Opinion
No. CV 03 0829153 S
March 10, 2005
MEMORANDUM OF DECISION ON CROSS MOTIONS FOR SUMMARY JUDGMENT (##115 AND 117)
This matter involving a lien priority dispute appeared before the court at the short calendar on February 7, 2005 concerning cross-motions for summary judgment. For the reasons stated below, the court denies the plaintiff Charter One Auto Finance's motion (#115) and grants the defendant Connecticut International Parking, LLC's motion (#117).
I PROCEDURAL BACKGROUND AND FACTS
In this matter, plaintiff Charter One Auto Finance and defendant Connecticut International Parking, LLC presented a stipulation of facts, dated November 2, 2004. In their stipulation, paragraph 18, they agree that there are no material facts in dispute.
According to the undisputed facts, plaintiff Charter One Auto Finance (Charter) was assigned a retail installment contract (contract) in which the defendant, Inkas Coffee Distribution Realty and Equipment LLC (Inkas) purchased a 2001 Ford F250 (the motor vehicle) for $36,340.00, which was to be paid in 60 monthly installments. Charter was granted a security interest in the motor vehicle on or about September 20, 2000 which lien was duly noted on the certificate of title of the motor vehicle. Inkas is currently in default under the contract for failure to make payments due for July 4, 2001 to the present. Inkas' debt to Charter, exclusive of legal fees and costs was $33,391.57. The reasonable value of the motor vehicle was $24,350.00.
Charter filed a withdrawal of this matter as to Inkas on January 12, 2004.
Connecticut International Parking, LLC (Connecticut International) is engaged in the business of storing motor vehicles at its open air parking lot located in East Granby, Connecticut. On or about May 10, 2001, Inkas delivered the motor vehicle to Connecticut International pursuant to an oral agreement to store it. Pursuant to that agreement, Inkas agreed to pay Connecticut International its standard rate of $9.25 per day for storage.
Pursuant to the oral agreement, Connecticut International took and maintained lawful possession of the motor vehicle from May 10, 2001 through May 16, 2004, and incurred $9,851.00 for storage fees during that period. Also, while the motor vehicle was in its possession, Connecticut International maintained and cared for it by regularly checking it. Connecticut International started and moved the motor vehicle on at least a monthly basis to ensure that its engine, mechanical system, and tires would remain in operating condition. Connecticut International did not send any notices to Charter during the period in which the motor vehicle was in Connecticut International's possession.
On or about April 16, 2004, Charter, claiming that it had lien rights in the motor vehicle, demanded that Connecticut International deliver it to Charter. Connecticut International offered to deliver the motor vehicle to Charter upon proof of Charter's rights, but demanded that Connecticut International be paid for the storage charges owed to it. Charter refused the demand and obtained an order of replevin for the motor vehicle pursuant to which a bond was posted.
As provided in the stipulation, paragraph 15, Connecticut International believes it is entitled to recover the sum of $9,851.00, plus interest. By virtue of its prior perfected security interest in the motor vehicle, Charter believes that it is not obligated to pay Connecticut International. Inkas filed for bankruptcy, which case was dismissed in December 2001. Charter and Connecticut International stipulated also, upon information and belief that Inkas is unable to pay either of them.
In its complaint, Charter One seeks replevin, which, as noted above, already has occurred, and other relief, including money damages and attorneys fees. Connecticut International filed a two-count counterclaim (#106), seeking a determination of the rights of the parties, and various other forms of relief.
II STANDARD OF REVIEW
Practice Book § 17-49 "provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law . . . In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party . . . The party seeking summary judgment has the burden of showing the absence of any genuine issue [of] material facts which, under applicable principles of substantive law, entitle him to a judgment as a matter of law . . . and the party opposing such a motion must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact." (Citations omitted; internal quotation marks omitted.) Barrett v. Montesano, 269 Conn. 787, 791-92, 849 A.2d 839 (2004).
Where the parties have stipulated to the relevant facts and there are no material facts in dispute, the court is presented with a question of law. See Paul Dinto Electrical Contractors, Inc. v. Waterbury, 266 Conn. 706, 713-14, 835 A.2d 33 (2003).
III DISCUSSION
According to the undisputed facts, Charter One's recorded security interest of September 20, 2000 pre-dated the date, May 10, 2001, when Connecticut International took and maintained lawful possession of the motor vehicle and when storage fees began to be incurred. The pivotal legal issue in this matter is whether or not a common-law possessory lien has priority over a previously recorded security interest.
Connecticut law long has recognized a common-law possessory lien. In Leavy v. Kinsella, 39 Conn. 50, 53 (1872), concerning the keeping of two pigs, our Supreme Court stated that "in general all bailees for hire have a lien on the thing bailed for the amount of their compensation, and common carriers and innkeepers have peculiar claims to their liens, because they cannot refuse to incur the expense cast upon them by their customers. And here the defendant may ground his right to a lien upon similar principles of justice and equity."
Subsequently, in a matter involving the keeping and feeding of a horse, the Supreme Court reiterated, "A lien is the right which a creditor has of detaining in his possession the goods of his debtor until the debt is paid. To the common-law idea of a lien it is necessary that the creditor should have the actual possession of the goods over which the lien is claimed, and that the debt should have been incurred in respect to the very goods detained." Fishell v. Morris, 57 Conn. 547, 551, 18 A. 717 (1889). The court noted also that such a common law lien is distinct from that created by a statute. See id., 552. "In all cases where statutes have created any right of security on the property of a debtor in the nature of a lien, not depending on possession, they have provided carefully for a registration of the transaction." Id. See State v. Marsala, 59 Conn.App. 135, 140 n. 5, 755 A.2d 965, cert. denied, 254 Conn. 948, 762 A.2d 902 (2000), citing Fishell v. Morris, supra.
In addition to the common law underpinnings of the possessory lien, General Statute § 49-61(a), concerning au artificer's lien, provides a mechanism by which a personal property owner may apply to the Superior Court to dissolve a bailee for hire's lien upon substitution of bond. Subsequent subsections of General Statute 49-61 provide for a procedure by which, as to a motor vehicle, a bailee for hire may give notice of his lien and for a sale of the property. See General Statute § 49-61(b)-(e). As discussed below, in view of the court's finding as to Connecticut International's priority status as a common-law possessory lienholder, it need not determine whether Connecticut International has any lien rights under § 49-61.
Section 49-61(a) provides, "The owner of any personal property which is held by one who claims to be a bailee for hire of that personal property and to have a lien in consequence thereof or anyone having a legal or equitable interest in that property, may apply in writing to any judge of the Superior Court, within whose jurisdiction that personal property is held or the lienor resides, to dissolve the lien upon the substitution of a bond with surety."
The similarity between a possessory lien for the keeping of a horse and one for storing and maintaining a motor vehicle is obvious. While the passage of time and the development of the automobile may now have made the latter a more common occurrence than the former, the legal principles underlying such a possessory lien remain intact.
In seeking summary judgment, Charter One does not contend otherwise. Rather, it argues that the decisional law on the common law possessory lien, such as Leavy v. Kinsella, supra, is unavailing "since [those cases] simply did not involve prior lienholders." See Charter One's memorandum of law, p. 7 (#116).
The court concludes that Connecticut's Uniform Commercial Code provides that such a possessory lien has priority over a previously recorded security interest. In Public Act 01-132, our legislature revised Article 9 of the Uniform Commercial Code, effective on October 1, 2001. General Statute § 42a-9-709 provides, "Public Act 01-132 . . . determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before October 1, 2001, sections 42a-9-101 to 42a-9-507, inclusive, of the general statutes, revision of 1958, revised to January 1, 2001, determine priority." (Footnote omitted.)
Section 133(a) of Public Act 01-132 likewise provides, "This act determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before the effective date of this act, sections 42a-9-101 to 42a-9-507, inclusive, of the general statutes, revision of 1958, revised to January 1, 2001, determine priority."
Since the relative priorities here were established prior to October 1, 2001, the court looks to the prior version of the Uniform Commercial Code. Former Section 42a-9-310 provides, "When a person in the ordinary course of his business furnishes services or materials with respect to goods subject to a security interest, a lien upon goods in the possession of such person given by statute or rule of law for such materials or services takes priority over a perfected security interest unless the lien is statutory and the statute expressly provides otherwise." In discussing former Section 9-310, White Summers notes that, "State statutory and common-law liens are excluded from the scope of Article 9, with the exception of the section 9-310 priority rule." (Footnotes omitted.) 4 J. White R. Summers, Uniform Commercial Code (4th Ed. 1995) § 30-12, p. 93. See Steelcase, Inc. v. Crystal, 238 Conn. 571, 585, 680 A.2d 289 (1996) (citing White Summers).
Public Act 01-132, section 53, as codified in General Statute § 42a-9-333, concerning priority of certain liens arising by operation of law, likewise provides, "(a) In this section, `possessory lien' means an interest, other than a security interest or an agricultural lien: (1) Which secures payment or performance of an obligation for services or materials furnished with respect to goods by a person in the ordinary course of the person's business; (2) Which is created by statute or rule of law in favor of the person; and (3) Whose effectiveness depends on the person's possession of the goods. (b) A possessory lien on goods has priority over a security interest in the goods unless the lien is created by a statute that expressly provides otherwise."
Applying § 9-310's priority rule, it is undisputed here that, in the ordinary course of its business, Connecticut International furnished services with respect to the motor vehicle. Until the motor vehicle was replevied by Charter One, Connecticut International was lawfully in possession of the motor vehicle. By operation of the common law, it was entitled to a possessory lien. This possessory lien is not premised on a statute; accordingly, the "unless" part of § 9-310s rule is inapplicable. Also, the court is unaware of a statute which expressly provides that a perfected security interest has priority over such a common law possessory lien and Charter One has not cited any. Pursuant to former § 42a-9-310, Connecticut International's possessory lien has priority over Charter One's perfected security interest.
This finding is consistent with those of other courts which have considered the applicability of § 9-310's priority rule. See Midlantic National Bank v. Sheldon, 751 F.Sup. 26, 28 (E.D.N.Y. 1990) (applying New York law); National Bank of Joliet v. Bergeron Cadillac, Inc., 66 Ill.2d 140, 142-44, 361 N.E.2d 1116 (Illinois Supreme Court 1977) (applying Illinois law); General Motors Acceptance Corp. v. Colwell Diesel Service Garage, Inc., 302 A.2d 595, 599-600 (Supreme Judicial Court of Maine 1973) (applying Maine law and citing cases from other jurisdictions); Nickell v. Lambrecht, 29 Mich.App. 191, 198-202, 185 N.W.2d 155 (Michigan Court of Appeals 1970) (applying Michigan law). See also Connecticut National Bank v. Giacomi, 233 Conn. 304, 326, 659 A.2d 1166 (1995) (appropriate to find guidance in precedent from other states which have adopted relevant provisions of the Uniform Commercial Code).
In view of the court's conclusion as to the priority status of Connecticut International's common-law possessory lien, the court need not determine the applicability of any statutory lien rights which Connecticut International may have had. See General Statutes § 49-61 (artificer's lien), discussed above, and General Statute § 42a-7-209 (warehouseman's lien).
Accordingly, judgment as to liability may enter for Connecticut International on both counts of the counterclaim, as to its claim on the replevin bond (count one) and for unjust enrichment (count two). See Practice Book § 17-50. Likewise, judgment may enter for Connecticut International as to count two of Charter's complaint against Connecticut International. Since neither party addressed the issue of the relief to be awarded on the counterclaim, except for stipulating, as discussed above, that Connecticut International incurred $9,851.00 for storage fees and that Connecticut International believes it is entitled to recover that sum, plus interest, the court makes no finding as to the relief to be awarded.
As noted above, the claim made against Inkas in count one of the complaint was withdrawn.
CONCLUSION
For the foregoing reasons, plaintiff Charter One Auto Finance's motion for summary judgment is denied and defendant Connecticut International Parking, LLC's motion for summary judgment is granted, as to liability only. Pursuant to Practice Book § 17-50, this matter is scheduled for a hearing on Tuesday, April 5, 2005, at 10:00 a.m. to consider the amount of the damages and to consider whether other relief is appropriate.
It is so ordered.
BY THE COURT
ROBERT B. SHAPIRO JUDGE OF THE SUPERIOR COURT