Court Opinion

ID: 9629782
Source: CourtListenerOpinion
Date Created: 2023-08-22 09:49:13.682554+00
Date Added: 2024-06-11T18:07:23.748226
License: Public Domain

SIMMS, Justice,
concurring in part, dissenting in part:
I agree with the majority that Traders did not have a duty to satisfy Lender’s lien before paying the insurance settlement to Borrowers. I dissent, however, from the majority’s determination that Lender’s other issue was not preserved for appeal.
I find Lender’s arguments are not only preserved for appeal, but are persuasive. In its petition, Lender claimed that Traders was liable for damages in the amount of the garageman’s lien. Lenders alleged that Traders had notice of its properly perfected security interest and wrongfully took possession of the car, caused charges to be assessed against it for repairs and storage and allowed it to be sold to foreclose the garageman’s hen. Lender urged this issue as a basis for the appeal in its petition in error and its brief. Traders has even conceded that Lender is entitled to the salvage value of the automobile.
The decisions cited by the majority to sustain its holding regarding the insurance settlement payment actuahy support Lender’s arguments on the issue of the wrongful possession. In Scholfield Bros., Inc. v. State Farm Mut. Auto Ins. Co., 242 Kan. 848, 752 P.2d 661 (1988), the court pointed out that what had happened to the physical remains of the wrecked vehicle was not an issue in that case because when the lender refused to release its security interest, the insurance company returned the title to the lender which, the court noted, was an act of “abandonment of any ownership claim therein”. 752 P.2d at 666. Similarly in Chrysler Corp. v. Smith, 434 Pa.Super. 429, 643 A.2d 1098 (1994), the court was concerned only with payment of the insured’s loss as the insurance company never took title to the damaged vehicle and never had possession of the certificate of title or the vehicle. The court there noted, however, that an insurer may convert a salvage vehicle by taking possession of it and thereafter disposing of it. In State Automobile Mutual Insurance Company v. Chrysler Credit Corp., et al, 792 SW 2d 626 (Ky.App.1990), that court found the allegations of that Lender’s petition were sufficient to assert conversion of a wrecked vehicle where the insurance company took possession of the salvage without recognition of the interest of the lien holder, did not apply for a statutory “salvage title” and wrongfully withheld the vehicle from the Lender.
Traders is not, in my opinion, entitled to judgment as a matter of law and the material facts are in dispute. I would reverse the summary judgment entered in favor of Traders and remand the matter for trial on this issue.