BILL NUMBER: SB 1650 CHAPTERED
BILL TEXT
CHAPTER 203
FILED WITH SECRETARY OF STATE JULY 21, 1998
APPROVED BY GOVERNOR JULY 20, 1998
PASSED THE ASSEMBLY JULY 7, 1998
PASSED THE SENATE MAY 7, 1998
AMENDED IN SENATE MARCH 19, 1998
INTRODUCED BY Senator Kelley
FEBRUARY 13, 1998
An act to amend Sections 3068.1, 3071, 3072, 3073, and 3074 of the
Civil Code, and to amend Sections 22670 and 22851.12 of the Vehicle
Code, relating to vehicles.
LEGISLATIVE COUNSEL'S DIGEST
SB 1650, Kelley. Vehicles: lien sales.
Existing law provides one lien sale procedure for vehicles that
have been determined to have a value of $2,500 or less and a
different lien sale procedure for vehicles that have been determined
to have a value exceeding $2,500.
This bill would increase the $2,500 amount to $4,000, thus making
one of the existing lien sale procedures applicable to vehicles
valued at $4,000 or less, and the other existing lien sale procedure
applicable to vehicles valued at over $4,000.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 3068.1 of the Civil Code is amended to read:
3068.1. (a) Every person has a lien dependent upon possession for
the compensation to which the person is legally entitled for towing,
storage, or labor associated with recovery or load salvage of any
vehicle subject to registration that has been authorized to be
removed by a public agency, a private property owner pursuant to
Section 22658 of the Vehicle Code, or a lessee, operator, or
registered owner of the vehicle. The lien is deemed to arise on the
date of possession of the vehicle. Possession is deemed to arise
when the vehicle is removed and is in transit, or when vehicle
recovery operations or load salvage operations have begun. A person
seeking to enforce a lien for the storage and safekeeping of a
vehicle shall impose no charge exceeding that for one day of storage
if, 24 hours or less after the vehicle is placed in storage, the
vehicle is released. If the release is made more than 24 hours after
the vehicle is placed in storage, charges may be imposed on a full,
calendar-day basis for each day, or part thereof, that the vehicle is
in storage. If a request to release the vehicle is made and the
appropriate fees are tendered and documentation establishing that the
person requesting release is entitled to possession of the vehicle,
or is the owner's insurance representative, is presented within the
initial 24 hours of storage, and the storage facility fails to comply
with the request to release the vehicle or is not open for business
during normal business hours, then only one day's charge may be
required to be paid until after the first business day. A "business
day" is any day in which the lienholder is open for business to the
public for at least eight hours. If the request is made more than 24
hours after the vehicle is placed in storage, charges may be imposed
on a full-calendar day basis for each day, or part thereof, that the
vehicle is in storage.
(b) If the vehicle has been determined to have a value not
exceeding four thousand dollars ($4,000), the lien shall be satisfied
pursuant to Section 3072. Lien sale proceedings pursuant to Section
3072 shall commence within 15 days of the date the lien arises. No
storage shall accrue beyond the 15-day period unless lien sale
proceedings pursuant to Section 3072 have commenced. The storage
lien may be for a period not exceeding 60 days if a completed notice
of a pending lien sale form has been filed pursuant to Section 3072
within 15 days after the lien arises. Notwithstanding this 60-day
limitation, the storage lien may be for a period not exceeding 120
days if any one of the following occurs:
(1) A Declaration of Opposition is filed with the department
pursuant to Section 3072.
(2) The vehicle has an out-of-state registration.
(3) The vehicle identification number was altered or removed.
(4) A person who has an interest in the vehicle becomes known to
the lienholder after the lienholder has complied with subdivision (b)
of Section 3072.
(c) If the vehicle has been determined to have a value exceeding
four thousand dollars ($4,000) pursuant to Section 22670 of the
Vehicle Code, the lien shall be satisfied pursuant to Section 3071.
The storage lien may be for a period not exceeding 120 days if an
application for an authorization to conduct a lien sale has been
filed pursuant to Section 3071.
(d) Any lien under this section shall be extinguished, and no lien
sale shall be conducted, if any one of the following occurs:
(1) The lienholder, after written demand to inspect the vehicle
made by either personal service or certified mail with return receipt
requested by the legal owner or the lessor, fails to permit the
inspection by the legal owner or lessor, or his or her agent, within
a period of time of at least 24 hours, but not to exceed 72 hours,
after the receipt of that written demand, during the normal business
hours of the lienholder. The legal owner or lessor shall comply with
inspection and vehicle release policies of the impounding public
agency.
(2) The amount claimed for storage exceeds the posted rates.
SEC. 2. Section 3071 of the Civil Code is amended to read:
3071. (a) A lienholder shall apply to the department for the
issuance of an authorization to conduct a lien sale pursuant to this
section for any vehicle with a value determined to be over four
thousand dollars ($4,000). A filing fee shall be charged by the
department and may be recovered by the lienholder if a lien sale is
conducted or if the vehicle is redeemed. The application shall be
executed under penalty of perjury and shall include all of the
following information:
(1) A description of the vehicle, including make, year model,
identification number, license number, and state of registration.
For motorcycles, the engine number also shall be included. If the
vehicle identification number is not available, the department shall
request an inspection of the vehicle by a peace officer, licensed
vehicle verifier, or departmental employee before accepting the
application.
(2) The names and addresses of the registered and legal owners of
the vehicle, if ascertainable from the registration certificates
within the vehicle, and the name and address of any person whom the
lienholder knows, or reasonably should know, claims an interest in
the vehicle.
(3) A statement of the amount of the lien and the facts that give
rise to the lien.
(b) Upon receipt of an application made pursuant to subdivision
(a), the department shall do all of the following:
(1) Notify the vehicle registry agency of a foreign state of the
pending lien sale, if the vehicle bears indicia of registration in
that state.
(2) By certified mail, send a notice, a copy of the application,
and a return envelope preaddressed to the department to the
registered and legal owners at their addresses of record with the
department, and to any other person whose name and address is listed
in the application.
(c) The notice required pursuant to subdivision (b) shall include
all of the following statements and information:
(1) An application has been made with the department for
authorization to conduct a lien sale.
(2) The person has a right to a hearing in court.
(3) If a hearing in court is desired, a Declaration of Opposition
form, signed under penalty of perjury, shall be signed and returned
to the department within 10 days of the date that the notice required
pursuant to subdivision (b) was mailed.
(4) If the Declaration of Opposition form is signed and returned
to the department, the lienholder shall be allowed to sell the
vehicle only if he or she obtains a court judgment , if he or she
obtains a subsequent release from the declarant or if the declarant,
cannot be served as described in subdivision (e).
(5) If a court action is filed, the declarant shall be notified of
the lawsuit at the address shown on the Declaration of Opposition
form and may appear to contest the claim.
(6) The person may be liable for court costs if a judgment is
entered in favor of the lienholder.
(d) If the department receives the Declaration of Opposition form
in the time specified, the department shall notify the lienholder
within 16 days of the receipt of the form that a lien sale shall not
be conducted unless the lienholder files an action in court within 30
days of the department's notice under this subdivision. A lien sale
of the vehicle shall not be conducted unless judgment is
subsequently entered in favor of the lienholder or the declarant
subsequently releases his or her interest in the vehicle. If a money
judgment is entered in favor of the lienholder and the judgment is
not paid within five days after becoming final, then the judgment may
be enforced by lien sale proceedings conducted pursuant to
subdivision (f).
(e) Service on the declarant in person or by certified mail with
return receipt requested, signed by the declarant or an authorized
agent of the declarant at the address shown on the Declaration of
Opposition form, shall be effective for the serving of process. If
the lienholder has served the declarant by certified mail at the
address shown on the Declaration of Opposition form and the mail has
been returned unclaimed, or if the lienholder has attempted to effect
service on the declarant in person with a marshal, sheriff, or
licensed process server and the marshal, sheriff, or licensed process
server has been unable to effect service on the declarant, the
lienholder may proceed with the judicial proceeding or proceed with
the lien sale without a judicial proceeding. The lienholder shall
notify the department of the inability to effect service on the
declarant and shall provide the department with a copy of the
documents with which service on the declarant was attempted. Upon
receipt of the notification of unsuccessful service, the department
shall send authorization of the sale to the lienholder and send
notification of the authorization to the declarant.
(f) Upon receipt of authorization to conduct the lien sale from
the department, the lienholder shall immediately do all of the
following:
(1) At least five days, but not more than 20 days, prior to the
lien sale, not counting the day of the sale, give notice of the sale
by advertising once in a newspaper of general circulation published
in the county in which the vehicle is located. If there is no
newspaper published in the county, notice shall be given by posting a
Notice of Sale form in three of the most public places in the town
in which the vehicle is located and at the place where the vehicle is
to be sold for 10 consecutive days prior to and including the day of
the sale.
(2) Send a Notice of Pending Lien Sale form 20 days prior to the
sale but not counting the day of sale, by certified mail with return
receipt requested, to each of the following:
(A) The registered and legal owners of the vehicle, if registered
in this state.
(B) All persons known to have an interest in the vehicle.
(C) The department.
(g) All notices required by this section, including the notice
forms prescribed by the department, shall specify the make, year
model, vehicle identification number, license number, and state of
registration, if available, and the specific date, exact time, and
place of sale. For motorcycles, the engine number shall also be
included.
(h) No lien sale shall be undertaken pursuant to this section
unless the vehicle has been available for inspection at a location
easily accessible to the public for at least one hour before the sale
and is at the place of sale at the time and date specified on the
notice of sale. Sealed bids shall not be accepted. The lienholder
shall conduct the sale in a commercially reasonable manner.
(i) Within 10 days after the sale of any vehicle pursuant to this
section, the legal or registered owner may redeem the vehicle upon
the payment of the amount of the sale, all costs and expenses of the
sale, together with interest on the sum at the rate of 12 percent per
annum from the due date thereof or the date when that sum was
advanced until the repayment. If the vehicle is not redeemed, all
lien sale documents required by the department shall then be
completed and delivered to the buyer.
(j) Any lien sale pursuant to this section shall be void if the
lienholder does not comply with this chapter. Any lien for fees or
storage charges for parking and storage of a motor vehicle shall be
subject to Section 10652.5 of the Vehicle Code.
SEC. 3. Section 3072 of the Civil Code is amended to read:
3072. (a) For vehicles with a value determined to be four
thousand dollars ($4,000) or less, the lienholder shall apply to the
department for the names and addresses of the registered and legal
owners of record. The request shall include a description of the
vehicle, including make, year, model, identification number, license
number, and state of registration. If the vehicle identification
number is not available, the Department of Motor Vehicles shall
request an inspection of the vehicle by a peace officer, licensed
vehicle verifier, or departmental employee before releasing the names
and addresses of the registered and legal owners and interested
parties.
(b) The lienholder shall, immediately upon receipt of the names
and addresses, send, by certified mail with return receipt requested
or by United States Postal Service Certificate of Mailing, a
completed Notice of Pending Lien Sale form, a blank Declaration of
Opposition form, and a return envelope preaddressed to the
department, to the registered owner and legal owner at their
addresses of record with the department, and to any other person
known to have an interest in the vehicle. The lienholder shall
additionally send a copy of the completed Notice of Pending Lien Sale
form to the department by certified mail on the same day that the
other notices are mailed pursuant to this subdivision.
(c) All notices to persons having an interest in the vehicle shall
be signed under penalty of perjury and shall include all of the
following information and statements:
(1) A description of the vehicle, including make, year model,
identification number, license number, and state of registration.
For motorcycles, the engine number shall also be included.
(2) The specific date, exact time, and place of sale, which shall
be set not less than 31 days, but not more than 41 days, from the
date of mailing.
(3) The names and addresses of the registered and legal owners of
the vehicle and any other person known to have an interest in the
vehicle.
(4) All of the following statements:
(A) The amount of the lien and the facts concerning the claim
which gives rise to the lien.
(B) The person has a right to a hearing in court.
(C) If a court hearing is desired, a Declaration of Opposition
form, signed under penalty of perjury, shall be signed and returned
to the department within 10 days of the date the Notice of Pending
Lien Sale form was mailed.
(D) If the Declaration of Opposition form is signed and returned,
the lienholder shall be allowed to sell the vehicle only if he or she
obtains a court judgment or if he or she obtains a subsequent
release from the declarant or if the declarant cannot be served as
described in subdivision (e).
(E) If a court action is filed, the declarant shall be notified of
the lawsuit at the address shown on the Declaration of Opposition
form and may appear to contest the claim.
(F) The person may be liable for court costs if a judgment is
entered in favor of the lienholder.
(d) If the department receives the completed Declaration of
Opposition form within the time specified, the department shall
notify the lienholder within 16 days that a lien sale shall not be
conducted unless the lienholder files an action in court within 30
days of the notice and judgment is subsequently entered in favor of
the lienholder or the declarant subsequently releases his or her
interest in the vehicle. If a money judgment is entered in favor of
the lienholder and the judgment is not paid within five days after
becoming final, then the judgment may be enforced by lien sale
proceedings conducted pursuant to subdivision (f).
(e) Service on the declarant in person or by certified mail with
return receipt requested, signed by the declarant or an authorized
agent of the declarant at the address shown on the Declaration of
Opposition form, shall be effective for the serving of process. If
the lienholder has served the declarant by certified mail at the
address shown on the Declaration of Opposition form and the mail has
been returned unclaimed, or if the lienholder has attempted to effect
service on the declarant in person with a marshal, sheriff, or
licensed process server and the marshal, sheriff, or licensed process
server has been unable to effect service on the declarant, the
lienholder may proceed with the judicial proceeding or proceed with
the lien sale without a judicial proceeding. The lienholder shall
notify the Department of Motor Vehicles of the inability to effect
service on the declarant and shall provide the Department of Motor
Vehicles with a copy of the documents with which service on the
declarant was attempted. Upon receipt of the notification of
unsuccessful service, the Department of Motor Vehicles shall send
authorization of the sale to the lienholder and shall send
notification of the authorization to the declarant.
(f) At least 10 consecutive days prior to and including the day of
the sale, the lienholder shall post a Notice of Pending Lien Sale
form in a conspicuous place on the premises of the business office of
the lienholder and if the pending lien sale is scheduled to occur at
a place other than the premises of the business office of the
lienholder, at the site of the forthcoming sale. The Notice of
Pending Lien Sale form shall state the specific date and exact time
of the sale and description of the vehicle, including the make, year
model, identification number, license number, and state of
registration. For motorcycles, the engine number shall also be
included. The notice of sale shall remain posted until the sale is
completed.
(g) No lien sale shall be undertaken pursuant to this section
unless the vehicle has been available for inspection at a location
easily accessible to the public at least one hour before the sale and
is at the place of sale at the time and date specified on the notice
of sale. Sealed bids shall not be accepted. The lienholder shall
conduct the sale in a commercially reasonable manner. All lien sale
documents required by the department shall be completed and delivered
to the buyer immediately following the sale.
(h) Any lien sale pursuant to this section shall be void if the
lienholder does not comply with this chapter. Any lien for fees or
storage charges for parking and storage of a motor vehicle shall be
subject to Section 10652.2 of the Vehicle Code.
SEC. 4. Section 3073 of the Civil Code is amended to read:
3073. The proceeds of a vehicle lien sale under this article
shall be disposed of as follows:
(a) The amount necessary to discharge the lien and the cost of
processing the vehicle shall be paid to the lienholder. The cost of
processing shall not exceed seventy dollars ($70) for each vehicle
valued at four thousand dollars ($4,000) or less, or one hundred
dollars ($100) for each vehicle valued over four thousand dollars
($4,000).
(b) The balance, if any, shall be forwarded to the Department of
Motor Vehicles within 15 days of any sale conducted pursuant to
Section 3071 or within five days of any sale conducted pursuant to
Section 3072 and deposited in the Motor Vehicle Account in the State
Transportation Fund, unless federal law requires these funds to be
disposed in a different manner.
(c) Any person claiming an interest in the vehicle may file a
claim with the Department of Motor Vehicles for any portion of the
funds from the lien sale that were forwarded to the department
pursuant to subdivision (b). Upon a determination of the Department
of Motor Vehicles that the claimant is entitled to an amount from the
balance deposited with the department, the department shall pay that
amount determined by the department, which amount shall not exceed
the amount forwarded to the department pursuant to subdivision (b) in
connection with the sale of the vehicle in which the claimant claims
an interest. The department shall not honor any claim unless the
claim has been filed within three years of the date the funds were
deposited in the Motor Vehicle Account.
SEC. 5. Section 3074 of the Civil Code is amended to read:
3074. The lienholder may charge a fee for lien sale preparations
not to exceed seventy dollars ($70) in the case of a vehicle having a
value determined to be four thousand dollars ($4,000) or less and
not to exceed one hundred dollars ($100) in the case of a vehicle
having a value determined to be greater than four thousand dollars
($4,000), from any person who redeems the vehicle prior to disposal
or is paid through a lien sale pursuant to this chapter. These
charges may commence and become part of the possessory lien when the
lienholder requests the names and addresses of all persons having an
interest in the vehicle from the Department of Motor Vehicles. Not
more than 50 percent of the allowable fee may be charged until the
lien sale notifications are mailed to all interested parties and the
lienholder or registration service agent has possession of the
required lien processing documents. This charge shall not be made in
the case of any vehicle redeemed prior to 72 hours from the initial
storage.
SEC. 6. Section 22670 of the Vehicle Code is amended to read:
22670. For lien sale purposes, the public agency causing the
removal of the vehicle shall determine if the estimated value of the
vehicle that has been ordered removed, towed, or stored is three
hundred dollars ($300) or less, over three hundred dollars ($300) but
four thousand dollars ($4,000) or less, or over four thousand
dollars ($4,000).
If the public agency fails or refuses to put a value on, or to
estimate the value of, the vehicle within three days after the date
of removal of the vehicle, the garage keeper specified in Section
22851 or the garage keeper's agent shall determine, under penalty of
perjury, if the estimated value of the vehicle that has been ordered
removed, towed, or stored, is three hundred dollars ($300) or less,
over three hundred dollars ($300) but four thousand dollars ($4,000)
or less, or over four thousand dollars ($4,000).
SEC. 7. Section 22851.12 of the Vehicle Code is amended to read:
22851.12. The lienholder may charge a fee for lien-sale
preparations not to exceed seventy dollars ($70) in the case of a
vehicle having a value determined to be four thousand dollars
($4,000) or less and not to exceed one hundred dollars ($100) in the
case of a vehicle having a value determined to be greater than four
thousand dollars ($4,000), from any person who redeems the vehicle
prior to disposal or is sold through a lien sale pursuant to this
chapter. These charges may commence and become part of the
possessory lien when the lienholder requests the names and addresses
of all persons having an interest in the vehicle from the department.
Not more than 50 percent of the allowable fee may be charged until
the lien sale notifications are mailed to all interested parties and
the lienholder or the registration service agent has possession of
the required lien processing documents. This charge shall not be
made in the case of any vehicle redeemed prior to 72 hours from the
initial storage.