Statutory Maximums for Auto Repair Liens in California
A registered owner takes his vehicle to a body shop for repairs. The shop performs the requested repairs. The repairs come out to $2,000.00. The registered owner fails to pay for the repairs and abandons the vehicle at the shop.
The auto finance lender/legal owner of the vehicle catches wind that the shop has the vehicle in its possession. The legal owner attempts to regain possession of the vehicle by tendering the statutory maximum for repairs and/or storage. The shop refuses, claiming that the legal owner must pay for the repairs, plus no less than “$10,000.00 in storage fees,†to reclaim the vehicle.
Must the legal owner pay the shop $12,000.00 to reclaim the vehicle? Probably not.
Cal. Civ. Code § 3068
Cal. Civ. Code § 3068 enumerates the caps on repairs and storage that a lienholder may charge before releasing a vehicle to its legal owner. These statutory maximums sit against the backdrop of certain procedural requirements common to the lien sale universe:
The shop’s lien arises at the time the shop presents the invoice for completed work to the registered owner, or 15 days after the work is completed, whichever occurs first. (§ 3068(a).) A shop loses their lien unless, within 30 days after the lien has arisen, the shop applies to the DMV to conduct a lien sale or files a court action. (§ 3068(b)(1).) If a shop loses their lien, they are only entitled to storage fees—they may no longer tack on any compensation for repairs. (§ 3068(b)(2).)
Statutory Maximums
In our fact pattern above, the shop is precluded from exacting $12,000.00 for release of the vehicle to its legal owner. Per § 3068(c)(1) shop is limited to the following:
- $1,500.00 for the work or services performed (the repairs); and
- $1,025.00 for storage, unless the shop has applied to the DMV to conduct a lien sale pursuant to § 3068 within 30 days of commencement of the storage, in which case it is entitled to $1,250.
Assuming the shop properly applied to the DMV to conduct a lien sale within 30 days of the lien arising/commencement of storage, they are entitled to a mamximum of $2,750.00. Upon the legal owner’s tender of this amount by cashier’s check or cash, the shop must release the vehicle.
However, these caps on storage and repairs do not apply if the shop obtained written consent from the legal owner to prior to performing and work or commencing storage/safekeeping.
Unfortunately, the legal owner in our fact pattern is also out of luck, to some degree. Body shops often reject a tender of the statutory maximums. In that event, the next step for the legal owner is to file suit against the body shop to recover the vehicle or damages representing the vehicle’s fair market value, which tends to be a slow and grueling process. Nonetheless, if litigation ensues and the court determines that the shop wrongfully withheld the vehicle, the legal owner is entitled to $1,750.00 in attorneys’ fees and costs. (§ 3068(d).).
Though arguably bleak, the $1,750.00 is not insignificant—if a noncompliant shop rejects the statutory maximums and a court finds that the shop wrongfully withheld the vehicle, the tables will have turned, and the shop will be the one opening its wallet. A body shop would therefore be prudent to (1) seek the legal owner’s consent to perform significant repairs; and (2) agree to release the vehicle to the legal owner for the statutory maximums. And the shop should remember that although it may not coerce a legal owner into paying the full storage fees and/or repair costs, it still has a viable cause of action against the registered owner to recover those losses.
Conclusion
Cal. Civ. Code § 3068 provides auto finance lenders/legal owners with concrete protection against lienholders who seek exorbitant and ambitious storage fees and/or repair costs for release of a vehicle. Legal owners should be mindful of these protections, and body shops should be wary of the consequences for noncompliance.
