In October, 2014, the Maryland Court of Special Appeals issued a decision concerning Maryland’s lien and recovery business. Lien and recovery companies are hired by mechanics and marinas to collect overdue charges for repairs and storage on vehicles and boats. At least as long as I have been practicing, lien companies have added a “processing fee” to the amount owed, and required that the boat or vehicle owner pay the processing fee in addition to the overdue charges in order to get their boat or vehicle back. If the owner didn’t pay up, then the vehicles were put up for auction. In Allstate Lien and Recovery Corp. v. Stansbury, however, the vehicle owner fought back. Mr. Stansbury asserted that including a $1000 processing fee in the amount required to redeem the vehicle was an unfair and deceptive practice, and violated Maryland’s laws against unfair debt collection. The trial court, and now the Court of Special Appeals, agreed that the inclusion of the processing fee was a violation of the Consumer Protection Act and the Consumer Debt Collection Act.
Violations of the Consumer Protection Act and Consumer Debt Collection Act both have significant consequences. Consumer Protection Act violations are grounds for shifting attorneys’ fees from the consumer to the business — which means that Allstate Lien and Recovery in this case is likely to be responsible for tens of thousands of dollars (even hundreds of thousands) of fees for Mr. Stansbury’s lawyers. A violation of Consumer Debt Collection allows for “damages of emotional distress and mental anguish suffered with or without accompanying injury.” This means that a jury is free to award money for distress and upset, even without any kind of physical symptoms, if the debt collector has acted badly. Since the lien and recovery company is the agent of the mechanic or marina — those businesses may also be on the hook if the lien and recovery company acts badly.
You are warned. The unlawful $1000 processing fee may be costing Allstate Lien and Recovery (or hopefully their insurer) hundreds of thousands of dollars beyond what they paid their own attorneys to defend the case.
With those warnings, when does a garageman’s lien attach? Here is the statute:
(a)(1) Any person who, with the consent of the owner, has custody of an aircraft and who, at the request of the owner, provides a service to or materials for the aircraft, has a lien on the aircraft for any charge incurred for any:
(i) Inspection, maintenance, repair, servicing, or rebuilding;
(ii) Storage, parking, handling, or tiedown; or
(iii) Parts, accessories, materials, or supplies.
(2) The operator of any airport on which an aircraft lands or which is otherwise used by an aircraft has a lien on the aircraft for any landing fee, flight fee, or other charge so incurred.
(3) A lien is created under this subsection when any charges giving rise to the lien are incurred.
(b)(1) Any person who, with the consent of the owner, has custody of a boat and who, at the request of the owner, provides a service to or materials for the boat, has a lien on the boat for any charge incurred for any:
(i) Repair, rebuilding, maintenance, servicing, or wet or dry wharfage;
(ii) Storage; or
(iii) Parts or accessories.
(2) A lien is created under this subsection when any charges giving rise to the lien are incurred.
(c)(1) Any person who, with the consent of the owner, has custody of a motor vehicle and who, at the request of the owner, provides a service to or materials for the motor vehicle, has a lien on the motor vehicle for any charge incurred for any:
(i) Repair or rebuilding;
(ii) Storage; or
(iii) Tires or other parts or accessories.
(2) A lien is created under this subsection when any charges set out under paragraph (1) of this subsection giving rise to the lien are incurred.
(d)(1) A park owner has a lien against a resident’s mobile home, if the park owner obtains a judgment against the resident under Title 8A, Subtitle 17 of the Real Property Article, and the resident fails to yield and render possession of the premises as ordered by the court.
(2) A lien under this subtitle shall be:
(i) Stayed if the resident files an appeal in accordance with Title 8A, Subtitle 17 of the Real Property Article; and
(ii) Extinguished if the resident redeems the premises in accordance with Title 8A, Subtitle 17 of the Real Property Article.
(3) A lien is created under this subsection when the resident fails to yield and render possession of the premises as ordered by the court.
Md. Code Ann., Com. Law § 16-202 (2014).
If you are owed money for repairs, storage or maintenance, here are the steps you should follow:
- retain possession unless and until paid in full;
- act promptly to hire a competent lawyer or lien sale company to prepare the statutory notices of lien.
- Accept payment in full — don’t add in charges that cannot be substantiated.
Baylaw, LLC can prepare statutory notices for a reasonable flat fee and walk you through the process of getting paid or obtaining title. Please email Dirk Schwenk dschwenk@baylawllc.com, or Jeff Toppe jtoppe@baylawllc.com for details.