CHAPTER 367

FORMERLY

HOUSE BILL NO. 880

AS AMENDED BY

HOUSE AMENDMENT NO. 1

AN ACT TO AMEND TITLES 25, 21 AND 10 OF THE DELAWARE CODE RELATING TO LIENS OF GARAGEMEN, LIVERY AND STABLE KEEPERS; SALE OF ABANDONED VEHICLES; REMOVAL AND SALE OF MOTOR VEHICLES FROM PUBLIC HIGHWAYS BY POLICE AND FEES THEREFOR.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend Chapter 39, Title 25, Delaware Code, by striking sections 3901 through 3909 in their entirety and substituting in lieu thereof the following new sections:

u§3901. Persons Entitled to Liens

(a) Any hotelkeeper, innkeeper, garage owner or other person who keeps a livery, boarding stable, garage, airport, marina, or other establishment and, for price or reward at such livery, boarding stable, garage, airport, marina or other establishment, furnishes food or care for any horse or has the custody or care of any carriage, cart, wagon, sleigh, motor vehicle, trailer, moped, boat, airplane, or other vehicle or any harness, robes or other equipment for the same or makes repairs, performs labor upon, furnishes services, supplies or matierals for, stores, safekeeps, or tows any carriage, cart, wagon, sleigh, motor vehicle, trailer, moped, boat, airplane, or other vehicle or any harness, robes, or other equipment for the same shall have a lien upon such horse, carriage, cart, wagon, sleigh, motor vehicle, trailer, moped, boat , airplane, or other vehicle, harness, robes or equipment and the right to detain the same to secure the payment of such price or reward.

(b) Unless the context of this Chapter requires otherwise, a lienholder shall mean any person defined in subsection (a) of this section.

§3902. Lienholder's Loss of Possession

(a) In case, either before or after the price or reward become due and payable, the lienholder under Section 3901 loses possession of the encumbered property, except by court order pursuant to this Chapter, the lienholder's lien shall continue in full force and effect, provided that within 10

days from the time of the loss of possession the lienholder files an application for the issuance of an authorization to conduct a lien sale or counterclaims for the sale of the encumbered property replevin action brought by the owners or other persons claiming an interest in the property.

§3903. Sale to Satisfy Liens

(a) If a lineholder under Section 3901 or Section 3902 is not paid the amount due, and for which the lien is given within thirty (30) days after the same or any part thereof became due, then the lienholder may proceed to sell the property, or so much thereof as may be necessary, to satisfy the lien and costs of sale pursuant to Section 3905 if (1) an authorization to conduct a lien sale has been issued pursuant to this section, (2) a judgment has been entered in favor of the lienholder on the claim which gives rise to the lien, or (3) the owners and any secured parties of record or known lienholders of the property have signed, after the lien has arisen, a release of any interest in the property in the form prescribed by Section 3904.

(b) A lienholder may apply to a justice of the peace in the county in which the lienholder's business establishment is situated for the issuance of any authorization to conduct a lien sale under Section 3905. The application shall be executed under penalty of perjury and shall include all of the following:

(1) A description of the property.

(2) The names and addresses of the owners of the property and the names and addresses of any other persons who the lienholder knows claim an interest in the property.

(3) A statement of the amount of the lien and facts concerning the claim which gives rise to the lien. If compensation for storage is claimed, the per diem rate of storage shall be shown.

(4) The date, time and place that the property will be sold if the authorization to conduct a lien sale is issued.

(5) A statement that the lienholder has no information or belief that there is a valid defense to the claim which gives rise to the lien.

(c) Upon receipt of an application which is made pursuant to subdivision (b), the justice of the peace shall send a notice and a copy of the applicatior by certified mail or registered mail, return receipt requested, to the owners secured parties of record and any known lienholders and any other persons whose names and addresses are listed in the application. If the identity of the last registered owner or secured party cannot be determined with reasonable certainty, the provisions of Section 3905 shall have the same effect as notice sent by certified or registered mail. The notice shallinclude all of the following:

(1) A statement that an application has been made with the justice of the peace for the issuance of an authorization to conduct a lien sale.

(2) A statement that (i) the person has a legal right to a hearing in court, (ii) if a hearing in court is desired, the enclosed declaration under penalty of perjury must be signed and returned, and (iii) if the declaration is signed and returned, the lienholder will be allowed to sell the vehicle only if he obtains a judgment in court or obtains a release from the owners and any known lienholders.

(3) A statement that (i) if the declaration is signed and returned, a hearing will be promptly scheduled, and the owners may then appear to contest the claim of the lienholder.

(4) A statement of the date, time and place that the property will be sold if the authorization to conduct a lien sale is issued.

(5) A statement that the justice of the peace will issue the authorization to conduct a lien sale unless the person signs and returns, within twenty (20) days after the date on which the notice was mailed, the enclosed declaration stating that the person desires to contest the claim which gives rise to the lien.

(6) A statement that the person shall be liable for costs if a judgment is entered in favor of the lienholder on the claim which gives rise to the lien.

(7) A declaration which may be executed by the person under penalty of perjury stating that he desires to contest the claim which gives rise to the lien and that he has a valid defense to the claim and he shall

furnish names and addresses where official notice may be received of any person or persons including himself known to claim an interest in the property of the hearing date.

(d) If the justice of the peace receives a declaration described in paragraph (3) of subsection (c) which is mailed within twenty (20) days after the date upon which the notice described in subsection (c) is mailed, the justice of the peace shall notify the lineholder, and owners and any other persons listed in the application or declaration of the hearing date unless the owners of the property and any known lienholder(s) have signed, after the lien has arisen, a release of any interest in the property in the form prescribed by §3904. In any other case, the justice of the peace shall issue an authorization to conduct a lien sale.

(e) In any hearing, the lineholder may have the amount of the indebtedness and right to sale determined and the person requesting the hearing may present and have determined any defenses, setoffs, counterclaims, cross-claims or third-party actions.

(f) Any fees shall be recoverable as a cost by the lienholder if a sale is conducted.

(g) The form of the applications, notices, and declarations described in this section shall be prescribed by the justice of the peace. The language used in the applications, notices and declarations should be simple and nontechnical.

§3904. Release of Owner's Interest in Vehicle or Property

(a) An owner of property subject to a lien under Section 3901 or 3902 may release any interest in the property after the lien has risen. The release shall be dated when signed and a copy shall be given at the time the release is signed to the person releasing the interest.

(b) The release shall contain all of the following information in simple, nontechnical language:

(1) A description of the property sufficient to identify it.

(2) The names and addresses of the owners.

(3) A statement of the amount of the lien and the facts concerning the claim which gives rise to the lien.

(4) A statement that the person releasing the interest understands that (i) he has a legal right to a hearing in court prior to any sale of the property to satisfy the lien and (li) he is giving up the right to appear to contest the claim of the lienholder.

(5) A statement that (i) the person releasing the interest gives up any interest he may have in the property and (ii) he is giving the lienholder permission to sell the property.

(6) A statement that there is no other person, persons or lienholders who have an outstanding interest in the property.

§3905. Notice of Sale; Disposition of Proceeds

(a) Prior to any such sale the lineholder shall give at least fifteen (15) days notice of the sale by handbills posted in five (5) or more public places and by advertising in a newspaper published and/or circulated in the county in which the sale is to be held.

(b) The proceeds of the sale shall be applied to the discharge of the lien and the cost of keeping and selling the Property. The balances, if any, of the proceeds of this sale shall be deposited with the Court to be applied by the Court to the payment of any lien or security interest to which the property may be subject in the order of their priority, with any remaining proceeds to be paid to the owner or owners of the property sold but, in case such owner or owners cannot be found, such balance shall be deposited with the Farmers Bank of the State of Delaware in the county in which such sale has been held to the credit of such owner or owners.

§3906. Notice

In the case of motor vehicles required to be registered under the motor vehicle laws of this or any other state, notice containing the information required in §3903(b) shall be given to the registered owners and known lienholders at their addresses of record with the Division of Motor Vehicle or similar agency and the return receipt, signed or unsigned, shall be held and considered as prima facie evidence of service of such notice. The lienholder shall notify the appropriate Delaware Auto Theft Unit.

§3907. Priority of Lien

All liens created pursuant to Section 3901 or Section 3902 shall be superior to any lien, title or interest of any person who has a security interest by virtue of a conditional sales contract or a prior perfected security interest in accordance with Title 6, Article IX of the Delaware Code.

§3908. Remedy of Owner

The owners or other persons claiming an interest in the property, in addition to the right to a hearing as provided herein, shall have the right to file an action in replevin at any time in accordance with the provisions of Chapter 95, Title 10, Delaware Code and no bond shall be required to be posted as a prerequisite to the filing of such an action or the issuance of the writ of replevin.

§3909. Jurisdiction

The Justice of the Peace Court in the county in which the lienholder's business establishment is situated shall have exclusive jurisdiction of all petitions for sale or replevin under this Chapter, notwithstanding any monetary amount which is claimed by the lienholder.

§3910. Rules The Justice of the Peace Court may adopt appropriate and specific rules to effectuate the intent and purpose of this Chapter."

Section 2. Amend §4404 of Chapter 44, Title 21, Delaware Code, by striking said section in its entirety and inserting in lieu thereof a new §4404 to read as follows:

§4404. Sale of Abandoned Vehicles

The Department shall have a possessory lien against said abandoned vehicles and shall have a right to sell said abandoned vehicles after complying with the notice and sale provisions as outlined in Chapter 39, Title 25, Delaware Code, with the exception that the proceeds of the sale shall be applied first to the costs of the sale, then to the costs of removing, towing, preserving and storing and then to the payment of any liens to which said motor vehicle, trailer, or part thereof may be subject in order of their priority, then to the State Treasurer who shall create a special fund thereof and who shall pay to the owner the monies held if a claim is made within one (1) year of the removal, or deposit the monies in the General Fund of the State of Delaware if no claim is made within one (1) year of the removal."

Section 3. Amend §6901 of Chapter 69, Title 21, Delaware Code, by adding thereto a new paragraph to read as follows:

"Anyone so removing any motor vehicle, trailer, or part thereof shall have a possessory lien against said motor vehicle, trailer, or part thereof for the costs of removing, towing, preserving and storing said motor vehicle, trailer or part thereof and shall have a right to sell said motor vehicle, trailer or part thereof after complying with the notice and sale provisions as outlined in Chapter 39, Title 25, Delaware Code, with the exception that the proceeds of the sale shall be applied first to the costs of the sale, then to the costs of removing, towing, preserving and storing and then to the payment of any liens to which said motor vehicle, trailer, or part thereof may be subject in order of their priority, then to the State Treasurer who shall create a special fund thereof and who shall pay to the owner the monies left if a claim is made within one (1) year of the removal or deposit the monies in the General Fund of the State of Delaware if no claim is made within one (1) year of the removal.

Section 4. Amend §9801 of Chapter 98, Title 10, Delaware Code, by adding thereto a new paragraph 3 to read as follows:

"(3) For processing applications for authorization to sell motor vehicles under the provisions of Chapter 39, Title 25, Chapter 44, Title 21, and Chapter 69, Title 21 For issuing orders without necessity of a hearing $ 1.00 For issuing orders with a hearing $15.00"

Approved June 27, 1978.