Matter of Ally Financial Inc. v. Bill’s Towing Service, Inc. (2020)
Citation: 181 AD3d 1045; 2020 NY Slip Op 01545, independently retrieved in full 2026-10-17, as was the official PDF above. · Court: Appellate Division, Third Department · Decided: March 5, 2020 · Opinion: Lynch, J. (Egan Jr., J.P., Clark, Aarons and Reynolds Fitzgerald, JJ., concurring).
Facts
At law enforcement’s direction, Bill’s Towing towed a vehicle with numerous parking violations. On May 5, 2017 its agent mailed a notice of lien and sale to the owner and to Ally, a lienholder. The notice claimed a lien for towing and storage and said the vehicle would be sold at public auction if not redeemed within 10 days. The vehicle was advertised and sold at auction to the tower itself, “which acquired title.” Ally brought a Lien Law § 201-a special proceeding to void the lien and the tower’s title, naming the DMV “[f]or the purpose of freezing the vehicle’s title.” Supreme Court held the lien valid but the notice of lien and sale defective. It “invalidated the sale of the vehicle, left the lien intact, and directed petitioner to pay the sum for towing and storage.”
Holding
The court affirmed. A Lien Law § 201 notice that does not itemize “[t]he nature of the debt or the agreement under which the lien arose”, and is not properly verified, is defective. On that basis “Supreme Court properly invalidated the sale.”
Reasoning
- The notice “did not include the authorization to tow and store,” so the lienholder “was not put on notice of the reason or authority concerning why a lien was placed upon the vehicle.”
- Section 201 requires the notice to be verified by the lienor. The verification signature was dated “June 14, 2017”, almost five weeks after the notice was served on May 5, 2017, so “the notice was defective.”
- The tower argued the proceeding was untimely under the 10-day window of § 201-a. It waived that argument by not pleading the statute of limitations as an affirmative defense (CPLR 3018(b), 3211(a)(5), (e)).
Practical impact
- Buyers / operators: a lien-sale buyer’s title in New York depends on the § 201 notice being complete and verified before service. A defective notice lets a court set the sale aside even when the underlying lien is valid. The remedy here was to unwind the sale and let the lender redeem for the towing and storage charges. This petitioner named DMV to freeze retitling; the opinion does not establish how routinely other lenders do so.
- Owners / debtors and lienholders: the § 201-a proceeding is the vehicle for attacking both the lien and the sale. The 10-day limit is an affirmative defense the lienor must raise.
Good-law status
Historical holding independently verified 2026-10-17. Current Lien Law 201 still requires verification and the basis of the debt. This is not a holding that every defect destroys the underlying lien, nor a holding restarting every § 201-a limitations period: the tower waived that defense. Exact-name and reporter-citation public searches located no verified later merits treatment in this review; that is an availability result, not citator clearance. Palisades and Nissan concern different notice defects and are not proof that this case was affirmatively followed. Complete subsequent history/treatment remains needs_verification.
Applies in →
new-york · towing-storage-and-mechanics-lien-sales · motor-vehicles
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