Opinion
CV-21-469
10-05-2022
WELLS FARGO BANK, N.A., D/B/A/ WELLS FARGO DEALER SERVICES APPELLANT v. PRESCOTT AUTOMOTIVE, LLC APPELLEE
Nixon, Light & Buzbee, PLLC, by: John B. Buzbee, for appellant. Stayton & Associates, P.A., by: Rowe Stayton, for appellee.
APPEAL FROM THE NEVADA COUNTY CIRCUIT COURT [NO. 50CV-20-18] HONORABLE DUNCAN CULPEPPER, JUDGE
Nixon, Light & Buzbee, PLLC, by: John B. Buzbee, for appellant.
Stayton & Associates, P.A., by: Rowe Stayton, for appellee.
OPINION
PHILLIP T. WHITEAKER, Judge
Wells Fargo Bank, N.A., d/b/a/ Wells Fargo Dealer Services ("Wells Fargo") appeals an order of the Nevada County Circuit Court denying its motion for summary judgment and granting the motion for summary judgment filed by appellee Prescott Automotive, LLC ("Prescott"). At issue on appeal is a question of priority among competing liens. Because we conclude that the circuit court erred in its resolution of that issue, we reverse and remand for entry of summary judgment in favor of Wells Fargo.
I. Factual and Procedural History
In 2017, Thaddeus Zawislak purchased a 2013 Jeep Wrangler in Erie, Pennsylvania, and executed a retail installment sale contract to finance the purchase. Wells Fargo became the assignee of the retail installment sale contract and perfected its purchase money security interest in accordance with Pennsylvania's Electronic Lien and Title Program.
Sometime in September 2019, while Zawislak was in Arkansas, the Jeep developed mechanical problems. Zawislak contacted Prescott and requested that Prescott tow the Jeep to its facility for repairs. For reasons that do not appear in the record, Zawislak never returned to collect his Jeep, and he never paid Prescott for any work done to the vehicle.
It is further unclear from the record whether any repairs were actually performed on the vehicle.
On April 29, 2020, Prescott mailed a notice to Wells Fargo advising that it had towed the vehicle to its facility, that towing and storage costs were accruing daily, and that it was claiming a first-priority possessory lien on the vehicle. According to the notice, Wells Fargo had forty-five days to claim the vehicle and retake possession at any time during Prescott's business hours "by appearing, proving ownership, and release of law enforcement or any other official hold and paying all charges or other written arrangement between the owner or lien holder and the towing and storage firm." Otherwise, Prescott claimed the right to dismantle, destroy, or sell the vehicle at public sale to the highest bidder.
Wells Fargo received the notice from Prescott on May 7, and a representative of Wells Fargo contacted Prescott on May 11 to attempt negotiation of the vehicle's release. Prescott refused to surrender the vehicle to Wells Fargo unless Wells Fargo paid Prescott $13,494.68 in towing and storage fees.
Wells Fargo subsequently filed an in rem complaint for replevin on May 28. In its complaint, Wells Fargo noted that Zawislak still owed nearly $21,000 on the sales contract and that the debt was secured by Wells Fargo's perfected purchase money security interest. Citing Arkansas Code Annotated section 18-45-202(b) (Repl. 2015), Wells Fargo asserted that its lien for the balance of the purchase money due to it by Zawislak was prior to and superior to Prescott's interest.
Despite the pendency of the litigation, Prescott sent notice to Wells Fargo on June 11 that the vehicle would be sold at public auction on June 26 and published notice of the sale in local newspapers. When no buyers appeared at the sale on the 26th, Prescott elected to cancel the sale. The same day, Prescott mailed a letter to the Arkansas Department of Finance and Administration (DF&A) asserting that "all statutory requirements have been met for Prescott Automotive to obtain an abandoned title" for the Jeep. DF&A issued a new certificate of title to Prescott on July 27.
Both Wells Fargo and Prescott subsequently moved for summary judgment. In its motion, Wells Fargo asserted that it was a financial institution with a validly perfected purchase money security interest in the vehicle and that its perfected security interest was superior to Prescott's possessory interest. In its accompanying brief, Wells Fargo argued that pursuant to Arkansas Code Annotated section 18-45-201 (Repl. 2015), Prescott possessed a repairman's lien giving him an "absolute lien upon the product or object of [its] labor, repair, or storage . . . for the sums of money due for [its] work, labor, or storage." That lien, however, is expressly made subordinate to the perfected lien of a financial institution for any claim for balance of purchase money due thereon by Arkansas Code Annotated section 18-45-202(b). Arguing that it met all of the requirements of section 18-45-202(b), Wells Fargo maintained that it possessed the superior interest in the vehicle.
In response, Prescott conceded that if its lien was only for repair work, Wells Fargo's purchase money lien would have priority. Prescott contended, however, that its lien was not only for repair work but that its charges were for towing, recovery, and storage of the vehicle under Arkansas Code Annotated section 27-50-1101(a)(1)(F) (Repl. 2022). Citing this section, Prescott argued that as of March 15, 2020, the vehicle was "abandoned as a matter of law" and that it had complied with the procedures outlined in section 27-50-1208 (Repl. 2022) for perfecting its possessory lien on the vehicle. Since the lien was for towing and storage of an abandoned vehicle, Prescott asserted its lien had priority. In the alternative, Prescott argued that Wells Fargo failed to "appear" at Prescott's place of business to make arrangements to retake possession of the vehicle, as "required" by Arkansas Code Annotated section 27-50-1208(e)(1)(H); thus, Wells Fargo's failure to avail itself of the remedies provided by Arkansas law rendered its claimed lien cancelled.
After a hearing, the circuit court entered an order granting Prescott's motion for summary judgment and denying Wells Fargo's motion. The court made the following findings and orders:
1. [Prescott] had a mechanic['s] lien pursuant to Ark. Code Ann. § 18-45-201 and [Wells Fargo] had a purchase money security interest.
2. The Court finds the property in question to have been abandoned pursuant to Ark. Code Ann. § 27-50-1101 and the call made by [Wells Fargo] to [Prescott] for the request of the property to be returned was insufficient.
3. The Court determined that the Arkansas Department of Finance and Administration made their determination that [Prescott's] lien took priority over [Wells Fargo's] lien and perfected such by issuing a new title to [Prescott] for the vehicle.
4. Due to the Arkansas Department of Finance and Administration making their determination, the Court is not overruling that determination and therefore, denies [Wells Fargo's] Motion for Summary Judgment and grants [Prescott's] Motion for Summary Judgment.
Wells Fargo filed a timely notice of appeal.
II. Standard of Review
In this case, the circuit court granted summary judgment in favor of the appellees. A court should grant summary judgment only when it is clear that there are no genuine issues of material fact to be litigated and the moving party is entitled to judgment as a matter of law. Wilcox v. Wooley, 2015 Ark.App. 56, at 4, 454 S.W.3d 792, 795. Here, both Wells Fargo and Prescott filed cross-motions for summary judgment essentially agreeing that there are no material facts remaining and that summary judgment is an appropriate means of resolving the case. Abraham v. Beck, 2015 Ark. 80, 456 S.W.3d 744. When the parties agree on the facts, we simply determine whether appellees were entitled to judgment as a matter of law. Baker v. Baker, 2022 Ark.App. 260, 646 S.W.3d 397.
In this appeal, we must also construe and apply several statutes. We review issues of statutory interpretation de novo. City of Ft. Smith v. Carter, 372 Ark. 93, 270 S.W.3d 822 (2008). Our supreme court has directed that the basic rule of statutory construction is to give effect to the intent of the General Assembly. Ryan & Co. AR, Inc. v. Weiss, 371 Ark. 43, 263 S.W.3d 489 (2007). In determining the meaning of a statute, our first rule is to construe it just as it reads, giving the words their ordinary and usually accepted meaning in common language. Id. This court construes the statute so that no word is left void, superfluous, or insignificant, and meaning and effect are given to every word in the statute if possible. Id. When the language of a statute is plain and unambiguous and conveys a clear and definite meaning, there is no need to resort to rules of statutory construction. Williform v. Ark. Dep't of Hum. Servs., 2018 Ark.App. 314, 551 S.W.3d 401. Additionally, in construing any statute, we place it beside other statutes relevant to the subject matter in question and ascribe meaning and effect to be derived from the whole. Ark. Game & Fish Comm'n v. Gerard, 2018 Ark. 97, 541 S.W.3d 422.
III. Analysis
In its first point on appeal, Wells Fargo argues that the circuit court's ruling "renders Arkansas Code Annotated section 18-45-202(b) meaningless." Because Wells Fargo's argument hinges on the language of the statute, we set it out here, as well as the language of the preceding statute, section 18-45-201:
All . . . automobile repairmen, . . . automotive storagemen, firms, and corporations who perform, or have performed, work or labor for any person, firm, or corporation, who have furnished any materials or parts for the repair of any vehicle . . ., or who store on their premises any automobile, . . . if unpaid, shall have an absolute lien upon the product or object of their labor, repair, or storage and upon all . . . automobiles . . . repaired or stored . . . for the sums of money due for their work, labor, storage, and for materials furnished by them and used in the product[.]Ark. Code Ann. § 18-45-201. Section 18-45-202 then provides in pertinent part as follows:
(a) The lien provided for in this subchapter shall take precedence over, and be superior to, any mortgage or other obligation attaching against the property in all cases in which the holder of the mortgage or other obligation shall permit the property to remain in the possession of and be used by the person owing and bound for the amount thereof.
(b) The lien provided for in this subchapter shall be subject to the perfected lien of a financial institution or vendor of automobiles, trucks, tractors, and all other motor-propelled conveyances for any claim for balance of purchase money due thereon.(Emphasis added.)
In its first finding of fact, the circuit court expressly determined that Prescott "had a mechanic['s] lien pursuant to Ark. Code Ann. § 18-45-201." We agree that this factual finding is entirely correct. According to the affidavit of Lee Walker, Prescott's president, "Prescott Automotive, LLC operates two distinct businesses." One of those businesses is an automotive repair shop, and the other business is a towing-and-storage business. Prescott is thus both an "automobile repairman" and an "automotive storageman" within the meaning of section 18-45-201. Prescott was undisputedly not paid for any work it may have done on the Jeep, nor was it paid for the storage of the automobile once the vehicle was on its premises. Accordingly, Prescott was entitled to "an absolute lien upon . . . the object of their . . . repair or storage and upon all automobiles . . . repaired or stored . . . for the sums of money due for their work, labor, [and] storage" under section 18-45-201. The circuit court's findings in this regard are accurate.
The court's second finding was that Wells Fargo "had a purchase money security interest." Again, this finding is correct. As noted above, Wells Fargo, a financial institution, was assigned Zawislak's retail sales contract, and it perfected its purchase money security interest in accordance with Pennsylvania law, where the sales contract was executed. Wells Fargo thus had a "perfected lien of a financial institution . . . for any claim for balance of purchase money due" on the Jeep.
Thus, the court made two specific findings on the basis of undisputed facts: Prescott had a mechanic's lien, and Wells Fargo, a financial institution, had a purchase money security interest. Under the plain language of section 18-45-202(b), mechanic's liens are subject to the perfected lien of a financial institution for any claim for balance of purchase money due. Mechanic's liens, being in derogation of the common law, are to be strictly construed. See, e.g., Books-A-Million, Inc. v. Ark. Painting & Specialties Co., 340 Ark. 467, 470, 10 S.W.3d 857, 859-60 (2000); Florida Oil Inv. Grp., LLC v. Goodwin & Goodwin, Inc., 2015 Ark.App. 209, 463 S.W.3d 323. Strictly construing section 18-45-202(b) and applying it to the undisputed facts, Wells Fargo was clearly entitled to summary judgment, and this should have ended the matter.
The circuit court erred as a matter of law when it essentially ignored its correct initial findings and plunged ahead with its subsequent determinations that the vehicle was abandoned pursuant to Arkansas Code Annotated section 27-50-1101, that Wells Fargo's attempts to contact Prescott were insufficient to secure the return of the property to Wells Fargo, and that DF&A "made [a] determination" that Prescott's lien took priority over Wells Fargo's lien. Accordingly, we reverse the circuit court's award of summary judgment to Prescott and remand for entry of an order granting summary judgment to Wells Fargo.
Reversed and remanded.
Virden and Klappenbach, JJ., agree.