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Case Law - save on Lexis / WestLaw. Original MSWord Version This case can also be found at 180 N.J. 24, 848 A.2d 732.
SYLLABUS
(This syllabus is not part of the opinion of the Court. It has
been prepared by the Office of the Clerk for the convenience of the
reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not
have been summarized). Argued February 2, 2004 -- Decided May 25, 2004 ZAZZALI, J., writing for the Court. The issue before the Court is whether a lessee is a lessors representative within the meaning of the Garage Keepers Lien Act, N.J.S.A. 2A:44-20 to-31 (Act) when the lease agreement requires the lessee to service and repair the vehicle.
The matter before the Court comes on an appeal from a motion for
summary judgment granted in favor of the lessor, General Electric Capital Auto Lease
(GECAL). Accordingly, the Court accepts as true the evidence supporting the garage keeper,
Davids Towing Service and David Brigati, Jr. (collectively, Davids) and accords it the
benefit of all favorable inferences. The relevant facts are that in July 1997,
Alfonso Violante (lessee) leased a 1994 Lexus GS300 from Bob Ciasulli Lexus, who
then assigned the lease to the lessor, GECAL. As a result of the
assignment, the vehicles Certificate of Title lists GECAL as the vehicles owner. Pursuant
to the lease agreement, the lessee is required to have the vehicle serviced
regularly as recommended by the manufacturer and as required by a warranty or
service contract. The lessee is also required, among other things, to maintain the
vehicle in good working order and condition.
On March 12, 1999, during the term of the lease, the car was
vandalized. The lessee contacted Davids and requested towing and repair services for the
damaged vehicle. That day, Davids towed the car to its garage. Davids did
not make any repairs and the car remained at the garage until August
1999. Davids delayed making the repairs because the lessee said that his insurance
company had to inspect the vehicle first. GECAL learned that the vehicle was
being stored at Davids in late April 1999, almost six weeks after Davids
had towed the vehicle. On or about April 28, 1999, GECAL requested access
to the vehicle for inspection and removal. Davids refused because GECAL would not
pay the towing charges and accumulated storage fees since March 12, 1999.
In July 1999, GECA filed an action against Violante, the lessee, for breach
of the lease contract and repossession of the vehicle and Davids for replevin
of the vehicle. After the complaint was filed and served, Davids agreed to
release the vehicle to GECAL in return for GECALs promise to pay any
judgment for towing and storage costs Davids might be awarded against it. Davids
then filed a combined cross claim and counterclaim against the lessee and GECAL.
Davids claimed that, under New Jersey law, GECAL and the lessee were jointly
and severally liable for the towing and storage bill of $6,550.83. Davids also
claimed that by requiring the lessee to maintain the vehicle in good repair,
GECAL expressly or impliedly authorized the towing and storage services. GECAL claimed that
the lessee was not its agent for the purpose of obligating it to
third parties for repairs or storage charges. It also argued that Davids failed
to mitigate damages by taking reasonable steps to determine that it was the
vehicles owner.
In June 2000, the trial court entered a default order against the lessee
and the matter proceeded with Davids claims against GECAL. After hearing argument regarding
whether the Act applied to the circumstances presented, the trial court granted summary
judgment to GECAL, finding that the Act does not apply to leased vehicles.
The Appellate Division affirmed, finding that Davids did not have a valid lien
against the vehicle because the lessee lacked the authority to incur storage and
repair charges on GECALs behalf. The panel found itself constrained by two cases,
Stern v. Ward and Auto Security Co. v. Stewart., which it interpreted as
holding that the lessee of an automobile was not the representative of the
lessor for the purpose of incurring charges on the lien claim.
The Supreme Court granted certification.
HELD: The Garage Keepers Lien Act entitles Davids Towing to pursue its lien
claim against GECALs vehicle for those services that the lessee was obligated to
undertake pursuant to the lease agreement. In addition, on the facts presented here,
N.J.S.A. 39:10A-14 does not provide Davids with a remedy against GECAL.
1. According to the Act, a garage keepers right to encumber a vehicle
with a lien is limited to those services performed at the request or
with the consent of the owner or the owners representative. Ward and Auto
Security Co. are distinguishable from the facts presented here. In those cases, the
lease agreement expressly forbade the lessee from having the vehicle repaired without first
getting the lessors consent. Pennsylvania law at the time did not consider a
lessee to be an owners representative under such an agreement. However, neither of
those cases held categorically that a lessee could never be considered a representative
of the owner. The case here presents a very different lease agreement, one
that expressly requires the lessee to repair and maintain the vehicle. (Pp. 9-13)
2. Because the Legislature did not define consent or representative, the Court looks
to their ordinary and well-understood meaning, which, for purposes of the Act, must
be understood in light of the policy goals underpinning the statute. The primary
purpose of the Act is to ensure that garage keepers receive payment for
storage, maintenance, supplies, repairs, and other services furnished to a motor vehicle. The
Act also affords owners with protection from unauthorized liens through the consent requirement.
By contractually compelling the lessee to maintain the vehicle in good repair, an
owner must be considered to have consented to repairs ordered by the lessee,
who similarly must be considered the owners representative under the statutory scheme. Because
the lessor receives an undeniable benefit from the services of the garage keeper,
denying the validity of the lien would unfairly prejudice the garage keeper and
thereby undermine the Acts central purpose. (Pp. 13-15)
3. Applying the above principles to the facts here, the lessee had the
authority to act as GECALs representative, as the term is used in the
Act, when he requested Davids services. By conditioning the lessees continued possession of
the car on satisfaction of the repair and maintenance obligations contained in the
lease agreement, GECAL empowered the lessee to act as the lessors representative for
the purpose of having a garage keeper make repairs or furnish other necessary
services. Davids is therefore entitled to subject GECALs vehicle to a lien for
the labor and services contemplated by the lease agreement. (Pp. 15-17)
4. The Act does not specifically require any notice to the lessor concerning
the garage keepers services on the vehicle. Whether notice should be required must
be resolved by the Legislature. Until then, principles of fairness necessitate that the
Court provide some guidance. Requiring the garage keeper to provide notice to the
owner/lessor avoids potential injustice by insuring that only storage expenses directly related to
the performance of repairs may serve as a basis for a lien under
the Act. Although the time period should be established by statute, until that
time, the trial court must make that determination on the facts of each
case. In offering interim guidance, trial courts should employ a test of reasonableness.
Ordinarily, notice to the lessor within seven days of the arrival at the
repair shop will be reasonable. Under the seven-day notice approach, the garage keeper
who provides notice within seven days will be entitled to a lien for
both the cost of storage for those initial seven days and the cost
of any storage that occurs after the lessor receives notice and an opportunity
to reclaim the vehicle. (Pp. 17-20)
5. The primary purpose of N.J.S.A. 39:10A-14 is the facilitation of a garage
keepers disposal of an abandoned vehicle. The plain language of this statute indicates
that the provision only applies to abandoned vehicles. The right to reclaim a
vehicle on payment of services and repairs under this statute does not come
into effect until the vehicle has been abandoned and the garage keeper has
notified the title owner of its intent to junk or sell the vehicle.
Therefore, N.J.S.A. 39:10A-14 does not provide a garage keeper with a broad right
of recovery against a lessor for costs associated with storage and repairs requested
by the lessee. Here, the vehicle was not abandoned within the meaning of
the statute. (Pp. 20-25)
Judgment of the Appellate Division is AFFIRMED IN PART and REMANDED IN PART
and the matter is REMANDED to the trial court for a determination of
the amount of the lien, which includes a reasonable amount for the tow
and storage.
JUSTICE VERNIERO, concurring and dissenting in part, concurs with the Courts opinion to
the extent that it concludes that a lessee of an automobile is the
lessors representative for purposes of the Act. But he would end the analysis
there. He dissents from the Courts imposition of notice and a timeline, as
that should be left for the legislature to determine.
CHIEF JUSTICE PORITZ and JUSTICES LONG, LaVECCHIA, ALBIN and WALLACE join in JUSTICE
ZAZZALIS opinion. JUSTICE VERNIERO filed a separate opinion concurring in part and dissenting
in part. SUPREME COURT OF NEW JERSEY A- 103 September Term 2002
Plaintiff-Respondent,
v.
ALFONSO VIOLANTE,
Defendant,
and
DAVIDS TOWING SERVICE and DAVID BRIGATI, JR., t/a DAVIDS TOWING SERVICE,
Defendants-Appellants.
Argued February 2, 2004 Decided May 25, 2004
On certification to the Superior Court, Appellate Division, whose opinion is reported at
358 N.J. Super 171 (2003)
William J. Pollinger argued the cause for appellants.
William S. Wolfson argued the cause for respondent (John R. Parker, attorney).
Donna L. Thompson submitted a brief on behalf of amicus curiae National Vehicle
Leasing Association, New Jersey Chapter.
This case comes to us on appeal from a motion for summary judgment granted in favor of the lessor. Accordingly, we must accept as true the evidence supporting the garage keeper and accord that party the benefit of all favorable inferences. R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 536 (1995). Viewed in that light, the pertinent facts are as follows. In July 1997, Alfonso Violante (lessee) leased a 1994 Lexus GS300 from Bob Ciasulli Lexus, who then assigned all right, title, and interest in and to the Vehicle and [the] Lease to respondent General Electric Capital Auto Lease (GECAL or lessor). As a result of the assignment, the vehicles Certificate of Title lists GECAL as the vehicles owner. The lease agreement contains the following provisions: USE AND CARE OF THE VEHICLE
1. USE AND RETURN OF THE VEHICLE
2. VEHICLE CARE AND CONDITION
3. EXCESS WEAR
4. LIENS, CLAIMS AND TICKETS
[(Emphasis added.)] The Garage Keepers Lien Act provides garage keepers with a statutory means for secur[ing] the payment of a debt incurred, by the owner or his representative, for the benefit of [the vehicle] and the use to which it is put. Crucible Steel Co. of Am. v. Polack Tyre & Rubber Co., 92 N.J.L. 221, 227 (E. & A. 1918). It states, in pertinent part: A garagekeeper who shall store, maintain, keep or repair a motor vehicle or furnish gasoline, accessories or other supplies therefor, at the request or with the consent of the owner or his representative, shall have a lien upon the motor vehicle or any part thereof for the sum due for such storing, maintaining, keeping or repairing of such motor vehicle or for furnishing gasoline or other fuel, accessories or other supplies therefor, and may, without process of law, detain the same at any time it is lawfully in his possession until the sum is paid. . . .
The lien shall not be superior to, nor affect a lien, title or
interest of a person held by virtue of a prior conditional sale or
a prior chattel mortgage properly recorded or a prior security interest perfected in
accordance with chapter 9 of Title 12A of the New Jersey Statutes.
[N.J.S.A. 2A:44-21 (emphasis added).]
As the statute makes clear, a garage keepers right to encumber a vehicle
with a lien is limited to those services performed at the request or
with the consent of the owner or [the owners] representative. Ibid. Although the
Acts main purpose is the protection of garage keepers, the consent requirement provides
an important safeguard to owners by precluding liability for unauthorized services. See Crucible
Steel Co. of Am., supra, 92 N.J.L. at 229 (explaining Act does not
encumber property of owner, except by his own act). The pivotal question thus
becomes whether an owners consent is present when, pursuant to a provision in
a lease agreement that requires the lessee to repair and maintain the vehicle,
the lessee requests a garage keepers services. Applying the above principles to the facts in this case, we hold that the lessee had the authority to act as GECALs representative, as that term is used in the Act, when he requested Davids services. In the lease agreement, GECAL imposed a number of contractual duties on the lessee to repair and service the vehicle. One provision of the agreement required the lessee to have the Vehicle serviced regularly as recommended by the manufacturer and as required by any warranty or service contract. Another provision obligated the lessee to keep the car in good working order and condition. The lessees failure to comply with either of those obligations entitled GECAL to repossess the vehicle and terminate the lease agreement. By conditioning the lessees continued possession of the car on satisfaction of the repair and maintenance obligations contained in the lease agreement, GECAL empowered the lessee to act as the companys representative for the purpose of having a garage keeper make repairs or furnish other necessary services. Davids is therefore entitled to subject GECALs vehicle to a lien for the labor and services contemplated by the lease agreement. We find unavailing GECALs argument that because the lease agreement expressly precluded the lessee from incurring liens on the vehicle, the lessee lacked the authority of a representative. That contention overlooks the fact that the right to encumber the vehicle with a lien belongs to the garage keeper and not the owner. As such, it is not within the owners power to restrict the garage keepers statutory right through a contract with a lessee. Cf. 53 Am. Jur. 2d Mechanics Liens § 143 (1996) (explaining that a lease provision declaring that the lessee is without power to subject the lessors interest to any mechanics lien claim is without effect). Accordingly, the provision in GECALs lease agreement barring the lessee from allowing the vehicle to be encumbered with a lien does not alter our conclusion that the lessee was GECALs representative. The above discussion does not resolve a second issue advanced by GECAL at oral argument. Specifically, GECAL urged us to consider whether a garage keeper must notify the lessor of the vehicles location and the amount of the charges being incurred against the vehicle in order to include storage fees in the lien claim. That question should be resolved by the Legislature. However, until the Legislature revisits the Act, principles of fairness necessitate that we provide some guidance on this issue. Included among the services that can furnish the basis for a garage keepers lien are storing or keeping a motor vehicle. N.J.S.A. 2A:44-21. The Act does not specifically require any notice to the lessor concerning the provision of those services. The absence of a notice requirement makes sense in the context of the statute because a lien only arises after the owner or the owners representative has requested or consented to the vehicles storage. When the lessee leaves the vehicle at the repair shop for weeks of storage, however, the lack of notice to the lessor becomes problematic. Because the lessees power as the lessors representative derives from the mandates of the lease agreement, storage services that are not contemplated by that contract necessarily fall outside the scope of the lessees representation. We recognize that a period of storage might be necessary for the performance of certain repairs. The lessees power to authorize repairs would extend to that storage period. But when storage of the vehicle is no longer necessary as an incident of the lessees obligations under the lease agreement, it would be unfair to hold that the property of the lessor, who has no knowledge of the vehicles location and no opportunity to keep costs from escalating, may be encumbered for services not contemplated in the underlying lease agreement. Requiring the garage keeper to provide notice to the lessor avoids that potential injustice by ensuring that only storage expenses directly related to the performance of repairs may serve as a basis for a lien under the Act. Although the time period should be established by statute, until such time as the Legislature acts, trial courts must make that determination on the facts of each case. In aid of that effort, we offer interim guidance. When evaluating the garage keepers efforts to notify the lessor, trial courts should employ a test of reasonableness. Ordinarily, notice to the lessor within seven days of the vehicles arrival at the repair shop will be reasonable. In the majority of foreseeable cases, seven days will allow the garage keeper to ascertain any problems that might warrant a departure from the normal course of affairs in which the lessee alone need be involved in arranging for repairs of the vehicle. By that time, the lessees unwillingness or inability to pay should become apparent, alerting the garage keeper of the need to contact the title owner. In view of the requirement under N.J.S.A. 39:3-4 that the lessors name and address be included on the vehicles registration, contacting the owner within seven days is feasible. Seven days thus serves as a baseline against which trial courts can measure the reasonableness of the garage keepers conduct. Under our seven-day-notice approach, a garage keeper who provides notice within seven days will be entitled to a lien for both the cost of storage for those initial seven days and the cost of any storage that occurs after the lessor receives notice and an opportunity to reclaim the vehicle. In contrast, a garage keeper who notifies the lessor after seven days have passed will not be permitted to hold the lessor responsible for the storage charges incurred from the end of the initial seven-day period until the time of notification. We recognize that our solution may not be perfect. Until the Legislature fashions another remedy, however, in most instances our approach will adequately safeguard the interests of both the garage keeper and lessor, and thus give effect to the legislative intent undergirding the Act. We emphasize that it is for the trial court to determine how much time is reasonable in the circumstances of each case, applying the guideline announced above. In this appeal, nothing in the lease agreement authorized the lessee to consent to storage other than storage that was incidental to repairs and maintenance required by the agreement. Accordingly, the lessee was not acting as GECALs representative when he allowed the vehicle to be stored for the extended period on which Davids bases a substantial portion of its claim. For that reason, that additional storage time cannot serve as a basis for Davids lien claim. Davids can only recover for storage charges incidental to the requested repairs. Whether, on these facts, that amounts to seven days is for the trial court to determine. As noted, Davids also contends in its briefs that N.J.S.A. 39:10A-14 provides another avenue for redress against GECAL for the towing and storage charges incurred by the lessee. Neither the trial court nor the Appellate Division addressed that claim. Having considered it, we agree with GECAL that under that statute, Davids does not have a valid claim. N.J.S.A. 39:10-14 is one part of a larger statutory scheme that has as its primary purpose the facilitation of a garage keepers disposal of abandoned motor vehicles. See L. 1983, c. 455 (describing statute, N.J.S.A. 39:10-8 to 20, as [a]n Act providing for the removal, storage, sale and junking of abandoned motor vehicles left at motor vehicle repair facilities) (emphasis added). For purposes of the statute, a vehicle is abandoned if it is left at a motor vehicle repair facility without an attempt by the owner, a person on the owners behalf or any other person having a legal right thereto to regain possession thereof:
a. For a period in excess of 60 days without the consent of an
authorized representative of the motor vehicle repair facility;
b. For a period of 60 days in excess of the period for which
consent has been given by an authorized representative of the motor vehicle repair
facility; or
c. For a period in excess of 60 days after being notified by an
authorized representative of the motor vehicle repair facility that service or repairs to
the motor vehicle have been completed.
[N.J.S.A. 39:10A-8.]
Once a vehicle meets that definition of abandoned, a garage keeper may remove,
sell, or obtain a junk title certificate for the vehicle, N.J.S.A. 39:10A-9, after
providing thirty-days notice to the vehicles owner or other person having a legal
right thereto. N.J.S.A. 39:10A-10 (requiring notice to owner before removal and storage); N.J.S.A.
39:10A-11 (requiring notice to owner before sale); N.J.S.A. 39:10A-12 (requiring notice to owner
before issuance of junk title certificate).
Focusing on the language entitling the owner to reclaim the vehicle upon payment
of the reasonable costs of removal and storage, Davids argues that N.J.S.A. 39:10A-14
requires a lessor reclaiming possession of a vehicle to pay for costs of
services furnished regardless of who requested the services. Davids interpretation, however, overlooks the
specific language employed in N.J.S.A. 39:10A-14 and the statutory context in which that
provision appears. We hold that the Garage Keepers Lien Act entitles Davids to pursue its lien claim against GECALs vehicle for those services that the lessee was obligated to undertake pursuant to the lease agreement. In view of that holding, we reverse the decision of the Appellate Division dismissing Davids lien claim and remand the case to the trial court for a determination of the amount of the lien, which includes a reasonable amount for the tow and storage. We also hold that, on the facts presented here, N.J.S.A. 39:10A-14 does not provide Davids with a remedy against GECAL. The order granting summary judgment to GECAL on that claim is affirmed. Reversed and remanded in part, and affirmed in part.
CHIEF JUSTICE PORITZ and JUSTICES LONG, LaVECCHIA, ALBIN, and WALLACE join in JUSTICE
ZAZZALIs opinion. JUSTICE VERNIERO filed a separate opinion concurring in part and dissenting
in part. SUPREME COURT OF NEW JERSEY A- 103 September Term 2002
GENERAL ELECTRIC CAPITAL AUTO LEASE,
Plaintiff-Respondent,
v.
ALFONSO VIOLANTE,
Defendant,
and
DAVIDS TOWING SERVICE and DAVID BRIGATI, JR., t/a DAVIDS TOWING SERVICE,
Defendants-Appellants.
JUSTICE VERNIERO, concurring in part, dissenting in part. SUPREME COURT OF NEW JERSEY NO. A-103 SEPTEMBER TERM 2002 ON CERTIFICATION TO Appellate Division, Superior Court
GENERAL ELECTRIC CAPITAL AUTO
Plaintiff-Respondent,
v.
ALFONSO VIOLANTE,
Defendant,
And
DAVIDS TOWING SERVICE and
Defendants-Appellants.
DECIDED May 25, 2004
Footnote: 1 In the lease agreement, you designates the lessee and us designates the lessor.
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