Santander Consumer USA, Inc. v. The City of Yonkers

Background

Santander financed Kate A. Mensah’s purchase of a 2017 Nissan Pathfinder and held title and a perfected lien. Mensah had the undisputed right to use and possess the vehicle. A.P.O.W. Towing, LLC (APOW) was Yonkers’s contract vendor for towing, storing, and disposing of vehicles at Yonkers’s request.

On January 24, 2020, APOW towed and impounded the vehicle at Yonkers’s request. Defendants attributed the tow to an expired registration and unpaid parking violations. Mensah said she received no written notice. Three days later, she obtained a hearing before an administrative law judge, who found that she owed Yonkers $1,367.63. Mensah paid the balance by March 20, 2020, but APOW continued holding the vehicle because of alleged towing and storage charges. Santander repossessed it on October 23, 2020, and sold it on November 25, 2020.

Before this opinion, Santander accepted Yonkers’s offer of judgment. The court entered judgment against Yonkers on Santander’s claims for $3,000 and required Yonkers to revise its code to provide prompt notice and an opportunity for a hearing before an independent person concerning vehicles towed for unpaid parking tickets or other violations. Santander and the APOW Defendants later stipulated to dismissal with prejudice and without costs of all claims between them.

Santander’s Attorney’s-Fee Motion

The court held that Santander qualified as a prevailing party under 42 U.S.C. § 1988 because it accepted Yonkers’s offer of judgment. Santander requested fees for four attorneys at hourly rates of $600, $550, and $375. The court found reasonable rates of $600 for Rudolph Meola, $500 for Nicholas Duston, and $375 for Anthony D’Elia and Sarah Bouskila.

Santander’s billing records claimed 222.1 hours and $115,672.50 in fees. The court deducted $32,799.50 for 59.9 hours spent on a summary-judgment motion that was never filed, leaving $82,873. The court applied a 15 percent enhancement for the contingency-fee arrangement rather than the requested 20 percent enhancement. It awarded $95,303.95 in attorney’s fees and approved $773.59 in costs, for a total award of $96,077.54. The motion was granted with modifications.

Mensah’s Constitutional Claims

The court rejected Yonkers’s argument that Mensah lacked standing because she had defaulted on her loan. Relying on the amount she had paid toward the vehicle, the court found that Mensah retained enough equity to have a property interest in it under the Fourteenth Amendment.

The court held that the seizure violated the Fourth and Fourteenth Amendments. The parties did not dispute that the vehicle was seized without a warrant. The court found that Yonkers’s public-safety justification did not support the seizure because, under Yonkers’s policy, the vehicle would be returned after Mensah paid the fines even if it remained unregistered. The court also found that Mensah received no pre-towing notice or hearing. The later hearing did not cure the problem because the towing was part of Yonkers’s authorized standard practice, and Mensah had to request the hearing herself.

The court therefore granted Mensah summary judgment on her federal constitutional claims. It granted summary judgment to Yonkers and APOW on Mensah’s claims under the New York Constitution because those claims duplicated her federal claims and remedies were available under 42 U.S.C. § 1983.

Conversion and General Business Law Claims

The court granted Mensah summary judgment on her conversion claim against APOW. It found that Mensah had a possessory interest in the vehicle and that APOW improperly retained it after Mensah paid Yonkers’s parking-ticket balance, relying instead on alleged towing and storage charges. The court also noted that APOW did not address the conversion claim in its opposition or reply papers.

The court granted APOW summary judgment on Mensah’s claim under New York General Business Law § 349. It held that the interaction was a single transaction, not conduct directed at consumers generally, and that Mensah had not defended the claim in her briefing.

Relief and Disposition

The court denied Mensah summary judgment as to damages because the record did not establish the amount of her claimed losses, including the vehicle’s value, transportation costs, and other alleged damages. The court allowed her to seek monetary damages by separate motion and directed the parties to confer about compensatory damages. It also stated that Mensah could move for attorney’s fees and costs.

The court denied Yonkers’s Motion for Summary Judgment. It granted Mensah’s Motion for Summary Judgment, while denying summary judgment as to damages. It granted APOW’s Motion for Summary Judgment in part and denied it in part: the motion was denied as to every claim except Mensah’s General Business Law § 349 claim. Santander’s Motion for Attorney’s Fees was granted with modifications, resulting in an award of $96,077.54 in fees and costs.