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General Electric Capital Auto Lease v. Violante

May 25, 2004

GENERAL ELECTRIC CAPITAL AUTO LEASE, PLAINTIFF-RESPONDENT,
v.
ALFONSO VIOLANTE, DEFENDANT, AND DAVID'S TOWING SERVICE AND DAVID BRIGATI, JR., T/A DAVID'S TOWING SERVICE, DEFENDANTS-APPELLANTS.



On certification to the Superior Court, Appellate Division, whose opinion is reported at 358 N.J. Super. 171 (2003).

SYLLABUS BY THE COURT

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

The issue before the Court is whether a lessee is a lessor's "representative" within the meaning of the Garage Keeper's Lien Act, N.J.S.A. 2A:44-20 to-31 (Act) when the lease agreement requires the lessee to service and repair the vehicle.

The matter before the Court comes on an appeal from a motion for summary judgment granted in favor of the lessor, General Electric Capital Auto Lease (GECAL). Accordingly, the Court accepts as true the evidence supporting the garage keeper, David's Towing Service and David Brigati, Jr. (collectively, David's) and accords it the benefit of all favorable inferences. The relevant facts are that in July 1997, Alfonso Violante (lessee) leased a 1994 Lexus GS300 from Bob Ciasulli Lexus, who then assigned the lease to the lessor, GECAL. As a result of the assignment, the vehicle's Certificate of Title lists GECAL as the vehicle's owner. Pursuant to the lease agreement, the lessee is required to have the vehicle serviced regularly as recommended by the manufacturer and as required by a warranty or service contract. The lessee is also required, among other things, to maintain the vehicle in good working order and condition.

On March 12, 1999, during the term of the lease, the car was vandalized. The lessee contacted David's and requested towing and repair services for the damaged vehicle. That day, David's towed the car to its garage. David's did not make any repairs and the car remained at the garage until August 1999. David's delayed making the repairs because the lessee said that his insurance company had to inspect the vehicle first. GECAL learned that the vehicle was being stored at David's in late April 1999, almost six weeks after David's had towed the vehicle. On or about April 28, 1999, GECAL requested access to the vehicle for inspection and removal. David's refused because GECAL would not pay the towing charges and accumulated storage fees since March 12, 1999.

In July 1999, GECA filed an action against Violante, the lessee, for breach of the lease contract and repossession of the vehicle and David's for replevin of the vehicle. After the complaint was filed and served, David's agreed to release the vehicle to GECAL in return for GECAL's promise to pay any judgment for towing and storage costs David's might be awarded against it. David's then filed a combined cross claim and counterclaim against the lessee and GECAL. David's claimed that, under New Jersey law, GECAL and the lessee were jointly and severally liable for the towing and storage bill of $6,550.83. David's also claimed that by requiring the lessee to maintain the vehicle in good repair, GECAL expressly or impliedly authorized the towing and storage services. GECAL claimed that the lessee was not its agent for the purpose of obligating it to third parties for repairs or storage charges. It also argued that David's failed to mitigate damages by taking reasonable steps to determine that it was the vehicle's owner.

In June 2000, the trial court entered a default order against the lessee and the matter proceeded with David's claims against GECAL. After hearing argument regarding whether the Act applied to the circumstances presented, the trial court granted summary judgment to GECAL, finding that the Act does not apply to leased vehicles. The Appellate Division affirmed, finding that David's did not have a valid lien against the vehicle because the lessee lacked the authority to incur storage and repair charges on GECAL's behalf. The panel found itself constrained by two cases, Stern v. Ward and Auto Security Co. v. Stewart., which it interpreted as holding that the lessee of an automobile was not the representative of the lessor for the purpose of incurring charges on the lien claim.

The Supreme Court granted certification.

HELD: The Garage Keeper's Lien Act entitles David's Towing to pursue it's lien claim against GECAL's vehicle for those services that the lessee was obligated to undertake pursuant to the lease agreement. In addition, on the facts presented here, N.J.S.A. 39:10A-14 does not provide David's with a remedy against GECAL.

1. According to the Act, a garage keeper's right to encumber a vehicle with a lien is limited to those services performed at the request or with the consent of the owner or the owner's representative. Ward and Auto Security Co. are distinguishable from the facts presented here. In those cases, the lease agreement expressly forbade the lessee from having the vehicle repaired without first getting the lessor's consent. Pennsylvania law at the time did not consider a lessee to be an owner's representative under such an agreement. However, neither of those cases held categorically that a lessee could never be considered a representative of the owner. The case here presents a very different lease agreement, one that expressly requires the lessee to repair and maintain the vehicle. (Pp. 9-13)

2. Because the Legislature did not define "consent" or "representative," the Court looks to their ordinary and wellunderstood meaning, which, for purposes of the Act, must be understood in light of the policy goals underpinning the statute. The primary purpose of the Act is to ensure that garage keepers receive payment for storage, maintenance, supplies, repairs, and other services furnished to a motor vehicle. The Act also affords owners with protection from unauthorized liens through the consent requirement. By contractually compelling the lessee to maintain the vehicle in good repair, an owner must be considered to have "consented" to repairs ordered by the lessee, who similarly must be considered the owner's "representative" under the statutory scheme. Because the lessor receives an undeniable benefit from the services of the garage keeper, denying the validity of the lien would unfairly prejudice the garage keeper and thereby undermine the Act's central purpose. (Pp. 13-15)

3. Applying the above principles to the facts here, the lessee had the authority to act as GECAL's representative, as the term is used in the Act, when he requested David's services. By conditioning the lessee's continued possession of the car on satisfaction of the repair and maintenance obligations contained in the lease agreement, GECAL empowered the lessee to act as the lessor's "representative" for the purpose of having a garage keeper make repairs or furnish other necessary services. David's is therefore entitled to subject GECAL's vehicle to a lien for the labor and services contemplated by the lease agreement. (Pp. 15-17)

4. The Act does not specifically require any notice to the lessor concerning the garage keeper's services on the vehicle. Whether notice should be required must be resolved by the Legislature. Until then, principles of fairness necessitate that the Court provide some guidance. Requiring the garage keeper to provide notice to the owner/lessor avoids potential injustice by insuring that only storage expenses directly related to the performance of repairs may serve as a basis for a lien under the Act. Although the time period should be established by statute, until that time, the trial court must make that determination on the facts of each case. In offering interim guidance, trial courts should employ a test of reasonableness. Ordinarily, notice to the lessor within seven days of the arrival at the repair shop will be reasonable. Under the seven-day notice approach, the garage keeper who provides notice within seven days will be entitled to a lien for both the cost of storage for those initial seven days and the cost of any storage that occurs after the lessor receives notice and an opportunity to reclaim the vehicle. (Pp. 17-20)

5. The primary purpose of N.J.S.A. 39:10A-14 is the facilitation of a garage keeper's disposal of an abandoned vehicle. The plain language of this statute indicates that the provision only applies to abandoned vehicles. The right to reclaim a vehicle on payment of services and repairs under this statute does not come into effect until the vehicle has been abandoned and the garage keeper has notified the title owner of its intent to junk or sell the vehicle. Therefore, N.J.S.A. 39:10A-14 does not provide a garage keeper with a broad right of recovery against a lessor for costs associated with storage and repairs requested by the lessee. Here, the vehicle was not abandoned within the meaning of the statute. (Pp. 20-25)

Judgment of the Appellate Division is AFFIRMED IN PART and REVERSED IN PART and the matter is REMANDED to the trial court for a determination of the amount of the lien, which includes a reasonable amount for the tow and storage.

JUSTICE VERNIERO, concurring and dissenting in part, concurs with the Court's opinion to the extent that it concludes that a lessee of an automobile is the lessor's representative for purposes of the Act. But he would end the analysis there. He dissents from the Courts imposition of notice and a timeline, as that should be left for the legislature to determine.

CHIEF JUSTICE PORITZ and JUSTICES LONG, LaVECCHIA, ALBIN and WALLACE join in JUSTICE ZAZZALI'S opinion. JUSTICE VERNIERO filed a separate opinion concurring in part and dissenting in part.

The opinion of the court was delivered by: Justice Zazzali

Argued February 2, 2004

In this case, a garage keeper who towed and stored a leased vehicle at the request of the lessee seeks to recover payment from the lessor for the value of those services by enforcing a lien against the vehicle pursuant to the Garage Keeper's Lien Act, N.J.S.A. 2A:44-20 to -31 (Act). That statute entitles a garage keeper to secure payment for storage, maintenance, repairs, and other services performed "at the request or with the consent of the owner or his representative" by imposing a lien on the motor vehicle serviced. N.J.S.A. 2A:44-21. The lessor challenged the garage keeper's right to a lien, arguing that the Act does not permit a lien for services furnished at the lessee's request because the lessee is neither the owner nor the owner's representative. The trial court dismissed the garage keeper's lien claim and the Appellate Division affirmed.

We must determine whether a lessee is a lessor's "representative" within the meaning of the Act when the lease agreement requires the lessee to service and repair the vehicle. We hold that by so obligating the lessee, the lessor confers upon the lessee the powers of a "representative" to provide the lessor's consent to services and repairs contemplated by the lease agreement. The garage keeper, therefore, can pursue its lien claim against the vehicle for those services that the lessee authorized as the owner's "representative."

We also address the garage keeper's claim that N.J.S.A. 39:10A-14 makes a lessor, as the vehicle's owner, liable for all charges related to storage and repairs. N.J.S.A. 39:10A-14 supplies owners with a mechanism for preventing a garage keeper from disposing of an abandoned motor vehicle. Because, in this appeal, the lessor's vehicle was not "abandoned" in the statutory sense, N.J.S.A. 39:10A-14 does not afford the garage keeper with a basis for recovery against the lessor.

I.

This case comes to us on appeal from a motion for summary judgment granted in favor of the lessor. Accordingly, we must accept as true the evidence supporting the garage keeper and accord that party the benefit of all favorable inferences. R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 536 (1995). Viewed in that light, the pertinent facts are as follows.

In July 1997, Alfonso Violante (lessee) leased a 1994 Lexus GS300 from Bob Ciasulli Lexus, who then assigned "all right, title, and interest in and to the Vehicle and [the] Lease" to respondent General Electric Capital Auto Lease (GECAL or lessor). As a result of the assignment, the vehicle's Certificate of Title lists GECAL as the vehicle's owner.

The lease agreement contains the following provisions:

USE AND CARE OF THE VEHICLE

1. USE AND RETURN OF THE VEHICLE

This Lease gives you*fn1 the right to use the Vehicle, according to the terms of this Lease, ...


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