Everybody out of the car.

Defendant's vehicle, leased from plaintiff, was impounded after defendant was arrested for driving while intoxicated. After pleading guilty to driving while ability-impaired, defendant attempted by telephone and in writing to recover the vehicle, but to no avail. Plaintiff eventually got the vehicle by executing a release and hold harmless agreement, wherein it agreed not to return the vehicle to defendant or any member of his family.

Plaintiff commenced this action to recover the unpaid balance due under the lease on grounds that defendant breached paragraph 11 of the lease when the vehicle was seized by the government and not promptly and unconditionally returned, but the First Department dismissed the complaint, in Ford Motor Credit Co. v. Louie, which was decided on October 2, 2007.

The court said that defendant's papers established prima facie that he made immediate and diligent efforts to recover the vehicle; that the District Attorney's office authorized the release of the vehicle to him; that, notwithstanding such authorization, the police did not return the vehicle to him or commence forfeiture proceedings; and that plaintiff, upon taking possession of the vehicle, declined to return it to him.

The court noted that plaintiff took the matter out of defendant's hands when plaintiff executed a release and hold harmless agreement with the property clerk, and upon taking possession of the vehicle, refused to return it to defendant, thereby thwarting his good-faith efforts to cure any default on the lease. The court cited plaintiff's bad faith in purportedly giving defendant an opportunity to cure, when, in fact,plaintiff had previously entered into a contract with the City specifically agreeing not to return the vehicle to defendant.