Bokker v. Hill

Robert L. Brown, Justice. Appellant David Bokker d/b/a Bokker’s Used Cars appeals a judgment in favor of appellee Roy Peterson d/b/a Peterson Glass Company relating to the priority between his vendor’s lien on a motor vehicle and Peterson’s mechanic’s lien on the same vehicle. The issue concerns statutory interpretation and, specifically, the effect of Act 737 of 1991, now codified at Ark. Code Ann. § 27-14-903(c)(l) (Repl. 1994), on lien priorities. We agree with the trial judge that Bokker failed to satisfy the requirements of the applicable lien-priority statute (Ark. Code Ann. § 18-45-202(b) (1987)), and we affirm. The facts in this case are really not in dispute. On May 18, 1994, Bokker entered into a retail installment contract in Wynne with Odell Hill for the sale of a 1986 Toyota Célica. Bokker agreed to finance the purchase price of the car. The agreed purchase price was $4,995, with $1,700 down and the balance ($3,295 plus other costs) payable in 18 monthly installments of $204.92 each. The certificate of title for the car, which was issued in Hill’s name, showed Bokker as the first lienholder. On December 19, 1994, Peterson did repair work to the broken rear window of the Toyota Célica at a cost of $590.17.1 Because there was no payment for the work done, Peterson stored the car on his business premises at a rate of $10 per day. On January 20, 1995, Hill made his last payment to Bokker on the car and later defaulted. The car remained on Peterson’s business premises. Bokker demanded return of the car, but Peterson refused. Bokker then filed suit against Hill and Peterson. He claimed damages against Hill for breach of contract in the amount of $2,258.29 and for possession of the car so that it could be sold and the proceeds applied to his lien. He also sought $1,000 against Peterson for wrongful detention of the car. Peterson answered and asserted that Bokker’s lien was inferior to his own mechanic’s lien. He further asserted that the car should be sold with the proceeds going first to satisfy his mechanic’s lien in the amount of $590.17 plus storage fees and next to satisfy Bokker’s lien. In addition, Peterson filed a counterclaim against Bokker on the basis that he (Peterson) had a priority lien. Bokker answered the counterclaim and stated that his vendor’s Hen was superior. An agreed order was entered by the trial judge for the sale of the Toyota Célica with the proceeds to be paid into the registry of the court for distribution after the trial judge decided the priority of the two Hens. However, the parties did not comply with this order. A bench trial followed on the priority question. Bokker testified that he did not retain the certificate of title, because that would have been iHegal under Arkansas law, but that he did show himself as first lienholder on the certificate and, thus, perfected his Hen. He argued that this was sufficient to give him priority. Peterson testified that he had done the repair work on the car and stored it and that his mechanic’s Hen was superior. The trial judge ruled from the bench in favor of Peterson, and judgment was entered accordingly. The judge found that Peterson had a first Hen on the car in the amount of $915 ($590.70 for window repair and $325 for storage) and that Bokker’s vendor’s Hen in the amount of $2,962.01 was a subordinate and inferior lien.2 The basis for' the judgment was that Bokker had not retained title to the vehicle, as required by Ark. Code Ann. § 18-45-202(b) (1987). Bokker first contends on appeal that the trial judge erred when he construed the pertinent statutes to favor Peterson. We refer first to the statutes relating to mechanic’s Hens. Automobile repairmen are given an “absolute Hen” on a vehicle for repairs and storage for which payment was not made. Ark. Code Ann. § 18-45-201 (1987). The next statute in the Code, codified at Ark. Code Ann- § 18-45-202 (1987), sets out the priority of mechanic’s hens vis-á-vis vendor liens: (b) The lien provided for in this subchapter shall be subject to the hen of a vendor of automobiles, trucks, tractors, and all other motor propelled conveyances retaining title therein, for any claim for balance of purchase money due thereon. (Emphasis ours.) In 1991, Act 737 was enacted into law, which made retention-of-tide notes to secure an interest in a vehicle a Class C misdemeanor. Ark. Code Ann. § 27-14-903 (Repl. 1994). Act 737 defined a title-retention note as: [A]ny instrument that grants the purchaser the right to possession and use of the vehicle, but withholds assignment of ownership on the existing certificate of tide and its delivery to the purchaser, until full payment has been made by the purchaser, thereby thwarting the purchaser’s ability to comply with subsection (b) of this section. Ark. Code Ann. § 27-14-903(c)(l)(B) (Repl. 1994). By making retention of title a Class C misdemeanor, Act 737 was direcdy at odds with § 18-45-202(b), quoted above, which grants priority to a vendor only if the vendor keeps possession of the title. Bokker does not make the argument that Act 737 impliedly revoked the tide-retention requirement of § 18-45-202. Rather, he argues that he perfected his vendor’s Hen by placing it on the certificate of title, which was delivered to Hill, and that, in essence, he did all that he could do under the law. We are confronted, nonetheless, with a priority-of-lien statute — § 18-45-202(b) — which plainly requires a vendor to keep the certificate of title in his possession in order to preserve priority over a mechanic’s hen. Admittedly, were Bokker to have done that, he would have been in violation of Act 737. Thus, § 18-45-202(b) has essentially been nullified as a statutory basis for establishing the superiority of a vendor’s lien. Nevertheless, Bokker urges us to give his vendor’s lien priority. But for us to hold that a vendor had priority over a mechanic without clear statutory authority establishing the benchmark for that priority would amount to judicial legislation. We have been loath to engage in judicial legislation in the past and decline to do so in the instant case. See, e.g., Sebastian County Chapter of the Am. Red Cross v. Weatherford, 311 Ark. 656, 846 S.W.2d 641 (1993); Trout Brothers, Inc. v. Emison, 311 Ark. 27, 841 S.W.2d 604 (1992); Pickens-Bond Construction Co. v. Case, 266 Ark. 323, 584 S.W.2d 21 (1979); Vault v. Adkisson, 254 Ark. 75, 491 S.W.2d 609 (1973). We are mindful of the fact that Act 737, in rendering title-retention notes illegal, also provides that it is not intended to limit the rights of a lienholder to perfect or record his security interest. Ark. Code Ann. § 27-14-903(d) (Repl. 1994). Perfection of a security interest, however, does not automatically equate to priority status over competing lienholders. The Uniform Commercial Code, for example, gives a mechanic’s lien priority over a perfected security interest in goods unless a “statute expressly provides otherwise.” Ark. Code Ann. § 4-9-310 (Repl. 1991). Here, the existing statute on point — § 18-45-202(b) — would give a vendor’s lien priority only if the vendor retained title. But, again, we will not attempt to resolve this statutory quandary, and we conclude that this is a matter for the General Assembly to address and clarify. Hence, because there is no statutory authority giving Bokker’s vendor’s lien priority status over Peterson’s mechanic’s lien, we must affirm. For his second point, Bokker claims that his judgment of $400 in attorney’s fees and $190.85 in costs should be awarded jointly and severally against Hill and Peterson, rather than solely against Hill. We disagree. In reviewing the record of this matter, we find no reference to the issue of joint and several liability being raised to the trial judge. Accordingly, the issue is not preserved for our review. Douthitt v. Douthitt, 326 Ark. 372, 930 S.W.2d 371 (1996); Betts v. Betts, 326 Ark. 544, 932 S.W.2d 336 (1996). Affirmed. Glaze, J., dissents. Footnotes [1] The judgment shows this amount to be $590.70. [2] The judgment figure for the vendor’s lien includes the balance of the purchase price plus prejudgment interest, costs, and attorney’s fees. Also, it appears that the correct figure for the mechanic’s lien should have been $915.70.