by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)
Right. I never do either. But if you do (or think you might in the future) then you might want to know about Durrani v. Wide World of Cars. In that case, plaintiff sued a car dealership and her ex-husband's former lawyers for delivering two Ferraris to her ex-husband, allegedly in violation of an order entered in their divorce action.
As the trial court described it, when plaintiff and her ex-husband were married, they lived an "extravagant lifestyle." Among other things, they owned "twenty-five luxury cars worth approximately one million dollars, boats and properties." Of these assets, however, plaintiff was only on the title of two cars (and not the Ferraris). Nonetheless, during their divorce proceeding, plaintiff sought "exclusive possession" of the Ferraris, which were titled and registered to her ex-husband and stored at the defendant dealership's facilities. Consistent with this claim, plaintiff's counsel sent a letter to the dealership requesting that it not release or transfer the Ferraris to anyone, including plaintiff's ex-husband, and threatening to hold the dealership liable for damages if it did. At the end of the letter, counsel asked the dealership to agree to abide by the demand and indicated that if it did not agree, plaintiff would "immediately seek to serve [the dealership] with a court order." The dealership did not respond.
Around the same time plaintiff's counsel sent this letter, the family part entered an order in the divorce proceeding preventing either party from dissipating, selling, etc. any assets of the marriage, and specifically identified the Ferraris in a list of assets to which this restraint applied. Plaintiff's counsel sent a copy of the order to the dealership, purportedly placing it on notice of the terms.
Several years later, the dealership notified plaintiff's ex-husband that it could no longer store the Ferraris because the credit card on file for the storage charges had been declined. Plaintiff's ex-husband responded by telling the dealership that he would provide it with information about where to deliver the cars, but instructing them not to deliver them to the former marital residence. Initially,plaintiff's ex-husband thought that he might be able to store the Ferraris at his attorney's office, but ultimately decided against this and had a representative pick them up from the dealership and take them to an undisclosed location.
One year later, plaintiff learned that the dealership was no longer storing the cars. Shortly thereafter, the family part entered a judgment of divorce awarding plaintiff all marital assets in the United States. "The location of the Ferraris was, however, unknown and remains undisclosed."
Plaintiff sued the dealership for fraud, conversion, unjust enrichment, and civil conspiracy, and sued her ex-husband's former attorney for conversion, unjust enrichment, and civil conspiracy. The dealership moved to dismiss. The trial court granted the motion, holding that the family court's order preventing plaintiff or her ex-husband from transferring assets did not apply to the dealership. Even if it did, however, the trial court held that releasing the Ferraris to plaintiff's ex-husband, the title owner, was "not engaging in encumbering, mortgaging, disposal, transfer of ownership, assigning or gifting of the Ferraris to a third party." Finally, the trial court held that plaintiff putting the dealership on notice of the family part order did not "create a bailment contract between plaintiff and [the dealership]."
Plaintiff appealed, and the Appellate Division affirmed. It agreed with the trial court that the family part's order did not apply to the dealership regardless of whether the dealership had notice of the order, and that, even if it did, the dealership did not "participate in any of the restraining order's prohibited sales or transfers of [plaintiff's ex-husband's] automobiles." The Appellate Division observed that, to hold otherwise, would have required the dealership to continue to store the Ferraris even though it was not being paid to do so. It held that it had "no legal basis" to hold the dealership to this obligation. Finally, the Appellate Division held that, as a bailee of plaintiff's ex-husband's Ferraris, the dealership was "obliged to transfer possession of the bailed goods to their rightful claimant who held title."
Let this be a lesson to you next time you and your spouse disagree over the family Ferraris.