Mares v. Lien Enforcement, Inc.

• Decision Date: 30 September 2016
• Docket Number: D068426
• Parties: EDWARD D. MARES, Plaintiff and appellant, v. LIEN ENFORCEMENT, INC. et al., Defendants and respondents.
• Court: California Court of Appeals Court of Appeals

EDWARD D. MARES, Plaintiff and appellant, v. LIEN ENFORCEMENT, INC. et al., Defendants and respondents.

D068426

COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA

September 30, 2016

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Super. Ct. No. 37-2014-00001733-CU-BT-CTL)

APPEAL from judgments of the Superior Court of San Diego County, Joel M. Pressman, Judge. Affirmed.

Glassey Smith and Sharon Elizabeth Glassey, Christopher Thomas Smith, Joshua Charles Anaya, for Plaintiff and Appellant.

Carlson & Messer and Jeanne Louise Zimmer, June Grace Felipe, for Defendant and Respondent Lien Enforcement, Inc.

Thomas Lucas and Timothy D. Lucas, A. Kerry Stack, for Defendant and Respondent Atlas Towing Services, Inc., doing business as Advanced Towing.

Plaintiff and appellant Edward D. Mares sued defendants and respondents Lien Enforcement, Inc. (LEI) and Atlas Towing Services, Inc., doing business as Advanced Towing (Advanced) for negligence, defamation, violation of the Unfair Competition Law (UCL; Bus. & Prof. Code, § 17200 et seq.) and declaratory relief after LEI, a debt collector, pursued Mares to collect towing and storage debt for a vehicle that Mares claimed to have previously sold to a third party. On the parties' cross-motions for summary judgment/summary adjudication, the trial court denied Mares's motion for summary adjudication and entered summary judgments in LEI's and Advanced's favor, ruling in part that Department of Motor Vehicles (DMV) registration information reflected that Mares was the registered owner of the vehicle, that LEI and Advanced reasonably relied on this information in directing collection efforts on Mares, and that Mares had not complied with the notice requirements of Vehicle Code¹ section 5900 for the vehicle's sale and transfer so as to absolve him of liability for the "parking, abandoning, or operation" of the vehicle.

Mares appeals from the summary judgments. He contends that (1) the trial court erred by denying summary adjudication of his declaratory relief cause of action because he presented admissible evidence he complied with section 5602, subdivision (a), under which a person entering into a bona fide sale of a vehicle will not be considered an "owner . . . so as to be subject to civil liability for the . . . [vehicle's] abandoning"; (2) the court erred by ruling that Advanced's statutory and general duties of due care, and LEI'sgeneral duty of due care, was limited to determining the identity of the vehicle's registered owner; (3) he demonstrated a triable issue of material fact as to whether Advanced and LEI reasonably investigated the registered owner's liability; (4) the court erred by granting summary judgment on his defamation claim because defendants provided false information to credit reporting agencies, and the Fair Credit Reporting Act (FCRA) did not preempt his claim; and (5) he presented triable issues of material fact as to whether Advanced and LEI committed unlawful, unfair or fraudulent acts.

We conclude the trial court did not err by denying Mares's motion for summary adjudication and by granting summary judgment in Advanced and LEI's favor. In part, we hold Mares did not show as a matter of law he was entitled to a judicial determination of nonliability under section 5602, subdivision (a), because the reference in that section to "civil liability for . . . abandoning" does not refer to responsibility for a lienholder's deficiency claim for towing and storage fees following a lien sale. We also hold summary judgment on Mares's negligence claims was proper based on undisputed evidence that Advanced and LEI determined that Mares was the registered owner of record at the time the vehicle was towed. For these and other reasons set forth below, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

In or around February 2012, Mares advertised a Jeep (the vehicle) for sale, and in response was contacted by a third party. The vehicle was registered in Mares's name at his grandparents' address. Mares met the buyer on the street, gave him the signed vehicle certificate of ownership (colloquially, the "pink slip"; Springmeyer v. Ford Motor Co.(1998) 60 Cal.App.4th 1541, 1569), and accepted $1,000 in cash. As Mares began filling out the notice of release of liability that he had detached from the certificate of ownership, the buyer drove away with the vehicle.

On March 1, 2012, Mares visited the Department of Motor Vehicles (DMV) and filled out a DMV form "Notice of Transfer and Release of Liability" (Reg. 138) (the notice of transfer).² He entered "Unknown" for the buyer's name and address. The DMV accepted the form.

In September 2012, in response to a call from the California Highway Patrol (CHP), Advanced towed and impounded the vehicle, which was found abandoned on a highway. Advanced relied on a CHP vehicle report showing that Mares was still the vehicle's registered owner. Advanced retained a lien service company to obtain DMV certified information regarding the vehicle and to act as its agent in performing activities relating to the lien sale. Advanced's lien servicer confirmed that Mares was the vehicle's registered owner and notified Mares of the pending lien sale. Specifically, on October 9, 2012, it sent a "notice of pending lien sale for vehicle valued at $4000 or less" and "notice of stored vehicle/amnesty offer" to Mares's grandfather's address on record, advising Mares that Advanced intended to sell the vehicle at a lien sale, and as the registered owner he was liable for the total towing, storage and lien processing chargesand fee, less the amount received from the sale. Mares's father received the amnesty offer and told Advanced that the vehicle had been sold and that a notice of transfer had been filed with the DMV. Following its impound, the vehicle was left unclaimed at Advanced's facility, declared abandoned, and disposed of pursuant to storage lien limitations. Advanced sold the vehicle for $200.

Because the lien sale proceeds did not satisfy the towing and storage fees, the deficiency was placed with LEI for collections. Advanced informed LEI that Mares was the vehicle's registered owner of record at the time of the tow, and according to the documents provided by Advanced, LEI also determined that Mares was the registered owner of the vehicle responsible for the debt. At some point, Mares contacted LEI and sent it DMV documents showing a notice of transfer had been filed, but LEI informed him it had verified the debt's legitimacy and would continue to collect it. LEI reported the debt to credit reporting bureaus.

Mares sued LEI and Advanced, and eventually filed a first amended complaint setting out causes of action for negligence, defamation as to LEI, violation of the UCL and declaratory relief. Mares alleged LEI and Advanced failed to use reasonable care in ascertaining whether he (1) was responsible for the claimed debt; (2) had complied with section 5602, subdivision (a) which requires proper endorsement and delivery of the vehicle's title; (3) was absolved of liability by his filing of the notice of transfer; and (4) made a bona fide sale of his vehicle, delivered possession of the vehicle as well as a properly endorsed certificate of ownership to the buyer, and filled out and properly filed the notice of transfer. Mares also alleged that LEI failed to use reasonable care inverifying whether it could legally collect the debt. In his cause of action for defamation, Mares alleged in part that LEI made false statements to credit reporting agencies that Mares had failed to pay a debt, causing those agencies to understand he was a higher credit risk. Many of these allegations were the basis for his UCL cause of action. Mares sought a judicial declaration as to his rights and duties with regard to the vehicle and specifically on his contention that he was not "subject to civil or criminal liability for the parking, abandonment, or operation of the vehicle."

Mares moved for summary adjudication of his negligence and defamation causes of action. In part, he argued he had extinguished any presumptive liability for the debt by complying with sections 5602, subdivision (a) and 5900. Mares pointed out he presented evidence—including via his sworn declaration describing how he had signed and dated the certificate of ownership³—that he entered into a bona fide sale, delivered possession of the vehicle, and endorsed and delivered the certificate of ownership to the buyer; that the buyer's name on the title was not required. Mares argued that though Advanced had obtained registration information revealing that Mares had sold the vehicle, it made no independent investigation, ignored information provided by Mares, and continued to attempt to collect the debt, and Advanced had a statutory duty of care under VehicleCode section 10652.5 and Civil Code section 3068.2, and it and LEI had general duties of care, to investigate whether Mares was the registered owner and liable for the debt. He asked the court to issue a judicial declaration that he was not liable to LEI or Advanced for the debt and to adjudicate that Advanced and LEI had duties to investigate whether he was liable for the towing and storage fees both before collecting them and after he disputed his liability.

LEI thereafter moved for summary judgment and alternatively summary adjudication of issues. It argued Mares's negligence claim failed because its collection efforts against Mares, the vehicle's registered owner according to DMV records, were reasonable; the FCRA (15 U.S.C. § 1681 et seq.) barred Mares's claim for defamation; and Mares's UCL and declaratory relief claims failed for lack of a...