Title: Smith v. Lewis Auto Body

State: wyoming

Issuer: Wyoming Supreme Court

Document:

ANTHONY SMITH v. LEWIS AUTO BODY2011 WY 109Case Number: S-10-0267Decided: 07/13/2011NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so correction may be made before final publication in the permanent volume.
APRIL 
TERM, A.D. 2011

ANTHONY 
SMITH,

Appellant 
(Plaintiff),

 
 
v.

 
 
LEWIS AUTO 
BODY,

Appellee 
(Defendant).

 
 
Appeal 
from the District Court of Laramie County

The 
Honorable Peter G. Arnold, Judge

 
Representing 
Appellant:

 
 
Brian J. Hunter, 
William M. McKellar, and Julie Tiedeken, McKellar, Tiedeken and Scoggin, LLC, 
Cheyenne, Wyoming.

 
 
Representing 
Appellee:

 
 
Mitchell E. Osborn, 
Cheyenne, Wyoming.

 
 
 
 
Before KITE, C.J., 
and GOLDEN, HILL, VOIGT, and BURKE, JJ.

 
 
BURKE, 
Justice.

 
 

[¶1]        
Appellant, 
Anthony Smith, appeals from an Order and Judgment awarding damages to Appellee, 
Lewis Auto Body, for costs incurred in connection with the repair and storage of 
his vehicle.  Mr. Smith contends the 
district court erred in awarding damages for storage beyond the date that his 
insurer demanded release of the vehicle.  
We reverse.

ISSUE

 
 

[¶2]      
Mr. Smith presents 
the following issue:

 
 
Was it proper for the 
district court to award damages to Lewis Auto Body for storage of the Corvette 
after the date that a demand was made for the return of the 
automobile?

 
 
FACTS

 
 

[¶3]        
On August 27, 2006, 
Mr. Smith was involved in a single-car accident that caused extensive damage to 
his 2006 Chevrolet Corvette.  The 
vehicle was subsequently taken to Lewis Auto Body for repairs.  State Farm Mutual Automobile Insurance 
Company insured the vehicle and worked directly with Lewis on behalf of Mr. 
Smith during the months that followed.  
After providing an initial estimate for repairs, Lewis ordered 
replacement parts and began tearing down the vehicle.  During that process, Lewis found 
additional damage that caused it to believe the car was a total loss.  Lewis requested that State Farm inspect 
the vehicle.  In the meantime, State 
Farm paid Lewis $6,500.00 for the parts that Lewis had ordered but had not 
installed.  Between November, 2006, 
and February, 2007, a representative of State Farm went to Lewis's shop numerous 
times to inspect the vehicle for additional damage and to determine Lewis's 
willingness and ability to repair the car.  Finally, on February 20, 2007, after 
conducting several inspections, State Farm determined that the car was a total 
loss.

 
 

[¶4]        
Forty-five days 
later, on April 6, 2007, State Farm requested that Lewis release the 
vehicle.  In response, Lewis sent an 
invoice to State Farm requesting payment for parts, labor, administrative tasks, 
and storage fees, which amounted to $30,816.32.  State Farm responded with a letter to 
Lewis confirming its prior demand for release of the vehicle and contesting 
certain charges contained in the invoice.  
State Farm indicated its willingness to pay "reasonable storage fees for 
the insured vehicle" from the date it deemed the vehicle a total loss until the 
date it demanded release of the vehicle.

 
 

[¶5]        
Lewis did not release 
the vehicle after the demand was made.  
Two days after receiving the letter from State Farm, Lewis asserted a 
lien against the vehicle in the amount of $30,816.32.  On the same day, Lewis attempted to 
foreclose the lien by sending notice to Mr. Smith and by publishing a notice of 
lien sale in the Wyoming Tribune-Eagle.  
On May 4, 2007, Lewis filed an affidavit with the County Clerk in an 
effort to obtain a certificate of title for the vehicle.  Lewis also sent a letter to Mr. Smith 
demanding payment of the $30,816.32 and threatening to sell the vehicle at 
public auction if payment was not received.  Lewis subsequently obtained title to the 
vehicle by way of a private sale.

 
 

[¶6]        
On June 15, 2007, Mr. 
Smith filed a Complaint for Replevin seeking to recover possession of the 
vehicle.  Upon discovering that 
Lewis had conducted a lien sale and had obtained title to the car, Mr. Smith 
amended the Complaint to add a claim for conversion.  On July 15, 2008, the district court 
granted summary judgment to Mr. Smith, finding that Lewis did not file a valid 
lien and did not provide proper notice of the sale.  The court vacated the lien sale and 
voided Lewis's title.  The following 
day, Lewis sent a notice to Mr. Smith stating that it had re-asserted its lien, 
this time in the amount of $36,816.32, and that it intended to sell the vehicle 
at public auction.  On July 22, 
2008, Lewis filed a Complaint for Money Judgment against Mr. Smith.  In response, Mr. Smith filed an 
Emergency Petition to Prohibit the Sale or Other Disposition of the vehicle. 
 The district court consolidated the 
actions.

 
 

[¶7]        
A bench trial was 
held in April, 2010.  The district 
court awarded damages to Lewis in the amount of $20,516.00, which included 
$15,240.00 in storage fees calculated at $60.00 per day for 254 days.  The district court determined that Lewis 
was entitled to storage fees during the period beginning February 20, 2007, when 
State Farm totaled the vehicle, and ending November 1, 2007, which was one week 
after State Farm posted a bond with the court to cover damages in the event that 
judgment was entered against Mr. Smith.  The court held as 
follows:

 
 
[S]ome time shortly 
after October 24th, 2007, [Lewis's] possession of the car should have come to an 
end because it was at that point both parties were engaged in a lawsuit.  State Farm posted the [] bond which is 
designed to protect you to cover any judgment that might have been entered 
against [Mr. Smith].

 
 
. . 
.

 

            
So my conclusion is that November 1st, 2007, is appropriate to set for 
the date after which  I don't believe you're entitled to anything for storage  
because it was at that date when you were protected.  In the first place, you were already in 
court, and there are procedures set up to have a judicial resolution of your 
complaints.  And you're protected 
because there's this $35,000 sitting there through the means of the [] bond. 

 
 
Mr. Smith timely 
filed this appeal, challenging the district court's award of storage 
fees.

 
 
STANDARD OF 
REVIEW

 
 

[¶8]        
In this case, we are 
presented solely with a question of law.  
We review the trial court's legal conclusions de novo.  Wilson v. Tyrrell, 2011 WY 7, ¶ 33, 246 P.3d 265, 275 (Wyo. 
2011).

 
 
DISCUSSION

 
 

[¶9]        
Mr. Smith suggests 
that the issue in this appeal is simply "whether one who retains property 
pursuant to a lien for storage can continue to accrue additional storage charges 
against the owner after a demand that the property be returned."  The district court determined that Lewis 
was entitled to recover storage fees for Mr. Smith's vehicle beyond the date 
that State Farm demanded release of the vehicle.  However, the court held that Lewis was 
not entitled to storage fees charged after State Farm filed a bond with the 
court to cover its potential liability to Lewis.  The court reasoned that, once the bond 
was filed, Lewis's interest in receiving payment for its services was protected, 
and, consequently, Lewis had no further need to retain possession of the 
vehicle.  

 
 

[¶10]     
Mr. Smith contends 
the district court erred in determining that Lewis was entitled to storage fees 
after demand for the release of the vehicle was made.  He argues that the storage charges 
incurred from April 6, 2007 through November 1, 2007 were improperly awarded. 
 In response, Lewis contends that 
because the district court determined that its lien was invalid, "there was no 
real cutoff date in 2007 that could have stopped the storage being charged by 
Appellee Lewis."  Lewis argues that 
the district court "could have awarded storage charges up to the date of trial 
in April 2010, had it found that it was reasonable to do so."  For the reasons set forth below, we find 
that Lewis was not entitled to recover storage fees that were charged after 
State Farm demanded release of the vehicle.

 
 

[¶11]     
Lewis asserts that it 
had the right to retain possession of the vehicle and continue to charge storage 
fees until its invoice was paid.  
Assuming, for purposes of this appeal, that Lewis was entitled to a lien 
for services related to the repair of Mr. Smith's vehicle, we recognize that 
Wyo. Stat. Ann. § 29-7-102(a) grants a right of possession to a lienholder until 
payment for the lienholder's labor or services is tendered.  Wyo. Stat. Ann. § 29-7-102(a) (LexisNexis 
2009) provides that a "lien claimant may retain possession of the property to 
which the lien pertains until paid for the labor, services, materials and feed 
which entitle the lien claimant to assert the lien."1  The governing provisions of the lien 
statutes, however, do not address whether a lienholder is also entitled to 
storage fees after a demand for release of the property has been made.  This issue appears to be one of first 
impression for this Court.  

 
 

[¶12]     
Mr. Smith cites to 
precedent from other states supporting his position.  In Country Mut. Ins. Co. v. Styck's Body Shop, 
Inc., 396 Ill. App. 3d 241, 918 N.E.2d 1195 (Ill. App. Ct. 2009), the 
Appellate Court of Illinois addressed the issue of whether a body shop was 
entitled to storage fees charged after the insurer demanded release of its 
insured vehicles.  In that case, the 
insurer periodically hired the body shop to tow and store its insured vehicles 
following accidents in which those vehicles were damaged.  Id. at 243.  The body shop began charging a $50.00 
processing fee for each vehicle towed and stored.  Id.  The insurer offered to pay all of the 
accrued storage charges except for the $50 processing fees.  Id.  The shop, however, refused to honor the 
insurer's demand for possession of the vehicles until the processing fees were 
paid.  Id.  The insurer subsequently brought a 
replevin action seeking release of the vehicles.  Id. at 244.  The trial court granted the insurer's 
motion for summary judgment, finding that the body shop was not entitled to 
storage charges after the insurer offered to pay the uncontested charges and 
demanded return of the vehicles.  Id. at 244-45.  

 
 

[¶13]     
On appeal, the court 
upheld the trial court's decision and determined that the insurer's demand alone 
was sufficient to cut off additional storage fees.  The court noted that Illinois Supreme 
Court precedent established that 

 
 
after the owner of 
property . . . demands the return of that property from a bailee, the bailee is 
not allowed both (1) to continue to retain possession of the property pursuant 
to a lien on the property and (2) charge storage fees for holding the property 
for the period of time after the demand was made.  

 
 

Id. at 247 (citing Weiland Tool & Manufacturing Co. v. 
Whitney, 44 Ill. 2d 105, 118, 251 N.E.2d 242, 249 (1969)).  The court found that after the body shop 
refused the insurer's demand for possession of the vehicle, the body shop was 
holding the property for its own benefit, rather than for the benefit of the 
insurer.  Country Mutual, 396 Ill. App. 3d at 
248.  Further, the court rejected 
the body shop's argument that it had no choice but to retain possession of the 
vehicles, noting that the body shop could have released the vehicles and sued 
the insurer for the disputed charges.  
Id. at 249-50.  The court stated that "it was Body 
Shop's choice, after [the insurer] demanded possession of a vehicle . . . not to 
return the vehicle and instead suffer the inconvenience of having part of its 
floor space occupied by insisting upon its right of retainer."  Id. at 249.  Ultimately, the court held that payment 
of the disputed storage charges was not required in order to prevent subsequent 
storage fees from accumulating:

 
 
[The insurer] did not 
need to make a proper legal tender in addition to a demand for possession to cut 
off additional storage fees. . . . [T]he demand for possession of a vehicle 
alone cut off Body Shop's right to continue charging storage fees for the days 
it retained that vehicle after [the insurer's] demand. 

 
 

Id. at 
248-49.

 
 

[¶14]     
In another similar 
case, GMAC v. D.C. Wrecker Service, 
220 W. Va. 425, 647 S.E.2d 861 (W. Va. 2007), the Supreme Court of Appeals of 
West Virginia determined that storage fees charged by a towing company should 
not extend beyond the date that the vehicle owner attempted to obtain the 
release of his vehicle.  The precise 
issue was whether the towing company held a valid lien for storage charges on a 
vehicle financed by General Motors Acceptance Corporation.  In resolving this issue, the court was 
required to determine whether the storage fees were "reasonable" as required by 
West Virginia statute.  Id. at 430-31.  The facts in that case established that 
the towing company hauled the financed vehicle to its impound lot after the 
vehicle was involved in a collision.  Id. at 428.  The owner attempted to obtain a release 
of the vehicle within the first week of the accident but was unable to contact 
the towing company.  Id.  Two weeks later, the vehicle-owner's 
aunt contacted the towing company and inquired about retrieving the vehicle. 
 Id.  The towing company informed her that the 
vehicle would not be released until $4,000.00 - $5,000.00 in towing and storage 
fees were paid.  Id.  Neither GMAC nor the owner of the 
vehicle paid the amount demanded by the towing company, and the company refused 
to release the vehicle.  Id. at 428-29.  The court found that the storage fees 
were unreasonable and that the trial court erred in finding that the towing 
company had a valid lien.  Id. at 431.  The court held 
that

 

[A]ssuming, arguendo, that [the owner] had consented 
to having [the towing company] tow and store [the owner's] vehicle, thereby 
creating a valid improver's lien for "reasonable" storage fees on [the towing 
company's] behalf, the trial court nonetheless erred when it found that the 
improver's lien extended beyond the date when [the owner] first sought to 
retrieve his vehicle.

 
 
 Id.  

 
 

[¶15]     
Finally, in Owens v. Pyeatt, 248 Cal. App. 2d 840 (Cal. App. 4th Dist. 
1967), the California Court of Appeals also determined that a lienholder who 
retains possession of property pursuant to a lien is not entitled to storage 
fees.  In that case, the plaintiffs 
were hired to repair a vehicle after it was involved in an accident.  After the repairs were completed, the 
vehicle owners attempted to obtain possession of the vehicle.  Id. at 843.  The plaintiffs, however, at the request 
of the owners' insurance company, refused to permit the owners to take 
possession unless they signed a release of claims under their insurance 
policy.  The owners refused to 
execute the release and the plaintiffs retained possession of the vehicle.  Id.  The plaintiffs subsequently brought suit 
against the owner of the vehicle and the vehicle's insurer to recover the cost 
of repairs and storage charges.  The 
jury rendered a verdict in favor of the plaintiffs.  On appeal, judgment was reversed.  The court determined that the vehicle 
owners should not have been required to execute the release as a condition to 
obtaining possession of their vehicle.  
Id. at 845.  The court also noted that the plaintiffs 
had retained possession of the vehicle to protect their garagekeeper's lien and 
held that "A garageman who retains possession of an automobile repaired by him 
in the exercise of his right to claim a lien thereon is not entitled to the 
reasonable value of the storage thereof during the time he keeps it in his 
possession."  Id. (citing Cal. Civ. Code § 2892; Moss v. Odell, 141 Cal. 335, 337 (Cal. 
1903)).

 
 

[¶16]     
The single case that 
Lewis cites as support for its position is distinguishable.  In Lake Charles Nissan, Inc. v. State Farm Mut. 
Auto. Ins. Co., 590 So. 2d 614 (La.App. 3 Cir. 1991), the insurer decided to "total out" a vehicle after it 
was sent to an automotive dealer for repairs.  A dispute arose over how much of the 
repair work had been authorized before the vehicle was totaled.  Id. at 615.  The repairer filed suit against the 
insurer for the alleged cost of the repairs, as well as for storage fees in the 
amount of $4.00 per day until the sums owed to the repairer were paid in 
full.  Id.  The appellate court, in affirming the 
trial court's ruling in favor of the repairer, cited to a Louisiana statute 
which provided that "He who, having in his possession the property of another, 
whether in deposit or on loan or otherwise, has been obliged to incur any 
expense for its preservation, acquires on this property two species of 
rights."  The court held that "an 
automobile repair shop is entitled to storage fees under this article as long as 
evidence is presented at trial which affords a basis to levy such charges and 
the storage time is reasonable."  Id.  There is no indication in the opinion 
that a demand for release of the vehicle was made and the court did not 
determine whether storage fees could be charged after a party requests that a 
vehicle be released from a repair shop.  
Perhaps more significantly, the Louisiana statute specifically authorized 
lien rights if the garageman incurred "any expense" for preservation of property 
in his possession.  Id.  Lewis has not identified any Wyoming 
statute providing similar protection.

 
 

[¶17]     
As in Country Mutual, we rely on the fact that 
once the demand is made, the lienholder no longer holds the subject property for 
the benefit of the property owner.  
Rather, the lienholder retains the property in order to collect a debt 
that it believes it is owed, a purpose directed entirely to its own benefit. 
 See id., 396 Ill. App. 3d at 248.  The cost of storage should be borne by 
the lienholder who insists on the right of possession.  Accordingly, we conclude that even if 
Lewis had timely asserted a valid lien in this case, Lewis was not entitled to 
storage fees after a demand for release of the vehicle was made because, during 
that period, Lewis was storing the vehicle for its own 
benefit.

 
 

[¶18]     
Lewis asserts that 
retaining possession of Mr. Smith's vehicle was its only practical course of 
action.  It contends that, after the 
district court determined that the initial lien was invalid, it had no choice 
but to hold onto the vehicle in order to protect its interest in receiving 
payment for labor, parts, and other expenditures related to the vehicle.  According to Lewis, "the only thing 
Appellee Lewis could do was continue to store the vehicle, attempt to perfect 
another lien and maintain an action for damages."  

 
 

[¶19]     
As indicated above, 
the argument that a repair shop has "no choice" but to retain possession of a 
vehicle as security was rejected in Country Mutual because, as the court 
noted, the body shop could have released the vehicles in its possession and sued 
for damages.  Id., 396 Ill. App. 3d at 249.  It was not necessary for Lewis to retain 
possession of the vehicle in order to file an action for damages.  Lewis also was entitled to assert a lien 
regardless of whether it had possession of the vehicle.  See Wyo. Stat. Ann. §§ 29-7-101 through 
29-7-106.  Under Wyo. Stat. Ann. § 
29-7-102(a), Lewis would have been entitled to retain possession pursuant to a 
valid lien until it received payment for its services.  We hold, however, that Lewis was not 
also entitled to accumulate storage charges during this 
period.

 
 

[¶20]     
Reversed 
and remanded for entry of an order consistent with this opinion.

 
 
FOOTNOTES

 
 

1The statute also 
states that the right of possession "terminates six (6) months after the date 
upon which the charges become due and payable unless the lien claimant has 
commenced proceedings to foreclose the lien as provided by W.S. 29-7-101 through 
29-7-106."