Two fire departments, one in New Jersey and the other in North Carolina, have found themselves in the middle of a complicated commercial lawsuit in Federal court over title to a brand new American LaFrance brush truck.
Last September, the Audubon Park Volunteer Fire Department in Audubon Park, New Jersey, agreed to purchase a $180,000 brush truck from American LaFrance LLC. The transaction was structured as a lease purchase whereby the fire company paid $29,763 down, with the balance to be financed through a lease with TD Equipment Finance, an affiliate of TD Bank.
The truck is a 2012 American LaFrance Brush Truck (identified in the complaint as a Pastak model with a VIN # 1FDOW5HT4CEA71862). Before the unit could be delivered, it apparently required some work to be performed by Anchor-Richey Emergency Vehicle Services, Inc., of Taylorsville, North Carolina. Anchor-Richey also happens to be an American LaFrance dealer.
In February, TD Equipment Finance wired the $150,000 balance to American LaFrance as final payment for the vehicle. The manufacturer’s Statement of Origin for the truck (the document that goes to the registry of motor vehicles for purposes of registering a new vehicle) was updated to list Audubon Park VFD as the owner with TD Equipment Finance as a lienholder.
When the vehicle was completed, Anchor-Richey refused to turn it over to Audubon Park VFD, claiming that the $150,000 payment should have been made payable to it, not American LaFrance. Despite months of wrangling the matter could not be straightened out.
On July 16, 2012, Anchor-Richey informed Audubon Park and TD Equipment Finance that it sold the brush truck to a fire company in North Carolina. That prompted TD Equipment to file suit in Federal District Court in New Jersey against:
- American LaFrance
- The unidentified fire company (listed in the suit as XYZ Fire Company of North Carolina).
The suit seeks monetary damages for breach of contract, fraud, misappropriation, and intentional interference with a business relationship, as well as an injunction to recover possession of the vehicle.
Cases like this make me wish I paid a little more attention in my commercial law class, but fundamentally at issue is going to be the rights of the lienholder (TD Equipment Finance) versus the mechanic’s lien rights of Anchor-Richey for the work they put into the vehicle.
Unclear at this point is why American LaFrance has not stepped to the plate to resolve this dispute without the parties having to make a Federal lawsuit out of it.
While many municipalities require successful bidders to post a performance bond to cover themselves in the event of such unforeseeable disputes, many volunteer fire departments that operate outside of municipal purchasing systems do not. Certainly the value of a performance bond may be one point to take away from this case.
Here is a copy of the complaint. Complaint