Consent required for storage lien

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Leaving a vehicle with a mechanic after the repairs are done is implicit consent to paying storage fees for the vehicle.

In addition, the Wisconsin Court of Appeals held on Feb. 17 that an owner who gains title to the car through replevin consents to additional fees, from the time it has knowledge of the storage until it retrieves the car.

After a motor vehicle accident, Robert Cunningham brought his vehicle to North Shore Collision LLC, Milwaukee. The work was completed on Sept. 28, 2009, but Cunningham refused to pay the $500 deductible he owed for the work, and abandoned the vehicle.

A sign was posted at North Shore, stating that it would charge a $300 administration fee and $99.95 per day for storage of cars left at the facility after repairs were completed.

In the meantime, Toyota Motor Credit Corp., which financed the vehicle, had obtained a judgment of replevin against Cunningham and became the owner of the vehicle on Oct. 13.

Toyota and North Shore disagreed how much Toyota should pay to recover the vehicle, and Toyota filed a second replevin action, against North Shore, to gain possession.

The circuit court ruled that Toyota was entitled to possession conditioned on it paying North Shore $1,799.35 – the $500 owing for repairs, plus $99.95 per day from Sept. 28, 2009, until Oct. 10, 2009, the date Cunningham abandoned the car.

North Shore appealed, and, in an opinion by Judge Gary E. Sherman, the Court of Appeals reversed, concluding that, in addition to the storage fees incurred by Cunningham, Toyota may be liable for more storage fees, if it consented to continued storage after it obtained title to the vehicle.

Section 779.43(3) provides that the keeper of a garage can obtain a storage lien for vehicles, if it gives “notice of the charges for storing [the vehicle] … on a signed service order or by posting in some conspicuous place in the garage … a card that is easily readable at a distance of 15 feet.”

However, the statute does not modify the common law rule that consent of the owner is required for the garage keeper to acquire lien rights against it.

Because Cunningham left the car in North Shore’s possession, the court held that North Shore was entitled to recover its storage fees from Toyota for the period during which Cunningham was the owner: Sept. 28, 2009, until Oct. 12, 2009.

After that date, the court found, North Shore could not assert a lien in storage fees until the new owner, Toyota, consented to the storage.

“If Toyota became aware that North Shore had possession of the vehicle, Toyota impliedly consented to the bailment of the vehicle with North Shore by continuing to leave the vehicle in North Shore’s possession,” the court wrote.

However, the court held that, because it could not determine from the record the date on which Toyota learned its vehicle was being stored at North Shore, the case must be remanded for the circuit court to make that finding.

The court concluded: “North Shore had a lien on the vehicle for storage fees from September 28, 2009, until October 12, when ownership of the vehicle changed. Toyota is responsible for these fees. … [I]f and when, during its ownership of the vehicle, Toyota consented – that is, Toyota learned that its vehicle was being kept at North Shore and continued to leave the property there – North Shore had another lien on the vehicle from the date of Toyota’s consent until the date the lien was satisfied.”
Attorney John Machulak, who represented North Shore, praised the opinion as good for people who run garage shops.

“They don’t want to store cars,” Machulak said “They want to get paid and move the cars out.”

Machulak noted that owners who have a good faith dispute over the amount of storage fees are not without remedies, because sec. 810.03 permits an owner seeking replevin to obtain possession of the property by seeking a preliminary determination and posting a bond.

What the Court Held

Case: Toyota Motor Credit Corp. v. North Shore Collision LLC, No. 2010AP761

Issue: When title to a vehicle transfers during a bailment, is the new owner liable for storage fees to the bailee?

Holding: Yes. The new owner is liable for any storage fees owed by the former owner, plus new charges beginning on the date it consents to continued storage by the bailee.

Attorneys: For Plaintiff: Joshua J. Brady, Milwaukee; For Defendant: John E. Machulak, Milwaukee.

David Ziemer can be reached at [email protected].