Request By:
Mr. Donald L. Davidson
Greenup County Clerk
Greenup, Kentucky 41144
Opinion
Opinion By: David L. Armstrong, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
Your problem concerns the transferring of a motor vehicle that is sold for storage. We assume you are referring to KRS 376.275, which provides that any person in the business of storage of motor vehicles shall have a lien on the motor vehicle for the reasonable or agreed storing charges, as long as it remains in his possession. The statute provides that the motor vehicle may be sold, under certain conditions, to pay the charges after the owner has been notified by registered letter of the time and place of sale.
The Department of Transportation form TD 96-159 is designed to implement KRS 376.275. At the bottom of the form it is written that "The county clerk when presented with this affidavit with the registered receipt required by KRS 376.275, may transfer the vehicle to the affiant or purchaser. " The form is an affidavit of the lienholder, which form sets forth the essential elements of KRS 376.275 in pursuing the lien by way of nonjudicial sale.
The old
Court of Appeals of Kentucky, in Department of Revenue v. Derringer, Ky., 399 S.W.2d 482 (1966), held that where a motor vehicle was sold under KRS 376.275, and even in the absence of a bill of sale and registration receipt presented to the county clerk by the seller, after a proper nonjudicial sale of the motor vehicle under the statute, the purchaser of the automobile was entitled to his requested change of registration to his name and to the issuance of a current license in his name, covering the automobile in question, upon his presentation to the county clerk of either a bill of sale or affidavit sufficient to reflect his status as a lienholder pursuant to KRS 376.275 and containing information required by KRS 186.200 (bill of sale) and upon his presentation to the clerk of the original, or a duplicate, of the current registration receipt for the automobile. In addition, the affidavit must indicate, if true, that the sale comported with sale requirements of KRS 376.280, in order for the sale to be commercially reasonable. We believe the same affidavit would be sufficient to authorize the issuance, by the county clerk who issued the present owner's copy of the receipt, of a duplicate current registration receipt. See KRS 186.180 and 186.200.
As relates to a district court's ordering a transfer of such lien ladened automobile, a court order would not be constitutional in the context of a nonjudicial sale. See § 28,
Kentucky Constitution, and Commonwealth v. Cornelius, Ky.App., 606 S.W.2d 172 (1980). We do not think it necessary to go into the realm of judicial sales, since this opinion is addressed to nonjudicial sales under KRS 376.275 and 376.280.
In connection with title and registration, see KRS 186.021, 186.040, 186A.030, 186A.055, 186A.085, and 186A.215.
In OAG 82-74, published, Banks-Baldwin, we concluded that under
Department of Revenue v. Derringer, Ky., 399 S.W.2d 482 (1966) 484, 485, and under the broad impact of
Flagg Brothers, Inc. v. Brooks, 436 U.S. 149, 56 L. Ed. 2d 185, 98 S. Ct. 1729 (1978), KRS 376.275 (nonjudicial sale of vehicle for storage or towing charges) is constitutional. In Flagg, above, the Supreme Court of the United States held that the act of a warehouseman in New York in proceeding to sell goods stored with him without a judicial sale and pursuant to Sec. 7-210 (identical with KRS 355.7-210) was not a state action for the purposes of 42 U.S.C. § 1983. The Supreme Court pointed out that the state of New York did not compel the sale of a bailor's goods, but merely announced the circumstances under which its courts would not interfere with a private sale. In Department of Revenue v. Derringer, above, the Court of Appeals of Kentucky specifically held that KRS 376.275, in providing for nonjudicial sale (private) of stored or towed motor vehicles upon notice (see also KRS 376.280), did not violate "due process". The court said that implicit in the statute is the idea that the sale must be commercially reasonable or effective. See § 2, Kentucky Constitution. The court added that the sale under KRS 376.275 was commercially reasonable, since the sale comported with the requirements of KRS 376.280.
CONCLUSIONS
(1) Where a nonjudicial sale of a motor vehicle held for storage charges meets the terms of KRS 376.275 and 376.280, the lienholder filing an affidavit and a duplicate of the current registration receipt, the purchaser is entitled to a change of registration and issuance of a current license.
(2) A district court has no constitutional authority to issue a nonjudicial order relating to the nonjudicial sale of a vehicle under KRS 376.275.