A dispute over work done on a 1973 Dodge Challenger led the Indiana Court of Appeals Monday to find the car’s owner may challenge a mechanic’s lien that a shop used to auction the car.
The 31-page opinion in Terry Banks v. Denny Jamison, d/b/a, Automotive Hammerart, 49A02-1304-PL-362, found vehicle owners have a right to challenge a mechanic’s liens when disputes arise about the work performed. The appeal attracted an amicus brief from the Automobile Dealers Association of Indiana, which argued in favor of affirming summary judgment for Denny Jamison.
Banks took the car to Jamison’s shop, but he claims Jamison did far more work than authorized, and Banks disputed a bill that exceeded $5,000. Jamison claims the work was authorized and that Banks did not contest a possessory mechanic’s lien he perfected or attempt to halt an auction of the car for which he was served notice.
The Court of Appeals panel majority affirmed summary judgment in favor of Jamison on Banks’ civil claims of theft and conversion, but it ruled that Banks may proceed with a claim in Marion Superior Court under the Deceptive Consumers Sales Act.
The majority rejected Jamison’s claim that Banks was estopped from arguing the unauthorized work was done after the mechanic’s lien was perfected. The panel also concluded the lien was invalid because there was no indication Banks was served.
"The possessory mechanic’s lien statute provides some guidance to a lien holder about the procedure for perfecting and foreclosing on a mechanic’s lien. While the statute provides that a vehicle 'may be sold at public auction' if the vehicle owner 'does not claim the vehicle and satisfy the mechanic’s lien on the vehicle,' Ind. Code § 9-22-6-2(g), the statute is silent on how or when a person may challenge a possessory mechanic’s lien," Judge Paul Mathias wrote for the majority, joined by Judge Cale Bradford.
"As we hold below, once proper service of the lien notice is obtained, unless and until the General Assembly provides for an adequate forum for the resolution of conflicting claims, the owner will have an adequate opportunity to challenge the validity of the lien, either through a replevin action or, once notified of the claimed lien, through a declaratory judgment action."
The ADAI in its amicus brief argued that to “permit Banks to challenge the validity of the mechanic’s lien after it has been foreclosed, and all statutory foreclosure procedures have been completed, would render the mechanic’s lien statute worse than useless.”
Mathias wrote that neither party came to the appeal with “clean hands.”
“Jamison could have offered, and Banks could have demanded, a written and signed estimate of the work to be performed that included Banks’s contact information. That single, simple step would have allowed both parties to avoid the expensive legal journey that has brought them before this court,” Mathias wrote.
The majority found that despite highly disputed facts in this case, the record shows Jamison didn’t act in bad faith. But Judge Rudolph R. Pyle III was unconvinced. He wrote that he concurred with most of the majority’s ruling but would also reverse summary judgment to allow Banks’ civil theft and conversion claims to proceed.
“This case is ripe for trial. The facts are so highly disputed that a jury is required to observe the facial expressions of the parties, listen to the tenor of their voices, and make a decision regarding their credibility. I believe Banks is being denied his day in court,” Pyle wrote.