Court Opinion

ID: 5944615
Source: CourtListenerOpinion
Date Created: 2022-01-13 05:57:36.016225+00
Date Added: 2024-06-11T08:47:23.599666
License: Public Domain

Wallace, J.
(dissenting). Ford Motor Credit Company (Ford) leased a motor vehicle to Molomo under a standard installment payment contract. Molomo was arrested in August 1989 while using the motor vehicle to make a drug purchase, and *215the vehicle was seized as an instrumentality of crime, under section 14-140 of the Administrative Code of the City of New York. That provision calls for sale of such seized property at public auction, following appropriate notice.*
At the time of seizure, the vehicle, a 1988 Mercury Topaz, was worth $6,850. Ford commenced a replevin action to satisfy its perfected security interest in the property, which amounted to $17,719.95. Molomo waived all claims to the vehicle, and the replevin and forfeiture proceedings were consolidated, by consent.
The IAS court held that forfeiture of such leased property, albeit for the salutary public purpose of discouraging narcotics trafficking, was unjustified and unduly oppressive where Ford, the lienholder, was entirely innocent and had done all that could be expected to prevent illegal use of the property, citing dictum in Calero-Toledo v Pearson Yacht Leasing Co. (416 US 663). In that case, upholding the Puerto Rico forfeiture statute, the court held that statutory forfeiture schemes which further punitive and deterrent purposes would not be rendered unconstitutional simply because of their applicability to the property interests of innocents. In so holding, Justice Brennan, in an obvious response to his dissenting colleagues, held out the possibility that the "broad sweep” of such forfeiture statutes might very well, in certain circumstances, give rise to "serious constitutional questions” (416 US, supra, at 688, 689). For example, "it would be difficult to reject the constitutional claim of an owner whose property subjected to forfeiture had been taken from him without his privity or consent * * * Similarly, the same might be said of an owner who proved not only that he was uninvolved in and unaware of the wrongful activity, but also that he had done all that reasonably could be expected to prevent the proscribed use of his property; for, in that circumstance, it would be difficult to conclude that forfeiture served legitimate purposes and was not unduly oppressive.” (416 US, supra, at 689-690.)
*216The three-pronged formula of the Calero-Toledo dictum has been amply satisfied by Ford, which was wholly uninvolved in Molomo’s criminal activity, and entirely unaware of such wrongful use of the vehicle. (See, Property Clerk, N. Y. City Police Dept. v Pagano, 170 AD2d 30, wherein we upheld the owner’s claim to an automobile as superior against forfeiture based upon the crime of reckless operation of the vehicle by his son, even though the son had already established an "abominable” record of traffic violations quite possibly known to the parent.) Here, there is no evidence that Ford was aware of any wrongful use of the vehicle.
The third requirement of the Calero-Toledo dictum is that the property owner must do all that reasonably could be expected of him to prevent the proscribed use of his property. Ford met this burden (see, Property Clerk, N. Y. City Police Dept. v Scricca, 140 Misc 2d 433) by including in the lease a clause providing that illegal use of the vehicle would constitute a breach of the contract. To require any further efforts on the part of the lessor would exceed the bounds of reasonableness and repudiate the Calero-Toledo formula. Such a diluted reading of the forfeiture provision would illogically impute to the Legislature an intention to destroy the contractual rights of third parties innocent of any knowledge of illegal enterprises involving their property (see, Matter of Dillon v Reese, 93 Misc 2d 464, 465-466).
It is Ford’s adherence to this formula, and not its preferred lienholder status (see, Santora Equip. Corp. v City of New York, 138 Misc 2d 631), which warrants return of the property. Unlike our recent decision in City of New York v Salamon (161 AD2d 470), Ford has never received satisfaction on its lien. The fair market value of the subject vehicle is but half the amount of the lien. Ford is thus in danger of suffering significant damage by being deprived of the continued leasehold use of this vehicle, which might enable it to mitigate its loss far more than would the proceeds to be realized at auction. Furthermore, in Salomon we were primarily concerned with the question of whether the lienholder had suffered any injury "as a result of the city’s failure to provide notice” (161 AD2d, supra, at 471), whereas notice is not a real issue in this case.
Accordingly, I would affirm the judgment insofar as it awarded possession of the seized vehicle to Ford.
Milonas, J. P., and Smith, J., concur with Kupferman, J.; Wallace and Ross, JJ., dissent in an opinion by Wallace, J.
*217Judgment, Supreme Court, New York County, entered August 13, 1990, modified to the extent of vacating the second and third decretal paragraphs which directed that the motor vehicle forfeited be delivered to Ford or, failing such delivery, the Property Clerk pay Ford $6,850 plus interest from the date of seizure and disbursements and enjoined Ford from delivering the vehicle to defendant or allowing him to redeem it or reinstate his contract with it, and, as so modified, otherwise affirmed, without costs.

 We note that this provision of the Code (formerly section 435-4.0) was held unconstitutional as applied, in McClendon v Rosetti (460 F2d 111), and even though the constitutional infirmity was "temporarily” repaired with the issuance of guidelines on remand (369 F Supp 1391; see, Butler v Castro, 896 F2d 698, 700-702), there has been no corrective amendment to the text in the 18 years since that order. We are not alone in having urged remedial legislative action, thus far to no avail (Property Clerk, N. Y. City Police Dept. v Seroda, 131 AD2d 289, 295; Property Clerk, N. Y. City Police Dept. v Hyne, 147 Misc 2d 774, 777, affd 171 AD2d 506).