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Henry J. Fischer et al., Respondents, v. Bright Bay Lincoln Mercury, Inc., Defendant and Third-Party Plaintiff-Respondent-Appellant. Justine Lomenzo, Third-Party Defendant-Appellant-Respondent

New York Supreme Court, Appellate Division1996-12-30
234 A.D.2d 586651 N.Y.S.2d 625

Summary

Holding. The judgment is modified to reduce the award in favor of the plaintiffs by $4,973.78 plus interest, and as modified, the judgment is affirmed and remitted to the trial court for recalculation of interest.

The plaintiffs purchased a vehicle from Bright Bay Lincoln Mercury, which had obtained the car from Justine Lomenzo. More than a year later, authorities discovered the vehicle was stolen and seized it. The plaintiffs sued Bright Bay for breach of the warranty of title under the Uniform Commercial Code. Bright Bay brought a third-party action against Lomenzo seeking indemnification.

The trial court awarded the plaintiffs restitution equal to the vehicle's purchase price and also awarded them the installment payments made on their auto loan. The appellate court modified the judgment, recognizing that while the plaintiffs were entitled to restitution to restore them to their pre-purchase position, awarding them both the purchase price and the loan payments would result in double recovery. The court reduced the award by the amount of installment payments plus interest.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether a buyer who receives restitution for breach of warranty of title may recover both the purchase price and installment loan payments
  • The appropriate remedy for breach of warranty of title under the Uniform Commercial Code
  • Whether restitution must put a buyer in status quo ante without providing a windfall

Procedural posture

The third-party defendant appealed from a summary judgment in favor of Bright Bay on its third-party indemnification claim, and Bright Bay cross-appealed from a summary judgment in favor of the original purchaser-plaintiffs on their breach of warranty claim.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

—In an action, inter alia, to recover damages for breach of warranty of title, the third-party defendant appeals, as limited by her brief, from so much of a judgment of the Supreme Court, Suffolk County (Newmark, J.), dated December 18, 1995, as, upon granting that branch of the motion of the defendant third-party plaintiff, Bright Bay Lincoln Mercury, Inc., which was for summary judgment on the issue of liability as to its third-party action against her, is in favor of Bright Bay Lincoln Mercury, Inc., and against her in the sum of $38,604.27. Bright Bay Lincoln Mercury, Inc., cross-appeals, as limited by its brief, from so much of the same judgment as, upon granting the plaintiffs’ motion for summary judgment on the issue of liability, is in favor of the plaintiffs and against it in the principal sum of $26,780.41.

Ordered that the judgment is modified, on the law, by deleting the provision thereof which is in favor of the plaintiffs and against Bright Bay Lincoln Mercury, Inc., in the principal sum of $26,780.41, and substituting therefor a provision which is in favor of the plaintiffs and against Bright Bay Lincoln Mercury, Inc., in the principal sum of $21,806.63; as so modified, the judgment is affirmed insofar as appealed and cross-appealed from, without costs or disbursements, and the matter is remitted to the Supreme Court, Suffolk County, for a recalculation of interest.

The plaintiffs purchased an automobile from the defendant, Bright Bay Lincoln Mercury, Inc. (hereinafter Bright Bay), in August 1990. The automobile was initially purchased by Bright Bay from the third-party defendant, Justine Lomenzo. More than one year later, the police learned that the automobile was stolen, and the automobile was subsequently seized. By selling the plaintiffs a stolen automobile, Bright Bay breached an express and implied warranty of title. The plaintiffs commenced this action seeking restitution or damages for breach of warranty of title pursuant to the Uniform Commercial Code. The Supreme Court restored the plaintiffs status quo ante.

When suing for a breach of warranty of title by the seller, the buyer may seek the remedy of restitution or damages (see, Menzel v List, 24 NY2d 91; 5 Corbin, Contracts § 1104, at 558). The purpose of restitution is to put the buyer status quo ante, restoring him to the position that he occupied before the contract was made. The purpose of damages is to put the buyer in the position he would have been had title been as warranted (see, Menzel v List, supra; 12 Williston, Contracts § 1454, at 2 [3d ed 1970]; 5 Corbin, Contracts § 996, at 15). Since Bright Bay breached the warranty of title, the plaintiffs were entitled to restitution and, on that basis, were properly awarded the purchase price of the vehicle (cf., Menzel v List, supra; see, 5 Corbin, Contracts § 1104, at 558).

The plaintiffs, however, were not entitled to the money they expended on installment payments on their automobile loan, since this would entitle them to a windfall by paying them twice for the purchase price of the automobile. Accordingly, so much of the judgment as is in favor of the plaintiffs and against Bright Bay should have been reduced by the amount of $4,973.78 with interest. Copertino, J. P., Joy, Krausman and McGinity, JJ., concur.