I was arrested about 2 months ago for car theft. I was driving my own car at the time of the arrest. I was stopped by the police for a traffic violation and the next thing I know I am being arrested for theft of my own car. I learned after my arrest that the car mechanic that I took my vehicle to had told the police that the mechanic was asserting a ‘garageman’s lien’ on the car. The mechanic said I took the car when the bill was not paid. Can I sue the cops?

It sounds like a nightmare scenario straight out of a law school exam: you get pulled over for a minor traffic violation, only to end up in handcuffs because the police database flags your vehicle as stolen. The twist? You owned the vehicle, but your mechanic called the police after a dispute over an unpaid bill, claiming a “garageman’s lien.” New York Penal Law § 165.05. Naturally, anyone subjected to an arrest under these circumstances wants accountability—and compensation. But while your frustration and outrage are entirely justified, the reality of civil litigation in New York creates significant hurdles to pursuing a lawsuit against the police or the auto repair shop.

Below is an analysis of why suing the police is unlikely to succeed, the legal complexities of taking action against the mechanic, and the cold economic realities that often prevent attorneys from taking these cases on a contingency fee basis.

1. Why You Can’t Win a False Arrest Lawsuit Against the Police

To succeed in a claim for false arrest or false imprisonment under New York law, a plaintiff must prove four core elements:

The fourth element—privilege—is where claims against police officers usually fail. Under New York Criminal Procedure Law § 140.10, a police officer is legally privileged to make a warrantless arrest if they have probable cause (or “reasonable cause”) to believe that a crime was committed and that the person arrested committed it.

Probable cause exists when the facts and circumstances known to the officer at the time of the arrest would lead a reasonably prudent person to believe a crime had occurred. In your situation, the arresting officers received a formal report from a business owner stating that a vehicle had been taken without authorization. New York Penal Law § 165.05. When the officer ran your plates or license during the traffic stop and saw an active stolen vehicle report, they possessed sufficient, objective facts to justify the arrest at that moment. The police officers are not required to conduct a mini-trial on the side of the road, parse through the intricacies of New York’s Lien Law, or verify whether the mechanic’s report was factually accurate before securing the vehicle and arresting the driver. Because the officers acted on a stolen vehicle report made by a third party, the arrest was privileged under the law. Without a lack of probable cause, a false arrest claim against the police department or the city will be dismissed.

What About a Federal Civil Rights Lawsuit (42 U.S.C. § 1983)?

Clients often ask if they can sue the City or NYPD under federal civil rights laws. 42 U.S.C. § 1983. However, Section 1983 claims against a municipality require demonstrating an unconstitutional official policy, custom, or systemic failure in police training or supervision (known as a Monell claim). Arresting an individual operating a vehicle reported as stolen in an official law enforcement database is a standard police function, not a systemic civil rights violation.

2. Claims Against the Repair Shop: Legal Liability vs. Insurance Reality

If the police are off the hook, what about the mechanic who filed a false police report?

Falsely reporting an incident to law enforcement is a crime in New York (such as Falsely Reporting an Incident, NY Penal Law § 240.50). But it is up to the District Attorney in each county to determine what crimes it will prosecute. You, as a citizen who were wronged, cannot force the District Attorney to file criminal charges.

Furthermore, under civil law, an individual or business that intentionally instigates or directs a false arrest by making a knowingly false report can theoretically be held liable for civil damages. Vernes v. Phillips, 266 N.Y. 298 (1935). However, turning a civil wrong into an actual financial recovery presents massive procedural and financial obstacles:

The Insurance Problem (Intentional Torts)

When you sue a business for a routine negligence claim—such as a mechanic improperly installing brakes that cause a crash—the shop’s commercial general liability (CGL) insurance policy steps in to pay for the legal defense and cover any settlement or judgment.

However, false imprisonment and intentional misrepresentation are intentional torts. Standard business insurance policies almost universally exclude coverage for intentional or criminal acts committed by the insured. This means:

  • The insurance company will refuse to defend or indemnify the repair shop.
  • The owner of the shop will have to pay for their defense out-of-pocket.
  • Any judgment you win will not be paid by an insurance carrier; you will have to collect it directly from the business’s assets.

3. The “Judgment-Proof” Business and Piercing the Corporate Veil

Even if you successfully sue the repair shop and win a civil judgment, collecting the money is another story.

Most small repair shops operate as a Limited Liability Company (LLC) or an Incorporated entity (Inc.). The entire purpose of forming an LLC or corporation is to create a legal “shield” that protects the business owner’s personal assets (their home, personal bank accounts, vehicles) from business liabilities.

If the repair shop lacks liquid cash or significant unencumbered assets, the business itself may be judgment-proof. To reach the owner’s personal assets, a plaintiff must pierce the corporate veil. Under New York law, piercing the corporate veil is an extraordinary equitable remedy. A plaintiff must prove two difficult elements by a preponderance of the evidence:

  1. The owner exercised complete domination and control over the entity, disregarding corporate formalities (e.g., commingling personal and business funds, inadequate capitalization); and
  2. The owner used that complete control to commit a fraud, wrong, or unjust act that directly injured the plaintiff. Morris v. N.Y. State Dept. of Taxation & Fin., 82 N.Y.2d 135 (1993).

Proving these elements requires extensive financial discovery, forensic accounting, depositions, and protracted motion practice—adding thousands of dollars in legal expenses before you ever see a dime.

4. The Economic Reality: Why Attorneys Can’t Take This on Contingency

When people consult a personal injury or civil rights lawyer, they generally expect the attorney to take the case on a contingency fee basis—meaning the lawyer pays upfront expenses and receives a percentage of the final recovery, charging no fee if they lose.

Attorneys accept cases on contingency when there is a combination of clear liability, measurable damages, and a solvent source of recovery (usually an insurance company).

In a scenario involving an unpaid mechanics dispute and a false arrest report:

  • No Insurance: As established, intentional torts are excluded from insurance coverage.
  • High Legal Costs: Between pleading the case, defending against motions to dismiss, conducting corporate discovery, and attempting to pierce the corporate veil, the legal fees will easily run into tens of thousands of dollars.
  • Disproportionate Damages: Unless you suffered a severe physical injury or an extended period of incarceration resulting in substantial lost wages, the quantifiable legal damages for a short detention will likely be far less than the cost of litigating the case.

Charging a client hourly for a case where the legal fees will exceed the recoverable money is fundamentally unfair to the client. Most experienced attorneys will decline these cases—not because you weren’t wronged, but because taking your money when you are unlikely to come out ahead financially is unethical practice.

The Takeaway

If you find yourself arrested under these circumstances, your primary focus should be working with a criminal defense attorney to ensure all criminal charges or summonses stemming from the arrest are dismissed immediately. While the legal system offers theoretical remedies against a mechanic who files a false report, practical legal barriers—namely police privilege, intentional tort insurance exclusions, corporate protections, and litigation costs—make a successful civil lawsuit highly unfeasible in most real-world situations.

By James Santner, Esq.

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