SUPREME COURT
STATE OF NEW YORK - MONROE COUNTY
____________________________________________________
CHARTER ONE AUTO FINANCE CORPORATION,
f/k/a AMERICAN CREDIT SERVICES, INC.,
Plaintiff,
-vs- INDEX # 2000/10806
KING HAGERSTOWN MOTORS L.L.C.
Trading as HAGERSTOWN FORD,
Defendant.
__________________________________________________
APPEARANCES:
Attorney for Plaintiff: Glenn M. Fjermedal, Esq.
Harris, Beach LLP
The Granite Building
130 East Main Street
Rochester, NY 14604-1687
Attorney for Defendant: Elizabeth A. Stundtner, Esq.
Saperston & Day, P.C.
800 First Federal Plaza
28 East Main Street
Rochester, NY 14614
Thomas A. Stander, J.
The Plaintiff, Charter One Auto Finance Corporation, f/k/a American Credit Services, Inc. ("Charter One") seeks summary judgment against the Defendant, King Hagerstown Motors, L.L.C., trading as Hagerstown Ford ("Hagerstown Ford") in the amount of $40,068.64 plus interest at the rate of 10.9% per annum from March 29, 2001, court costs and reasonable attorneys fees.
The Defendant, Hagerstown Ford, seeks dismissal of the action on the grounds that this Court does not have jurisdiction over the person of the Defendant, or in the alternative, forum non conveniens.
The first issue to be addressed is whether this Court has jurisdiction over the Defendant. Defendant is a car dealership incorporated under Maryland laws and maintains its principal place of business in Maryland. The Plaintiff and Defendant entered into a Master Dealer and Reserve Account Agreement for Charter One to provide financing to buyers of vehicles from Defendant, Hagerstown Ford. Under this scheme the purchaser of a vehicle and Hagerstown Ford would enter into a Retail Installment Contract. Hagerstown Ford then assigns the contract to Charter One in exchange for payment of the entire purchase price to Defendant.
Hagerstown Ford asserts that there is no personal jurisdiction over them as Defendant. The Defendant, Hagerstown Ford, claims that it does not transact any business in New York sufficient to establish jurisdiction. The affidavits set forth that Hagerstown Ford does not have employees, property, or offices in New York State; did not agree with Plaintiff to resolve any disputes in New York; and is not authorized to do any business in New York State.
This Court is authorized to exercise long arm jurisdiction over a non-domiciliary who transacts any business within the State of New York. CPLR §302(a)(1).
It is a "single act statute" and proof of one transaction in New York is sufficient to invoke jurisdiction, even thought the defendant never enters New York, so long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted (citations omitted).
Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460,466 (1988). A party need not be "present" in the State in order to be subject to jurisdiction: it is enough that the "party avails itself of the benefits of the forum, has sufficient minimum contact with it, and should reasonably expect to defend its actions there." Id. Under CPLR 302(a)(1) there must be a showing that the Plaintiff's cause of action arose out of the business contacts in New York or that the business transacted here is sufficiently related to the subject matter of the lawsuit to warrant the exercise of jurisdiction. McGowan v. Smith, 52 N.Y.2d 268,273 (1981).
The evidence presented demonstrates that the business activities of Hagerstown Ford with Charter One through the Master Dealer and Reserve Account Agreement are purposeful. Charter One submits, and Defendant, Hagerstown Ford, does not refute, that from 1997 to the present Hagerstown Ford has assigned 1,030 Retail Installment Contracts for the sale of vehicles using financing from Charter One under the Master Dealer and Reserve Account Agreement. The sum of money involved totals over 17 million dollars. The evidence demonstrates that the Defendant has purposefully availed itself of the privilege of transacting business in New York State, has reaped benefits from this forum, and should reasonably expect to defend its actions in this State. The Plaintiff has presented proof of sufficient minimum contacts to establish jurisdiction.
There has also been a showing that there is a substantial relationship between the transaction of business by Hagerstown Ford in New York State and the claims asserted by Charter One. The causes of action arise from the business relationship created between the parties through the Master Dealer and Reserve Account Agreement. Under this Agreement the parties had an arrangement for the assignment of Installment Retail Contracts entered into between Hagerstown Ford and a purchaser of a vehicle. The causes of action relate to an assignment of one of these contracts under the Agreement. The evidence demonstrates a substantial relationship between the transaction and the causes of action.
There is sufficient proof to support the exercise of long arm jurisdiction under CPLR §302(a)(1). The Defendants motion to dismiss this action on the grounds of lack of personal jurisdiction is DENIED.
The Defendant papers do not set forth the necessary criteria for a change of venue for forum non conveniens. That application is also DENIED.
II. SUMMARY JUDGMENT
The Plaintiff seeks summary judgment on its Complaint. The Complaint sets forth causes of action for breach of contract, breach of warranty, costs and expenses, and negligence.
The factual circumstances in this case are that the Defendant, Hagerstown Ford, entered into a Retail Installment Contract ("Contract") with a buyer to purchase a vehicle on August 9, 1999. On the same date Hagerstown Ford assigned this Contract to Charter One pursuant to the Assignment Clause of the Contract. The assigning of Retail Installment Contracts by Hagerstown Ford to Charter One was based upon the Master Dealer and Reserve Account Agreement entered into by the parties.
The Assignment Clause of the Contract, in part, states the following:
The Seller will immediately cause the Assignee's name to appear on the Certificate of Title as the first and only lienholder. In the event the Assignee's name fails to appear on the Certificate of Title as the first and only lienholder, without regard as to fault, said failure shall be deemed a breach of the provisions of this Assignment and Seller shall be obligated to repurchase this Contract for the unpaid balance including earned finance charges.
A lien on the vehicle in question was recorded on the Certificate of Title on September 16, 1999. The Defendant submits a chronology of the period of time between the assignment to Charter One and the recording of the lien on the Certificate of Title. This chronology shows that a draft from Charter One for payment of the vehicle was deposited on August 17, 1999; the necessary documents were mailed to the West Virginia Division of Motor Vehicles within 13 days of the depositing of the draft; the lien was filed by the DMV on August 30, 1999; and the lien was recorded by the DMV on the Certificate of Title on September 16, 1999. Charter One's name appears on the Certificate of Title as the first and only lienholder as of September 16, 1999.
The purchaser of the vehicle in question filed a petition for Chapter 7 Bankruptcy on October 1, 1999. The United States Bankruptcy Court for the Northern District of Virginia, on August 11, 2000, issued an Order setting aside the lien of Charter One Auto Finance on the vehicle at issue and making the vehicle a part of the Debtor's bankruptcy estate. The basis for this setting aside of the lien of Charter One was that the lien was not perfected more than 20 days prior to the purchaser's commencement of the bankruptcy proceeding.
The Plaintiff alleges a claim for breach of contract by Hagerstown Ford's failure to immediately perfect the lien as required by the Assignment Clause of the Contract and for breach of warranty by Defendants failure to provide Plaintiff with absolute title to the vehicle free of all liens. (1) Plaintiff also sets forth a cause of action for costs and expenses pursuant to the terms of the Assignment Clause of the Contract and for negligence in failing to promptly record the lien. The Plaintiff seeks payment by the Defendant for the amount of the assigned contract in the sum of $40,068.64 plus interest at 10.9%.
The Defendants have submitted evidentiary proof that raises a question of fact as to whether the conduct of the Defendant breaches the requirement that the seller "immediately" cause the name Charter One to appear on the Certificate of Title as the first and only lienholder. The motion by the Plaintiff, Charter One, for summary judgment is DENIED.
Based upon all the papers submitted in support and in opposition to these motions, upon the above Decision, and after due deliberation, it is hereby
ORDERED that the motion of the Defendant, King Hagerstown Motors, L.L.C. trading as Hagerstown Ford, to dismiss this action on the grounds of lack of personal jurisdiction, or in the alternative, forum non conveniens, is DENIED; it is further
ORDERED that the motion of the Plaintiff, Charter One Auto Finance Corporation, f/k/a American Credit Services, Inc., for summary judgment against Defendant, Hagerstown Motors L.L.C., in the amount of $40,068.64 plus interest, court costs, and reasonably attorneys' fees is DENIED; it is further
ORDERED that all other applications are DENIED
Dated: August ___, 2001
Rochester, New York
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Thomas A. Stander
Supreme Court Justice
C:\Documents and Settings\rboucher\Desktop\Law Reporter\charterone-Dec.wpd The Plaintiff also asserts in its papers that there was a breach of the Master Dealer and Reserve Account Agreement. However, the Plaintiff does not specifically allege any claims for breach of the terms of this Agreement. At oral argument it was set forth that the provisions of this Agreement have been applied to the account of the Defendant based upon the mere filing of bankruptcy by the purchaser of the vehicle. The Court considers this application moot.