HOUSE BILL No. 4640 April 16, 1997, Introduced by Reps. Profit, Palamara and Griffin and referred to the Committee on Commerce. A bill to amend 1915 PA 312, entitled "An act to establish, protect and enforce by lien the rights of garage keepers who furnish labor or material for storing, repair- ing, maintaining, keeping or otherwise supplying automobiles or other vehicles," by amending sections 1, 2, and 3 (MCL 570.301, 570.302, and 570.303), sections 1 and 2 as amended by 1990 PA 58, and by adding sections 4, 5, 6, and 7; and to repeal acts and parts of acts. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 1.Every garage keeper who in pursuance of any con-2tract, expressed or implied, written or unwritten, furnishes any3labor, material, or supplies shall have a lien upon any vehicle4stored, maintained, supplied, or repaired by him or her for the5proper charges due for the storage, maintenance, keeping, and6repair thereof and for gasoline or aviation fuel, electric02014'97 ** VPW 2 1current, or other accessories and supplies furnished or expenses2bestowed or labor performed thereon at the request or with the3consent of the registered owner of the vehicle, whether the owner4is a conditional sale vendee or a mortgagor remaining in posses-5sion or otherwise. The garage keeper may detain the vehicle at6any time it is in his or her possession within 90 days after per-7forming the last labor or furnishing the last supplies for which8the lien is claimed. The lien, insofar as the lien is for labor9and material furnished in making repairs upon a vehicle, shall10have priority over all other liens upon the vehicle. Except as11provided in section 1a for aircraft, the lien shall become of no12effect as against the holder of a security interest, conditional13sales agreement, or other lien prior to the accrual of the lien14upon the payment by the prior lien holder to the garage keeper of15the amount of the lien, but not exceeding $600.00 in the case of16a ground vehicle, and $200.00 in the case of watercraft, or any17accessory used for the operation of watercraft, which payment18shall then be added to the amount of the lien of the prior lien19holder.THIS ACT SHALL BE KNOWN AND MAY BE CITED AS THE "GARAGE 20 KEEPER'S LIEN ACT". 21 Sec. 2.Except as otherwise provided for aircraft in22section 1b, if charges described in section 1 are not paid within2345 days after a claim of lien together with an itemized statement24of the account is delivered to the registered owner of the vehi-25cle by personal service or service by registered or certified26mail addressed to the last known address of the registered owner27of the vehicle, the garage keeper may sell the vehicle at public02014'97 ** 3 1auction. The sale shall be held not less than 20 days nor more2than 60 days after the expiration of the 45-day period. Not3later than 10 days before any sale is held, the garage keeper4shall give written notice of the time and place of the sale to5the department of state, to any lienholder as shown by the6records of the department of state, and to the registered owner7of the vehicle. Notice to the department of state and the lien-8holders shall be given by first-class mail, addressed to the9department of state, Lansing, Michigan, and to the address of the10lienholders, as shown by the records of the department. Notice11to the registered owner of the vehicle shall be given personally12or by certified mail, directly to the last known address of the13registered owner. The garage keeper may bid for and purchase the14vehicle at the sale. If the garage keeper directly or indirectly15purchases the vehicle at the sale, the proceeds of the sale shall16be considered to be either the amount paid by the garage keeper17or the fair cash market value of the vehicle at the time of sale,18whichever is the greater. Any surplus received at the sale,19after all charges of the garage keeper have been paid and satis-20fied and all costs of sale have been deducted, shall be returned21to any lienholder who has given notice to the garage keeper of22his or her claim of lien, before distribution of the proceeds of23the sale is complete, and the balance shall be returned to the24registered owner of the vehicle.AS USED IN THIS ACT: 25 (A) "DEPARTMENT" MEANS THE DEPARTMENT OF STATE. 26 (B) "GARAGE KEEPER" MEANS A PERSON OR THE PERSON'S HEIRS, 27 PERSONAL REPRESENTATIVE, SUCCESSORS, AND ASSIGNEES, WHO FOR HIRE 02014'97 ** 4 1 OR REWARD, PUBLICLY OFFER TO STORE, MAINTAIN, KEEP, OR REPAIR A 2 VEHICLE OR ANY ACCESSORY USED IN THE OPERATION OF A VEHICLE OR TO 3 FURNISH ACCESSORIES AND SUPPLIES FOR A VEHICLE OR ANY ACCESSORY 4 USED IN THE OPERATION OF A VEHICLE. 5 (C) "LAST KNOWN ADDRESS" MEANS THE ADDRESS PROVIDED BY THE 6 OWNER IN THE MOST RECENT CONTRACT FOR STORAGE, LABOR, MATERIAL, 7 OR SUPPLIES ENTERED INTO BETWEEN THE GARAGE KEEPER AND THE OWNER, 8 OR IN A SUBSEQUENT WRITTEN NOTICE OF CHANGE OF ADDRESS TO THE 9 GARAGE KEEPER OR AS SHOWN BY THE RECORDS OF THE DEPARTMENT. 10 (D) "OWNER" MEANS THE PERSON IN WHOSE NAME A VEHICLE IS REG- 11 ISTERED OR TITLED. 12 (E) "VEHICLE" MEANS THAT TERM AS DEFINED IN SECTION 79 OF 13 THE MICHIGAN VEHICLE CODE, 1949 PA 300, MCL 257.79. 14 Sec. 3. (1)Wherever in the act is used the term "garage15keeper", it shall be construed to include all persons who for16hire or reward, publicly offer to store, maintain, keep and17repair automobiles, aircraft, watercraft or any accessory used in18the operation of watercraft and other vehicles and to furnish19accessories and supplies for automobiles, aircraft, watercraft or20any accessory used in the operation of watercraft or other vehi-21cles for the transportation of persons or merchandise upon and22over the public streets and highways or through the air. In23municipalities wherein are in force any laws or ordinances rela-24tive to the regulation and licensing of garages, no person shall25be entitled to avail himself of the provisions of the act, unless26he shall, during the period of the whole time covered by his27claim for lien, have been duly licensed and shall have fully02014'97 ** 5 1complied with all laws and ordinances relative to the licensing2of garages.A GARAGE KEEPER WHO IN PURSUANCE OF A CONTRACT, 3 EXPRESSED OR IMPLIED, WRITTEN OR UNWRITTEN, FURNISHES LABOR, 4 MATERIAL, OR SUPPLIES SHALL HAVE A LIEN UPON THE VEHICLE STORED, 5 MAINTAINED, SUPPLIED, OR REPAIRED BY HIM OR HER FOR THE CHARGES 6 DUE FOR THE STORAGE, MAINTENANCE, KEEPING, AND REPAIR OF THE 7 VEHICLE AND FOR GASOLINE, ELECTRIC CURRENT, OR OTHER ACCESSORIES 8 AND SUPPLIES FURNISHED, EXPENSES BESTOWED, OR LABOR PERFORMED ON 9 THE VEHICLE AT THE REQUEST OR WITH THE CONSENT OF THE OWNER OF 10 THE VEHICLE. 11 (2) THE GARAGE KEEPER MAY DETAIN THE VEHICLE WITHIN 90 DAYS 12 AFTER PERFORMING THE LAST LABOR OR FURNISHING THE LAST SUPPLIES 13 FOR WHICH THE LIEN IS CLAIMED. 14 (3) THE LIEN, INSOFAR AS THE LIEN IS FOR LABOR AND MATERIAL 15 FURNISHED IN MAKING REPAIRS UPON A VEHICLE, SHALL HAVE PRIORITY 16 OVER ALL OTHER LIENS UPON THE VEHICLE. THE LIEN HAS NO EFFECT 17 AGAINST THE HOLDER OF A SECURITY INTEREST, CONDITIONAL SALES 18 AGREEMENT, OR OTHER LIEN PRIOR TO THE ACCRUAL OF THE GARAGE 19 KEEPER'S LIEN UPON THE PAYMENT BY THE PRIOR LIENHOLDER TO THE 20 GARAGE KEEPER OF THE AMOUNT OF THE LIEN, AN AMOUNT NOT EXCEEDING 21 20% OF THE MARKET VALUE OF THE REPAIRED VEHICLE OR $5,000.00, 22 WHICHEVER IS LESS. A PAYMENT MADE UNDER THIS SUBSECTION SHALL 23 THEN BE ADDED TO THE AMOUNT OF THE LIEN OF THE PRIOR LIENHOLDER. 24 AS USED IN THIS SUBSECTION, "MARKET VALUE OF THE REPAIRED 25 VEHICLE" MEANS THE VALUE AS DETERMINED BY THE MOST CURRENT ISSUE 26 OF A NATIONALLY RECOGNIZED USED VEHICLE GUIDE. 02014'97 ** 6 1 (4) THE GARAGE KEEPER SHALL NOT COLLECT THE AMOUNT DESCRIBED 2 IN SUBSECTION (3) FOR LABOR AND MATERIALS FOR ANY OF THE 3 FOLLOWING IF THE MATERIALS USED WERE CUSTOM MATERIALS THAT ARE 4 NOT NORMALLY AVAILABLE FROM THE MANUFACTURER OR SUPPLIER OF THE 5 VEHICLE OR THAT ARE NOT NORMALLY INSTALLED ON THE VEHICLE BY THE 6 ORIGINAL MANUFACTURER: 7 (A) THE REPAIR OR REPLACEMENT OF ALL OR A PART OF THE 8 INTERIOR OR EXTERIOR OF THE REPAIRED VEHICLE. 9 (B) THE INSTALLATION, REPAIR, OR REPLACEMENT OF ELECTRONIC 10 AND RELATED PARTS. 11 (C) THE INSTALLATION, REPAIR, OR REPLACEMENT OF ANY OTHER 12 MATERIALS OR PARTS THAT ARE NOT ESSENTIAL TO THE NORMAL OPERATION 13 OF THE REPAIRED VEHICLE. 14 (5) A GARAGE KEEPER MAY CHARGE THE OWNER A REASONABLE AMOUNT 15 FOR THE STORAGE OF A VEHICLE, FOR THE STORAGE OF ANY ACCESSORY 16 USED IN THE OPERATION OF A VEHICLE, OR FOR THE STORAGE OF ACCES- 17 SORIES AND SUPPLIES FURNISHED FOR A VEHICLE OR ANY ACCESSORY USED 18 IN THE OPERATION OF A VEHICLE. UNLESS OTHERWISE AGREED TO IN 19 WRITING, THE CHARGE SHALL BE FOR NOT MORE THAN 120 DAYS' STORAGE. 20 THESE CHARGES MAY BE IN ADDITION TO THE MAXIMUM ALLOWANCE UNDER 21 SUBSECTION (3). 22 SEC. 4. (1) A LIEN UNDER SECTION 3 SHALL BE ENFORCED ONLY 23 AS PROVIDED IN THIS SECTION. 24 (2) IF CHARGES DESCRIBED IN SECTION 3 ARE NOT PAID, THE 25 GARAGE KEEPER MAY SELL THE VEHICLE AT A PUBLIC SALE, IF THE SALE 26 CONFORMS TO THIS SECTION. 02014'97 ** 7 1 (3) THE OWNER SHALL BE NOTIFIED OF THE PROPOSED SALE OF THE 2 VEHICLE IN ORDER TO SATISFY THE LIEN OF THE GARAGE KEEPER BY A 3 NOTICE SENT BY CERTIFIED MAIL TO THE LAST KNOWN ADDRESS OF THE 4 OWNER. THE NOTICE SHALL INCLUDE BOTH OF THE FOLLOWING: 5 (A) AN ITEMIZED STATEMENT OF THE GARAGE KEEPER'S LIEN SHOW- 6 ING THE AMOUNT DUE AT THE TIME OF THE NOTICE AND THE DATE ON 7 WHICH THE AMOUNT BECAME DUE. 8 (B) A DEMAND FOR PAYMENT WITHIN A PERIOD OF 45 DAYS AFTER 9 DELIVERY OF THE NOTICE. 10 (4) ON THE SAME DAY THAT THE SUBSECTION (3) NOTICE IS SENT 11 TO THE OWNER, THE GARAGE KEEPER SHALL SEND AN EXACT DUPLICATE OF 12 THAT NOTICE BY FIRST-CLASS MAIL, ADDRESSED TO THE DEPARTMENT OF 13 STATE, BUREAU OF AUTOMOTIVE REGULATION, LANSING, MICHIGAN. 14 (5) THE SALE SHALL BE HELD NOT LESS THAN 20 DAYS AND NOT 15 MORE THAN 60 DAYS AFTER THE EXPIRATION OF THE 45-DAY PERIOD. 16 (6) A SALE OF THE VEHICLE SHALL BE HELD AT THE FACILITY OF 17 THE GARAGE KEEPER OR AT THE NEAREST SUITABLE PLACE. 18 (7) BEFORE A SALE OF A VEHICLE PURSUANT TO THIS SECTION, THE 19 OWNER MAY PAY THE AMOUNT NECESSARY TO SATISFY THE LIEN, INCLUDING 20 THE REASONABLE EXPENSES OR FEES INCURRED BY THE GARAGE KEEPER 21 UNDER THIS ACT, AND REDEEM THE VEHICLE. UPON RECEIPT OF THIS 22 PAYMENT, THE GARAGE KEEPER SHALL RETURN THE VEHICLE TO THE OWNER 23 IN THE SAME CONDITION, OR SUBSTANTIALLY THE SAME CONDITION, AS IT 24 WAS IN WHEN STORED BY THE GARAGE KEEPER. 25 (8) NOT LESS THAN 20 BUSINESS DAYS BEFORE A SALE IS HELD, 26 THE GARAGE KEEPER SHALL GIVE WRITTEN NOTICE OF THE MANNER, TIME, 27 AND PLACE OF THE SALE TO THE LIENHOLDER AS SHOWN BY THE RECORDS 02014'97 ** 8 1 OF THE DEPARTMENT, AND TO THE OWNER OF THE VEHICLE. NOTICE TO 2 THE LIENHOLDERS SHALL BE GIVEN BY CERTIFIED MAIL, ADDRESSED TO 3 THE LIENHOLDERS, AS SHOWN BY THE RECORDS OF THE DEPARTMENT. 4 NOTICE TO THE OWNER OF THE VEHICLE SHALL BE GIVEN BY CERTIFIED 5 MAIL, DIRECTLY TO THE LAST KNOWN ADDRESS OF THE OWNER. 6 (9) AFTER THE EXPIRATION OF THE 45-DAY PERIOD, THE GARAGE 7 KEEPER MAY MAKE APPLICATION TO THE DEPARTMENT FOR A CERTIFICATE, 8 IN A FORM AS PRESCRIBED BY THE SECRETARY OF STATE, FOR A FEE OF 9 $10.00. UPON THE SALE OF A VEHICLE UNDER THIS ACT, THE GARAGE 10 KEEPER SHALL COMPLETE THE CERTIFICATE AS INDICATED ON ITS FACE 11 AND GIVE THE COMPLETED CERTIFICATE TO THE PURCHASER OF THE 12 VEHICLE. IN ADDITION TO OTHER INFORMATION AS MAY BE REQUIRED BY 13 THE SECRETARY OF STATE, THE PURCHASER SHALL SUBMIT THIS CERTIFI- 14 CATE TO THE DEPARTMENT WHEN MAKING AN ORIGINAL APPLICATION FOR A 15 CERTIFICATE OF TITLE OR A VEHICLE REGISTRATION FOR THE VEHICLE IN 16 THE NAME OF THE PURCHASER. 17 (10) BEFORE A SALE OF A VEHICLE PURSUANT TO THIS SECTION, A 18 LIENHOLDER OF A VEHICLE TO BE SOLD MAY PAY THE GARAGE KEEPER THE 19 AMOUNT OF THE GARAGE KEEPER'S LIEN, INCLUDING THE REASONABLE 20 EXPENSES OR FEES INCURRED BY THE GARAGE KEEPER UNDER THIS ACT. 21 THE AMOUNT PAYABLE TO THE GARAGE KEEPER SHALL NOT EXCEED THE FAIR 22 CASH MARKET VALUE OF THE VEHICLE. A PAYMENT MADE TO THE GARAGE 23 KEEPER SHALL BE ADDED TO THE AMOUNT OF THE LIEN OF THE LIENHOLDER 24 WHO MADE THE PAYMENT, AND SHALL BE SUBTRACTED FROM THE AMOUNT OF 25 THE GARAGE KEEPER'S LIEN. 26 (11) A PURCHASER IN GOOD FAITH OF A VEHICLE SOLD UNDER THIS 27 SECTION TAKES THE VEHICLE FREE OF ANY RIGHTS OF PERSONS AGAINST 02014'97 ** 9 1 WHOM THE LIEN WAS VALID, DESPITE NONCOMPLIANCE BY THE GARAGE 2 KEEPER WITH THE REQUIREMENTS OF THIS SECTION. 3 (12) THE GARAGE KEEPER MAY BID FOR AND PURCHASE THE VEHICLE 4 AT THE SALE. IF THE GARAGE KEEPER DIRECTLY OR INDIRECTLY PUR- 5 CHASES THE VEHICLE AT THE SALE, THE PROCEEDS OF THE SALE SHALL BE 6 CONSIDERED TO BE EITHER THE AMOUNT PAID BY THE GARAGE KEEPER OR 7 THE FAIR CASH MARKET VALUE OF THE VEHICLE AT THE TIME OF SALE, 8 WHICHEVER IS GREATER. 9 (13) ANY SURPLUS RECEIVED AT THE SALE, AFTER ALL CHARGES OF 10 THE GARAGE KEEPER HAVE BEEN PAID AND SATISFIED AND ALL COSTS OF 11 SALE HAVE BEEN DEDUCTED, SHALL BE RETURNED TO ANY LIENHOLDER WHO 12 HAS GIVEN NOTICE TO THE GARAGE KEEPER OF HIS OR HER CLAIM OF 13 LIEN, BEFORE DISTRIBUTION OF THE PROCEEDS OF THE SALE IS COM- 14 PLETE, AND THE BALANCE OF THE SURPLUS SHALL BE RETURNED TO THE 15 OWNER OF THE VEHICLE. 16 (14) PROCEEDS OF THE SALE REMAINING AFTER THE DISTRIBUTION 17 IS MADE UNDER SUBSECTION (13) SHALL BE RETURNED TO THE OWNER OF 18 THE VEHICLE BY MAILING THE PROCEEDS TO THE OWNER'S LAST KNOWN 19 ADDRESS BY CERTIFIED MAIL. IF THE GARAGE KEEPER CANNOT LOCATE 20 THE OWNER WITHIN 14 DAYS AFTER THE DATE OF THE SALE, THE REMAIN- 21 ING PROCEEDS SHALL BE TRANSMITTED TO THE DEPARTMENT. IF THE 22 OWNER DOES NOT CLAIM THE REMAINING PROCEEDS WITHIN 2 YEARS AFTER 23 THE DATE OF THE SALE, THE REMAINING PROCEEDS SHALL ESCHEAT TO THE 24 STATE. 25 SEC. 5. AN OWNER OR LIENHOLDER WHO SUFFERS DAMAGES BECAUSE 26 OF A GARAGE KEEPER'S FAILURE TO COMPLY WITH THIS ACT MAY BRING AN 02014'97 ** 10 1 ACTION IN A COURT OF APPROPRIATE JURISDICTION FOR THE ACTUAL 2 AMOUNT OF THE DAMAGES OR $250.00, WHICHEVER IS GREATER. 3 SEC. 6. THIS ACT SHALL NOT APPLY TO A VEHICLE FOR WHICH THE 4 GARAGE KEEPER ISSUES A WAREHOUSE RECEIPT, BILL OF LADING, OR 5 OTHER DOCUMENT OF TITLE. 6 SEC. 7. (1) IN MUNICIPALITIES WHERE THERE ARE IN FORCE ANY 7 LAWS OR ORDINANCES RELATIVE TO THE REGULATION AND LICENSING OF 8 GARAGES, A GARAGE KEEPER SHALL NOT BE ENTITLED TO AVAIL HIMSELF 9 OR HERSELF OF THE PROVISIONS OF THIS ACT, UNLESS, DURING THE 10 PERIOD OF THE WHOLE TIME COVERED BY HIS OR HER CLAIM FOR LIEN, HE 11 OR SHE WAS DULY LICENSED AND HAD FULLY COMPLIED WITH ALL LAWS AND 12 ORDINANCES RELATIVE TO THE LICENSING OF GARAGES. 13 (2) A GARAGE KEEPER WHO IS REGULATED BY THE MOTOR VEHICLE 14 SERVICE AND REPAIR ACT, 1974 PA 300, MCL 257.1301 TO 257.1340, IS 15 NOT ENTITLED TO AVAIL HIMSELF OR HERSELF OF THE PROVISIONS OF 16 THIS ACT UNLESS HE OR SHE HAS BEEN IN COMPLIANCE WITH THE MOTOR 17 VEHICLE SERVICE AND REPAIR ACT, 1974 PA 300, MCL 257.1301 TO 18 257.1340, DURING THE ENTIRE PERIOD COVERED BY HIS OR HER CLAIM 19 FOR A LIEN. 20 Enacting section 1. Sections 1a, 1b, and 2a of 1915 PA 312, 21 MCL 570.301a, 570.301b, and 570.302a, are repealed. 22 Enacting section 2. This amendatory act takes effect 23 October 1, 1997. 02014'97 ** Final page. VPW