VCF v. McClellan, No. 96

• Citation: 2003 OK CIV APP 27,69 P.3d 274
• Decision Date: 23 October 2002
• Docket Number: No. 610., No. 105, No. 96
• Parties: VOLVO COMMERCIAL FINANCE LLC THE AMERICAS, successor in interest to Volvo Commercial Finance Inc. The Americas, formerly known as Volvo Truck Finance North America, Inc., Plaintiff/Appellant, v. Charles McCLELLAN, d/b/a B & C Auto, an individual; Harold Wiggins, an individual, deceased, and his known and unknown heirs, successors and assigns; Michael Wiggins, an individual, surviving son of Harold Wiggins; State of Oklahoma ex rel Oklahoma Tax Commission; Houdek Enterprises, Inc., a Texas corporation; and Firstar Equipment Finance Corporation, a Delaware corporation, Defendants/Appellees.
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

69 P.3d 274

2003 OK CIV APP 27

VOLVO COMMERCIAL FINANCE LLC THE AMERICAS, successor in interest to Volvo Commercial Finance Inc. The Americas, formerly known as Volvo Truck Finance North America, Inc., Plaintiff/Appellant, v. Charles McCLELLAN, d/b/a B & C Auto, an individual; Harold Wiggins, an individual, deceased, and his known and unknown heirs, successors and assigns; Michael Wiggins, an individual, surviving son of Harold Wiggins; State of Oklahoma ex rel Oklahoma Tax Commission; Houdek Enterprises, Inc., a Texas corporation; and Firstar Equipment Finance Corporation, a Delaware corporation, Defendants/Appellees.

Nos. 96,105, 96,610.

Court of Civil Appeals of Oklahoma, Division No. 1.

October 23, 2002.

John B. Heatly, Oklahoma City, OK, for Plaintiff/Appellant.

Jason D. Leonard, Carlton Dimery, Oklahoma City, OK, for Defendant/Appellee, Charles McClellan.

Douglas B. Allen, General Counsel, Alfred L. Bowman, Assistant General Counsel, Oklahoma City, OK, for Defendant/Appellee, Oklahoma Tax Commission.

Max C. Tuepker, Shawnae E. Proctor, Oklahoma City, OK, for Defendant/Appellee, Houdek Enterprises, Inc.

James Vogt, Oklahoma City, OK, for Defendant/Appellee, Firstar Equipment Finance Corporation.

Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 1.

OPINION

CARL B. JONES, Judge:

¶ 1 These appeals arise from a declaratory judgment and replevin action brought by Plaintiff, Volvo Commercial Finance LLC The Americas (VCF), relating to a non-judicial foreclosure of a storage lien against a 1998 Volvo Truck/Tractor (Case No. 96,105) and an order awarding prevailing party attorney fees against VCF (Case No. 96,610).

I. FACTS AND PROCEDURAL HISTORY

¶ 2 On August 5, 1998, Defendant Harold Wiggins, an independent truck driver, purchased a new 1998 Volvo diesel tractor (Truck) for $97,000.00 from a truck dealer in Texas. The Truck was purchased by Harold under the terms of a Credit Sales Contract, which was assigned by the dealer to VCF. An original Texas Certificate of Title was issued October 7, 1998, showing title in Harold's name and listing VCF as the first lienholder.

¶ 3 On December 2, 1998, Harold died of sudden cardiac arrest while operating the Truck in Texas. The Truck sustained approximately $2,500.00 in damages due to the accident caused by Harold's heart attack. On December 9, 1998, Harold's son, Defendant Michael Wiggins, obtained possession of the Truck from a wrecker service in Abilene, Texas, upon payment of towing and storage charges. Michael moved the Truck to his residence in Oklahoma City, which was located next door to his father's home.

¶ 4 On December 21, 1998, Michael telephoned VCF, advised them of Harold's death and inquired about the payoff amount of Harold's loan. According to the record, Michael became very angry and irritated as a result of the conversation. On February 2, 1999, VCF sent a default notice to Harold. Because Michael collected and read Harold's mail, he became aware that VCF had begun the process of attempting to repossess the Truck. On February 16, 1999, VCF left a telephone message asking that Michael return the call.

¶ 5 At some time after February 16, 1999, Michael arranged to store the Truck at Defendant Charles McClellan's place of business in Oklahoma City. According to Michael, McClellan knew Harold owned the Truck and that he was deceased. Michael also claimed he and McClellan had an agreement that McClellan would store the Truck and attempt to collect storage charges from VCF. The agreement provided that Michael would be paid the first $1,000.00 collected from VCF and that the two would split any amounts collected above $1,000.00. The trial court specifically found that Michael arranged for storage of the Truck to prevent VCF from repossessing it. McClellan denied any deal with Michael.

¶ 6 McClellan never prepared any invoice for storage charges and he never attempted to contact Michael, Harold or VCF asking for payment of those charges. On May 25, 1999, McClellan commenced foreclosure proceedings pursuant to 42 O.S. Supp.1992 § 91. On that date, McClellan and/or his wife prepared and signed an Oklahoma Tax Commission form entitled "Notice of Sale." The Notice referred to the VIN number on the Truck and provided for the sale of the Truck on June 7, 1999, at 12:00 p.m. at McClellan's residence. The Notice also stated the sale was to be conducted to satisfy a lien on the Truck being claimed by McClellan, d/b/a B & C Auto, in the amount of $2,505.00 for storage charges from December 10, 1998, to May 25, 1999, at the rate of $15.00 per day. The trial court determined that $15.00 per day is a reasonable rate for the storage of a vehicle. However, the court found that McClellan stored the Truck for only 98 days rather than the 167 days claimed by McClellan. Thus, the court held that McClellan's storage charges totaled only $1,470.00.

¶ 7 Also on May 25, 1999, McClellan's wife posted the "Notice of Sale" form at three public places located within Oklahoma County. The Notice of Sale was mailed to Harold, the record owner of the Truck, at his Oklahoma City residence. Michael received the notice prior to June 3, 1999. The Notice of Sale was also sent by certified mail to VCF at its address listed on the Texas Certificate of Title. Although VCF argued the Notice was delivered to the wrong address and signed for by an unauthorized person, the trial court found that delivery of the Notice was made in accordance with VCF's regular and usual custom and practice for mail delivery. Therefore, the court held that VCF was properly notified of the pending foreclosure sale.

¶ 8 On June 7, 1999, at 12:00 p.m., no third-party bidders appeared at the sale. McClellan thereafter claimed the Truck in satisfaction of his garageman's lien. On June 10, 1999, McClellan submitted the Notice of Sale and other sale documents to Defendant Oklahoma Tax Commission (OTC) and sought to obtain an Oklahoma Certificate of Title in his name. VCF contacted McClellan on June 14, 1999, and advised him of Harold's death. McClellan stated that he was in the process of obtaining title to the Truck. On June 30, 1999, the OTC issued an Oklahoma Certificate of Title showing McClellan as the owner of the Truck and listing no lienholder.

¶ 9 In July of 1999, Marvin Houdek, the owner of Defendant Houdek Enterprises, Inc., contacted McClellan after learning that the Truck was for sale. Houdek thereafter obtained the Truck's VIN number and a copy of the Title from McClellan, and learned that McClellan had obtained the Truck as a result of a foreclosed storage lien and that the prior owner had died. The Truck contained no log book or owner's manual, and had no license plates or safety inspection sticker. Upon returning to Texas, Houdek telephoned the OTC to verify that the Truck had a clear title and contacted the Volvo dealership indicated on the Truck to inquire whether there was a warranty on the Truck. Houdek also arranged for Defendant Firstar Equipment Finance Corporation to finance the purchase.

¶ 10 On July 20, 1999, McClellan sold the Truck for $72,000.00 under a lease/purchase agreement with Houdek as lessee and Firstar as owner and lessor. McClellan received $69,500.00 of the purchase price and Houdek received $2,500.00 to repair the Truck. Houdek took possession of the Truck and returned to Texas. The trial court found that at the time of the sale, neither Houdek nor Firstar had any personal knowledge of any claim by VCF or of the identity of the owner prior to McClellan. On July 21, 1999, Houdek submitted an application for a Texas Certificate of Title to the Texas Department of Transportation (TDOT). On August 7, 1999, TDOT issued a Texas Certificate of Title for the Truck showing Firstar as owner and Houdek as lessee.

¶ 11 VCF filed the instant lawsuit on July 27, 1999, against McClellan, Michael, the estate of Harold, the OTC and certain John Doe defendants. VCF later joined Houdek and Firstar in place of the John Doe defendants. In its petition, VCF asserted a claim for replevin, recovery of the sale proceeds, unjust enrichment/constructive trust as to the sale proceeds, and declaratory judgment regarding the Truck title and priority of liens. In an amended petition, VCF added a claim contending that the foreclosure and notice provisions of 42 O.S. Supp.1992 § 91(A) and corresponding OTC Rules violated VCF's state and federal due process rights.

¶ 12 Following a non-jury trial held on February 12th through 15th, 2001, the trial court held: Michael is the sole living heir of Harold; Michael lawfully came into possession of the Truck upon Harold's death; McClellan lawfully came into possession of the Truck by virtue of Michael's request to store the Truck; McClellan stored the Truck from February 17, 1999, to May 25, 1999, during which time unpaid storage charges of $1,470.00 accrued; McClellan obtained a garageman's lien upon the Truck under § 91; McClellan complied with the requirements of § 91 in foreclosing his garageman's lien; VCF timely received the Notice of Sale and failed to diligently respond thereto; McClellan became the lawful owner of the Truck foreclosing any interest held by Harold, Michael and VCF; the OTC properly issued an Oklahoma Certificate of Title to McClellan showing no lienholder on the title; Section 91 is constitutional; Firstar and Houdek were bona fide purchasers for value of the Truck; Firstar is the legal owner-lessor of the Truck and Houdek is the legal lessee of the Truck, and they are entitled to possession of same; VCF failed to sustain its burden of proof on any of its claims; and McClellan is entitled to retain the proceeds of the sale of the Truck. By separate order, and after a hearing, the trial court awarded attorney fees and costs to McClellan ($39,718.34), Houdek ($37,116.10) and Firstar ($31,470.75). VCF appeals.

II. STANDARD OF REVIEW

¶ 13 The judgment presented for review is a compilation...