Whitmore v. New Jersey Division of Motor Vehicles

• Decision Date: 06 November 1975
• Parties: Patricia WHITMORE and Charles Coston, Plaintiffs, v. NEW JERSEY DIVISION OF MOTOR VEHICLES et al., Defendants, and New Jersey Automobile Dealers Association et al., Intervenors.
• Court: New Jersey Superior Court

Page 492

137 N.J.Super. 492

349 A.2d 560

Patricia WHITMORE and Charles Coston, Plaintiffs, v. NEW JERSEY DIVISION OF MOTOR VEHICLES et al., Defendants, and New Jersey Automobile Dealers Association et al., Intervenors.

Superior Court of New Jersey,

Chancery Division.

Nov. 6, 1975.

Steven P. McCabe, Middlesex County Legal Services Corp., Perth Amboy, for plaintiffs (James J. Lynch, Union County Legal Services Corp., Plainfield, and Mark, for Goldman, Newark Legal Services Corp., Newark, attorneys, Russell Piccoli, New Jersey State Office of Legal Services, Trenton, of counsel and on the brief).

Harley A. Williams, Deputy Atty. Gen., for defendants New Jersey Division of Motor Vehicles and John A. Waddington, Director of New Jersey Division of Motor Vehicles (William F. Hyland, Atty. Gen., attorney).

Joseph J. Jankowski, Woodbridge, for defendant Sakovan, Inc. (Hutt, Berkow & Hollander, Woodbridge, attorneys).

Frank J. Cundari, Perth Amboy, for intervenor New Jersey Automobile Dealers Ass'n (Wilentz, Goldman & Spitzer, Perth Amboy, attorneys).

Stephen R. Spector, Paramus, for intervenor New Jersey Gasoline Retailers Ass'n and Allied Trades, Inc. (Ferrara, Glock & Spector, Paramus, attorneys).

FURMAN, J.S.C.

The constitutionality of the public sale provisions of the Garage Keepers Lien Act, N.J.S.A. 2A:44--20 Et seq., is at issue The automobiles of both plaintiffs were retained by garage keepers after repairs. Repair bills were disputed and not paid. Plaintiff Coston's automobile is still retained. Plaintiff Whitmore's automobile was sold at public sale and title transferred by defendant Division of Motor Vehicles.

The Garage Keepers Lien Act is declaratory of a common law right of lien upon enhancement of the value of a chattel by work and materials, an extension of the common law artisan's and farrier's liens. Crucible Steel Co. v. Polack Tyre & Rubber Co., 92 N.J.L. 221, 227, 104 A. 324 (E. & A.1918); White v. Smith, 44 N.J.L. 105, 109 (Sup.Ct.1882); Cf. Ferrante v. Foley, 49 N.J. 432, 437, 231 A.2d 208 (1967); National State Bank v. Rapp, 49 N.J. 457, 459, 231 A.2d 222 (1967); Diesel v. Associates Fin. Serv., 125 N.J.Super. 53, 55, 308 A.2d 373 (App.Div.1973); Onondaga Truck Lease, Inc. v. Hovell, 107 N.J.Super. 463, 465, 259 A.2d 6 (Cty.Ct.1969), aff'd 111 N.J.Super. 549, 270 A.2d 46 (App.Div.1970). The garage keeper's possessory lien until payment for repairs made to a motor vehicle is not challenged in this action.

Plaintiffs attack the validity of N.J.S.A. 2A:44--29, 30, 31 which provides for a public sale after 30 days' retention by the garage keeper:

If no proceedings are taken for the repossession of the motor vehicle or part thereof by the owner, such property so held by the garage keeper shall, after the expiration of 30 days from the date of the detention, be sold at public auction, subject to any prior lien, title or interest held by virtue of a prior conditional sale or a prior chattel mortgage properly recorded.

Notice of the sale, under section 2A:44--29 of this title shall be published for 2 weeks at least once in each week, in some newspaper circulating in the municipality in which the garage is situate and not less than 5 days' notice of such sale shall be given by posting the notice in 5 public places in said municipality.

The proceeds of the sale shall be applied to the payment of the lien and the expenses of the sale. The balance, if any, shall be paid to the owner of the motor vehicle, or part thereof. The balance, if not claimed by the owner within 60 days after sale, shall be paid to the municipality, in which the garage is situated, for the support of the poor.

An alternative procedure prior to the expiration of 30 days is available to the owner of the vehicle under N.J.S.A. 2A:44--23, 24, 25, 26 and 27.

The owner or the person entitled to the immediate possession of the motor vehicle or part thereof so detained, may, on learning of the detention of the same, immediately demand from the garage keeper or the person in charge thereof, a statement of the true amount claimed to be due for the storing, maintaining, keeping or repairing of such motor vehicle, or for furnishing gasoline, accessories or other supplies therefor. If upon receiving such statement he considers the amount thereof excessive, he may offer what he considers to be reasonably due and demand possession of the motor vehicle or part thereof so detained. If possession is refused, he may obtain possession thereof by depositing the amount claimed in the statement with the clerk of a court of competent jurisdiction in the county where the motor vehicle or part thereof may be, together with $10 to cover the costs of court in an action in the county district court and $50 in any other court.

When the amount claimed to be due and the costs are deposited with the clerk of the court as provided in section 2A:44--23 of this title, the claimant shall be entitled to possession of the motor vehicle or part thereof, pursuant to process out of said court.

In lieu of depositing the amount claimed in cash as provided by section 2A:44--23 of this title, a bond in double the amount claimed and double the amount required to be deposited as costs, may be filed with the clerk of the court. It shall have sufficient surety, and be approved in the manner similar bonds are now approved in the court from which process is to issue.

The bond shall be in such form as the court shall prescribe.

The garage keeper shall assert his claim for a lien in the court within the time and in the manner prescribed by the rules governing the practice of the court. The court may hear and determine the matter in a summary manner. The judgment, if any, may be satisfied out of the deposit made or an action may be brought on the bond filed.

If no claim is made by the garage keeper, or if judgment shall be rendered for the defendant, the court may order the return of the money deposited or the discharge of the bond and may also fix and determine the amount of damages suffered by the owner for the seizure and detention of the motor vehicle or part thereof, and render a judgment for such amount against the garage keeper.

The public sale procedure is mandatory, not permissive, if the owner of the vehicle has not pursued his remedy under N.J.S.A. 2A:44--23 to 27. Crucible Steel Co. v. Polack Tyre & Rubber Co., supra, 92 N.J.L. at 230, 104 A. 324. The right of public sale enlarges on the common law right of possession of a lienholder. Lanterman v. Luby, 96 N.J.L. 255, 257--258, 114 A. 325 (E. & A.1921); Windsor Contr. Corp. v. Budny, 93 N.J.Super. 235, 241, 225 A.2d 596 (App.Div.196), aff'd 51 N.J. 5, 236 A.2d 885 (1967); Reilly v. Griffith, 141 N.J.Eq. 154, 164, 56 A.2d 502 (Ch.1947), aff'd 142 N.J.Eq. 724, 61 A.2d 235 (E. & A.1948). After reducing his underlying claim to a judgment the lienholder at common law could obtain execution on the property retained by him. Crucible Steel Co. v. Polack Tyre & Rubber Co., supra, 92 N.J.L. at 229, 104 A. 324; Kalio Universal, Inc. v. B.A.M., Inc., 95 N.J.Super. 393, 398--399, 231 A.2d 376 (App.Div.1967); Cf. N.J.S.A. 2A:44--32.

Implementation of N.J.S.A. 2A:44--29 to 31 by a garage keeper is action by force of state statute and not common law. Thus it is subject to be struck down under the Fourteenth Amendment to the United States Constitution if in derogation of a constitutional right to prior notice and an opportunity to be heard, as plaintiffs contend. Reitman v. Mulkey, 387 U.S. 369, 375--380, 87 S.Ct. 1627, 18 L.Ed.2d 830 (1967); Nixon v. Condon, 286 U.S. 73, 85--89, 52 S.Ct. 484, 76 L.Ed. 984 (1932); Cockerel v. Caldwell, 378 F.Supp. 491, 494 (W.D.Ky.1974); Adams v. Dept. of Motor Vehicles, 11 Cal.3d 146, 152--153, 113 Cal.Rptr. 145, 148--149, 520 P.2d 961, 964--965, 64 A.L.R.3d 803, 808--809 (Sup.Ct.1974); Cf. King v. So. Jersey Nat. Bank, 66 N.J. 161, 176, 330 A.2d 1 (1974).

Transfer of title after a public sale under N.J.S.A. 2A:44--29 is effectuated by the Division of Motor Vehicles under N.J.S.A. 39:10--15, which provides for the issuance of a certificate of ownership to the purchaser at the public sale. Defendant Division of Motor Vehicles, by regulation effective September 19, 1975, has required proof of personal notice by certified mail of a proposed public sale under N.J.S.A. 2A:44--29, not proof merely of public notice by newspaper advertisement and posting in public places, prior to transfer of title.

Plaintiffs analogize from Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972), and other recent decisions (North Georgia Finishing v. DiChem, 419 U.S. 601, 95 S.Ct. 719, 42 L.Ed.2d 751 (1975); Sniadach v. Family Finance Corp., 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969); Van Ness Industries v. Claremont Painting, 129 N.J.Super. 507, 324 A.2d 102 (Ch.Div.1974); Cf. Mitchell v. W. T. Grant Co., 416 U.S. 600, 94 S.Ct. 1895, 40 L.Ed.2d 406 (1974), which invalidate seizures of significant property or possessory interests, with state participation or authorization, prior to notice and an opportunity to be heard in a judicial proceeding. That constitutional principle is applicable and controlling.

More directly in point, plaintiffs rely also upon Hernandez v. European Auto Collision, Inc., 487 F.2d 378 (2 Cir. 1973); Cockerel v. Caldwell, supra; Mason v. Garris, 360 F.Supp. 420, mod. 364 F.Supp. 452 (N.D.Ga.1973); Straley v. Gassaway Motor Co., Inc., 359 F.Supp. 902 (S.D.W.Va.1973); Adams v. Dept. of Motor Vehicles, supra, and Lee...