In Allstate Lien & Recovery Corp. v. Stansbury, the Court of Appeals of Maryland determined that a “garageman’s lien” on a vehicle does not include “lien enforcement costs” or “costs of process” if the lien is redeemed prior to the non-judicial sale of the vehicle.
Rather, the Court determined that the plain language of the applicable statute, Maryland Code, Comm. Law § 16-202(c), only provides for a garageman’s lien to include costs for repairs, rebuilding, storage, and tires or accessories. Recovery of such costs was only appropriate after the vehicle was actually sold, where they could be authenticated, or alternatively, in a replevin proceeding or other judicial action, where the amount owed for enforcement costs would be subject to judicial scrutiny.
A copy of this opinion is available here.
Following an automobile accident, Owner left his vehicle to a Repair Shop for servicing and repairs. Four months later, due to a delay in obtaining certain parts, Repair Shop notified Owner that the repairs were complete and presented a bill. Upon Owners failure to retrieve the vehicle and pay the bill, Repair Shop sent Owner a notice that the vehicle would be sold, listing $6,630.37 in repair charges as well as a $1,000 “cost of process” fee. Ultimately, the vehicle was sold at auction.
Owner sued Repair Shop, and several other parties, alleging violation of several consumer protection laws and common law theories challenging, among other things, the right to collect the amounts claimed by the Repair Shop.
Owner argued that the text of Maryland Code, Comm. Law § 16-202(c), which provided for the Repair Shop’s “garageman’s lien” on the vehicle, did not permit recovery of the $1,000 processing fee where the vehicle was redeemed prior to the sale. The trial court agreed, and after it instructed the jury as a matter of law that the “$1,000 processing fee is not an appropriate part of the lien,” the jury returned a verdict for Owner.
The intermediate appellate court affirmed, and the Court of Appeals granted certiorari to consider whether a lien and recovery company hired to execute a garageman’s lien could include its lien "enforcement costs and expenses for executing the lien" as part of the amount necessary to redeem the vehicle. Op. at 1 n.2.
As an initial matter, the Court explained that a garageman’s lien is “an ex parte, prejudgment creditor’s remedy”, Op. at 15, which is provided for under Maryland Code, Comm. Law § 16-202(c). Based upon the plain language of the statute, the Court determined that “[a] processing fee is not included as part of the lien.” Op. at 18 (quotations omitted). Rather, Section 16-202(c) provides:
(c) Motor vehicle lien. – (1) Any person who, with the consent of the owner, has custody of a motor vehicle and who, at the request of the owner, provides a service to or materials for the motor vehicle, has a lien on the motor vehicle for any charge incurred for any:
(i) Repair or rebuilding;
(ii) Storage; or
(iii) Tires or other parts or accessories.
(2) A lien is created under this subsection when any charges set out under paragraph (1) of this subsection giving rise to the lien are incurred.
Md. Code, Comm. Law § 16-202(c).
Consequently, the Court explained “the basic premise presented in our garageman’s lien statutory scheme is that costs incurred by the repair company to sell the vehicle subject to a garageman’s lien, can only be recovered from the proceeds of the actual sale of the vehicle, when actual expenses for lien enforcement costs were known and could be authenticated.” Op. at 22.
The Court noted that alternatively, such costs may be recovered where an owner filed a replevin action to recover possession of the vehicle or posted a bond to stay a sale, subject to a judicial action. However, in either circumstance, “the amount owed for enforcement costs incurred, not the subject of a lien established under Section 16-202(c), would be subject to judicial scrutiny for reasonableness, at the least.” Op. at 22.
The Court posited that a different interpretation of the statute would permit a repair company to demand any amount for lien enforcement costs prior to an ex parte sale, thereby inhibit vehicle owners from redeeming their vehicles. Op. at 22-23.
Accordingly, the Court concluded that “a garageman’s lien includes charges incurred for ‘repair or rebuilding, storage, or tires or other parts or accessories’, but does not encompass lien enforcement costs or expenses or cost of process fees prior to sale, should the owner attempt to redeem the vehicle before sale.” Op. at 23.