BILL NUMBER: AB 327	CHAPTERED  09/15/99

	CHAPTER   376
	FILED WITH SECRETARY OF STATE   SEPTEMBER 15, 1999
	APPROVED BY GOVERNOR   SEPTEMBER 15, 1999
	PASSED THE ASSEMBLY   AUGUST 26, 1999
	PASSED THE SENATE   AUGUST 23, 1999
	AMENDED IN SENATE   JULY 14, 1999
	AMENDED IN ASSEMBLY   MAY 18, 1999

INTRODUCED BY   Assembly Member Gallegos

                        FEBRUARY 11, 1999

   An act to amend Sections 3071 and 3072 of the Civil Code, relating
to vehicles.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 327, Gallegos.  Vehicles:  license plates:  lien sales.
   Existing law provides procedures for the sale of a vehicle at a
lien sale and makes that sale void unless the lienholder complies
with those procedures and other provisions relating to liens.
   This bill would require, following the sale of a vehicle at a lien
sale, the lienholder to remove and destroy the vehicle's license
plates and, within 5 days of that sale, submit a completed notice of
"Release of Liability" form to the Department of Motor Vehicles,
which the department would be required to retain that form for 2
years.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  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) Following the sale of a vehicle, the lienholder shall do both
of the following:
   (1) Remove and destroy the vehicle's license plates.
   (2) Within five days of the sale, submit a completed "Notice of
Release of Liability" form to the Department of Motor Vehicles.
   (i) The Department of Motor Vehicles shall retain all submitted
forms described in paragraph (2) of subdivision (h) for two years.
   (j) 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.
   (k) 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.
   (l) 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. 2.  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) Following the sale of a vehicle, the lienholder shall do both
of the following:
   (1) Remove and destroy the vehicle's license plates.
   (2) Within five days of the sale, submit a completed "Notice of
Release of Liability" form with the Department of Motor Vehicles.
   (h) The Department of Motor Vehicles shall retain all submitted
forms described in paragraph (2) of subdivision (g) for two years.
   (i) 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.
   (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.