Case: MSD SUCCESSFULLY DEFENDS MTLR, CORP. AGAINST “PHANTOM” INDEMNIFICATION LAWSUIT
Our client, MTLR is a lessor of commercial delivery vehicles in New York and New Jersey that has been in business for over thirty (30) years. Master Purveyor’s (“Master”), is a commercial meat provider that leased a fleet of delivery trucks from our client. Under the lease agreement, Master was fully responsible for traffic violations while using MTLR’s vehicles and Master was required to fully indemnify MTLR for any such violations.
In 2014, the NYC Dept. of Finance entered an associated Default Judgment (“judgment”) against Master for nearly $100,000, arising out of approximately 426 violations dating back to 2006. Master failed to vacate the judgment in the Administrative Proceeding before the NYC Dept. of Finance (“Administrative Proceeding”) and in the subsequent Article 78 Proceeding brought in Supreme Court.
Plaintiff then commenced another action seeking indemnification for the judgment ($113,254.60, with interest), alleging that the lease provision was not enforceable. Andrew Small, moved to dismiss the action, pursuant to CPLR §3211. The motion was granted by Justice Theresa M. Ciccotto.
Justice Ciccotto concluded that Master failed to show that either of the prior rulings were not fully determinative, and that the lease provisions were either unenforceable or superseded by the alleged lack of notice; that Master is collaterally estopped from proceeding and the action is time-barred. The action was not commenced until after six (6) years from the issuance of the first violations issued in 2006.
Finally, Justice Ciccotto determined that, “There is no legal theory upon which Plaintiff can prevail, and this Court wonders when Plaintiff intends to give up the proverbial ghost”.