520 P.2d 961, 113 Cal.Rptr. 145
Docket No. Sac. 7959.Supreme Court of California. In Bank.
April 10, 1974.
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Robert Chartoff and Alan F. Neckritz for Petitioners.
Evelle J. Younger, Attorney General, and Frank A. Iwama, Deputy Attorney General, for Respondents.
Wallace O’Connell and Partridge, O’Connell Partridge for Real Parties in Interest.
Sheppard, Mullin, Richter Hampton, George R. Richter, Jr., and William M. Burke as Amici Curiae on behalf of Respondents and Real Parties in Interest.
CLARK, J. —
Petitioners challenge the constitutionality of California’s garageman’s labor and materials lien provided for by Civil Code sections 3068, subdivision (a), 3071, 3072,
3073, and 3074. These provisions, in conjunction
with section 5909, subdivision (a), of the Vehicle Code,
authorize an unpaid garageman to retain and sell vehicles to which he has made repairs and require the California Department of Motor Vehicles (department), upon proof of the lien sale and notice to the owner, to transfer registration of the car to a purchaser without prior hearing.
Petitioners contend the state’s failure to provide the owner a hearing either at the time of the seizure of the vehicle or prior to the lien sale and title transfer violates the requirements of due process guaranteed by the Fourteenth Amendment to the United States Constitution and article I, section 13, of the California Constitution. Petitioners ask us to hold the garageman’s lien statute invalid and issue a writ of mandamus ordering the department and other respondents not to participate in the garageman’s
lien sales or to transfer or record the transfer of the interest of any owner of a vehicle seized and sold pursuant to the code sections in question.
Petitioner Adams sues as an individual and, pursuant to section 382 of the Code of Civil Procedure, as representative of all persons similarly situated. Following repair of her car, dispute arose between petitioner Adams and real party in interest Stellato over the amount of the bill. When petitioner refused to pay for the repair, Stellato retained possession of the car, later selling it pursuant to the statutory scheme. The buyer, real party in interest Moseley, then filed an “Application for Registration of Vehicle Sold at Lien Sale” with the department. Petitioner Adams now seeks to restrain respondents’ recording of title transfer both for her car and for any other car purchased through lien sale.
Petitioner Pineda joins in this action as a taxpayer challenging the constitutionality of the expenditure of public funds in enforcement of the garageman’s lien law. (See Code Civ. Proc., § 526a; Blair v. Pitchess (1971) 5 Cal.3d 258, 268 [96 Cal.Rptr. 42, 486 P.2d 1242, 45 A.L.R.3d 1206].)
General Principles (1) In a series of cases decided since 1969, the United States Supreme Court and this court have held procedural due process requires the giving of notice and an opportunity for hearing before the state, in aid of a creditor, may deprive a debtor of any significant property interest, including temporary use and enjoyment. Exceptions to this principle are justifiable only in “extraordinary circumstances.” (Fuentes v. Shevin
(1972) 407 U.S. 67, 90 [32 L.Ed.2d 556, 575, 92 S.Ct. 1983].)
In applying this principle, courts have invalidated statutes providing for wage garnishment (Sniadach v. Family Finance Corp. (1969) 395 U.S. 337 [23 L.Ed.2d 349, 89 S.Ct. 1820] McCallop v. Carberry (1970) 1 Cal.3d 903 [83 Cal.Rptr. 666, 464 P.2d 122]), claim and delivery (Blair v. Pitchess, supra, 5 Cal.3d 258), prejudgment attachment of checking accounts (Randone v. Appellate Department (1971) 5 Cal.3d 536
[96 Cal.Rptr. 709, 488 P.2d 13]), and replevin of household goods (Fuentes v. Shevin, supra, 407 U.S. 67). Of course, the principle established by the above-cited cases applies only when a taking involves significant action by the state. (Evans v Newton (1966) 382 U.S. 296, 299-301 [15 L.Ed.2d 373, 377-378, 86 S.Ct. 486].)
In the cited cases state action was clear since the seizure was effected by state officers or court process. (2) But such direct involvement is not necessary to a determination of state action, for private conduct may become so entwined with governmental action as to become subject to the constitutional limitations placed on state action by the Fourteenth Amendment to the United States Constitution and article I, section 13, of the California Constitution. (Adickes v. Kress Co. (1970)398 U.S. 144 [26 L.Ed.2d 142, 90 S.Ct. 1598]; Reitman v. Mulkey
(1967) 387 U.S. 369 [18 L.Ed.2d 830, 87 S.Ct. 1627]; Evans v Newton, supra, 382 U.S. 296; Burton v. Wilmington Pkg. Auth. (1961) 365 U.S. 715, 722 [6 L.Ed.2d 45, 50, 81 S.Ct. 856].)
The vehicle service lien and the procedures for its enforcement are created and governed by statute. The procedure is administered by the Department of Motor Vehicles, and transfer of title to the lien sale purchaser is ultimately recorded by the department. Thus, although a private individual retains and sells the car, his power to do so arises from and is subject to specific provisions of state statute and his exercise of that power is supervised by the department. In this case, the department sent a notice to petitioner Adams and sent forms to Stellato describing the procedures
for conducting the sale and for recording the sale. The department supplied Moseley an “Application for Registration of Vehicle Sold at Lien Sale” and an additional form requesting a statement of the relevant facts. In the absence of petitioners’ challenge the department would ultimately have recognized and recorded transfer of title from Adams to Moseley.
Respondents and Stellato argue that the retention and sale of petitioner Adams’s car were authorized by contract and were effected by a private individual without the aid of court process or personnel. As already noted, however (see fn. 9, ante), the repair contract did not by its terms provide for seizure or sale, so that Stellato’s actions, if authorized at all, were permitted only by statute. Secondly, although the seizure and sale were effected by Stellato alone without the aid of state personnel, that fact is not dispositive, as the cases cited above make clear. (See, e.g., Burton v. Wilmington Pkg. Auth., supra, 365 U.S. 715.) Moreover, the state’s role is not merely “ministerial” (as Stellato characterizes it) since the state through the department actively supervised preparations for the sale. Even more importantly, by statutes authorizing and empowering Stellato to sell the car and requiring the department to recognize and record transfer of title, the state delegated to Stellato the traditional governmental function of lien enforcement and enabled him to pass good title to an automobile he did not own. (See Reitman v. Mulkey, supra, 387 U.S. 369; Evans v. Newton, supra, 382 U.S. 296.)
Respondent relies heavily on Moose Lodge No. 107 v. Irvis
(1972) 407 U.S. 163 [32 L.Ed.2d 627, 92 S.Ct. 1965], where the United States Supreme Court held that the issuance of a liquor license to a private club did not “sufficiently implicate the State in the discriminatory policies of Moose Lodge so as to make the latter `state action.’ . . .” Irvis is distinguishable, however, since there the state simply licensed the lodge to sell liquor and was not involved in and in no way encouraged the acts of discrimination complained of. Here, in contrast, the lien is expressly provided for by statute, its execution by sale is authorized by statute, and a state agency oversees the sale and records the transfer of title.
(3) We conclude, therefore, that the state’s involvement in the imposition and enforcement of the garageman’s liens constitutes state action.
Existence of Extraordinary Circumstances
As noted above, summary procedures may be justified in certain “extraordinary circumstances.” (4) The garageman’s lien law, however, is not limited to such circumstances, nor does respondent appear to contend otherwise. In Shevin, supra, 407 U.S. 67, 91-92 [32 L.Ed.2d 556, 576-577], the court gave examples of summary procedures which may satisfy the requirements of due process: “. . . the Court has allowed summary seizure of property to collect the internal revenue of the United States, to meet the needs of a national war effort, to protect against the economic disaster of a bank failure, and to protect the public from misbranded drugs and contaminated food.” (Fns. omitted.) The garageman’s lien law applies broadly to labor and materials furnished in the repair of all motor vehicles and is not limited to situations comparable to those enumerated in Shevin.
Compliance with Due Process Standards (a) Issues
We must next determine whether the garageman’s lien law violates due process. It could do so in two respects.
First, the lien law permits interim retention of the automobile without prior notice or hearing, pending payment or sale of the car.
Secondly, the lien law permits the garageman to permanently deprive the owner of his automobile, and it is open to question whether there is adequate opportunity for prior hearing.
(b) Interim Retention (5) We do not believe interim retention of the automobile violates the principle of Sniadach.
In none of the cases bearing on temporary deprivation of use and enjoyment of property did the creditor have a possessory interest of the same character as a garageman’s interest in a car left for him to repair with his own labor and materials. Usually the claim of an attaching or garnisheeing creditor is a general claim unrelated to the specific property seized. And while the claim of a conditional vendor or chattel mortgagee arises out of a transaction involving the seized chattel itself, the interest of such creditor in the seized chattel is ordinarily purely pecuniary; the creditor has not, subsequent to the acquisition of the chattel by the vendee or
mortgagee, mixed his own labor with it, nor, more significantly, has he added to it materials to which he originally had a right of possession.
Furthermore, even assuming that the possessor of a garageman’s lien does not have an interest in any sense superior to that of a conditional vendor or chattel mortgagee, or even to that of an attaching creditor, the above-cited cases are distinguishable on the ground that creditors there sought assistance of a state officer or proceeded under color of state law to alter the status quo either by dispossessing debtors or by diverting rights or benefits owed the debtors by third parties. Here, however, the creditor is in rightful possession at the time he asserts his lien. To strike down the garageman’s possessory lien would be to alter the status quo in favor of an opposing claimant; the garageman would be deprived of his possessory interest precisely as were the debtors in Shevin and Blair.
(c) Sale (6) Since, in the absence of extraordinary circumstances, due process requires notice and hearing be accorded before the state may temporarily take property from a debtor, it follows a fortiori that the same requirement must be met for permanent deprivation. There is no provision in the garageman’s lien law for hearing prior to the sale of the car and the transfer of its registration. The question is whether other legal procedures available to the owner are sufficient to satisfy the notice and hearing requirement.
Section 3071 of the Civil Code provides that the owner has 10 days in which to pay the amount due before the garageman may initiate proceedings to sell the vehicle. The next 2 sections provide for at least 10 days’ notice to the public, either by publication or by posting in conspicuous places and 20 days’ notice to owners by registered mail, reduced to 10 days if the garageman certifies under penalty of perjury that the car is worth less than $200. Thus, in as few as 30 days following the owner’s
initial refusal to pay (or as few as 20 days if the car is worth less than $200), a lien sale may be held. Section 3074 of the code provides that within 20 days after the lien sale the legal owner may redeem his automobile upon payment of repair costs and the expenses of sale together with interest. This period of redemption, coupled with the 30-day presale period, gives the owner of a vehicle worth more than $200 50 days in which to obtain hearing. Section 3074 also provides that the owner of a vehicle worth less than $200 has no right of redemption. Thus, such an owner may irretrievably lose his car after only 20 days.
Although the garageman’s lien law makes no provision for hearing prior to sale and transfer of a retained vehicle, respondents have suggested that the owner of the car “has the opportunity to institute a civil action against [the garageman] to contest the propriety of the sale of the car.” Respondents do not, however, indicate what kind of action would be appropriate under the circumstances. Presumably they have reference to an action for conversion or for declaratory relief.
However, neither of these actions will suffice. Since the chattel may be sold as soon as 30 days after the garageman’s first demand for payment and may be placed beyond recall 20 days thereafter, there is no assurance, and indeed little probability, that trial of a contested lien claim could be held within the minimum period preceding transfer to the buyer. (See Cal. Rules of Court, rules 220 and 509.) California law does not provide for accelerated hearing of contested lien claims, and only by resort to temporary restraining orders and injunctions could sale and transfer be halted pending adjudication, at least if events take their ordinary course. Since temporary injunction is an extraordinary remedy and is thus discretionary (see 2 Witkin, Cal. Procedure (2d ed. 1970) Provisional Remedies, § 78, pp. 1516-1517), it lacks the certainty necessary to insure a hearing prior to permanent deprivation. A motion to specially set might be made, but its granting lies within the discretion of the trial court (see Cal. Rules of Court, rules 225 and 513) and the requisite certainty of relief is again lacking. While an action for conversion of a car worth less than $500 would be heard in small claims court after 10 days and no later than 30 days following filing of the action (see Code Civ. Proc., § 117d), even in that situation the owner would have to act immediately (i.e., the day the garageman asserted his lien) in order to insure his rights would be protected. Furthermore, a small claims action is precluded if the car is worth more than $500; if it is worth less than $200, the owner need receive only 10 days’ notice following the initial 10-day period for payment and has no right of redemption. He thus will have no assurance of hearing prior to loss of all rights in the vehicle.
DISPOSITION (7) Because sections 3071, 3072, 3073, and 3074 of the Civil Code permit involuntary sale and transfer of a vehicle without affording the owner an opportunity for hearing, they deprive owners of due process of law and are, therefore, invalid. (8, 9) Section 3068, subdivision (a), of the Civil Code and section 5909, subdivision (a), of the Vehicle Code are not affected by the invalidity of the above sections, the former for reasons already discussed and the latter because it becomes operative only when title to an automobile has already passed by involuntary transfer and does not purport to empower anyone to pass title in violation of the Constitution.
Since misunderstanding of our decision could cause unnecessary economic dislocation, we now indicate what we do not hold.
We do not invalidate the entire statutory scheme. (10) A garageman still may retain possession of a car when the owner, for whatever reason, declines to pay for its repair. But the garageman may no longer sell the car to satisfy his claim. If the owner remains unwilling or unable to pay the amount claimed, the parties are relegated to such remedies as are provided by common law or statute, consonant with requirements of due process.
We do not hold, as respondents fear we might, that a hearing preceding a permanent taking of the owner’s automobile must be conducted by the Department of Motor Vehicles. The Legislature, if it determines that common law remedies are inadequate, or if it feels compelled under the state Constitution, may specify remedies in addition to those available.
The alternative writ is discharged; the peremptory writ is granted. Respondents are ordered not to process or otherwise act on applications for
transfer of registration pursuant to any lien sale conducted under the sections of the Civil Code herein declared unconstitutional.
Wright, C.J., McComb, J., Tobriner, J., Mosk, J., Burke, J., and Sullivan, J., concurred.
While either this court or the Court of Appeal may entertain original jurisdiction in mandamus (see Cal. Const., art. VI, § 10, and Cal. Rules of Court, rule 56(a)), an appellate court should grant the relief sought only when “`the issues presented are of great public importance and must be resolved promptly.'” (Mooney v. Pickett (1971) 4 Cal.3d 669, 674-675 [94 Cal.Rptr. 279, 483 P.2d 1231]; County of Sacramento v. Hickman
(1967) 66 Cal.2d 841, 845 [59 Cal.Rptr. 609, 428 P.2d 593].) In recognition that original proceedings in appellate courts are truly extraordinary, rule 56(a) requires that “[i]f the petition might lawfully have been made to a lower court in the first instance, it shall set forth the circumstances which, in the opinion of the petitioner, render it proper that the writ should issue originally from the reviewing court.” The averments of the petition for writ of mandate (that the garageman’s lien statute works great hardship on poor persons and that the question of the statute’s validity is one of statewide significance) are scarcely adequate justification for bypassing the lower courts. If these may suffice, this court will, in such proceedings, become a court of first, not last, resort. As a consequence of petitioners’ impatience, this court is denied the record which it would otherwise have had. If the case had not already been briefed and argued here and if the issues presented were not so clearly destined to come before this court (probably sooner than later; see, e.g., Quebec v. Bud’s Auto Service (2d Civ. 41502), filed 10 May 1973, per Thompson, J.; rehg. granted 1 June 1973), it would not be inappropriate to deny a peremptory writ for procedural reasons. In any event, precipitate resort to the appellate courts will not be encouraged in the future.
and Randone, see Trost, Revival of Prejudgment Remedies in California: The New Attachment and Claim and Delivery Statutes
(1973) 48 State Bar J. 26; see also Comment, Attachment in California: Another Round of Creditors’ Rights and Debtor Protection, 20 U.C.L.A. L.Rev. 1015.
[54 P.2d 482].)
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