Lemon Law | Dissolved Corporation | Student Due Process

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New York State Lemon Law Provides Remedy For Purchasers Of Defective Vehicles

New York State Lemon Law

New York’s New Car Lemon Law (General Business Law §198-a) provides a legal remedy for buyers or lessees of new cars that turn out to be lemons. Generally speaking, the law covers both new and used personal vehicles that do not conform to the manufacturer’s warranty or which the manufacturer or dealer cannot repair after a reasonable number of attempts during the first 18,000 miles, or two years from delivery, whichever is first. If the problem is not repaired after a reasonable number of attempts, the manufacturer may be required to refund the full purchase price or lease price, or offer a comparable car. Even if the car is repaired, the consumer may still be entitled to relief if the value of the car is substantially reduced.

How is the Lemon Law enforced? Consumers have the choice of participating in an arbitration program or suing the manufacturer directly. The time limit to file a claim under the Lemon Law is four years from the date of delivery of the vehicle. In filed lawsuits, courts are authorized to award reasonable attorney fees to successful claimants.

In Puszkiewicz-Cimino v. FCA US, LLC, we secured a full “buy-back” of our client’s 2015 Jeep Renegade. Our client began to have problems with the vehicle two days after delivery, when the “check engine” light first appeared. For weeks and months afterward, the car was at the dealer repair shop on 8 separate occasions, totaling 31 days in a four-month period, for various electrical and mechanical issues.

After filing the claim and producing extensive documentation and repair records, including video-recorded evidence of the defects, we negotiated a full refund of the purchase price and fees (including New York sales tax which is refunded by the State), together with reimbursement of the Lemon Law filing fee. This was a home run for our client who was now able to purchase a new, and hopefully more reliable, car with the proceeds of the settlement.

Purchasers or lessees of vehicles should be sure to carefully document any performance or repair issues during the 18,000 mile/two year period and seek the advice of experienced counsel within the Lemon Law’s four year statute of limitations.

Reinstatement of Dissolved Corporation Renews Case

Dissolved Corporation Renews Case

In Fan-Dorf Properties, Inc. v. Classic Brownstones Unlimited, LLC an appeals court was recently faced with a case by a dissolved corporation challenging as fraudulent a deed from the corporation transferring real estate to another.

According to the decision, in 1974, plaintiff Fan-Dorf Properties, Inc. (“Fan-Dorf”) acquired title to the property located at 15 West 129th Street. In 1993, Fan-Dorf was dissolved by proclamation of the Secretary of State for failure to pay New York State franchise taxes, pursuant to Tax Law §203a.

Under Tax Law 203a, the New York Secretary of State may dissolve a corporation that fails to pay franchise taxes. The dissolved corporation can be reinstated nunc pro tunc upon payment in full of the outstanding franchise taxes. Tax Law 203a(7). Generally, if the corporation continues to conduct business after dissolution, it does not get the benefit of de facto status, but the corporation may continue to operate for the sole purpose of winding up its affairs. Courts have, however, concluded that a dissolved corporation “is legally dead” and can no longer sue except in the limited respects to “winding up.”

In 1999, Fan-Dorf’s owner, Randolph Adamson, passed away. In October 2000, a deed was recorded transferring the property to defendant 15 West 129th Street Corp. (“15 West”). Between 2001 and 2006, the property was transferred several times, with defendant Classic Brownstones Unlimited, LLC (“Classic”) being the most recent owner. Defendant Cathay Bank holds two mortgages totaling about $900,000, pursuant to mortgage loans to Classic. Fan-Dorf and plaintiff Michael Adamson, as administrator of Randolph Adamson’s estate, claimed that the October 2000 deed transferring the property was forged.

The plaintiffs commenced this action seeking to quiet title to the property and Cathay Bank moved to dismiss the complaint as against it under CPLR 3211 (a) (3), contending that Fan-Dorf lacked capacity to maintain the action be cause it had been dissolved as of 1993.

The lower court granted the motion. However, three days later, Fan-Dorf received from the Department of Taxation and Finance a “Consent to Reinstatement” and “Certificate of Consent,” pursuant to Tax Law §203-a (7). Presumably, all the past franchise taxes were paid. Based on this, the plaintiffs moved for renewal under CPLR 2221(e), arguing that the Consent to Reinstatement revived the corporation as if the dissolution had never occurred and, therefore, Fan-Dorf had capacity to maintain the action.

CPLR 2221 provides that a motion for leave to renew or to reargue a prior motion just be made to the judge who signed the order, unless he or she is for any reason unable to hear it. A motion for leave to renew must be based upon “new facts not offered on the prior motion that would change the prior determination” or must demonstrate that “there has been a change in the law that would change the prior determination” and the motion must be supported by “reasonable justification for the failure to present such facts on the prior motion.”

Here, the Court determined that the plaintiffs were entitled to renewal, reasoning that the “Consent to Reinstatement constitutes new facts unavailable at the time of the initial motion.”

Availability of an Article 78 Gave Student His Due Process

Village Law Encroached Upon First Amendment Right To Report A Crime

In Horton v. Board of Education of the Sherburne-Earlville Central School Dist., the plaintiff student was suspended for the remainder of the school year after being found—in a superintendent’s hearing held under New York Education Law §3214—to have violated the school district’s student code of conduct. Invoking 42 U.S.C. §1983, he contended the suspension deprived him of his property interest in receiving his education, and of his liberty interest in his good name and reputation, without due process. Granting defendant Board of Education and school superintendent Schnabl judgment on the pleadings, the court dismissed them from the suit. In doing so, the court agreed with well-settled case authority holding that Article 78 of New York’s CPLR was an adequate post-deprivation remedy in State court for resolving disputes over discipline in public schools. Where, as this case, Article 78 gave the student a meaningful opportunity to challenge his academic suspension, the student was not deprived of due process simply because he did not avail himself of the opportunity. The student also failed to plead facts plausibly suggesting conduct so egregious as to constitute a violation of substantive due process.

According to the complaint, the student was suspended from school through the remainder of the 2014-2015 school year. The student’s suspension was initially imposed following a hearing held pursuant to New York Education Law §3214 on November 13, 2014, at which defendant Susan Westling, Esq., presided as hearing officer. Upon receiving notice of the superintendent’s decision to suspend the student after the November 13 hearing, the student requested that the hearing be reopened to consider additional evidence. The District granted the student’s request and a second day of testimony was held on January 27, 2015, during which additional evidence was presented and the student, who was represented by counsel, was provided the opportunity to testify in his defense. After the rehearing, Westling issued supplemental findings of fact and recommendations and ultimately confirmed the findings and penalty recommended after the November hearing. The Superintendent accepted Westling’s recommendations and confirmed the suspension by letter dated January 29, 2015.

The student then appealed the Superintendent’s decision to the Board of Education, which heard the appeal on February 9, 2015. The Board upheld the suspension to the end of the school year.

On February 16, 2015, the student appealed to the New York State Commissioner of Education. On October 5, 2015, he sent a letter to the Commissioner withdrawing his appeal indicating that, since he graduated in June of 2015, the appeal is now moot.

On January 16, 2017, the student commenced this federal action alleging procedural and substantive due process violations.

Relying on case law, the federal Court recognized that the “Fourteenth Amendment’s Due Process Clause protects persons against deprivations of life, liberty, or property without due process of law, and ‘those who seek to invoke its procedural protection must establish that one of these interests is at stake.’ ‘[S]tandard analysis under that provision proceeds in two steps: We first ask whether there exists a liberty or property interest of which a person has been deprived, and if so we ask whether the procedures followed by the State were constitutionally sufficient.’”

“Protected property interests ‘are not created by the Constitution.’” “Instead, ‘they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law.’” Noting that the Second Circuit has found that New York Education Law §3202 creates a property interest in a public education, the Court concluded that “a student such as Plaintiff has a protected property interest in his education, meaning that he could not have been deprived of that right with out due process of law. Here, Plaintiff also contends that he was deprived of the liberty interest in his good reputation with due process.”

The Court further recognized that the U.S. Supreme Court has ruled that “students facing a ten-day suspension must be given some kind of notice and afforded some type of hearing.” “The Court stated that the hearing could be held immediately following the incident and be informal.” “However, the Supreme Court did caution ‘suspensions or expulsions for the remainder of the school term, or permanently, may require more formal procedures.”

Finally, the Court said “it is well-established in the context of disciplinary proceedings, such as those at issue here, that post-discipline due process provides sufficient due process to satisfy the requirements of the Fourteenth Amendment.”

Thus, the Court agreed with well-settled case authority that Article 78 is an adequate post-deprivation remedy in state court for resolving disputes over discipline in public schools.

“Where, as here, Article 78 gave Plaintiff a meaningful opportunity to challenge his academic suspension, he was not deprived of due process simply because he failed to avail himself of the opportunity.”

As to the student’s liberty interest claim, the Court held “even assuming that Plaintiff suffered a deprivation of a liberty interest under his ‘stigma-plus’ theory, as with his property interest claim, the liberty interest claim is subject to dismissal. Not only was he provided with all the process he was due, there was an adequate post deprivation procedure to remedy the alleged deprivation, i.e., an Article 78 proceeding.”

As for the student’s substantive due process claim, the Court said to establish a violation, “a plaintiff must (1) identify the constitutionalright at stake and (2) demonstrate that the government’s action were conscience-shocking or arbitrary in the constitutional sense. The ‘shock the conscience’ standard is not easily met; the plaintiff must show that the government’s conduct was ‘egregious’ and ‘outrageous,’ ‘not merely incorrect or ill-advised.’”

To satisfy this, the Court ruled the student had to demonstrate “the defendant’s actions were ‘so egregious, so outrageous, that they may fairly be said to shock the contemporary conscience,” which the Court concluded he had not.

This newsletter is provided by Hamburger, Maxson & Yaffe, LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such

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