GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

H	1 

HOUSE BILL 853

Short Title:  Motor Vehicle Towing Modifications.	(Public)

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Sponsors: Representative Bowie.

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Referred to:  Transportation, if favorable, Judiciary II.

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April 12, 1995

A BILL TO BE ENTITLED
AN ACT TO MAKE MODIFICATIONS TO VARIOUS STATUTES REGULATING THE TOWING OF MOTOR VEHICLES.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 20-72(b) reads as rewritten:
"(b)	In order to assign or transfer title or interest in any motor vehicle registered under the provisions of this Article, the owner shall execute in the presence of a person authorized to administer oaths at a Division of Motor Vehicles facility or at a commission contract North Carolina Motor Vehicle License Agency an assignment and warranty of title on the reverse of the certificate of title in form approved by the Division, including in such assignment the name and address of the transferee; and no title to any motor vehicle shall pass or vest until such assignment is executed and the motor vehicle delivered to the transferee.  The provisions of this section shall not apply to any foreclosure or repossession under a chattel mortgage or conditional sales contract or any judicial sale.
Any person transferring title or interest in a motor vehicle shall deliver the certificate of title duly assigned in accordance with the foregoing provision to the transferee at the time of delivering the vehicle, except that where a security interest is obtained in the motor vehicle from the transferee in payment of the purchase price or otherwise, the transferor shall deliver the certificate of title to the lienholder and the lienholder shall forward the certificate of title together with the transferee's application for new title and necessary fees to the Division within 20 days.  Any person who delivers or accepts a certificate of title assigned in blank shall be guilty of a Class 2 misdemeanor.
The title to a salvage vehicle shall be forwarded to the Division as provided in G.S. 20-109.1."
Sec. 2.  G.S. 20-77(d) reads as rewritten:
"(d)	An operator of a place of business for garaging, repairing, parking or storing vehicles for the public in which a vehicle remains unclaimed for 10 days, or the landowners upon whose property a motor vehicle has been abandoned for more than 30 days, shall, within five days after the expiration of that period, report the vehicle as unclaimed to the Division.  Failure to make such report shall constitute a Class 3 misdemeanor.
Any vehicle which remains unclaimed after report is made to the Division may be sold by such operator or landowner in accordance with the provisions relating to the enforcement of liens and the application of proceeds of sale of Article 1 of Chapter 44A."
Sec. 3.  G.S. 20-114(c) reads as rewritten:
"(c)	It shall also be the duty of every sheriff of every county of the State and of every police or peace officer of the State to make immediate report to the Commissioner of all motor vehicles reported to him as abandoned or that are seized by him for being used for illegal transportation of alcoholic beverages or other unlawful purposes, and no motor vehicle shall be sold by any sheriff, police or peace officer, or by any person, firm or corporation claiming a mechanic's or storage lien, or under judicial proceedings, until notice on a form approved by the Commissioner shall have been given the Commissioner at least 10 days before the date of such sale."
Sec. 4.  G.S. 44A-4 reads as rewritten:
"§ 44A-4.  Enforcement of lien by sale.
(a)	Enforcement by Sale. – If the charges for which the lien is claimed under this Article remain unpaid or unsatisfied for 10 days following the maturity of the obligation to pay any such charges, the lienor may enforce the lien by public or private sale as provided in this section.  The lienor may bring an action on the debt in any court of competent jurisdiction in the county where the vehicle is being stored at any time following maturity of the obligation.  Failure of the lienor to bring such action within a 180-day period following the commencement of storage shall constitute a waiver of any right to collect towing and storage charges which accrue after such period.  Provided that when property is placed in storage pursuant to an express contract of towing or storage, the lien shall continue and the lienor may bring an action to collect towing and storage charges and enforce his lien at any time within 120 days following default on the obligation to pay towing and storage charges.
The owner or person with whom the lienor dealt may at any time following the maturity of the obligation bring an action in any court of competent jurisdiction in the county where the vehicle is being stored as by law provided.  If in any such action the owner or other party requests immediate possession of the property and pays the amount of the lien asserted into the clerk of the court in which such action is pending, the clerk shall issue an order to the lienor to relinquish possession of the property to the owner or other party.  The request for immediate possession may be made in the complaint, which shall also set forth the amount of the asserted lien and the portion thereof which is not in dispute, if any.  If within three days after service of the summons and complaint, as the number of days is computed in G.S. 1A-1, Rule 6, the lienor does not file a contrary statement of the amount of the lien at the time of the filing of the complaint, the amount set forth in the complaint shall be deemed to be the amount of the asserted lien.  The clerk may at any time disburse to the lienor that portion of the cash bond, which the plaintiff says in his complaint is not in dispute, upon application of the lienor.  The magistrate or judge shall direct appropriate disbursement of the disputed or undisbursed portion of the bond in the judgment of the court.  In the event an action by the owner pursuant to this section is heard in district or superior court, the substantially prevailing party in such court may be awarded a reasonable attorney's fee in the discretion of the judge payable by the party requesting the initial tow.
(b)	Notice and Hearings. –
(1)	If the property upon which the lien is claimed is a motor vehicle that is required to be registered, the lienor following the expiration of the 10-day period provided by subsection (a) shall give notice to the Division of Motor Vehicles that a lien is asserted and sale is proposed and shall remit to the Division a fee of ten dollars ($10.00).  The Division of Motor Vehicles shall issue notice by registered or certified mail, return receipt requested, within 10 days of receipt of notice from the lienor, to the person having legal title to the property, if reasonably ascertainable, to the person with whom the lienor dealt if different, and to each secured party and other person claiming an interest in the property who is actually known to the Division or who can be reasonably ascertained.  The notice shall state that a lien has been asserted against specific property and shall identify the lienor, the date that the lien arose, the general nature of the services performed and materials used or sold for which the lien is asserted, the amount of the lien, and that the lienor intends to sell the property in satisfaction of the lien.  The notice shall inform the recipient that the recipient has the right to a judicial hearing at which time a determination will be made as to the validity of the lien prior to a sale taking place.  The notice shall further state that the recipient has a period of five days from the date of receipt in which to notify the Division by registered or certified mail, return receipt requested, that a hearing is desired and that if the recipient wishes to contest the sale of his property pursuant to such lien, the recipient should notify the Division that a hearing is desired and the Division shall notify lienor.  The hearing shall be held in the county where the vehicle is being stored.  The notice shall state the required information in simplified terms and shall contain a form whereby the recipient may notify the Division that a hearing is desired by the return of such form to the Division.  Failure of the recipient to notify the Division within five days of the receipt of such notice that a hearing is desired shall be deemed a waiver of the right to a hearing prior to the sale of the property against which the lien is asserted, the Division shall notify the lienor, and the lienor may proceed to enforce the lien by public or private sale as provided in this section and the Division shall transfer title to the property pursuant to such sale.  If the Division is notified within the 10-day period provided above that a hearing is desired prior to sale, the lien may be enforced by sale as provided in this section and the Division will transfer title only pursuant to the order of a court of competent jurisdiction in the county where the vehicle is being stored.
	   If the Division notifies the lienor that the registered or certified mail notice has been returned as undeliverable, the lienor may institute a special proceeding in the county where the vehicle is being held, for authorization to sell that vehicle.  In such a proceeding a lienor may include more than one vehicle, but the proceeds of the sale of each shall be subject only to valid claims against that vehicle, and any excess proceeds of the sale shall escheat to the State and be paid immediately to the treasurer for disposition pursuant to Chapter 116B of the General Statutes.  A vehicle owner or possessor claiming an interest in such proceeds shall have a right of action under G.S. 116B-38.
	   The application to the clerk in such a special proceeding shall contain the notice of sale information set out in subsection (f) hereof.  If the application is in proper form the clerk shall enter an order authorizing the sale on a date not less than 14 days therefrom, and the lienor shall cause the application and order to be sent immediately by first-class mail pursuant to G.S. 1A-1, Rule 5, to each person to whom the Division has mailed notice pursuant to this subsection.  Following the authorized sale the lienor shall file with the clerk a report in the form of an affidavit, stating that two or more bona fide bids on the vehicle were received, the names, addresses and bids of the bidders, and a statement of the disposition of the sale proceeds.  The clerk then shall enter an order directing the Division to transfer title accordingly.
	   If prior to the sale the owner or legal possessor contests the sale or lien in a writing filed with the clerk, the proceeding shall be handled in accordance with G.S. 1-399.
	   If the vehicle value is eight hundred dollars ($800.00) or less, the lienor may contact the Division of Motor Vehicles, once notification has been made to the division pursuant to this section, to arrange certification of vehicle value.  A certificate of disposal may be issued by the Division within 30 days of the initial tow, service, or repairs.  This certificate of disposal will be properly validated by the Division and will cause the vehicle to be closed and the title voided.
	   If the lienor desires a title to a vehicle with a value of eight hundred dollars ($800.00) or less, a certificate of declared value shall be issued by the Division, properly validated and shall cause the title to transfer through the special proceeding process.
	   If a vehicle is left on a property engaged in the business of towing, storage, or repairs for more than 10 days, it shall be considered abandoned.  If the last registered owner fails to redeem the vehicle, the owner shall be guilty of a traffic infraction and shall be responsible for all charges to that vehicle.  In addition to the monetary penalty payable under this Chapter, the person found to be responsible for the infraction is also liable for restitution in the amount of the deficiency remaining after disposal of the vehicle pursuant to this section.  Any attempt on the part of the registered owner to renew his drivers license shall be denied until all penalties and the deficiency have been satisfied pursuant to this section.
	   Notice to the proper authority shall be on a failure to redeem form approved by the Division and shall cause a citation to be issued to the registered owner.
(2)	If the property upon which the lien is claimed is other than a motor vehicle required to be registered, the lienor following the expiration of the 15-day period provided by subsection (a) shall issue notice to the person having legal title to the property, if reasonably ascertainable, and to the person with whom the lienor dealt if different by registered or certified mail, return receipt requested.  Such notice shall state that a lien has been asserted against specific property and shall identify the lienor, the date that the lien arose, the general nature of the services performed and materials used or sold for which the lien is asserted, the amount of the lien, and that the lienor intends to sell the property in satisfaction of the lien.  The notice shall inform the recipient that the recipient has the right to a judicial hearing at which time a determination will be made as to the validity of the lien prior to a sale taking place.  The notice shall further state that the recipient has a period of 10 days from the date of receipt in which to notify the lienor by registered or certified mail, return receipt requested, that a hearing is desired and that if the recipient wishes to contest the sale of his property pursuant to such lien, the recipient should notify the lienor that a hearing is desired.  The notice shall state the required information in simplified terms and shall contain a form whereby the recipient may notify the lienor that a hearing is desired by the return of such form to the lienor.  Failure of the recipient to notify the lienor within five days of the receipt of such notice that a hearing is desired shall be deemed a waiver of the right to a hearing prior to sale of the property against which the lien is asserted and the lienor may proceed to enforce the lien by public or private sale as provided in this section.  If the lienor is notified within the 10-day period provided above that a hearing is desired prior to sale, the lien may be enforced by sale as provided in this section only pursuant to the order of a court of competent jurisdiction.
(c)	Private Sale. – Sale by private sale may be made in any manner that is commercially reasonable.  If the property upon which the lien is claimed is a motor vehicle, the sale may not be made until notice is given to the Commissioner of Motor Vehicles pursuant to G.S. 20-114(c).  Not less than 15 days prior to the date of the proposed private sale, the lienor shall cause notice to be mailed, as provided in subsection (f) hereof, to the person having legal title to the property, if reasonably ascertainable, to the person with whom the lienor dealt if different, and to each secured party or other person claiming an interest in the property who is actually known to the lienor or can be reasonably ascertained.  Notices provided pursuant to subsection (b) hereof shall be sufficient for these purposes if such notices contain the information required by subsection (f) hereof.  The lienor shall not purchase, directly or indirectly, the property at private sale and such a sale to the lienor shall be voidable.
(d)	Request for Public Sale. – If an owner, the person with whom the lienor dealt, any secured party, or other person claiming an interest in the property notifies the lienor prior to the date upon or after which the sale by private sale is proposed to be made, that public sale is requested, sale by private sale shall not be made.  After request for public sale is received, notice of public sale must be given as if no notice of sale by private sale had been given.
(e)	Public Sale. –
(1)	Not less than 10 days prior to sale by public sale the lienor:
a.	Shall notify the Commissioner of Motor Vehicles as provided in G.S. 20-114(c) if the property upon which the lien is claimed is a motor vehicle; and
a1.	Shall cause notice to be mailed to the person having legal title to the property if reasonably ascertainable, to the person with whom the lienor dealt if different, and to each secured party or other person claiming an interest in the property who is actually known to the lienor or can be reasonably ascertained, provided that notices provided pursuant to subsection (b) hereof shall be sufficient for these purposes if such notices contain the information required by subsection (f) hereof; and
b.	Shall advertise the sale by posting a copy of the notice of sale at the courthouse door in the county where the sale is to be held;
	and shall publish notice of sale once a week for two consecutive weeks in a newspaper of general circulation in the same county, the date of the last publication being not less than five days prior to the sale if the vehicle is less than three years old.
(2)	A public sale must be held on a day other than Sunday and between the hours of 10:00 A.M. and 4:00 P.M.:
a.	In any county where any part of the contract giving rise to the lien was performed, or
b.	In the county where the obligation secured by the lien was contracted for.
(3)	A lienor may purchase at public sale.
(f)	Notice of Sale. – The notice of sale shall include:
(1)	The name and address of the lienor;
(2)	The name of the person having legal title to the property if such person can be reasonably ascertained and the name of the person with whom the lienor dealt;
(3)	A description of the property;
(4)	The amount due for which the lien is claimed;
(5)	The place of the sale;
(6)	If a private sale the date upon or after which the sale is proposed to be made, or if a public sale the date and hour when the sale is to be held.
(g)	Damages for Noncompliance. – If the lienor fails to comply substantially with any of the provisions of this section, the lienor shall be liable to the person having legal title to the property or any other party injured by such noncompliance in the sum of one hundred dollars ($100.00), together with a reasonable attorney's fee as awarded by the court.  Damages provided by this section shall be in addition to actual damages to which any party is otherwise entitled."
Sec. 5.  This act becomes effective October 1, 1995.