NEW YORK LEMON LAW STATUTE OF LIMITATIONS
(Who decided court or arbitrator)
New York lemon law, case, statute of limitations, claim, New York lemon law statute of limitations, statute, court, claim, New York lemon law arbitration
Matter of BMW of North America LLC v. Gesmundo,
9465/06
Decided: July 26, 2006
WESTCHESTER COUNTY
Supreme Court
For Petitioner:
Biedermann, Hoenig & Ruff
For Defendant:
Carton & Rosoff, P.C.
Justice Smith
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Upon the foregoing papers, it is Ordered and adjudged that this petition is
disposed of as follows:
Respondent had commenced an arbitration proceeding against petitioner under the
New York State Lemon Law Statute, embodied in Section 198-a of Article 11-A of
the General Business Law. Petitioner herein has commenced this special
proceeding seeking an Order permanently staying said arbitration as time-barred.
Specifically, petitioner contends that because the original retail sale and
delivery of the subject vehicle took place on February 11, 2002,1 more than four
years prior to the commencement of the arbitration proceeding, respondent's
arbitration is time-barred under Section 198-a, subdivision (j). Petitioner
notes that while the sale of the subject vehicle to respondent had occurred on
September 9, 2003, there is no statutory toll for the purchase of used vehicles.
Respondent opposes the petition, arguing that there are questions of fact
related to whether the subject vehicle is in fact a new or used vehicle, which
properly are addressed by the arbitrator. Moreover, respondent notes that the
immediate previous owner of the subject vehicle had been a dealership in
Maryland, which apparently had obtained ownership just four months after the
original sale, which change in ownership is otherwise unexplained and,
respondent argues, raises questions about whether the vehicle was a dealer
demonstration vehicle, and thus outside of the definition of a consumer to which
the four-year statute of limitations applies. Respondent also argues that if the
subject vehicle previously had been rejected by any original consumer as
defective, the first delivery could be determined to be null and void since
respondent had been misled about the car's history and its being free of
defects, and thus equity requires that the issue of vehicle's status be
construed against petitioner. Finally, respondent argues that petitioner
repeatedly had promised to resolve respondent's car problem by providing
respondent with a new vehicle, and thereafter had avoided respondent when it
came time to actually effect their agreement, eventually resulting in
petitioner's withdrawing its promise exactly four years after the asserted
original delivery date. Since the timing of petitioner's actions demonstrate
that it purposefully had lulled respondent into non-action so that the statute
of limitations would run, respondent urges that petitioner should be estopped
from pleading the statute of limitations.
By way of reply, petitioner argues that there is no issue as to whether this
subject vehicle was new or used, as claimed by respondent. Petitioner concedes
that the New Car Lemon Law applies to the vehicle although it was sold used
because the vehicle was purchased within 2 years from the date of the original
delivery.
Further, petitioner has submitted an affidavit from Marianne Caulfield, a
managing attorney in the Consumer Litigation Department of BMW of North America,
LLC, wherein she states that she has researched the vehicle's history, a copy of
which Customer History report is submitted along with her affidavit, and she has
determined that the original purchaser was an individual and that the vehicle
never was used as a demonstration vehicle. According to Ms. Caulfield, it is
custom and practice for title of a vehicle to be transferred to a dealership
when a vehicle is traded in, as here had occurred. Therefore, since the date of
the original delivery of the vehicle was February 11, 2002, petitioner reasserts
that respondent's demand for arbitration must be deemed time-barred.
Finally, petitioner argues that respondent's estoppel argument should be
rejected because the alleged misrepresentations upon which said defense is
predicated were made by Westchester BMW, an independent dealership, and not by
BMW of North America, LLC, petitioner herein. In any event, petitioner argues
that what transpired merely occurred within the context of trade-in
negotiations, "which do not rise to the level of fraud as a matter of law."
It is settled law that in arbitration proceedings, questions of law and fact are
for the arbitrators to determine. See Korein v. Rabin, 29 A.D.2d 351, 355 (1st
Dept. 1968). It previously has been held that the issue of whether a party has
established the criteria necessary to qualify as a consumer under the Lemon Law
is for the arbitrator to determine, see Chrysler Motors Corp. v. Schachner, 138
Misc.2d 501, 508 (1988), revd. on other grnds., 166 A.D.2d 683 (2nd Dept. 1990),
and that whether a vehicle is "new" is also an issue for the arbitrator. See
Matter of Subaru (Mckelvey), 141 Misc.2d 41, 42 (Sup. Ct. 1988). Similarly,
questions of procedural arbitrability, i.e, those concerning whether conditions
precedent to an obligation to arbitrate have been met, such as, but not limited
to, time limits, notice, waiver, laches, estoppel and like defenses to
arbitrability, also are generally for the arbitrators to decide. See Howsam v.
Dean Witter Reynolds, Inc., 537 U.S. 79, 84-85 (2002), quoting Moses H. Cone Mem.
Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 (1983); Diamond Waterproofing
Systems, Inc. v. 55 Liberty Owners Corp., 4 N.Y.3d 247 (2005). Further, it has
been held that where there is a broad arbitration agreement between the parties,
statute of limitation issues and issues regarding whether or not a contract was
induced by fraud are to be determined by the arbitrator. See Diamond Sys. v. 55
Liberty, 4 N.Y.3d 247, 252 (2005); May v. Anspach, 24 A.D.3d 671 (2nd Dept.
2005); Matter of Merritt Eng'g Consultants, P.C. v. 55 Liberty Owners' Corp., 18
A.D.3d 210 (2005); Kidder, Peabody & Co., Inc. v. Weiner, 269 A.D.2d 119 (1st
Dept. 2000). However, where, as here, there are statutory time limitations, the
issue of whether a proceeding is time-barred should be decided by the Courts in
the first instance. See Matter of Smith Barney v. Luckie, 85 N.Y.2d 193, 201
(1995).
Nevertheless, respondent herein has raised the issue of the applicability of the
doctrine of equitable estoppel. With respect to said doctrine, same is
applicable only:
when the actions of the defendant lulled the Plaintiff into inaction to allow
the statute of limitations to expire. Incorporated Village of Rockville Centre
v. Town of Hempstead, 278 A.D.2d 279 (2nd Dept.2000); and East Midtown Plaza
Housing Co., Inc. V. City of New York, 218 A.D.2d 628 (1st Dept.1995). "[D]efendant
may be estopped to plead the Statute of Limitations where Plaintiff was induced
by fraud, misrepresentation or deception to refrain from filing a timely action
(citations omitted)." Simcuski v. Saeli, 44 N.Y.2d 442, 448, 449 (1978). "[T]he
doctrine of estoppel is only available to a Plaintiff who commences an action
within a reasonable time after the facts giving rise to the estoppel have ceased
to be operational (citations omitted)." Campbell v. Chabot, 189 A.D.2d 746 (2nd
Dept.1993). The Plaintiff asserting equitable estoppel must establish the
Defendant's specific actions kept Plaintiff from timely commencing the action.
Zumpano v. Quinn, -N.Y.3d-, 2006 WL 395229 (2006).
Wiesel v. Rubinstein, 12 Misc.3d 1168(A) (Sup. Ct. Nass. Co. 2006); see, also
Doe v. Holy See (State of Vatican City), 17 A.D.3d 793, 794 (3rd Dept. 2005).
Based upon the application of the foregoing principles of law to the record at
bar and upon consideration of the parties' respective arguments, the Court
denies the petition to permanently stay arbitration finding that the issue of
whether petitioner is equitably estopped from asserting a statute of limitations
defense is one for the arbitrator to determine after presentment of all of the
facts. This Court is not persuaded by petitioner's argument that any
misrepresentations made to respondent cannot serve to equitably estop petitioner
from invoking a statute of limitations defense since respondent's unrefuted
averment is that Tom McDonagh at Westchester BMW had told him that BMW of North
America had instructed McDonagh to negotiate with respondent "in the best
interest of BMW, Westchester BMW and [him]self," arguably rendering Westchester
BMW an agent of BMW of North America and thus ultimately responsible for any
wrongdoing chargeable to Westchester BMW.
The Temporary Restraining Order set forth in the May 19, 2006, Order to Show
Cause is hereby vacated and this matter shall proceed to arbitration.
1. This date is provided on the subject vehicle's Motor Vehicle History Report.
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