As a creditors rights attorney, you can guess that I’m frugal and don’t spend lots of money on new cars. My Acura is over 7 years old, and I’ve been very lucky: no big expenses or repairs. Until today, when I took it in to get a funny noise checked out. I learned that, in car talk, “funny” is synonymous with “expensive.” Yikes.
So, today, I’m talking about auto mechanic’s liens on cars in Tennessee.
Tenn. Code Ann. § 66-19-101 allows a mechanic to assert a lien for repairs performed on”any type of conveyance used in the transportation of persons or merchandise either by land or by water or through the air” that are performed at the request of the owner. Under T.C.A. § 66-19-102, this lien lasts 12 months or until the end of the lawsuit to enforce the lien.
Under the common law, mechanics had to retain possession of the vehicle in order to maintain this lien. Give the car back to the customer, the cases said, and you lose your lien. Ask any mechanic, and they all think they have to retain the car or lose the lien.
That’s incorrect, as under the above statutes, possession is no longer required to preserve the lien, but here’s the catch: in order to preserve the priority of the lien against existing lien-holders, the mechanic has to retain possession of the vehicle and not return it to the owner after the repairs. This part of the law comes from Tennessee’s Article 9, at Tenn. Code Ann. § 47-9-310, which determines priority between competing liens.
Retain the car, and you jump ahead of the title lender; turn it over, and you go to the back of the line.
Two more interesting points. First, even if the owner files Bankruptcy, the repairman can retain possession and not violate the stay, because under 11 U.S.C. 362(b)(3), any action to “maintain or continue” your lien’s perfection is not stayed. See In re Hamby, 360 B.R. 657, 662 (Bkrtcy.E.D.Tenn.,2007).
Second, if the owner comes on to your lot and takes the car back, without your consent, the law does not deem the repairman to have relinquished his rights: “[A] possessory lienholder does not lose his lien where a property is taken from his possession without his consent.” Associates Commercial Corp. v. Francisco, 667 S.W. 2d 481, 482 (Tenn. Ct. App. 1984).
So, auto mechanics do indeed have lien rights on cars they repair, whether or not they maintain possession. Of course, none of this is any help to me, because the very big bill waiting for me later today is still far cheaper than the 2011′s sitting out there on the lot.