New York State Court of Claims

New York State Court of Claims

PRIMUS AUTOMOTIVE v. THE STATE OF NEW YORK, #2001-015-540, Claim No. 99569


Court awarded damages to secured creditor whose lien was negligently omitted from title by DMV. Recovery was limited to amount of unpaid loan plus interest from date of entry of judgment determining liability.

Case Information

Claimant short name:
Footnote (claimant name) :

Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
Motion number(s):

Cross-motion number(s):

Claimant's attorney:
Wilson, Elser, Moskowitz, Edelman & Dicker, LLPBy: Nathan A. Haynes, Esquire
Defendant's attorney:
Honorable Eliot Spitzer, Attorney General
By: Dennis M. Acton, EsquireAssistant Attorney General
Third-party defendant's attorney:

Signature date:
September 14, 2001
Saratoga Springs

Official citation:

Appellate results:

See also (multicaptioned case)

The trial of this matter was limited to the issue of claimant's damages arising from the New York State Department of Motor Vehicles' (DMV) negligent release of a recorded lien in favor of claimant on a 1995 Honda Accord VIN # 1HGCD5666SA026725. The State's liability was determined in a decision and order dated April 4, 2000 on claimant's motion for summary judgment.

The sole witness called by the claimant at trial was Domenic Maggio who identified himself as a dealer account manager employed by Primus Financial Services. With regard to the issue of damages Maggio testified that at the time DMV negligently issued the title to the subject vehicle absent the claimant's then existing, recorded lien, the balance of the loan secured by the lien was $9,032.68. He further testified that in the absence of a physical examination of a motor vehicle his employer uses the National Automobile Dealers Association (NADA) blue book value to establish the value of a particular vehicle. Over objection claimant offered what purports to be a copy of the NADA Official Used Car Guide Automated Vehicle Valuation for the subject vehicle dated November 11, 1998. He did not testify how he obtained the document or who provided the information upon which the valuation was based such as the vehicle's mileage which is estimated thereon. The valuation provides two adjusted values for the vehicle: a retail figure $14, 350.00 and a trade-in figure $12,200.00. Maggio testified that claimant relies upon the NADA trade-in value in making loans.

On cross-examination Maggio admitted that no one at Primus Financial Services inspected the subject vehicle at the time of the release of lien or subsequent thereto. On redirect examination the witness explained that the vehicle was not inspected because it had been sold to a third party and was therefore unavailable. At the conclusion of Maggio's redirect examination the claimant rested.

The defendant called Roseann Harris, an employee of DMV's Title Bureau, who described her duties as issuing titles, maintaining DMV records and releasing liens. The witness described some of the documents contained in defendant's Exhibit A and identified certain items contained therein as forms (DTF-802) used to secure an exemption from sales tax for gifted motor vehicles. She testified that each DTF-802 form was completed by the buyer/seller of a motor vehicle, filed with DMV and forwarded by DMV to the Department of Taxation and Finance.

On cross-examination Harris acknowledged that the DTF-802 form was completed by the

purchaser/seller of the vehicle and was simply filed with DMV.
The second witness called by the defendant was Don Van Wely who testified that he was a 31 year employee of the New York State Division [
sic] of Taxation and Finance employed in the Sales Tax Desk Audit Unit. Van Wely testified that he was familiar with the forms and documents earlier identified as Exhibit A and alleged that such documents were kept in the regular course of business. The defendant offered Exhibit A in evidence and it was received over objection.
On cross-examination the witness admitted that the purported sale of a motor vehicle between related persons for minimum value stated is not rare. He acknowledged that at least one of the DTF-802 forms included in defendant's Exhibit A contained no statement of the vehicle's value and another listed the value at $100.00. Van Wely further testified that although Taxation and Finance could conduct an inquiry to determine if the value of a motor vehicle listed on a DTF-802 was understated he was unaware of such an inquiry being made with regard to the forms included in defendant's Exhibit A. The witness admitted that the actual value of a vehicle may be unrelated to the value indicated on the form filed with DMV. He testified that the affidavit portion of the DTF-802 form is completed only if the transaction is purported to be for less than the vehicle's fair market value. Van Wely observed that the form attached to Exhibit A and referring to the Adderly to Wright transfer included a check in the box designating that such transfer was a gift. At the conclusion of the witness' cross-examination the defendant rested.

It is axiomatic that in order to recover from the State of New York for the negligence of its officers, employees or agents "a claimant must prove the existence of a duty, the breach of that duty, that the breach was a proximate cause of the accident, and damages" (
Green v State of New York, 222 AD2d 553, 554). Where, as in this case, the Court has determined that the State is liable in negligence upon a prior summary judgment motion the claimant still bears the burden of proving damages. At trial claimant's unrefuted testimony demonstrates that at the time of the State's negligent release of claimant's security lien, effected through the issuance of a title to a motor vehicle, absent proof of such lien, the unpaid balance of the underlying loan was $9,032.68. As with most if not all secured automobile loans, upon an event triggering the loan's default the lender may repossess the property which secures the loan, arrange for the commercially reasonable sale of the property on notice to the borrower and commence a legal action to recover any resulting deficiency between the loan amount and the fair market value of the security (see, Kohler v Ford Motor Credit Co., 93 AD2d 205). Here the negligence of the State allowed the vehicle's transfer free and clear of claimant's previously recorded lien thereby preventing claimant from repossessing the vehicle, arranging for its sale, and seeking a deficiency judgment. Although at trial claimant attempted to demonstrate that the value of the vehicle was greater than the remaining indebtedness on the loan at or near the time of the State's negligent release of the lien through the submission of a NADA automated vehicle valuation, the Court is not persuaded in that regard. While there are numerous cases in which the NADA blue book values of automobiles have been received in evidence the Court is aware of no case in which such blue book value alone was found to be determinative in establishing the subject vehicle's fair market value. In those cases in which the vehicle's blue book value was considered the party seeking to prove value invariably also offered testimony regarding the actual physical condition of the vehicle at the time in question (see, People v Williams, 143 AD2d 566, affd 74 NY2d 675; People v Hart, 227 AD2d 916; People v Kirkwood, 200 AD2d 409). Here no testimony or other evidence of the vehicle's condition at the time of the State's negligent act was offered.
Moreover, in considering an appraisal based upon NADA values of mobile homes in a tax certiorari proceeding, Judge Rossetti observed, "[w]ithout some specification of the data underlying NADA's values, respondent is deprived of any real opportunity to cross-examine with respect to such data's applicability to this proceeding and the comparability of the sales therein to the subject mobile homes" (
Frontier Park, Matter of, v Assessor of Town of Babylon, 184 Misc 2d 354, 358). The submission of the NADA automated vehicle valuation without further testimony establishing that the value has some material relationship to the particular vehicle at issue (see, People v Kirkwood, supra) is deemed insufficient to establish the vehicle's fair market value. Claimant's damages may not be based upon such a speculative foundation.
The fact remains, however, that but for the State's negligence claimant would have had a secured interest in the property in the amount of the unpaid balance of the loan originally secured by the recorded lien. Claimant may, therefore, recover the sum of $9,032.68 which claimant's dealer account manager testified at trial was the balance due on the loan at the time of the release of lien.

The Court Clerk is directed to enter judgment in accord with this decision with prejudgment interest at the legal rate from the date of filing of this Court's prior decision and order determining the defendant's liability as a matter of law (
see, CPLR 5001 (a); Love v State of New York, 78 NY2d 540; S.A.B. Enters. v Village of Athens, 164 AD2d 558).

September 14, 2001
Saratoga Springs, New York

Judge of the Court of Claims