New York Law Review

Tag: Employee Knowledge

  • Matter of Royal Motor Car Corp. v. New York State Dept. of Motor Vehicles, 41 N.Y.2d 729 (1977): Imputation of Employee Knowledge to Employer Regarding Odometer Readings

    Matter of Royal Motor Car Corp. v. New York State Dept. of Motor Vehicles, 41 N.Y.2d 729 (1977)

    An employer is deemed to possess the knowledge of its employees acquired within the scope of their employment; therefore, a car dealership is held responsible for the knowledge its salesman had regarding the accuracy of a vehicle’s odometer reading.

    Summary

    Royal Motor Car Corp. challenged the suspension of its dealer registration. The Commissioner of Motor Vehicles suspended the registration due to a violation regarding the proper disclosure of odometer readings on a used vehicle. The company’s salesman had knowledge, during a repurchase transaction, suggesting the odometer reading was inaccurate. The court held that the salesman’s knowledge was imputed to the dealership, making the dealership responsible for the violation. This imputation prevented the dealership from claiming ignorance and upheld the suspension.

    Facts

    Royal Motor Car Corp. sold a used 1969 Pontiac to Stephen Craft in November 1972. In October 1974, the dealership repurchased the same vehicle from Craft. During repurchase negotiations with the same salesman, Craft stated the mileage was the same as when he bought it. Royal Motor Car then sold the vehicle to Taconic Motors Corporation in November 1974, with a certificate of sale listing the odometer reading as 29,464 without indicating that the true mileage was unknown. The original sale to Craft in 1972 listed the odometer reading as 29,465, and Craft’s odometer mileage statement in 1974 listed it as 29,464.

    Procedural History

    The Commissioner of Motor Vehicles suspended Royal Motor Car Corp.’s dealer registration after a hearing, determining a violation of regulations regarding odometer disclosure. The Appellate Division reversed the Commissioner’s determination. The New York Court of Appeals then reviewed the Appellate Division’s decision.

    Issue(s)

    Whether the knowledge of a car dealership’s salesman regarding a vehicle’s odometer reading is imputable to the dealership, thus making the dealership responsible for violations concerning odometer disclosure requirements.

    Holding

    Yes, because the knowledge of the petitioner’s salesman, acquired at the time of resale of the vehicle by Craft to petitioner and indicating that the mileage registered must have been less than that actually traveled, was attributable to petitioner.

    Court’s Reasoning

    The Court of Appeals reasoned that the knowledge of the salesman, acquired during the repurchase of the vehicle, was imputable to Royal Motor Car Corp. The court cited 200 East End Ave. Corp. v General Elec. Co., 5 AD2d 415, affd 6 NY2d 731, to support the principle of imputing employee knowledge to the employer. To rule otherwise, the court stated, “would render the regulation nugatory and lead to deception.” The court also referenced People ex rel. Price v Sheffield Farms Co., 225 NY 25, 29-30, to emphasize the importance of preventing deceptive practices. The court found substantial evidence supporting the Commissioner’s determination that the dealer knew the mileage indicated was less than the actual mileage. The Court held that the Appellate Division’s decision was incorrect, reversed the order, and reinstated the Commissioner’s determination. The court also stated that there was no warrant for a disturbance of the punishment imposed (Matter of Pell v Board of Educ., 34 NY2d 222, 230, 233).