How do I get a mechanic's lien for a customer who has not paid their service bill?
Full Question:
Answer:
A lien is a claim to property for the payment of a debt, typically one connected to the property. It is the right to retain the lawful possession of the property of another until the owner fulfills a legal duty to the person holding the property, such as the payment of lawful charges for work done on the property. The right of lien generally arises by operation of law, but in some cases it is created by express contract. There are two kinds of liens; particular and general. When a person claims a right to retain property, due to money or labor invested in that property, it is a particular lien. Liens may arise by express contract; from implied contract, as from general or particular usage of trade; or by legal relation between the parties, such as created with common carriers and inn keepers. In certain circumstances, the lien holder may foreclose on the property if the debt is not paid in full.
To create a valid lien, it is essential that the party claiming a lien should have the absolute property or ownership of the thing or, at least, a right to vest it; that the party claiming the lien should have an actual or constructive, possession, with the assent of the party against whom the claim is made; that the lien should arise upon an agreement, express or implied and not be for a limited or specific purpose that contradicts the express terms or the clear, intent of the contract. In certain circumstances, the lien holder may foreclose on the property if the debt is not paid in full. Liens can generally be removed by the payment of the amount owed. This payment can occur at any time up to and including the stage at which the closing documents for the sale of the property are signed.
There are several types of liens, all of which could cloud the title and prevent the seller from conveying marketable title to the buyer. A judgment lien is created when a court grants a creditor an interest in the debtor's property, based upon a court judgment. A judgment lien can be filed if an actual judgment in a lawsuit is obtained from a court. Such cases include failure to pay a debt, including credit cards, bank loans, or deficiency judgments on repossessed vehicles. In some circumstances, judgments can be enforced by sale of property until the amount due is satisfied. A plaintiff who obtains a monetary judgment is termed a "judgment creditor." The defendant becomes a "judgment debtor." secure payment of the claim to the injured party. After the judgment creditor places a lien upon the attached property, the next step in the collection process is to conduct a sale of the attached property to satisfy the judgment debt. Laws regarding judgment liens vary by jurisdiction, so local laws should be consulted for specific requirements.
The following are North Carolina statutes:
§ 44A-1. Definitions.
As used in this Article:
(1) "Legal possessor" means
a. Any person entrusted with possession of personal property by an
owner thereof, or
b. Any person in possession of personal property and entitled thereto
by operation of law.
(2) "Lienor" means any person entitled to a lien under this Article.
(2a) "Motor Vehicle" has the meaning provided in G.S. 20-4.01.
(3) "Owner" means
a. Any person having legal title to the property, or
b. A lessee of the person having legal title, or
c. A debtor entrusted with possession of the property by a secured
party, or
d. A secured party entitled to possession, or
e. Any person entrusted with possession of the property by his employer
or principal who is an owner under any of the above.
(4) "Secured party" means a person holding a security interest.
(5) "Security interest" means any interest in personal property which
interest is subject to the provisions of Article 9 of the Uniform
Commercial Code, or any other interest intended to create security in
real or personal property.
(6) "Vessel" has the meaning provided in G.S. 75A-2.
§ 44A-2. Persons entitled to lien on personal property.
(a) Any person who tows, alters, repairs, stores, services, treats, or
improves personal property other than a motor vehicle or an aircraft in
the ordinary course of his business pursuant to an express or implied
contract with an owner or legal possessor of the personal property has a
lien upon the property. The amount of the lien shall be the lesser of
(1) The reasonable charges for the services and materials; or
(2) The contract price; or
(3) One hundred dollars ($100.00) if the lienor has dealt with a legal
possessor who is not an owner.
This lien shall have priority over perfected and unperfected security
interests.
(b) Any person engaged in the business of operating a hotel, motel, or
boardinghouse has a lien upon all baggage, vehicles and other personal
property brought upon his premises by a guest or boarder who is an owner
thereof to the extent of reasonable charges for the room, accommodations
and other items or services furnished at the request of the guest or
boarder. This lien shall not have priority over any security interest in
the property which is perfected at the time the guest or boarder brings
the property to said hotel, motel or boardinghouse.
(c) Any person engaged in the business of boarding animals has a lien
on the animals boarded for reasonable charges for such boarding which are
contracted for with an owner or legal possessor of the animal. This lien
shall have priority over perfected and unperfected security interests.
(d) Any person who repairs, services, tows, or stores motor vehicles in
the ordinary course of the person's business pursuant to an express or
implied contract with an owner or legal possessor of the motor vehicle,
except for a motor vehicle seized pursuant to G.S. 20-28.3, has a lien
upon the motor vehicle for reasonable charges for such repairs,
servicing, towing, storing, or for the rental of one or more substitute
vehicles provided during the repair, servicing, or storage. This lien
shall have priority over perfected and unperfected security interests.
Payment for towing and storing a motor vehicle seized pursuant to G.S.
20-28.3 shall be as provided for in G.S. 20-28.2 through G.S. 20-28.5.
(e) Any lessor of nonresidential demised premises has a lien on all
furniture, furnishings, trade fixtures, equipment and other personal
property to which the tenant has legal title and which remains on the
demised premises if (i) the tenant has vacated the premises for 21 or
more days after the paid rental period has expired, and (ii) the lessor
has a lawful claim for damages against the tenant. If the tenant has
vacated the premises for 21 or more days after the expiration of the paid
rental period, or if the lessor has received a judgment for possession of
the premises which is executable and the tenant has vacated the
premises, then all property remaining on the premises may be removed and
placed in storage. If the total value of all property remaining on the
premises is less than one hundred dollars ($100.00), then it shall be
deemed abandoned five days after the tenant has vacated the premises, and
the lessor may remove it and may donate it to any charitable institution
or organization. Provided, the lessor shall not have a lien if there is
an agreement between the lessor or his agent and the tenant that the
lessor shall not have a lien. This lien shall be for the amount of any
rents which were due the lessor at the time the tenant vacated the
premises and for the time, up to 60 days, from the vacating of the
premises to the date of sale; and for any sums necessary to repair damages
to the premises caused by the tenant, normal wear and tear excepted; and
for reasonable costs and expenses of sale. The lien created by this
subsection shall be enforced by sale at public sale pursuant to the
provisions of G.S. 44A-4 (e).
This lien shall not have priority over any security interest in the
property which is perfected at the time the lessor acquires this lien.
(e1) This Article shall not apply to liens created by storage of
personal property at a self-service storage facility.
(e2) Any lessor of a space for a manufactured home as defined in G.S.
143-143.9 (6) has a lien on all furniture, furnishings, and other personal
property including the manufactured home titled in the name of the tenant
if (i) the manufactured home remains on the demised premises 21 days
after the lessor is placed in lawful possession by writ of possession and
(ii) the lessor has a lawful claim for damages against the tenant. If the
lessor has received a judgment for possession of the premises which has
been executed, then all property remaining on the premises may be removed
and placed in storage. Prior to the expiration of the 21-day period, the
landlord shall release possession of the personal property and
manufactured home to the tenant during regular business hours or at a
time mutually agreed upon. This lien shall be for the amount of any rents
which were due the lessor at the time the tenant vacated the premises and
for the time, up to 60 days, from the vacating of the premises to the
date of sale; and for any sums necessary to repair damages to the
premises caused by the tenant, normal wear and tear excepted; and for
reasonable costs and expenses of the sale. The lien created by this
subsection shall be enforced by public sale under G.S. 44A-4 (e). The
landlord may begin the advertisement for sale process immediately upon
execution of the writ of possession by the sheriff, but may not conduct
the sale until the lien has attached. This lien shall not have any
priority over any security interest in the property that is perfected at
the time the lessor acquires this lien. The lessor shall not have a lien
under this subsection if there is an agreement between the lessor or the
lessor's agent and the tenant that the lessor shall not have a lien.
(f) Any person who improves any textile goods in the ordinary course of
his business pursuant to an express or implied contract with the owner or
legal possessor of such goods shall have a lien upon all goods of such
owner or possessor in his possession for improvement. The amount of such
lien shall be for the entire unpaid contracted charges owed such person
for improvement of said goods including any amount owed for improvement
of goods, the possession of which may have been relinquished, and such
lien shall have priority over perfected and unperfected security
interests. "Goods" as used herein includes any textile goods, yarns or
products of natural or man-made fibers or combination thereof. "Improve"
as used herein shall be construed to include processing, fabricating or
treating by throwing, spinning, knitting, dyeing, finishing, fabricating
or otherwise.
(g) Any person who fabricates, casts, or otherwise makes a mold or who
uses a mold to manufacture, assemble, or otherwise make a product
pursuant to an express or implied contract with the owner of such mold
shall have a lien upon the mold. For a lien to arise under this
subsection, there must exist written evidence that the parties understood
that a lien could be applied against the mold, with the evidence being in
the form either of a written contract or a separate written statement
provided by the potential holder of the lien under this subsection to the
owner of the mold prior to the fabrication or use of the mold. The
written contract or separate written statement must describe generally
the amount of the potential lien as set forth in this subsection. The
amount of the lien under this subsection shall equal the total of (i) any
unpaid contracted charges due from the owner of the mold for making the
mold, plus (ii) any unpaid contracted charges for all products made with
the mold. The lien under this subsection shall not have priority over any
security interest in the mold which is perfected at the time the person
acquires this lien. As used in this subsection, the word "mold" shall
include a mold, die, form, or pattern.
§ 44A-3. When lien arises and terminates.
Liens conferred under this Article arise only when the lienor acquires
possession of the property and terminate and become unenforceable when the
lienor voluntarily relinquishes the possession of the property upon which
a lien might be claimed, or when an owner, his agent, a legal possessor
or any other person having a security or other interest in the property
tenders prior to sale the amount secured by the lien plus reasonable
storage, boarding and other expenses incurred by the lienor. The
reacquisition of possession of property voluntarily relinquished shall
not reinstate the lien. Liens conferred under this Article do not
terminate when the lienor involuntarily relinquishes the possession of
the property.
§ 44A-4. Enforcement of lien by sale.
(a) Enforcement by Sale. — If the charges for which the lien is claimed
under this Article remain unpaid or unsatisfied for 30 days or, in the
case of towing and storage charges on a motor vehicle, 10 days following
the maturity of the obligation to pay any such charges, the lienor may
enforce the lien by public or private sale as provided in this
section. The lienor may bring an
action on the debt in any court of competent
jurisdiction at any time following maturity of the obligation. Failure of
the lienor to bring such action within a 180-day period following the
commencement of storage shall constitute a waiver of any right to collect
storage charges which accrue after such period. Provided that when
property is placed in storage pursuant to an express contract of storage,
the lien shall continue and the lienor may bring an action to collect
storage charges and enforce his lien at any time within 120 days
following default on the obligation to pay storage charges.
The owner or person with whom the lienor dealt may at any time
following the maturity of the obligation bring an action in any court of
competent jurisdiction as by law provided. If in any such action the
owner or other party requests immediate possession of the property and
pays the amount of the lien asserted into the clerk of the court in which
such action is pending, the clerk shall issue an order to the lienor to
relinquish possession of the property to the owner or other party. The
request for immediate possession may be made in the complaint, which
shall also set forth the amount of the asserted lien and the portion
thereof which is not in dispute, if any. If within three days after
service of the summons and complaint, as the number of days is computed
in G.S. 1A-1, Rule 6, the lienor does not file a contrary statement of
the amount of the lien at the time of the filing of the complaint, the
amount set forth in the complaint shall be deemed to be the amount of the
asserted lien. The clerk may at any time disburse to the lienor that
portion of the cash bond, which the plaintiff says in his complaint is not
in dispute, upon application of the lienor. The magistrate or judge shall
direct appropriate disbursement of the disputed or undisbursed portion of
the bond in the judgment of the court. In the event an action by the
owner pursuant to this section is heard in district or superior court,
the substantially prevailing party in such court may be awarded a
reasonable attorney's fee in the discretion of the judge.
(b) Notice and Hearings. —
(1) If the property upon which the lien is claimed is a motor vehicle
that is required to be registered, the lienor following the expiration of
the relevant time period provided by subsection (a) shall give notice to
the Division of Motor Vehicles that a lien is asserted and sale is
proposed and shall remit to the Division a fee of ten dollars ($10.00).
The Division of Motor Vehicles shall issue notice by registered or
certified mail, return receipt requested, to the person having legal
title to the property, if reasonably ascertainable, to the person with
whom the lienor dealt if different, and to each secured party and other
person claiming an interest in the property who is actually known to the
Division or who can be reasonably ascertained. The notice shall state
that a lien has been asserted against specific property and shall
identify the lienor, the date that the lien arose, the general nature of
the services performed and materials used or sold for which the lien is
asserted, the amount of the lien, and that the lienor intends to sell the
property in satisfaction of the lien. The notice shall inform the
recipient that the recipient has the right to a judicial hearing at which
time a determination will be made as to the validity of the lien prior to
a sale taking place. The notice shall further state that the recipient
has a period of 10 days from the date of receipt in which to notify the
Division by registered or certified mail, return receipt requested, that
a hearing is desired and that if the recipient wishes to contest the sale
of his property pursuant to such lien, the recipient should notify the
Division that a hearing is desired. The notice shall state the required
information in simplified terms and shall contain a form whereby the
recipient may notify the Division that a hearing is desired by the return
of such form to the Division. The Division shall notify the lienor
whether such notice is timely received by the Division. In lieu of the
notice by the lienor to the Division and the notices issued by the
Division described above, the lienor may issue notice on a form approved
by the Division pursuant to the notice requirements above.
If notice is issued by the lienor, the recipient shall return the form
requesting a hearing to the lienor, and not the Division, within 10 days
from the date the recipient receives the notice if a judicial hearing is
requested. If the registered or certified mail notice has been returned
as undeliverable and the notice of a right to a judicial hearing has been
given to the owner of the motor vehicle in accordance with G.S. 20-28.4,
no further notice is required. Failure of the recipient to notify the
Division or lienor, as specified in the notice, within 10 days of the
receipt of such notice that a hearing is desired shall be deemed a waiver
of the right to a hearing prior to the sale of the property against which
the lien is asserted, and the lienor may proceed to enforce the lien by
public or private sale as provided in this section and the Division shall
transfer title to the property pursuant to such sale. If the Division or
lienor, as specified in the notice, is notified within the 10-day period
provided above that a hearing is desired prior to sale, the lien may be
enforced by sale as provided in this section and the Division will
transfer title only pursuant to the order of a court of competent
jurisdiction.
If the registered or certified mail notice has been returned as
undeliverable, or if the name of the person having legal title to the
vehicle cannot reasonably be ascertained and the fair market value of the
vehicle is less than eight hundred dollars ($800.00), the lienor may
institute a special proceeding in the county where the vehicle is being
held, for authorization to sell that vehicle. Market value shall be
determined by the schedule of values adopted by the Commissioner under
G.S. 105-187.3.
In such a proceeding a lienor may include more than one vehicle, but
the proceeds of the sale of each shall be subject only to valid claims
against that vehicle, and any excess proceeds of the sale shall be paid
immediately to the Treasurer for disposition pursuant to Chapter 116B of
the General Statutes.
The application to the clerk in such a special proceeding shall contain
the notice of sale information set out in subsection (f) hereof. If the
application is in proper form the clerk shall enter an order authorizing
the sale on a date not less than 14 days therefrom, and the lienor shall
cause the application and order to be sent immediately by first-class
mail pursuant to G.S. 1A-1, Rule 5, to each person to whom notice was
mailed pursuant to this subsection. Following the authorized sale the
lienor shall file with the clerk a report in the form of an affidavit,
stating that the lienor has complied with the public or private sale
provisions of G.S. 44A-4, the name, address, and bid of the high bidder or
person buying at a private sale, and a statement of the disposition of the
sale proceeds. The clerk then shall enter an order directing the
Division to transfer title accordingly.
If prior to the sale the owner or legal possessor contests the sale or
lien in a writing filed with the clerk, the proceeding shall be handled
in accordance with G.S. 1-301.2.
(2) If the property upon which the lien is claimed is other than a
motor vehicle required to be registered, the lienor following the
expiration of the 30-day period provided by subsection (a) shall issue
notice to the person having legal title to the property, if reasonably
ascertainable, and to the person with whom the lienor dealt if different
by registered or certified mail, return receipt requested. Such notice
shall state that a lien has been asserted against specific property and
shall identify the lienor, the date that the lien arose, the general
nature of the services performed and materials used or sold for which the
lien is asserted, the amount of the lien, and that the lienor intends to
sell the property in satisfaction of the lien. The notice shall inform
the recipient that the recipient has the right to a judicial hearing at
which time a determination will be made as to the validity of the lien
prior to a sale taking place. The notice shall further state that the
recipient has a period of 10 days from the date of receipt in which to
notify the lienor by registered or certified mail, return receipt
requested, that a hearing is desired and that if the recipient wishes to
contest the sale of his property pursuant to such lien, the recipient
should notify the lienor that a hearing is desired. The notice shall
state the required information in simplified terms and shall contain a
form whereby the recipient may notify the lienor that a hearing is
desired by the return of such form to the lienor. Failure of the
recipient to notify the lienor within 10 days of the receipt of such
notice that a hearing is desired shall be deemed a waiver of the right to
a hearing prior to sale of the property against which the lien is
asserted and the lienor may proceed to enforce the lien by public or
private sale as provided in this section. If the lienor is notified within
the 10-day period provided above that a hearing is desired prior to
sale, the lien may be enforced by sale as provided in this section only
pursuant to the order of a court of competent jurisdiction.
(c) Private Sale. — Sale by private sale may be made in any manner that
is commercially reasonable. If the property upon which the lien is
claimed is a motor vehicle, the sale may not be made until notice is
given to the Commissioner of Motor Vehicles pursuant to G.S. 20-114 (c).
Not less than 30 days prior to the date of the proposed private sale, the
lienor shall cause notice to be mailed, as provided in subsection (f)
hereof, to the person having legal title to the property, if reasonably
ascertainable, to the person with whom the lienor dealt if different, and
to each secured party or other person claiming an interest in the
property who is actually known to the lienor or can be reasonably
ascertained. Notices provided pursuant to subsection (b) hereof shall be
sufficient for these purposes if such notices contain the information
required by subsection (f) hereof. The lienor shall not purchase,
directly or indirectly, the property at private sale and such a sale to
the lienor shall be voidable.
(d) Request for Public Sale. — If an owner, the person with whom the
lienor dealt, any secured party, or other person claiming an interest in
the property notifies the lienor prior to the date upon or after which
the sale by private sale is proposed to be made, that public sale is
requested, sale by private sale shall not be made. After request for
public sale is received, notice of public sale must be given as if no
notice of sale by private sale had been given.
(e) Public Sale. —
(1) Not less than 20 days prior to sale by public sale the lienor:
a. Shall notify the Commissioner of Motor Vehicles as provided in G.S.
20-114 (c) if the property upon which the lien is claimed is a motor
vehicle; and
a1. Shall cause notice to be mailed to the person having legal title to
the property if reasonably ascertainable, to the person with whom the
lienor dealt if different, and to each secured party or other person
claiming an interest in the property who is actually known to the lienor
or can be reasonably ascertained, provided that notices provided pursuant
to subsection (b) hereof shall be sufficient for these purposes if such
notices contain the information required by subsection (f) hereof; and
b. Shall advertise the sale by posting a copy of the notice of sale at
the courthouse door in the county where the sale is to be held;and shall publish notice of sale once a week for two consecutive weeks in
a newspaper of general circulation in the same county, the date of the
last publication being not less than five days prior to the sale. The
notice of sale need not be published if the vehicle has a market value of
less than three thousand five hundred dollars ($3,500), as determined by
the schedule of values adopted by the Commissioner under G.S. 105-187.3.
(2) A public sale must be held on a day other than Sunday and between
the hours of 10:00 A.M. and 4:00 P.M.:
a. In any county where any part of the contract giving rise to the lien
was performed, or
b. In the county where the obligation secured by the lien was
contracted for.
(3) A lienor may purchase at public sale.
(f) Notice of Sale. — The notice of sale shall include:
(1) The name and address of the lienor;
(2) The name of the person having legal title to the property if such
person can be reasonably ascertained and the name of the person with whom
the lienor dealt;
(3) A description of the property;
(4) The amount due for which the lien is claimed;
(5) The place of the sale;
(6) If a private sale the date upon or after which the sale is proposed
to be made, or if a public sale the date and hour when the sale is to be
held.
(g) Damages for Noncompliance. — If the lienor fails to comply
substantially with any of the provisions of this section, the lienor
shall be liable to the person having legal title to the property or any
other party injured by such noncompliance in the sum of one hundred
dollars ($100.00), together with a reasonable attorney's fee as awarded
by the court. Damages provided by this section shall be in addition to
actual damages to which any party is otherwise entitled.
§ 44A-5. Proceeds of sale.
The proceeds of the sale shall be applied as follows:
(1) Payment of reasonable expenses incurred in connection with the
sale. Expenses of sale include but are not limited to reasonable storage
and boarding expenses after giving notice of sale.
(2) Payment of the obligation secured by the lien.
(3) Any surplus shall be paid to the person entitled thereto; but when
such person cannot be found, the surplus shall be paid to the clerk of
superior court of the county in which the sale took place, to be held by
the clerk for the person entitled thereto.
§ 44A-6. Title of purchaser.
A purchaser for value at a properly conducted sale, and a purchaser for
value without constructive notice of a defect in the sale, whether or not
the purchaser is the lienor or an agent of the lienor, acquires title to
the property free of any interests over which the lienor was entitled to
priority.
§ 44A-6.1. Action to regain possession of a motor vehicle or vessel.
(a) When the lienor involuntarily relinquishes possession of the
property and the property upon which the lien is claimed is a motor
vehicle or vessel, the lienor may institute an action to regain
possession of the motor vehicle or vessel in small claims court any time
following the lienor's involuntary loss of possession and following
maturity of the obligation to pay charges. The lienor shall serve a copy
of the summons and the complaint pursuant to G.S. 1A-1, Rule 4, on each
secured party claiming an interest in the vehicle or vessel. For purposes
of this section, involuntary relinquishment of possession includes only
those situations where the owner or other party takes possession of the
motor vehicle or vessel without the lienor's permission or without
judicial process. If in the court action the owner or other party retains
possession of the motor vehicle or vessel, the owner or other party shall
pay the amount of the lien asserted as bond into the clerk of the court in
which the action is pending.
If within three days after service of the summons and complaint, as the
number of days is computed in G.S. 1A-1, Rule 6, neither the defendant
nor a secured party claiming an interest in the vehicle or vessel files a
contrary statement of the amount of the lien at the time of the filing of
the complaint, the amount set forth in the complaint shall be deemed to
be the amount of the asserted lien. The clerk may at any time disburse to
the lienor that portion of the cash bond which is not in dispute, upon
application of the lienor. The magistrate shall:
(1) Direct appropriate disbursement of the disputed or undisbursed
portion of the bond; and
(2) Direct appropriate possession of the motor vehicle or vessel if, in
the judgment of the court, the plaintiff has a valid right to a lien.
(b) Either party to an action pursuant to subsection (a) of this
section may appeal to district court for a trial de novo.
§ 44-38. Claim of lien to be filed; place of filing.
All claims shall be filed in the office of the clerk of superior court
in the county where the labor has been performed or the materials
furnished, specifying in detail the materials furnished or the labor
performed, and the time thereof. If the parties interested make a special
contract for such labor performed, or if such material and labor are
specified in writing, in such cases it shall be decided agreeably to the
terms of the contract, provided the terms of such contract do not affect
the lien for such labor performed or materials furnished.
§ 44-48. Discharge of liens.
All liens created by this Chapter may be discharged as follows:
(1) By filing with the clerk a receipt or acknowledgment, signed by the
claimant, that the lien has been paid or discharged.
(2) By depositing with the clerk money equal to the amount of the
claim, which money shall be held by said officer for the benefit of the
claimant.
(3) By an entry in the lien docket that the action on the part of the
claimant to enforce the lien has been dismissed, or a judgment rendered
against the claimant in such action.
(4) By a failure of the claimant to commence an action for the
enforcement of the lien within six months from the notice of lien filed.