The mechanic’s lien is a well-known legal device to ensure those making repairs on an owner’s property have a legal claim to the property if the owner doesn’t make the required payments for those repairs. However, Maryland provides a special type of mechanic’s lien known as a “garageman’s lien,” which defines specific rights afforded to those making repairs on a boat, plane, or motor vehicle. See Allstate Lien & Recovery Corp. v. Stansbury, 219 Md. App. 575, 577 (2014) (discussing the Md. Comm. Law Code Ann. § 16-202 and referring to a “garageman’s lien”).
Typically, a lien created under this statute functions just like a mechanic’s lien in other contexts. It grants someone who has performed repairs on, for example, a car, a security interest in that car if the owner has not paid for those repairs for 30 days or more. If the owner continues to owe this money once the lien attaches, the mechanic (the “lien holder”) can sell the car and recoup the money he or she is owed. (Note: to be legal, this sale must follow a very specific notice procedure as discussed more below) In the Allstate Lien case, for example, Maryland’s Appellate Court explained that a mechanic can recoup not only the money owed for the repairs but also “costs of process” fees when he sells the car, but that such processing/sale fees are not included in the lien itself if the owner redeems the vehicle prior to sale. See 219 Md. App. at 528-529.
What is less well-known, however, is that this statute also accounts for money owed simply for storing a vehicle, plane, or boat. The text of the statute has three main sections addressing circumstances in which “any person” who performs “a service to or materials” to a vehicle at the owner’s request and in that person’s custody “has a lien…for any charge incurred” — one for aircraft, one for boats, and one for motor vehicles. § 16-202(a),(b),(c). The allowable charges associated with actual work that can be covered by a lien differ somewhat for each of these vehicle types; all cover repair and servicing charges, as well as the costs of any parts or accessories sold, but “servicing and maintenance” is also included for boats and planes, while “inspection” costs are only included for planes.
Included in these provisions, however, are also charges related to “storage” for all three vehicle types as well as “parking, handling, or tiedown” for an aircraft, as well as “wet or dry wharfage” (a fee charged by a terminal for loading and unloading goods) for a boat. Id.
The proper use of garageman’s lien as it relates to these types of storage fees has only been fully explored in a few Maryland cases and only in the motor vehicle context. [1] These cases make clear that if a mechanic, service person, or vehicle storage business wants to cover the full gamut of costs envisioned by this statute, it must provide the correct notice to the property owner and properly publish the sale or auction of the vehicle. The Court of Appeals made a point to spell out the full requirements of someone trying to effectuate a garageman’s lien, through a public sale, in Friendly Fin. Corp. v. Orbit Chrysler Plymouth Dodge Truck, Inc., 378 Md. 337 (2003). The case involved repairs and storage of a vehicle and so steps #1 through #3 relate only to a lien for repairs, but as to the required steps to effectuate a storage lien, the court wrote:
(4) The garage stores the vehicle, creating a lien in favor of the garage for storage costs. § 16-202(c)(1)(ii).
(5) The garage retains possession of the vehicle until either the charges are paid or the lien is otherwise discharged. § 16-203(a).
(6) The garage, within 30 days of the creation of the lien, sends notice of the lien to all holders of perfected security interests. § 16-203(b)(1)(i).
(7) If the bill remains unpaid for 30 days, the garage, may initiate a public sale of the vehicle. § 16-207(a).
(8) The garage sends notice, at least 10 days prior to sale, to the owner, all holders of perfected security interests, and the Motor Vehicle Administration. § 16-207(b)(2).
(9) The garage publishes notice once a week for the two weeks immediately preceding the sale in one or more newspapers of general circulation in the county where the sale is to be held. § 16-207(b)(1).
(10) The garage sells the vehicle. § 16-207.
Id. at 345-46 (subsequently detailing how the proceeds of the sale are applied under § 16-207(e)(1). The big-ticket items for business owners hoping to sell a vehicle in this way are: #6 required notice of the lien to the vehicle owner and anyone with a perfected security interest in it (i.e., lender); #8 required notice of the public sale to all such interested parties and the MVA, and #9 the required publication of the public sale in one or more newspapers “of general circulation in the county [of sale],” once a week for two weeks prior to the sale. As was the case in Friendly Fin. Corp., these provisions allow a garage that does repairs to a vehicle to effectuate a lien on the cost of repairs and, once those costs go unpaid, also pursue a storage lien for costs of storage as well. [2]
But, and importantly, they also allow a business to place liens on vehicles they are simply storing for an individual who stops paying for that storage, and a mechanism to potentially place this kind of storage cost lien on a car that has been repaired and paid for but which the owner has left sitting on that business’s lot (presuming that the owner is on notice that they will be charged storage fees for any vehicle they don’t promptly pick up).
As Friendly Fin. Corp. explained, however, failure to give proper notice to both the lienor and those with perfected security interests in the vehicle under § 16-203(b) disallows recovery of storage fees under § 16-203(c)(2)(ii). Id. at 347 (citing § 16-207(e)(3)(ii) as laying out the “penalty for this omission”). It should be noted, however, that penalty provision only disallows “storage charges incurred or imposed by the lienor,” thereby arguably leaving any charges for third-party storage fees covered by the lien, albeit capped at $300. See n. 2 supra.
NOTES
[1] The two seminal Maryland cases on this issue have subsequently been cited by a few federal cases in the District of Maryland, but there is no case law around this statute as it relates to airplanes and boats at all, with the sole exception of Zimmerman Marine v. W/V Rotten Kids, 2017 U.S. Dist. LEXIS 90359 (D. Md. June 12, 2017). There, the court refused to grant summary judgment to either side as there remained questions as to which line-item repairs to a boat had already been paid for and released from the lien in question and whether the contract between parties properly granted possession of the boat to the repairer during the repairs.
[2] While the statute provides for storage fees capped at $5 a day, not to exceed $300, for any storage fees associated with a “third party holder [of the vehicle],” there is no such cap for a business that directly contracts with customers for the storage of vehicles (whether related to any repair services or not). See § 16-207(f)(1).
