Come Get Your Car!!!

By: Jeanne

From time to time, dealers are faced with a situation where a customer has tendered his or her vehicle for repairs, but refuses to pay for the work and will not pick up the vehicle. Recently, we became aware of one instance where the owner of the repaired vehicle died while the car was in the shop, leaving no heirs to pick it up or pay for it. What can a dealer do to ensure payment and terminate the obligation to safely store the vehicle for untold periods of time?

Louisiana law provides two options to recoup the cost of repairs made. The first option, a Repairman’s lien, is a privilege for the cost of repairs made, including the parts and labor, and arises by operation of law alone. The privilege may be enforced by a writ of sequestration, without the Repairman having to furnish security.

This privilege, which is superior to all other privileges with certain important exceptions, is effective for a period of 120 days from the last day the labor was performed if the vehicle has been removed from the place where the labor was performed. If the vehicle remains in the dealer’s possession, such privilege continues as long as it remains there.

To obtain a Repairman’s lien, the dealer must file a Verified Petition for Garnishment Under Writ of Sequestration. After the sheriff executes the writ of sequestration, the owner of the vehicle may obtain the release of the vehicle by paying off the judgment. If the owner does not do so, a final judgment can be obtained which allows the dealer to sell the seized vehicle.

The second option available to dealers falls under the Louisiana Towing and Storage Act. The procedure is somewhat onerous, but allows for the recovery of storage fees1 as well as repairs. To begin this process, the Repairman must notify the Department of Public Safety and Corrections, Office of Motor Vehicles, Reconstructed/Stored Vehicle Unit (the “Department”) when a vehicle has been stored or left in possession of a motor vehicle dealer or Repairman for repair and has not been claimed in order to provide the Department with information about the stored vehicle. The Department will then provide the Repairman with information regarding the most current owner and any lienholder information available on the stored vehicle. Then, the Repairman must make two notifications to the owner of the vehicle.

Within ten business days from the date the Department sends the vehicle owner information to the Repairman (five days if sent electronically), the Repairman shall send a First Notice with a certificate of mailing to the owner of the vehicle at the owner’s last known address and to any lienholder. The First Notice shall include:

(1) address of the repair shop;

(2) full description of vehicle-year, make, model, VIN; (3) vehicle license plate number, state of issuance, and expiration date, if known; (4) name of the person that had the vehicle towed or placed in storage; (5) date the vehicle was placed in storage and any applicable adjusted storage dates; (6) condition of the vehicle; and (7) all outstanding charges against the stored vehicle.

After a period of forty-five days from the First Notice, if payment of the cost of storage or repair has not been made, the Repairman must send a Final Notice. The Repairman shall send the Final Notice in the same manner as the First Notice, informing the stored vehicle’s owner that unless he pays all outstanding charges and claims the vehicle or makes arrangements, the Repairman may apply for a permit to sell or permit to dismantle from the Department after fifteen days from the date of the Final Notice. The Final Notice shall also inform the stored vehicle’s owner of the entitlement to any credits from the sale; and that he may be turned over to collections for failure to pay outstanding charges and claims.

Prior to issuance of the permit to sell or permit to dismantle, the Repairman shall provide the Department with the following evidence:

• A copy of the original report of the stored vehicle including owner and lienholder information furnished by the Department.

• A copy of the first and final notices sent to the owner of the stored vehicle and to any lienholder.

• A photograph of the vehicle in its current condition.

• If the Department requires an affidavit of physical inspection, it shall be completed by a Peace Officer Standards and Training (P.O.S.T.) certified law enforcement officer, who has the proper credentials.

• Although both methods involve some procedural hoops, the Repairman’s lien requirements are intended to be more user friendly.

• The original certificate of mailing for the first notice and the certified mail, electronic return receipt, if applicable, for the final notice sent to the stored vehicle’s owner and to any lienholder.

• An appraisal based on the most recent National Automobile Dealers Association Guide.