owing thereon is accelerated where, following a default consisting solely of the failure to make timely instalment payments and the subsequent repossession of the motor vehicle, the buyer makes timely tender of an amount which would be sufficient to redeem the vehicle in the absence of such provision; The statute further provides that “any such prohibited provision shall be void but shall not otherwise affect the validity of the contract (NY Pers. Prop. Law §302(14).” Defendant then cites Park Auto Sales v. Lemonier (9 Misc 3d 942), a lower court case to support her argument that the remedy for a violation is a bar on the recovery of the deficiency. However, both the statute and the case are distinguishable from the facts at bar because they require that the borrower submit or make a tender of the past due amounts and attempt to redeem the vehicle. In this case that did not occur. It is undisputed that defendant had no interest and no intention to continue to make payments on her ex-husband’s car, once he stopped giving her the money for it. As held by the court in Park “Under the circumstances present here, where the defendant was attempting to redeem her vehicle after repossession, the acceleration of the loan was not permitted. Thus, the plaintiff should have allowed the defendant to redeem the vehicle after repossession by paying the past due amounts on the loan, together with the repossession expenses (id at 944).” Defendant acknowledges there is no other legal authority in New York precluding recovery of the deficiency amount for this violation. The court finds defendant has failed to sustain its burden in establishing a right to summary judgment. To the extent defendant argues that plaintiff failed to dispose of the car in a commercially reasonable manner, the court finds this is a question of fact to be determined at trial, and if successfully established would impact the amount of damages if any. Plaintiff’s cross-motion for partial summary judgment and dismissal of defenses and counterclaims is denied for the same reasons set forth above. Based on the foregoing, both the motion and cross-motion are denied in their entirety. This constitutes the decision and order of the court. Dated: March 30, 2020
