Toyota Lease Tr. v. Vill. of Freeport

MEMORANDUM AND ORDER

STEVEN I. LOCKE, UNITED STATES MAGISTRATE JUDGE:

Presently before the Court in this civil rights action is Plaintiff Toyota Lease Trust's (“Toyota” or “Plaintiff”) Motion for Attorneys' Fees and Damages (“Toyota's Motion” or “Toyota Mot.”). See DE [75]. Defendant The Village of Freeport (“Freeport” or “the Village”) opposes. See DEs [76], [77], [82], [86].

By way of Complaint (“Complaint” or “Compl.”) filed in this Court on May 15, 2020, Toyota commenced this action pursuant to 42 U.S.C. § 1983 (“Section 1983”) alleging violations of: (i) the Fourth and Fourteenth Amendments to the United States Constitution; (ii) Article I, §§ 6 and 12 of the New York State Constitution; and (iii) the New York General Obligations Law § 349 by Defendants Freeport, All County Hook Up Towing, Inc., d/b/a All County Towing & Recovery (“All County”) and Joseph Calvagno (“Calvagno”) (collectively, “Defendants”). See Compl., ¶¶ 1-6, 88-93, DE [1]. On June 13, 2022, the Court dismissed Defendants All County and Calvagno from this action. See Order dated June 13, 2022. On July 8, 2022, the parties filed their motions for summary judgment. See DEs [58]-[61]. This Court entered a Report and

Recommendation on January 24, 2023, recommending that Toyota's motion for summary judgment be granted on its Fourth and Fourteenth Amendments due process claims and as to its request for declaratory relief, but denied as to compensatory damages. See Report and Recommendation, DE [62], at 33-34. Judge Gujarati adopted this Report and Recommendation, granting Plaintiff's motion for summary judgment as to its Fourth and Fourteenth Amendments due process claims, denying it as to compensatory damages, reserving judgment on Toyota's request for declaratory relief, and granting Freeport's motion for summary judgment as to Plaintiff's replevin cause of action. See Order dated 03/30/2023. Plaintiff filed Toyota's Motion on June 16, 2023.^[1] See Toyota Mot.; see also DE [81]. For the reasons set forth herein, the Court grants Toyota's Motion in part and denies it in part.

I. BACKGROUND

This litigation has an extensive history, familiarity with which is presumed. See DE [62] at 3-11 (detailing the underlying facts of this action). Thus, the Court only provides a summary of facts and procedural history necessary to decide the instant motion.

A. Relevant Facts

The following facts are taken from the Court's Report and Recommendation, adopted by Judge Gujarati on March 30, 2023, and the parties' pleadings, declarations, and exhibits with respect to Plaintiff's Motion. See Report and Recommendation, DE [62]; Declaration of Holly Klinger in Support of Motion for

Damages and Attorneys' Fees (“Klinger Decl.”), DE [75-2]; Declaration of Nicholas A. Duston (“Duston Decl.”), DE [75-4]; Declaration of Helen Benzie in Opposition to Plaintiff's Motion for Compensatory Damages and Legal Fees and Expenses (“Benzie Decl.”), DE [76]; Supplemental Declaration of Nicholas A. Duston (“Supp. Duston Decl.”), DE [80-2].

i. The Parties and the Lease

Plaintiff is a Delaware business trust and holds titles to leased vehicles in the United States. Report and Recommendation at 3. Freeport is a duly organized municipal corporation under New York state law. Id. All County is a towing company that has a contractual agreement with Freeport for towing and impounding services. Id.

On or about October 6, 2018, Millennium Super Store, LLC d/b/a Millennium Toyota Scion (the “Dealership”) leased a 2018 Toyota Camry bearing VIN 4T1B11HK2JU149713 (the “Vehicle”) to non-party customers Dorothy Kinsey and Sandra D. Kinsey (the “Lessees”). Id. at 4. The lease (“Lease Agreement”), which the Dealership assigned to Plaintiff, provided for monthly payments of $369.00 beginning on October 6, 2018. Id.; Klinger Decl., Exhibit (“Ex.”) A at 1. A failure to make a monthly payment or a seizure of the Vehicle constituted a default under the Lease Agreement, which triggered a right to possession by Toyota, among other remedies. Report and Recommendation at 4; Klinger Decl., Ex. A at 2. On or about November 5, 2018, the New York State Department of Motor Vehicles (“NYSDMV” or “DMV”) issued a title listing Toyota Lease Trust as the owner of the Vehicle. Report and

Recommendation at 4. At all relevant times, Plaintiff remained the titled owner and lessor of the Vehicle. Id.

Dorothy and Sandra Kinsey defaulted on the Vehicle's payments beginning in on December 6, 2019, although they were late on payments beginning on November 17, 2018. Id.

ii. Freeport's Seizure of the Vehicle and Its Relevant Policies, Customs and Practices

On February 5, 2020, All County towed the Vehicle at Freeport's direction. Id. The Village impounded the Vehicle under its “Scofflaw” policy because Sandra Kinsey had over $1,000 in unpaid tickets. Id. As of February 5, 2020, the Vehicle had an odometer reading of 26,269 miles. Id. Toyota initially learned of Freeport's impoundment from an unidentified individual calling on the Lessee's behalf on or about February 14, 2020, who notified Plaintiff that the car was “picked up by the city.” Id. at 7. In addition, All County sent a letter to Toyota dated February 10, 2020, indicating that the Vehicle had been “taken into custody... and... held in [its] impound yard since: 2/5/2020,” that it “claim[ed] a lien on this vehicle,” and indicating that it would be “released to the owner” only “upon full payment of all charges accrued ..” Benzie Decl., Ex. E.

Toyota later received correspondence from the Village dated March 25, 2020, notifying Plaintiff of the Vehicle's impoundment. Klinger Decl., Ex. B. Freeport refused to permit Toyota to retrieve the Vehicle unless Plaintiff agreed to pay various outstanding fines, penalties, towage and storage charges. Report and Recommendation at 8. Counsel for Toyota, Freeport and All County agreed on

October 22, 2020, that Plaintiff would recover possession of the Vehicle pendente lite. Id. at 9. Toyota recovered the Vehicle on or about November 11, 2020. Id. at 10.

iii. Toyota's Claimed Damages

The J.D. Power Used Car Guide (the “Guide”) is a vehicle pricing service that is recognized as an authoritative standard in the industry, and is an accurate indicator of used vehicle pricing, providing prices based upon comparable vehicle sales. Report and Recommendation at 10. The Guide lists various auction values that Toyota likely would have obtained for the Vehicle, had it been returned to Plaintiff's possession on the date of Freeport's letter to Toyota, March 25, 2020; when Plaintiff was informed by All County that it could retrieve the Vehicle, October 22, 2020; and when Toyota retrieved the Vehicle, November 11, 2020. Klinger Decl., Ex. C (displaying the March 25, 2020, auction estimate report by the Guide for the Vehicle); Benzie Decl, Exs. K, L (displaying the October 22, 2020, and November 11, 2020, auction estimate reports, respectively). The Vehicle was sold for $14,800 on February 17, 2021. Klinger Decl., Ex. D.

Toyota claims that it is entitled to depreciation damages of $3,665. See Memorandum of Law in Support of Plaintiff's Motion for Damages and Attorneys' Fees (“Toyota Mem.”), DE [75-1], at 2. Plaintiff calculates this amount by subtracting the auction price of the Vehicle on February 17, 2021, See Klinger Decl., Ex. D, from the average auction value of the Vehicle according to the Guide on March 25, 2020, the date of Freeport's letter to Toyota. See id., Exs. B, C. The Village, by contrast, asserts that Toyota's depreciation damages should be calculated from March 25, 5

2020, to October 22, 2020, the date on which Plaintiff was informed by All County that it could retrieve the Vehicle. See Amended Memorandum of Law in Opposition to Plaintiff's Motion for Compensatory Damages and Legal Fees and Expenses (“Freeport Am. Opp.”), DE [82-1], at 11-12; Report and Recommendation at 9.

Toyota further claims that it is entitled to an additional $2,583 in “loss of use” damages. See Toyota Mem. at 2, 8-11. Plaintiff argues that had the Vehicle been in its possession between March 25, 2020, and October 22, 2020, it could have re-leased the Vehicle or auctioned it and re-invested the auction proceeds in a performing lease with a similar payment stream of $369 per month. See id.

Finally, Plaintiff asserts that it is entitled to nominal damages in the absence of compensatory damages. See Toyota Mem. at 6.

B. Procedural History

Based on the above, Toyota commenced this action by way of Complaint dated May 15, 2020 against Freeport, All County and Calvagno for: (i) deprivation of property by unreasonable seizure and without due process of law in violation of the Fourth and Fourteenth Amendments; (ii) deprivation of property by unreasonable seizure and without due process of law in violation of New York Constitution Article I Sections 6 and 12; (iii) declaratory relief against all Defendants that New York State Vehicle and Traffic Law §1224 is unconstitutional, as applied pursuant to Freeport's Scofflaw policy, under the United States and New York State Constitutions and that Defendants are liable under Section 1983 for all damages and attorneys' fees incurred; (iv) replevin; and (v) violation of New York State General Obligations Law

§ 349 against All County and Calvagno. See Compl. On December 17, 2021, the Village emailed Plaintiff's counsel a settlement offer for $900 (the “Settlement Offer”) that Freeport refers to as an offer of judgment. See Freeport Am. Opp. at 7; Supp. Duston Decl., ¶ 39 and Ex. 5, DE [80-5]. The claims against All County and Calvagno were dismissed by stipulation, which was so ordered by Judge Gujarati on...