Bank of America v. J & S Auto Repairs

694 P.2d 277, 143 Ariz. 447, 1984 Ariz. App. LEXIS 545
CourtCourt of Appeals of Arizona
DecidedJanuary 27, 1984
DocketNo. 2 CA-CIV 4852
StatusPublished
Cited by1 cases

This text of 694 P.2d 277 (Bank of America v. J & S Auto Repairs) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bank of America v. J & S Auto Repairs, 694 P.2d 277, 143 Ariz. 447, 1984 Ariz. App. LEXIS 545 (Ark. Ct. App. 1984).

Opinion

OPINION

BIRDSALL, Chief Judge.

This appeal is from a judgment of $3,000 in favor of appellees James J. Lohmeier [448]*448and Sharon Lohmeier, and J & S Auto, Inc. and against the Bank of America. The judgment was entered after trial to the court sitting without a jury. The action in the trial court was commenced by the bank to replevy a 1977 Plymouth Voyager Van upon which it held a purchase money lien. The title holder and obligor on the security agreement, Thomas H. Duncan, was also named as a defendant but he was never served. J & S filed a counterclaim against the bank seeking $4,400 for repairs to the vehicle claiming the bank was unjustly enriched in that amount.

On appeal the appellant bank contends that A.R.S. § 33-1022(B) and (C) is a complete bar to the appellees’ recovery. That statute provides:

* * * * ü¡ *
“B. Proprietors of garages, repair and service stations shall have a lien upon motor vehicles of every kind, and the parts and accessories placed thereon, for labor, materials, supplies and storage for the amount of the charges, when the amount of the charges is agreed to by the proprietor and the owner.
C. The lien shall not impair any other lien or conditional sale of record at the time the labor, materials, supplies and storage were commenced to be furnished, unless furnished with the knowledge and consent of the record lienor or vendor.”

J & S has cross-appealed contending the amount of the judgment was inadequate. We reverse with directions to enter judgment in favor of the appellant.

The facts necessary to an understanding of the parties’ contentions follow. About August 15, 1978, Duncan had the van towed to J & S, a garage operated by Lohmeier. There had been a fire in the engine compartment which destroyed the engine, transmission, and other parts. At Duncan’s direction Lohmeier dismantled the vehicle to make a repair estimate. Nothing in the engine compartment or transmission was salvageable. Lohmeier attempted to contact Duncan to give him the estimate, but could not locate him. Subsequently, Lohmeier sent a letter by certified mail to an address discovered in the vehicle, from which it was forwarded to the last address Duncan had given the postal authorities. The letter pointed out that the vehicle, even in its damaged condition, still had some value.

The appellee found two documents in the glove compartment of the vehicle. One was a conditional sales contract dated June 8, 1977, showing a deferred payment price of $9,576.60 payable in 36 installments. Although Duncan was shown as the buyer and the van was the subject of the sale, there was no reference to the Bank of America. The contract listed Century-Chrysler Plymouth as the seller, but no address was included. The other document was a California Department of Motor Vehicles “Cashier’s Temporary Receipt and Certificate of Number” which did not indicate any lien or absence of a lien.

When the letter was returned unclaimed, Lohmeier hired a title processing service to search for encumbrances by the Arizona Department of Transportation. He gave the service the documents found in the glove compartment. The owner of the service, a former long-time employee of the department, received documentation indicating that the vehicle was not stolen and there was no record of a lien. She reported this to Lohmeier. Believing Duncan had abandoned the van and that there was a clear title, Lohmeier undertook to make repairs for his own use and benefit and applied for an Arizona title. The repairs necessitated the labor of his mechanics, parts and materials, and some sublet work.

At all times it was Lohmeier's intention to secure the ownership of the vehicle. Subsequently he was informed of the bank’s lien. When he received this information the repairs had been completed. Evidence showed that in its burned out condition when delivered to J & S it had a fair market value of between $500 and $600. After the repairs, Lohmeier arranged a sale at $5,600. Other evidence showed it had a repaired value of $4,000.

[449]*449Lohmeier offered to remove his parts and return the van along with the worn, used, and burned parts which he had removed. Removing the new parts would not have affected in any manner the uses to which the vehicle could be put at the time of its original delivery to J & S Auto (except that it would have been easier for someone else to make repairs).

The Bank of America refused the offer to remove the new parts and insisted upon receiving the vehicle in its repaired, more valuable condition. During the pretrial period the parties agreed that the bank could take the vehicle without prejudice to the appellees’ counterclaim.

The parties agreed that the bank had a valid lien which was in existence prior to the possession of the vehicle by J & S but that J & S had no knowledge of the lien when the repairs were made. It was also agreed that neither the bank nor Duncan gave J & S authority to repair the vehicle, except that Duncan had authorized the work necessary to inspect the fire damage. The conditional sales agreement contained the following provision:

“All parts, accessories, and equipment hereafter attached to said personal property shall become a component part thereof and shall belong to Seller and be subject to the terms hereof. No loss, damage to, or destruction of the personal property shall relieve Purchaser from his obligations hereunder.”

We believe the appellant’s reliance upon A.R.S. § 33-1022 is well taken.- The appellee argues that the statute is not controlling because of a provision in the Uniform Commercial Code, A.R.S. § 44-31351 pertaining to accessions. This section permits a party with a security interest in goods to have priority as to those goods when they are installed in other goods with certain exceptions.2 The illustration given in the comment to the U.C.C., Section 9-314, Uniform Laws Annotated, is “a new motor in an old car.” However, the U.C.C. provision is applicable only when the party installing the goods in the “whole” has a security interest. The appellee had no security interest because there was no prior agreement with the owner regarding the amount of the charges. See Cherry’s Incorporated v. Sharpensteen, 33 Ariz. 342, 265 P. 90 (1928).

Thus the narrow question before us is whether J & S can recover on the theory of unjust enrichment under the facts of this case, since otherwise we find Cherry’s, Incorporated v. Sharpensteen, supra, controlling. We are not now concerned with liens, or their priority, or security; rather, we must determine whether it would be unjust enrichment to allow the bank to retain the benefit of the repairs made by J & S without paying reasonable compensation. Paar v. City of Prescott, 59 Ariz. 497,130 P.2d 40 (1942); State v. Martin, 59 Ariz. 438, 130 P.2d 48 (1942).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Bank of America v. J. & S. AUTO REPAIRS
694 P.2d 246 (Arizona Supreme Court, 1985)

Cite This Page — Counsel Stack

Bluebook (online)
694 P.2d 277, 143 Ariz. 447, 1984 Ariz. App. LEXIS 545, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bank-of-america-v-j-s-auto-repairs-arizctapp-1984.