Bill Text: DE HB258 | 2011-2012 | 146th General Assembly | Draft
Bill Title: An Act To Amend Title 25 Of The Delaware Code Relating To Liens.
Spectrum: Slight Partisan Bill (Democrat 21-10)
Status: (Engrossed - Dead) 2012-06-28 - Returned to the House [HB258 Detail]
Download: Delaware-2011-HB258-Draft.html
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SPONSOR: |
Rep. Bennett & Sen. Peterson & Sen. Cloutier; |
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Reps. Gilligan, Atkins, Brady, Carson, Hocker, Hudson, Q. Johnson, Keeley, Kenton, Kowalko, Longhurst, Miro, Mitchell, Mulrooney, Peterman, Ramone, Schwartzkopf, B. Short, D. Short, Viola, D.P. Williams, Wilson; Sens. Bunting, Connor, Ennis, Henry, Katz, Sokola |
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HOUSE OF REPRESENTATIVES 146th GENERAL ASSEMBLY |
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HOUSE BILL NO. 258 |
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AN ACT TO AMEND TITLE 25 OF THE DELAWARE CODE RELATING TO LIENS. |
Section 1.Amend Chapter 39, Title 25 of the Delaware Code by making additions as shown by underlining and deletions as shown by strike through as follows:
§3901. Persons entitled to liens.
(a) Any hotelkeeper, innkeeper, garage owner, auction service or other person who keeps a livery, boarding stable, garage, airport, marina or other establishment and, for price or reward at such livery, boarding stable, garage, airport, marina or other establishment, furnishes food or care for any horse or has the custody or care of any carriage, cart, wagon, sleigh, motor vehicle, trailer, moped, boat, airplane or other vehicle or any harness, robes or other equipment for the same or makes repairs, auctions, performs labor upon, furnishes services, supplies or materials for, stores, safekeeps or tows any carriage, cart, wagon, sleigh, motor vehicle, trailer, moped, boat, airplane or other vehicle or any harness, robes or other equipment for the same shall have a lien upon such horse, carriage, cart, wagon, sleigh, motor vehicle, trailer, moped, boat, airplane or other vehicle, harness, robes or equipment and the right to detain the same to secure the payment of such price or reward.
(b) Unless the context of this chapter requires otherwise, a lienholder shall mean any person defined in subsection (a) of this section.
§3902. Lienholder's loss of possession.
In case,
either before or after the price or reward become due and payable, the
lienholder under §3901 of this title loses possession of the encumbered
property, except by court order pursuant to this chapter, the lienholder's lien
shall continue in full force and effect, provided that within 10 days from the
time of the loss of possession the lienholder pursuant to §3903 of this
title files an application for the issuance of an authorization to
conduct a lien sale a warrant commanding the sheriff to seize the
chattel and safely keep it to abide the final judgment in the action or
files a counterclaim for the sale of the encumbered property pursuant to this
chapter in a replevin action brought pursuant to Chapter 95 of Title 10 by the
owners or other persons claiming an interest in the property.
§3903. Sale to satisfy liens; notice of sale.
(a) If a
lienholder under §3901 or §3902 of this title is not paid the amount due, and
for which the lien is given within 30 days after the same or any part thereof
became due, then the any lienholder with a valid Delaware
business license may proceed to sell the property, or so much thereof as
may be necessary, to satisfy the lien and costs of sale pursuant to this
chapter. §3905 of this title if:
(1) An
authorization to conduct a lien sale has been issued pursuant to this section;
(2) A
judgment has been entered in favor of the lienholder on the claim which gives
rise to the lien; or
(3) The
owners and any secured parties of record or known lienholders of the property
have signed, after the lien has arisen, a release of any interest in the
property in the form prescribed by §3904 of this title.
(b) A
lienholder may apply to a Justice of the Peace Court in the county in which the
lienholder's business establishment is situated for the issuance of any
authorization to conduct a lien sale under §3905 of this title. In the event
that the lienholder's business establishment is located in more than 1 county,
the Justice of the Peace Court in the county where the property is, or most
recently was, located shall have exclusive original jurisdiction. The
application shall be executed under penalty of perjury and shall include all of
the following:
(1) A
description of the property.
(2) The
names and addresses of the owners of the property and the names and addresses
of any other persons who the lienholder knows claim an interest in the
property.
(3) A
statement of the amount of the lien and facts concerning the claim which gives rise
to the lien. If compensation for storage is claimed, the per diem rate of
storage shall be shown.
(4) The
date, time and place that the property will be sold if the authorization to
conduct a lien sale is issued.
(5) A
statement that the lienholder has no information or belief that there is a
valid defense to the claim which gives rise to the lien.
(c) Upon
receipt of an application which is made pursuant to subsection (b) of this
section, the justice of the peace shall send a notice and a copy of the
application by certified mail or registered mail, return receipt requested, to
the owners, secured parties of record and any known lienholders and any other
persons whose names and addresses are listed in the application. If the
identity of the last registered owner or secured party cannot be determined
with reasonable certainty, §3905 of this title shall have the same effect as
notice sent by certified or registered mail. The notice shall include all of
the following:
(1) A
statement that an application has been made with the justice of the peace for
the issuance of an authorization to conduct a lien sale.
(2) A
statement that the person has a legal right to a hearing in court; if a hearing
in court is desired, the enclosed declaration under penalty of perjury must be
signed and returned and if the declaration is signed and returned, the
lienholder will be allowed to sell the vehicle only if he obtains a judgment in
court or obtains a release from the owners and any known lienholders.
(3) A
statement that if the declaration is signed and returned, a hearing will be
promptly scheduled and the owners may then appear to contest the claim of the
lienholder.
(4) A
statement of the date, time and place that the property will be sold if the
authorization to conduct a lien sale is issued.
(5) A
statement that the justice of the peace will issue the authorization to conduct
a lien sale unless the person signs and returns, within 20 days after the date
on which the notice was mailed, the enclosed declaration stating that the
person desires to contest the claim which gives rise to the lien.
(6) A
statement that the person shall be liable for costs if a judgment is entered in
favor of the lienholder on the claim which gives rise to the lien.
(7) A
declaration which may be executed by the person under penalty of perjury
stating that he desires to contest the claim which gives rise to the lien and
that he has a valid defense to the claim and he shall furnish names and
addresses where official notice may be received of any person or persons
including himself known to claim an interest in the property of the hearing
date.
(d) If the
justice of the peace receives a declaration described in paragraph (3) of
subsection (c) of this section which is mailed within 20 days after the date
upon which the notice described in subsection (c) of this section is mailed,
the justice of the peace shall notify the lienholder and owners and any other
persons listed in the application or declaration of the hearing date unless the
owners of the property and any known lienholder or lienholders have signed,
after the lien has arisen, a release of any interest in the property in the
form prescribed by §3904 of this title. In any other case, the justice of the
peace shall issue an authorization to conduct a lien sale.
(e) In any
hearing, the lienholder may have the amount of the indebtedness and right to
sale determined and the person requesting the hearing may present and have
determined any defenses, setoffs, counterclaims, cross-claims or third-party
actions.
(f) Any
fees shall be recoverable as a cost by the lienholder if a sale is conducted.
(g) The
form of the applications, notices and declarations described in this section
shall be prescribed by the justice of the peace. The language used in the
applications, notices and declarations should be simple and nontechnical.
(b) Before such sale is held the lienholder shall serve a notice upon the owner by mailing it to the owner at his last known place of residence, or to his last known post-office address.Any notice permitted or required under this section shall be sent by certified mail, return receipt requested, and by first-class mail.A like notice shall be served in the same way upon any person who shall have given to the lienholder notice of an interest in the property subject to the lien and upon any person who has perfected a security interest in the property by filing a financing statement pursuant to the provisions of the uniform commercial code or who is listed as lienholder upon the certificate of title of the property pursuant to the provisions of the motor vehicle law.
(c) Notices required by this section shall contain the following:
(1) The nature of the debt or the agreement under which the lien arose, with an itemized statement of the claim and the time when due;
(2) A brief description of the personal property against which the lien exists;
(3) The estimated value of such property;
(4) The amount of such lien, at the date of the notice;
(5) A demand that the owner pay the amount of such lien, on or before a date mentioned therein, not less than 60 days from the date of mailing, and the time when and place where such property will be sold, if such amount is not paid;
(6) A statement that the owner is entitled to bring a proceeding under section 3904 of this title within 60 days of the date of mailing of the notice if the owner disputes the validity of the lien or the amount claimed; and
(7) A signed verification, under penalty of perjury, by the lienholder to the effect that the lien upon such property is valid, that the debt upon which such lien is founded is due and has not been paid and that the facts stated in such notice are true to the best of the lienholder's knowledge and belief.
§3904. Proceeding to determine validity of liens.
Within 60 days after mailing of the notice of sale, the owner or any person entitled to notice pursuant to section 3903 of this title may commence a special proceeding to determine the validity of the lien.If the owner or any such person shall show that the lienholder is not entitled to claim a lien in the property, or that all or part of the amount claimed by the lienholder has not been properly charged to the account of such owner or such person, or, that all or part of such amount exceeds the fair and reasonable value of the services performed by the lienholder, the court shall direct the entry of judgment cancelling the lien or reducing the amount claimed thereunder accordingly.If the lienholder shall establish the validity of the lien, in whole or in part, the judgment shall fix the amount thereof, and shall provide that the sale may proceed upon expiration of five days after service of a copy thereof upon the owner or such person, unless the property is redeemed prior thereto pursuant to section 3905 of this title.If the lien is cancelled, the judgment shall provide that, upon service of a copy of the judgment upon the lienholder, the owner or such person shall be entitled to possession of the property.
§3905. Redemption before sale.
At any time before property is sold pursuant to this chapter, the owner thereof or any person entitled to notice of sale pursuant to section 3903 of this title may redeem the property by paying to the lienholder the amount due on account of the lien, and whatever legitimate expenses have been incurred at the time of such payment in serving the notice and advertising the sale as required by this chapter.Upon making such payment, any of such persons are entitled to the possession of the property.
§3906. Release of owner's interest in vehicle or property.
(a) An owner of property subject to a lien under §3901 or §3902 of this title may release any interest in the property after the lien has risen. The release shall be dated when signed and a copy shall be given at the time the release is signed to the person releasing the interest.
(b) The release shall contain all of the following information in simple, nontechnical language:
(1) A description of the property sufficient to identify it.
(2) The names and addresses of the owners.
(3) A statement of the amount of the lien and the facts concerning the claim which gives rise to the lien.
(4) A statement that the person releasing the interest understands that the person has a legal right to a hearing in court prior to any sale of the property to satisfy the lien and the person is giving up the right to appear to contest the claim of the lienholder.
(5) A statement that the person releasing the interest gives up any interest that person may have in the property and the person is giving the lienholder permission to sell the property.
(6) A statement that there is no other person, persons or lienholders who have an outstanding interest in the property.
§39053907.
Notice of sale; disposition of proceeds.
(a) Prior to any such sale the lienholder shall give at least 15 days' notice of the sale by handbills posted in 5 or more public places and by advertising in a newspaper published and/or circulated in the county in which the sale is to be held.
(b) The proceeds of the sale shall be applied to the discharge of the lien and the cost of keeping and selling the property. The balance, if any, of the proceeds of the sale shall be deposited not later than 10 days from the date of the sale with the court to be applied by the court to the payment of any lien or security interest to which the property may be subject in the order of their priority, with any remaining proceeds to be paid to the owner or owners of the property sold but, in case such owner or owners cannot be found, such balance shall be turned over to the State Treasurer not later than 60 days from the date of the sale who shall create a special fund thereof and who shall pay to the owner the moneys left if a claim is made within 1 year of the sale, or deposit the moneys in the General Fund if no claim is made within 1 year of the sale.
(c) In every lien sale authorized under this chapter, it shall be the duty of the lienholder to complete and file with the Court a disposition of proceeds form, as designated by the Court, within 10 days from the date of the sale. No transfer of or new certificate of title to the vehicle sold or salvage certificate shall be issued by the Department of Motor Vehicles without proof of the filing of said disposition of proceeds form with the Court within the required time period. A copy of the disposition of proceeds form sealed with the Court's seal shall constitute sufficient proof of filing.
(a) In the case of motor vehicles required to be registered under the motor vehicle laws of this or any other state, notice containing the information required in §3903(b) of this title shall be given to the registered owners and
known lienholders at their addresses of record with the Division of Motor Vehicles or similar agency and the return receipt, signed or unsigned, shall be held and considered as prima facie evidence of service of such notice.
(b) The lienholder shall notify the appropriate Delaware auto theft unit.
(c) The Division of Motor Vehicles is authorized to adopt administrative regulations and forms relating to motor vehicles subject to this chapter.In the event a sale or title transfer is completed without complying with this chapter, no cause of action shall lie against the Division of Motor Vehicles.An owner or other such person may seek damages only from the lienholder responsible for the sale of the vehicle.
(a) All liens created pursuant to §3901 or §3902 of this title shall be superior to any lien, title or interest of any person who has a security interest by virtue of a conditional sales contract or a prior perfected security interest in accordance with Article 9 of Title 6.
(b) Notwithstanding the provisions of subsection (a) of this section, any person who stores or safekeeps any motor vehicle towed at the request of a party other than the owner of the vehicle may attain priority of lien as follows:
(1) By providing notice by certified mail to a title holder of record within 7 business days of the date upon which possession is taken;
(2) By providing notice by certified mail to lienholders of record within 7 business days of the date upon which possession is taken; and
(3) By providing notice by telephone or in person to the appropriate police agency.
The owners or other persons claiming an interest in the property, in addition to the right to a hearing as provided herein, shall have the right to file an action in replevin or detinue at any time in accordance with Chapter 95 of Title 10, and no bond shall be required to be posted as a prerequisite to the filing of such an action or the issuance of the writ.
The Justice
of the Peace Court in the county in which the lienholder's business
establishment is located shall have exclusive original jurisdiction of all petitions
for sale proceedings under this chapter, notwithstanding the
monetary amount claimed by the lienholder. In the event that the lienholder's
business establishment is located in more than 1 county, the Justice of the
Peace Court in the county where the property is, or most recently was, located
shall have exclusive jurisdiction. The Justice of the Peace Court shall also
hear actions in replevin or detinue filed under this chapter, unless a party
requests a jury and pays all necessary costs to transfer the action to Superior
Court.
The Justice of the Peace Court and Superior Court may adopt appropriate and specific rules to effectuate the intent and purpose of this chapter.
SYNOPSIS
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This bill simplifies the procedures for selling a vehicle to satisfy a lien.Under the current law, a garagekeeper must institute a proceeding in a Justice of the Peace Court for permission to hold a sale for every vehicle for which the owner does not pay the repair bill.If this bill is enacted, the owner and all those with a security interest in the vehicle will be provided notice of the garagekeeper's intent to sell the vehicle and the owner or other person must affirmatively apply to the Justice of the Peace Court within 60 days for a hearing.If the owner does not so apply, the garagekeeper may proceed with the sale without any further court proceedings.This bill is modeled after a similar law in the State of New York.As with its predecessor statute, this process may also be applied to liveries, stables, airports, and marinas. |
