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Powers v. Lien Enforcement, Inc.

COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT
May 15, 2017
F071859 (Cal. Ct. App. May. 15, 2017)

Opinion

F071859

05-15-2017

HOLLY POWERS, Plaintiff and Appellant, v. LIEN ENFORCEMENT, INC. et al., Defendants and Respondents.

Glassey Smith, Christopher T. Smith, and Joshua C. Anaya for Plaintiff and Appellant. Carlson & Messer, Jeanne L. Zimmer, J. Grace Felipe, and Tamar Gabriel for Defendants and Respondents.


NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. S1500CV281929)

OPINION

APPEAL from a judgment of the Superior Court of Kern County. Sidney P. Chapin, Judge. Glassey Smith, Christopher T. Smith, and Joshua C. Anaya for Plaintiff and Appellant. Carlson & Messer, Jeanne L. Zimmer, J. Grace Felipe, and Tamar Gabriel for Defendants and Respondents.

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Plaintiff appeals from the judgment entered after the trial court denied her motion for summary adjudication and granted defendants' motion for summary judgment. Plaintiff's complaint sought a declaration that she was not liable to defendants for the balance of the towing and storage charges owed on a motor vehicle registered to her after a lien sale of the vehicle. Plaintiff also sought recovery on the grounds defendants were negligent and violated the unfair competition law when they attempted to collect the deficiency balance from her. We find no error and affirm.

FACTUAL AND PROCEDURAL BACKGROUND

On June 15, 2013, defendant Wolf's Bouquet Union and Towing, Inc. (Wolf), towed and impounded a 1994 Mazda MX3 (the Mazda) at the direction of Santa Clarita Parking Enforcement. Two searches of Department of Motor Vehicles (DMV) records showed Holly Powers (plaintiff) as the registered owner of the Mazda. Wolf, through its agent, Ritter Lien Sales, Inc. (Ritter), gave notice to plaintiff that the Mazda would be sold at a lien sale because the towing and storage charges had not been paid. Plaintiff asserts she did not receive the notice because it was sent to an old address. Wolf sold the Mazda at the lien sale for less than the amount owing; it engaged defendant Lien Enforcement, Inc. (LEI) to collect the remaining balance from plaintiff.

The DMV documents showed Holly Miller as the registered owner. Plaintiff conceded she was the Holly Miller referred to in the registration records.

In response to a collection letter from LEI, plaintiff told its representative that she had sold the Mazda in 2006; LEI requested documentation of the sale. Plaintiff did not provide LEI with that documentation prior to filing her lawsuit. On May 8, 2014, plaintiff filed this action against defendants. She alleges causes of action for negligence (failing to adequately investigate and determine ownership of the Mazda), violation of the unfair competition law (Bus. & Prof. Code, § 17200 et seq.), and declaratory relief (seeking a declaration that she is not liable for payment of the towing and storage charges in issue).

Plaintiff moved for summary adjudication of the fourth cause of action for declaratory relief, and three issues of duty: (1) that Wolf had a statutory duty to investigate whether plaintiff, as registered owner of the Mazda, was liable for the charges before trying to collect them; (2) that Wolf had a common law duty of due care to conduct a reasonable investigation after plaintiff challenged her liability for the debt; and (3) that LEI had a common law duty of due care to conduct a reasonable investigation to determine whether plaintiff was liable for the debt after she challenged her liability. On the same day, defendants moved for summary judgment or, in the alternative, summary adjudication of each cause of action.

The undisputed facts demonstrated plaintiff sold the Mazda and delivered possession to Bakersfield Mitsubishi on February 25, 2006. Neither plaintiff nor Bakersfield Mitsubishi changed the registration of the Mazda after this transaction. Bakersfield Mitsubishi sold the Mazda to Day Sun Auto Sale (Day Sun), apparently an automobile wholesaler, on May 1, 2006. At the time Wolf towed the Mazda, it checked DMV records through two sources to determine ownership, and both identified plaintiff as the registered owner of the Mazda. There is no evidence either defendant was aware of the Wholesale Report of Sale, a DMV document that reflected the transfer of the vehicle from Bakersfield Mitsubishi to Day Sun, prior to the commencement of this action.

Plaintiff submitted two copies of the Wholesale Report of Sale with her evidence. Plaintiff's attorney declared one copy was obtained through a production of documents by Bakersfield Mitsubishi on December 9, 2014. Plaintiff declared she obtained the other copy from the DMV prior to filing her lawsuit; she did not declare that she provided a copy of it to either defendant prior to suit.

Plaintiff contended that, through various actions she took and through Bakersfield Mitsubishi's filing of the Wholesale Report of Sale with the DMV, plaintiff substantially complied with certain statutes, which relieved her of liability for the charges defendants sought to collect.

DISCUSSION

I. Motions for Summary Judgment

Summary judgment is properly granted when no triable issue exists as to any material fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) In moving for summary judgment, a "defendant . . . has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to the cause of action." (Id., subd. (p)(2).) Once the moving defendant has met its initial burden, "the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto." (Ibid.)

"A party may move for summary adjudication as to . . . one or more issues of duty, if the party contends . . . that one or more defendants either owed or did not owe a duty to the plaintiff." (Code Civ. Proc, § 437c, subd. (f)(1).) A motion for summary adjudication follows the same procedures as a motion for summary judgment. (Id., subd. (f)(2).) "Similar to summary judgment, the moving party's burden on summary adjudication is to establish evidentiary facts sufficient to prove or disprove the elements of a claim or defense." (Oakland Raiders v. National Football League (2005) 131 Cal.App.4th 621, 629 (Oakland Raiders).)

"Since both summary judgment and summary adjudication motions involve purely questions of law, we review the granting of summary judgment or summary adjudication de novo to ascertain from the papers whether there is a triable issue of material fact. [Citations.] In doing so, we 'consider[] all of the evidence the parties offered in connection with the motion (except that which the court properly excluded) and the uncontradicted inferences the evidence reasonably supports. [Citation.]' " (Oakland Raiders, supra, 131 Cal.App.4th at p. 630.) "We examine (1) the pleadings to determine the elements of the claim, (2) the motion to determine if it establishes facts justifying judgment in the moving party's favor, and (3) the opposition—assuming movant has met its initial burden—to 'decide whether the opposing party has demonstrated the existence of a triable, material fact issue. [Citation.]' " (Ibid.)

There is a triable issue of fact precluding summary judgment or summary adjudication "if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) The evidence of the party opposing the motion must be liberally construed, and that of the moving party strictly construed. (Johnson v. Superior Court (2006) 143 Cal.App.4th 297, 308.) On appeal, the trial court's judgment is presumptively correct, and the appellant must affirmatively demonstrate error. (Yield Dynamics, Inc. v. TEA Systems Corp. (2007) 154 Cal.App.4th 547, 556-557.)

II. Summary Adjudication of Declaratory Relief Cause of Action

A. Liability for towing and storage charges

Plaintiff's fourth cause of action for declaratory relief alleged a controversy over whether plaintiff was liable for the balance of the towing and storage charges sought by defendants after the lien sale of the Mazda. She alleged she was not subject to liability for the charges pursuant to certain statutory exemptions, and sought a declaration of her rights and duties with respect to the debt. In her motion for summary adjudication, plaintiff sought a declaration that she was not liable to either defendant for that debt. The trial court found plaintiff had not demonstrated she fulfilled the requirements for any exemption from liability and denied her motion for summary adjudication of the declaratory relief cause of action.

The creation of and procedure for enforcing a lien on a motor vehicle for towing and storage charges is governed by Civil Code sections 3067 through 3074. Civil Code section 3068.1 provides: "Every person has a lien dependent upon possession for the compensation to which the person is legally entitled for towing [or] storage . . . of any vehicle subject to registration that has been authorized to be removed by a public agency . . . ." (Id., subd. (a)(1).) "If the vehicle has been determined to have a value not exceeding four thousand dollars ($4,000), the lien shall be satisfied pursuant to Section 3072." (Id., subd. (b).) It is undisputed that Wolf towed the Mazda after Santa Clarita Parking Enforcement ordered it impounded for having an expired vehicle registration. Plaintiff apparently does not dispute that the vehicle had a value of $4,000 or less.

We note the Mazda sold at the lien sale for $350.

To satisfy the lien, "the lienholder shall apply to the department for the names and addresses of the registered and legal owners of record." (Civ. Code, § 3072, subd. (a).) The DMV will release to the lienholder "the names and addresses of the registered and legal owners and interested parties." (Ibid.) The lienholder must then send, by certified mail, a notice of pending lien sale "to the registered owner and legal owner at their addresses of record with the department, and to any other person known to have an interest in the vehicle." (Id., subd. (b).)

" 'Department' " refers to the DMV. (Veh. Code, § 290; see Civ. Code, § 3067 ["Words used in this chapter which are defined in Division 1 of the Vehicle Code shall have the same meaning as in the Vehicle Code."].)

The " 'registered owner' " of a vehicle "is a person registered by the department as the owner of a vehicle." (Veh. Code, § 505.) "A 'legal owner' is a person holding a security interest in a vehicle which is subject to the provisions of the Uniform Commercial Code." (§ 370.) Defendants presented evidence that they obtained DMV information identifying the registered and legal owner of the Mazda through two sources: first through Santa Clarita Parking Enforcement, at the time of towing, and later through Ritter, which was licensed and bonded to obtain certified DMV records from the DMV on behalf of towing companies. According to the DMV records, plaintiff was the registered owner of the Mazda and there was no legal owner. Ritter sent a notice of pending lien sale to plaintiff by certified mail at the address reflected in the DMV records.

All further references to code sections are to the Vehicle Code, unless otherwise indicated.

After a lien sale, "[a] tow truck operator who has a lien on a vehicle pursuant to [Civil Code] Section 3068.1 has a deficiency claim against the registered owner of the vehicle . . . for an amount equal to the towing and storage charges . . . less the amount received from the sale of the vehicle." (Civ. Code, § 3068.2, subd. (a), italics added.) The Mazda sold for less than Wolf's towing and storage charges; defendants communicated with plaintiff, attempting to recover the deficiency from her as the registered owner of the vehicle. Plaintiff, however, contends she was not liable for the deficiency because she sold the car prior to the time it was towed and fell within exceptions to the liability of the registered owner.

"A registered owner who has sold or transferred his or her vehicle prior to the vehicle's removal and who was not responsible for creating the circumstances leading to the removal of the vehicle is not liable for any deficiency under this section if that registered owner executes a notice pursuant to Section 5900 of the Vehicle Code and submits the notice to the Department of Motor Vehicles." (Civ. Code, § 3068.2, subd. (d).) Section 5900 provides that the owner of a vehicle, who sells it and delivers possession to the buyer, "shall, within five calendar days, notify the department of the sale or transfer . . . in the appropriate form provided for that purpose by the department." (Id., subd. (a).) Plaintiff's undisputed material facts in support of her motion for summary adjudication of the fourth cause of action do not include any fact or evidence showing she submitted the proper form to the DMV notifying it of the transfer of the Mazda to Bakersfield Mitsubishi, within five days of the transaction or at any time before the vehicle was towed by Wolf. Plaintiff concedes the appropriate notice of transfer of the Mazda was not submitted to the DMV at the time she sold the Mazda to Bakersfield Mitsubishi. The first amended complaint alleges plaintiff "signed a Release of Liability Form," but "[u]nbeknownst to [plaintiff], Bakersfield Mitsubishi failed to transfer the registration of the vehicle out of [plaintiff's] name." An executed notice of release of liability form was included in the documents produced by Bakersfield Mitsubishi during the litigation, but there was no evidence it was ever sent to the DMV.

Plaintiff also declared that she called the DMV and was told "there was a Notice of Release of Liability filed June 14, 2006," and she should instruct LEI to contact the DMV and confirm this. Defendants objected to this statement and the trial court sustained the objection. Plaintiff has not challenged that ruling on appeal. Consequently, we disregard the portions of plaintiff's declaration to which an objection was sustained. (Code Civ. Proc., § 437c, subd. (c).)

According to DMV records, plaintiff was the registered owner of the Mazda at the time of the lien sale and at the time defendants attempted to obtain payment of the deficiency amount from her. Plaintiff has not established she was entitled to a declaratory judgment that she was exempt from liability for the deficiency under Civil Code section 3068.2, subdivision (d).

B. Effect of Vehicle Code provisions

Plaintiff contends section 5602 affords an additional, similar exception to liability for the towing and storage charges. Section 5602 provides:

"An owner who has made a bona fide sale or transfer of a vehicle and has delivered possession of the vehicle to a purchaser is not, by reason of any of the provisions of this code, the owner of the vehicle so as to be subject to civil liability or criminal liability for the parking, abandoning, or operation of the vehicle thereafter by another when the selling or transferring owner, in addition to that delivery and that bona fide sale or transfer, has fulfilled either of the following requirements:
"(a) He or she has made proper endorsement and delivery of the certificate of ownership as provided in this code.

"(b) He or she has delivered to the department or has placed in the United States mail, addressed to the department, either of the following documents:

"(1) The notice as provided in subdivision (b) of Section 4456 or Section 5900 or 5901.

"(2) The appropriate documents and fees for registration of the vehicle to the new owner pursuant to the sale or transfer."

This section provides a general exemption from civil or criminal liability for parking, abandoning, or operation of a vehicle. Civil Code sections 3068.1 and 3068.2 specifically address liability for towing and storage charges. "It is well settled . . . that a general provision is controlled by one that is special, the latter being treated as an exception to the former. A specific provision relating to a particular subject will govern in respect to that subject, as against a general provision, although the latter, standing alone, would be broad enough to include the subject to which the more particular provision relates." (Rose v. State of California (1942) 19 Cal.2d 713, 723-724; accord, San Francisco Taxpayers Assn. v. Board of Supervisors (1992) 2 Cal.4th 571, 577.) Because Civil Code sections 3068.1 and 3068.2 specifically govern liens for towing and storage, they are the specific provisions that control over the general provisions of section 5602. Thus, the applicable provisions with which plaintiff was required to comply in order to obtain an exemption from liability for the towing and storage charges based on transfer of the vehicle were those found in Civil Code section 3068.2, subdivision (d). Plaintiff has not established she complied with those requirements.

In her argument regarding section 5602, subdivision (b)(1), plaintiff contends the requirement of giving notice of the transfer to the DMV may be satisfied if a subsequent owner of the vehicle transfers it and gives notice of the transfer to the DMV. Even if we were to apply a similar rule to Civil Code section 3068.2, subdivision (d), we would not find plaintiff satisfied the requirements for an exemption from liability in this case.

Under section 5602, subdivision (b)(1), mailing or delivering the notice required by section 5900 precludes liability of a transferor of a vehicle for subsequent operation of the vehicle. Section 5602 (or its predecessor, § 178) has been applied in numerous cases in which third parties were injured in collisions with a vehicle after transfer of ownership. In some cases, the ownership of the vehicle had been transferred without completion of all the steps necessary to comply with the statutory requirements for a change in registered ownership or the paperwork did not strictly comply with those requirements. (See, e.g., Stoddart v. Peirce (1959) 53 Cal.2d 105 (Stoddart); Durbin v. Fletcher (1985) 165 Cal.App.3d 334 (Durbin); Brennan v. Gordon Ball, Inc. (1985) 163 Cal.App.3d 832; Borjesson v. Simpson (1960) 177 Cal.App.2d 365; Gorham v. Taylor (1959) 176 Cal.App.2d 600.) The question in each case was whether there had been sufficient compliance with section 5602 to preclude liability of the prior owner for the third party's injuries.

In Stoddart, defendant Peirce traded the subject vehicle in to defendant Nance Chevrolet Company (Nance), a bonded dealer, when he purchased a new car in January 1956. (Stoddart, supra, 53 Cal.2d at p. 110.) He endorsed the certificate of ownership and delivered it to Nance. Nance did not send notice of the transfer to the DMV at that time. (Ibid.) On February 7, 1956, Nance sold and delivered the vehicle to defendant Maines. Both parties to that transaction executed a " 'Dealer Notice,' " designed to give the DMV notice of the sale; the dealer notice was not timely mailed by the next business day, but was received by the DMV on February 14, 1956. (Id. at pp. 110-111.) On March 6, 1956, Maines and the vehicle were involved in an accident with the plaintiffs, who were injured. In April, the DMV received from Nance the registration card, certificate of ownership endorsed by Peirce, and the necessary fees to transfer the registration to Maines, which it did. (Id. at p. 111.) In the plaintiffs' subsequent action, the trial court directed a verdict against Peirce, Nance and Maines. (Ibid.)

Under former section 402 (now § 17150), an owner of a vehicle was liable for personal injury resulting from negligent operation of the vehicle by a permissive user. (Stoddart, supra, 53 Cal.2d at p. 109, fn. 1.) In the event of a transfer of the vehicle, such liability could be avoided by complying with former section 178, the predecessor of current section 5602. (Stoddart, supra, at p. 112, fn. 6.) In Stoddart, the court held that, while Nance had not timely mailed its dealer notice to the DMV, the notice was sufficient to exempt Nance from liability for the plaintiffs' injuries, because it was received by the DMV prior to the accident. (Id. at pp. 120-121.) It noted that the cases cited by the plaintiffs held only that "failure to comply with the pertinent code sections defeats the transferor's exemption from liability under section 402 in those instances wherein no notice of the transfer has been received by the Department of Motor Vehicles prior to the occurrence of the accident." (Id. at p. 113.) The court added:

Section 402 at that time provided in pertinent part: " 'Every owner of a motor vehicle is liable and responsible for the death of or injury to person or property resulting from negligence in the operation of such motor vehicle . . . by any person using or operating the same with . . . permission . . . .' " (Stoddart, supra, 53 Cal.2d at p. 109, fn. 1.) --------

"It seems quite obvious that when the sections are considered as a whole, it must be held that when the Dealer's Notice reaches the Department, and contains full information properly identifying the vehicle and all parties, and places each in its or his relative position in regard to the transactions which have taken place, all prior to the accident in question, then every purpose of the statutory requirements has been fulfilled, and complete protection has been given to the public. To hold otherwise would be to read into the legislation a penalty which the Legislature could not have intended, and which is not specifically expressed in any code section." (Stoddart, supra, 53 Cal.2d at p. 120, fn. omitted.)

The court concluded its interpretation did not negate the time requirement that the dealer mail the notice of transfer by the end of the next business day. The court gave that provision the effect it had always had: "If the dealer mails within the limited time, he receives the advantage of exemption during the period his notice is in transit; otherwise he does not." (Stoddart, supra, 53 Cal.2d at p. 121.) Because Nance met the requirements for an exemption from liability to the plaintiffs, it was entitled to judgment in its favor. (Id. at p. 123.)

In Durbin, the trial court entered summary judgment in favor of certain defendants in a personal injury action arising out of an automobile accident involving a Camaro driven by defendant Fletcher. (Durbin, supra, 165 Cal.App.3d. at p. 337.) "During the eight days preceding the accident, defendant Doerksen transferred possession of the Camaro to defendant Fresno Datsun, which in turn transferred possession to defendant Brewer's Car Corner. Brewer's in turn transferred possession of the Camaro to defendant Fletcher." (Ibid.)

Doerksen traded the Camaro in at Fresno Datsun; he delivered the vehicle and registration, but not the certificate of ownership, which was held by the bank that was the legal owner of the vehicle. He signed a notice of transfer and left it with Fresno Datsun. The notice of transfer sent by Fresno Datsun was received by the DMV three days after the accident. Doerksen remained as registered owner in the DMV records at the time of the accident. (Durbin, supra, 165 Cal.App.3d at pp. 337-338.)

Fresno Datsun sold the Camaro to Brewer's Car Corner three or four days before the accident. (Durbin, supra, 165 Cal.App.3d at p. 338.) Fresno Datsun could not deliver the certificate of ownership because it had not yet received it from the legal owner. It mailed a notice of transfer to the DMV, but the notice reflected an incorrect license number, which the DMV computer would have rejected because it did not match the vehicle identification number. (Id. at pp. 338-339.) Brewer's Car Corner sold the Camaro to Fletcher, one of its salesmen, apparently on the same date it purchased it. Brewer's Car Corner did not deliver the certificate of ownership to Fletcher, but mailed a notice of transfer to the DMV. (Id. at pp. 339-340.) The DMV did not receive it until after the accident. (Id. at pp. 337, 345.)

In this court's opinion, we noted that, if the transferor of a vehicle fails to comply with section 5602, he or she remains an owner of the vehicle. (Durbin, supra, 165 Cal.App.3d at p. 341.) Subsequent transferees and their permissive users are considered to be permissive users of the original transferor. (Id. at p. 342.) None of the transferor defendants delivered the certificate of ownership, so none satisfied section 5602, subdivision (a). (Durbin, supra, at p. 343.)

We considered whether the transferors complied with section 5602, subdivision (b)(1). (Durbin, supra, 165 Cal.App.4th at p. 343.) We reviewed the notice of transfer mailed by Brewer's Car Corner to the DMV and concluded it was timely mailed, bore the correct date of sale, and contained all the information necessary to inform those injured by the Camaro about the persons liable for those injuries. (Id. at pp. 343-347.) Thus, it absolved Brewer's Car Corner of liability. (Id. at p. 347.) We went on to conclude the prior transferors were also absolved of liability. "The purpose of the notice statutes is not to furnish a trap whereby some unwary individual may be held liable for the actions of another over whom he has no control. Rather, the purpose is to protect parties, to register transfers and sales of property, and to protect third parties injured by the operation of a vehicle. [Citations.] It is an established rule of statutory construction that statutes are to be given a reasonable interpretation. . . . Absurd results are to be avoided if possible." (Ibid.) Holding the prior transferors liable would be an absurd result, would "fly in the face of the purposes of the subject legislation," and would amount to an improper penalty. (Id. at pp. 347-348.) "To hold the predecessors liable after a subsequent owner transmits a proper notice to DMV would mean the predecessor's liability could continue throughout numerous successive conveyances of title to the vehicle." (Id. at p. 348.) Thus, summary judgment was properly granted in favor of all three of the transferor defendants. (Ibid.)

Stoddart and Durbin addressed ownership and transfer issues in the context of a personal injury action after an automobile accident involving the subject vehicle. In that context, "[i]t has variously been said: that the purpose of the [motor vehicle registration] statutes is to afford a more certain indicia of ownership than mere possession for the protection of the public with respect to accidents, violations of law, and fraud upon innocent purchasers [citation]; that they 'were enacted in the interest of the public welfare' [citation]; and that they are 'for the purpose of identifying the vehicle in the hands of transferees. The state is concerned in the identity and ownership of cars operated upon the public highways' [citation]." (Laureano v. Christensen (1971) 18 Cal.App.3d 515, 522 (Laureano).) In personal injury actions, the registration statutes provide a means of identifying the persons legally responsible for operation of the vehicle and for any injuries resulting from its negligent or otherwise wrongful operation.

In the context of a towing company's lien on a vehicle it towed and stored pursuant to the authorization of a public agency, the registration statutes serve the purpose of identifying the owner of the vehicle "for the protection of the public with respect to . . . violations of law." (Laureano, supra, 18 Cal.App.3d at p. 522.) They ensure that the owner or owners of the vehicle, rather than the towing company or the public agency, are held responsible for the costs of towing and storage of vehicles removed due to the owner's or a permissive user's violations of law.

If we find, by analogy, that the rule derived from Stoddart and Durbin would be appropriate in applying Civil Code section 3068.2, subdivision (d), the rule would afford plaintiff no relief in this case. Under that rule, if a subsequent transferor of the vehicle complied with the statutory requirements for giving notice of transfer of ownership before the liability in issue was incurred, a prior transferor would be protected by the exemption from liability, even if the prior transferor did not comply.

In her motion for summary adjudication of her declaratory relief cause of action, plaintiff submitted a certified copy of a Wholesale Report of Sale, which plaintiff obtained from the DMV and which indicated Bakersfield Mitsubishi sold the vehicle to Day Sun on May 1, 2006. Defendants did not dispute the sale from Bakersfield Mitsubishi to Day Sun or the presence of the Wholesale Report of Sale in the DMV files at the time plaintiff obtained a copy of it. Plaintiff presented no evidence, however, regarding the date on which the Wholesale Report of Sale was mailed or delivered to, or received by, the DMV. Plaintiff's declaration merely states that she obtained a certified copy of the document from the DMV prior to filing this action. There is no evidence showing the document was on file with the DMV prior to the date on which the Mazda was towed by Wolf and the charges were incurred. It is undisputed that the DMV records identified plaintiff as the registered owner at the time of towing. Thus, plaintiff failed to establish she was exempt from liability for the towing and storage charges under Civil Code section 3068.2, subdivision (d), even if we consider the effect of the Wholesale Report of Sale.

We note that, even if section 5602 provided an alternative means of avoiding liability for Wolf's charges, plaintiff did not demonstrate compliance with that section. Her claim that she complied with subdivision (b)(1) of section 5602 fails for the same reason as her claim that she complied with Civil Code section 3068.2, subdivision (d): she did not deliver to the DMV a notice of transfer as described in section 5900. She does not contend she satisfied the requirements of section 5602, subdivision (b)(2).

Compliance with section 5602, subdivision (a) requires "proper endorsement and delivery of the certificate of ownership" to the transferee. (§§ 5600, subd. (a)(1), 5602, subd. (a).) Plaintiff concedes she did not endorse or deliver the certificate of ownership, but contends she instead filled out an application for duplicate title, which satisfied that requirement. "When the required certificate of ownership is lost, stolen, damaged, or mutilated, the application for transfer may be made upon a form provided by the department for a duplicate certificate of ownership. The transferor shall write his or her signature and address in the appropriate spaces provided upon the application and file the same together with the proper fees for duplicate certificate of ownership and transfer." (§ 5752, subd. (a).)

Assuming, without deciding, that an application for a duplicate title could be used as a substitute for properly endorsing and delivering the certificate of ownership, as plaintiff contends, plaintiff did not establish she provided Bakersfield Mitsubishi with a proper application for a duplicate certificate of ownership. Plaintiff's separate statement of undisputed material facts in support of her motion for summary adjudication of the fourth cause of action did not contain any reference to completing or delivering an application for a duplicate title. In opposition to defendants' motion, plaintiff referred to an application for duplicate title, to dispute defendants' assertion plaintiff did not comply with section 5602. The document on which plaintiff relied, however, was not properly completed. It did not indicate whether it was intended to be an application for a duplicate title, an application for transfer of title with a duplicate title, an application for a paperless title, or an application for transfer with a paperless title; the appropriate box for that choice was not checked. Additionally, the instructions on the form indicated the seller (in this case, plaintiff) was to complete parts 1 through 5. Instead, the signature in part 3, certifying that the certificate of ownership for the vehicle was lost, stolen, not received, or illegible/mutilated, is that of "P. Prather," for Bakersfield Mitsubishi; part 4, the registered owner's release of interest, was signed with plaintiff's name, followed by "by P. Prather." Thus, plaintiff did not sign the portions of the form she was responsible for completing. Although another document produced by Bakersfield Mitsubishi contained a power of attorney section apparently signed by plaintiff, it was incomplete in that no name was written in as the person authorized to act as attorney in fact for plaintiff. Thus, plaintiff did not demonstrate that she delivered to Bakersfield Mitsubishi a properly executed application for transfer of title with a duplicate certificate of ownership. Accordingly, she failed to establish compliance with the requirements of section 5602, subdivision (a).

Because plaintiff was the registered owner of the Mazda at the time it was towed, as indicated in the DMV records, and plaintiff did not establish compliance with any provision for an exemption from that liability, the trial court properly denied plaintiff's motion for summary adjudication in her favor of her declaratory relief cause of action and granted defendants' motion for summary judgment on the declaratory relief cause of action.

III. Summary Judgment in Favor of Defendants

A. First and second causes of action for negligence

Plaintiff's first and second causes of action for negligence against Wolf and LEI, respectively, essentially allege defendants were negligent in failing to use reasonable care to ascertain whether plaintiff was liable for the towing and storage charges and whether she was entitled to an exemption from liability. In support of its motion for summary judgment on the negligence causes of action, defendants presented facts and evidence showing the debt in issue arose on June 15, 2013, when Wolf towed and impounded the Mazda for expired vehicle registration at the direction of Santa Clarita Parking Enforcement. At the time of towing, Wolf obtained from Santa Clarita Parking Enforcement a California Highway Patrol Vehicle Report (CHP 180), which showed plaintiff as the registered owner of the vehicle. On June 20, 2013, Wolf hired Ritter to obtain certified DMV information regarding the Mazda. On that date, Ritter obtained information from the DMV confirming that plaintiff was the registered owner of the Mazda. These facts were not disputed by plaintiff.

Under Civil Code section 3072, "the lienholder shall apply to the department for the names and addresses of the registered and legal owners of record." (Id., subd. (a).) "The lienholder shall, immediately upon receipt of the names and addresses, send, by certified mail with return receipt requested . . . , a completed Notice of Pending Lien Sale form . . . to the registered owner and legal owner at their addresses of record with the department, and to any other person known to have an interest in the vehicle." (Id., subd. (b).) After the sale, the lienholder "has a deficiency claim against the registered owner of the vehicle . . . for an amount equal to the towing and storage charges . . . and the lien sale processing fee pursuant to [Civil Code] Section 3074, less the amount received from the sale of the vehicle." (Id., § 3068.2, subd. (a).)

The lienholder's initial obligation is to obtain from the DMV the names and addresses of the registered and legal owners of the vehicle, in order to give notice to them of the lien sale. If the DMV identifies anyone else with an interest in the vehicle, or if the lienholder is aware of anyone else with an interest, that person is also entitled to notice of the lien sale. The notice is designed to give the registered owner, the legal owner, and anyone else known to have an interest in the vehicle an opportunity to pay the towing and storage charges and avoid a lien sale of the vehicle. After the lien sale, only the registered owner is liable for the deficiency. (Civ. Code, § 3068.2, subd. (a).)

These statutes do not impose on the lienholder a broad ranging obligation to investigate ownership of the vehicle or liability for the deficiency beyond obtaining identification of the registered and legal owners from the DMV. They specify that the lienholder's obligation is to request from the DMV the names and addresses of the registered and legal owners of the vehicle. Defendants obtained from the DMV the name and address of the registered owner. The DMV information indicated there was no legal owner; it did not identify anyone else with an interest in the vehicle.

Plaintiff asserts that, pursuant to Civil Code section 3068.2, the lienholder "has a duty to ascertain whether the registered owner is liable for the debt." She points to no language in that section imposing such an obligation. She seems to assume that, because the statute contains an exemption from liability under certain circumstances, the lienholder has an obligation in every case to investigate beyond an inquiry of the DMV to determine whether the exemption applies before attempting to collect the deficiency. We find no basis for such an obligation in the statute.

Civil Code section 3072 provides that "[a]ny lien for fees or storage charges for parking and storage of a motor vehicle shall be subject to Section 10652.5 of the Vehicle Code." (Id., subd. (j).) Plaintiff contends section 10652.5 imposed on defendants an obligation to search beyond the DMV registration records to determine whether the plaintiff was liable for the deficiency balance. She interprets the reference in that statute to ascertaining the name and address of the legal owner "from the records of the" DMV to mean the lienholder must investigate all the records of the DMV, not just the registration records, to identify those with an interest in the vehicle. (See § 10652.5, subd. (a).) The argument lacks merit. Section 10652.5 pertains to legal owners of vehicles; it imposes no obligations for identification of registered owners.

Plaintiff presented no evidence suggesting defendants' request for information from the DMV only gave them access to something less than all its records. Further, as previously discussed, plaintiff did not comply with the statutory prerequisites to an exemption from liability for the deficiency balance. Defendants cannot be held liable for negligently failing to discover an entitlement to an exemption that did not exist. The trial court correctly granted defendants' motion for summary judgment or summary adjudication on this cause of action.

B. Third cause of action for violation of the unfair competition law

Plaintiff's third cause of action alleged defendants engaged in unlawful, unfair, and fraudulent practices in violation of the unfair competition law (Bus. & Prof. Code, § 17200 et seq.). It alleged defendants falsely represented that plaintiff and others were liable for towing and storage fees on vehicles they had previously sold, and that persons who complied with section 5602 were not absolved of liability for those charges. Further, it alleged defendants failed to use reasonable care in ascertaining liability for towing and storage charges and compliance with statutory exemptions.

Defendants' evidence established that the alleged misrepresentations concerning plaintiff were not false and defendants did not fail to use reasonable care as alleged. Thus, plaintiff could not have been injured by defendants' actions. A plaintiff may not maintain an action for violation of the unfair competition law unless he or she "has suffered injury in fact and has lost money or property as a result of the unfair competition." (Bus. & Prof. Code, § 17204.) The trial court properly determined defendants were entitled to judgment on this cause of action.

DISPOSITION

The judgment is affirmed. Defendants are entitled to their costs on appeal.

/s/_________

DETJEN, J. WE CONCUR: /s/_________
LEVY, Acting P.J. /s/_________
FRANSON, J.


Summaries of

Powers v. Lien Enforcement, Inc.

COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT
May 15, 2017
F071859 (Cal. Ct. App. May. 15, 2017)
Case details for

Powers v. Lien Enforcement, Inc.

Case Details

Full title:HOLLY POWERS, Plaintiff and Appellant, v. LIEN ENFORCEMENT, INC. et al.…

Court:COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT

Date published: May 15, 2017

Citations

F071859 (Cal. Ct. App. May. 15, 2017)