Citifinancial Auto, Inc. v. Mike's Wrecker Service, Inc.

206 P.3d 63, 41 Kan. App. 2d 914, 2009 Kan. App. LEXIS 164
CourtCourt of Appeals of Kansas
DecidedMay 1, 2009
Docket100,272
StatusPublished

This text of 206 P.3d 63 (Citifinancial Auto, Inc. v. Mike's Wrecker Service, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Citifinancial Auto, Inc. v. Mike's Wrecker Service, Inc., 206 P.3d 63, 41 Kan. App. 2d 914, 2009 Kan. App. LEXIS 164 (kanctapp 2009).

Opinion

Malone, J.:

Mike’s Wrecker Service, Inc. (Mike’s), appeals the district court’s decision granting summary judgment in favor of Citifinancial Auto. Inc. (Citifinancial). Citifinancial had a lien on a 2004 Ford Mustang purchased and titled in Nevada. After local police discovered the Mustang abandoned without any tags in Manhattan, Kansas, they called Mike’s to tow and store the car. Pursuant to K.S.A. 8-1101 et seq., Mike’s claimed a hen on the Mustang for the value of its services. After requesting verification of the last registered owner and any lienholders from the Kansas Department of Revenue, Division of Vehicles (division of vehicles), and receiving a response of “no records found,” Mike’s published notice in the local newspaper of its intent to auction the Mustang. *916 Citifinancial did not receive notice of the sale. Mike’s purchased the Mustang, valued between $11,000 and $12,000, at its own auction for a $500 bid.

Citifinancial sued Mike’s to recover the value of its hen in the amount of $8,641.52. The district court granted summary judgment in favor of Citifinancial and found that Mike’s failed to make a reasonable effort to notify Citifinancial of the sale. We agree with the district court that under the circumstances, especially given the value of the Mustang, Mike’s efforts to notify Citifinancial of the sale may not have been reasonably calculated to satisfy due process. However, we conclude the evidentiary record was insufficient for the district court to resolve the due process issue on summary judgment. Accordingly, we remand the case to the district court for further proceedings.

Factual and procedural background

On October 3, 2005, Citifinancial financed the purchase of a 2004 Ford Mustang for Tommie P. Canady of Las Vegas, Nevada. The State of Nevada issued a certificate of title for the Mustang and listed the owner .as Canady and the lienholder as Citifinancial.

On January 17, 2006, police officers found the Mustang in a parking lot in Manhattan, Kansas. The Mustang did not have any license plates, and the police issued a citation for a parking violation. The police then asked Mike’s to tow the Mustang away from the location. Mike’s towed the Mustang to its place of business and stored the vehicle there.

One week later, on January 24,2006, Mike’s submitted a request to the division of vehicles for verification of the last registered owner and any lienholders for the Mustang based on the vehicle identification number (VIN). The division of vehicles returned the request and indicated “no record found.”

On February 20, 2006, Mike’s published a notice in the Manhattan Mercury newspaper of its intent to publicly auction the Mustang the following day, February 21, 2006, at 8 a.m. to satisfy the storage and towing fees of $870. In addition, the printing fees for publishing the notice were $23.90. Because Mike’s did not *917 know the identity of the owner or know of any lienholders, Mike’s did not mail notice of the sale to Canady or Citifinancial.

On February 21, 2006, Mike’s purchased the Mustang at its own auctior. for a $500 bid, and Mike’s submitted a possessory lien affidavit to the division of vehicles. However, Mike’s did not file the required documents with the Riley County clerk pursuant to K.S.A. 8-1107 until after Citifinancial filed its lawsuit. On March 9, 2006, Mike’s submitted an application with the division of vehicles to have the car title issued in its name, and on that same date, the division of vehicles issued a certificate of title for the Mustang listing Mike’s as the owner.

On April 1, 2006, Mike’s sold the Mustang to Aaron Monihen, and Monihen granted KSU Federal Credit Union a security interest in the Mustang pursuant to a security agreement. The record does not reflect the sale price of the Mustang, but the parties later stipulated that the value of the Mustang was $li,000 to $12,000. At the time of the sale, Monihen had no knowledge of the existence of Citifinancial’s hen on the Mustang.

Citifinancial later learned about the auction and sale to Monihen by conducting a CARFAX title search on the Mustang. On June 21,2007, Citifinancial filed a petition with the district court naming Mike’s, KSU Federal Credit Union, and Monihen as defendants. In the petition, Citifinancial alleged conversion of its security interest against Mike’s and sought to recover the value of its hen in the amount of $8,641.52 plus interest. Citifinancial also asserted a claim against KSU Federal Credit Union and Monihen for in rem foreclosure of its security interest- in the Mustang.

On January 18, 2008, Citifinancial filed a motion for summary judgment. In the motion, Citifinancial argued that Mike’s did not strictly comply with K.S.A. 8-1101 et seq., and Mike’s failed to make an adequate attempt to notify Citifinancial of the sale in order to satisfy due process. Citifinancial also alleged that the sale was void because Mike’s failed to pay cash for the Mustang at the public auction as required by K.S.A. 8-1105, and Mike’s failed to file the required documents with the Riley County clerk pursuant to K.S.A. 8-1107 until nearly 2 years after the auction.

*918 Also, on January 18, 2008, the defendants filed a motion for summary judgment. The defendants asserted that Mike’s complied with K.S.A. 8-1101 et seq. by lawfully coming into possession of the Mustang in response to the police department’s request, by submitting the title verification request to the division of vehicles within 30 days, and by selling the Mustang by public auction after pubhshing notice of the sale. The defendants denied haring any knowledge that the Mustang was titled in Nevada and denied that the Kansas statutes imposed any duty upon Mike’s to conduct a title search outside Kansas.

On February 25, 2008, the district court granted summary judgment in favor of Citifinancial on its claim against Mike’s. The district court found that Citifinancial did everything possible to protect its security interest in the Mustang. The district court rejected Mike’s “narrow interpretation” of K.S.A. 8-1101 et seq. that a towing service need only contact the division of vehicles to find the last registered owner of a vehicle and any lienholders. The district court found that under the circumstances Mike’s failed to make a reasonable effort to notify Citifinancial of the sale.

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Bluebook (online)
206 P.3d 63, 41 Kan. App. 2d 914, 2009 Kan. App. LEXIS 164, Counsel Stack Legal Research, https://law.counselstack.com/opinion/citifinancial-auto-inc-v-mikes-wrecker-service-inc-kanctapp-2009.