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JUSTICE OF THE PEACE COURT
CHAPTER 39. LIENS OF GARAGE OWNERS, LIVERY AND STABLE KEEPERS;
REPLEVIN BY OWNER
Sec. 3901. Persons entitled to liens.
3902. Lienholder's loss of possession.
3903. Sale to satisfy liens.
3904. Release of owner's interest in vehicle or property.
3905. Notice of sale; disposition of proceeds.
3906. Motor vehicles.
3907. Priority of lien.
3908. Remedy of owner.
3909. Jurisdiction.
3910. Rules.
§ 3901. Persons entitled to liens.
(a) Any hotelkeeper, innkeeper, garage owner, auction service or other
person who keeps a livery, boarding stable, garage, airport, marina or
other establishment and, for price or reward at such livery, boarding
stable, garage, airport, marina or other establishment, furnishes food
or care for any horse or has the custody or care of any carriage, cart,
wagon, sleigh, motor vehicle, trailer, moped, boat, airplane or other
vehicle or any harness, robes or other equipment for the same or makes
repairs, auctions, performs labor upon, furnishes services, supplies or
materials for, stores, safekeeps or tows any carriage, cart, wagon, sleigh,
motor vehicle, trailer, moped, boat, airplane or other vehicle or any
harness, robes or other equipment for the same shall have a lien upon
such horse, carriage, cart, wagon, sleigh, motor vehicle, trailer, moped,
boat, airplane or other vehicle, harness, robes or equipment and the right
to detain the same to secure the payment of such price or reward.
(b) Unless the context of this chapter requires otherwise, a lienholder
shall mean any person defined in subsection (a) of this section. (17 Del.
Laws, c. 620, § 1; Code 1915, § 2863; 34 Del. Laws, c. 193; Code 1935,
§ 3344; 25 Del. C. 1953, § 3901; 61 Del. Laws, c. 367, § 1; 68 Del. Laws,
c. 62, §§ 1, 2.)
§ 3902. Lienholder's loss of possession. In
case, either before or after the price or reward become due and payable,
the lienholder under § 3901 of this title loses possession of the encumbered
property, except by court order pursuant to this chapter, the lienholder's
lien shall continue in full force and effect, provided that within 10
days from the time of the loss of possession the lienholder pursuant to
§ 3903 of this title files an application for the issuance of an authorization
to conduct a lien sale or files a counterclaim for the sale of the encumbered
property pursuant to this chapter in a replevin action brought pursuant
to Chapter 95 of Title 10 by the owners or other persons claiming an interest
in the property. (17 Del. Laws, c. 620, § 1; Code 1915, § 2863; 34 Del.
Laws, c. 193; Code 1935, § 3344; 25 Del. C. 1953, § 3901; 61 Del. Laws,
c. 367, § 1.)
§ 3903. Sale to satisfy liens.
(a) If a lienholder under § 3901 or 3902 of this title is not paid the
amount due, and for which the lien is given within 30 days after the same
or any part thereof became due, then the lienholder may proceed to sell
the property, or so much thereof as may be necessary, to satisfy the lien
and costs of sale pursuant to § 3905 of this title if:
(1) An authorization to conduct a lien sale has been issued pursuant
to this section;
(2) A judgment has been entered in favor of the lienholder on the claim
which gives rise to the lien; or
(3) The owners and any secured parties of record or known lienholders
of the property have signed, after the lien has arisen, a release of any
interest in the property in the form prescribed by § 3904 of this title.
(b) A lienholder may apply to a justice of the peace in the county in which
the lienholder's business establishment is situated for the issuance of
any authorization to conduct a lien sale under § 3905 of this title. The
application shall be executed under penalty of perjury and shall include
all of the following:
(1) A description of the property.
(2) The names and addresses of the owners of the property and the names
and addresses of any other persons who the lienholder knows claim an interest
in the property.
(3) A statement of the amount of the lien and facts concerning the claim
which gives rise to the lien. If compensation for storage is claimed,
the per diem rate of storage shall be shown.
(4) The date, time and place that the property will be sold if the authorization
to conduct a lien sale is issued.
(5) A statement that the lienholder has no information or belief that
there is a valid defense to the claim which gives rise to the lien.
(c) Upon receipt of an application which is made pursuant to subsection
(b) of this section, the justice of the peace shall send a notice and a
copy of the application by certified mail or registered mail, return receipt
requested, to the owners, secured parties of record and any known lienholders
and any other persons whose names and addresses are listed in the application.
If the identity of the last registered owner or secured party cannot be
determined with reasonable certainty, § 3905 of this title shall have the
same effect as notice sent by certified or registered mail. The notice shall
include all of the following:
(1) A statement that an application has been made with the justice
of the peace for the issuance of an authorization to conduct a lien sale.
(2) A statement that the person has a legal right to a hearing in court;
if a hearing in court is desired, the enclosed declaration under penalty
of perjury must be signed and returned and if the declaration is signed
and returned, the lienholder will be allowed to sell the vehicle only
if he obtains a judgment in court or obtains a release from the owners
and any known lienholders.
(3) A statement that if the declaration is signed and returned, a hearing
will be promptly scheduled and the owners may then appear to contest the
claim of the lienholder.
(4) A statement of the date, time and place that the property will be
sold if the authorization to conduct a lien sale is issued.
(5) A statement that the justice of the peace will issue the authorization
to conduct a lien sale unless the person signs and returns, within 20
days after the date on which the notice was mailed, the enclosed declaration
stating that the person desires to contest the claim which gives rise
to the lien.
(6) A statement that the person shall be liable for costs if a judgment
is entered in favor of the lienholder on the claim which gives rise to
the lien.
(7) A declaration which may be executed by the person under penalty of
perjury stating that he desires to contest the claim which gives rise
to the lien and that he has a valid defense to the claim and he shall
furnish names and addresses where official notice may be received of any
person or persons including himself known to claim an interest in the
property of the hearing date.
(d) If the justice of the peace receives a declaration described in paragraph
(3) of subsection (c) of this section which is mailed within 20 days after
the date upon which the notice described in subsection (c) of this section
is mailed, the justice of the peace shall notify the lienholder and owners
and any other persons listed in the application or declaration of the hearing
date unless the owners of the property and any known lienholder(s) have
signed, after the lien has arisen, a release of any interest in the property
in the form prescribed by § 3904 of this title. In any other case, the justice
of the peace shall issue an authorization to conduct a lien sale.
(e) In any hearing, the lienholder may have the amount of the indebtedness
and right to sale determined and the person requesting the hearing may present
and have determined any defenses, setoffs, counterclaims, cross-claims or
third-party actions.
(f) Any fees shall be recoverable as a cost by the lienholder if a sale
is conducted.
(g) The form of the applications, notices and declarations described in
this section shall be prescribed by the justice of the peace. The language
used in the applications, notices and declarations should be simple and
nontechnical. (17 Del. Laws, c. 620, § 1; Code 1915, § 2863; 34 Del. Laws,
c. 193; Code 1935, § 3344; 25 Del. C. 1953, § 3901; 61 Del. Laws, c. 367,
§ 1.)
§ 3904. Release of owner's interest in vehicle or
property.
(a) An owner of property subject to a lien under § 3901 or § 3902 of this
title may release any interest in the property after the lien has risen.
The release shall be dated when signed and a copy shall be given at the
time the release is signed to the person releasing the interest.
(b) The release shall contain all of the following information in simple,
nontechnical language:
(1) A description of the property sufficient to identify it.
(2) The names and addresses of the owners.
(3) A statement of the amount of the lien and the facts concerning the
claim which gives rise to the lien.
(4) A statement that the person releasing the interest understands that
he has a legal right to a hearing in court prior to any sale of the property
to satisfy the lien and he is giving up the right to appear to contest
the claim of the lienholder.
(5) A statement that the person releasing the interest gives up any interest
he may have in the property and he is giving the lienholder permission
to sell the property.
(6) A statement that there is no other person, persons or lienholders
who have an outstanding interest in the property. (61 Del. Laws, c. 367,
§ 1.)
§ 3905. Notice of sale; disposition of proceeds.
(a) Prior to any such sale the lienholder shall give at least 15 days'
notice of the sale by handbills posted in 5 or more public places and by
advertising in a newspaper published and/or circulated in the county in
which the sale is to be held.
(b) The proceeds of the sale shall be applied to the discharge of the lien
and the cost of keeping and selling the property. The balance, if any, of
the proceeds of the sale shall be deposited not later than 10 days from
the date of the sale with the court to be applied by the court to the payment
of any lien or security interest to which the property may be subject in
the order of their priority, with any remaining proceeds to be paid to the
owner or owners of the property sold but, in case such owner or owners cannot
be found, such balance shall be turned over to the State Treasurer not later
than 60 days from the date of the sale who shall create a special fund thereof
and who shall pay to the owner the moneys left if a claim is made within
1 year of the sale, or deposit the moneys in the General Fund if no claim
is made within 1 year of the sale.
(c) In every lien sale authorized under this chapter, it shall be the duty
of the lienholder to complete and file with the court a disposition of proceeds
form, justice of the peace civil form no. 48, within 10 days from the date
of the sale. No transfer of or new certificate of title to the vehicle sold
or salvage certificate shall be issued by the Division of Motor Vehicles
without proof of the filing of said disposition of proceeds form with the
court within the required time period. A copy of the disposition of proceeds
form sealed with the court's seal shall constitute sufficient proof of filing.
(17 Del. Laws, c. 620, § 1; Code 1915, § 2863; 34 Del. Laws, c. 193; Code
1935, § 3344; 25 Del. C. 1953, § 3901; 61 Del. Laws, c. 367, § 1; 64 Del.
Laws, c. 34, §§ 1, 2.)
§ 3906. Motor vehicles. In the case of motor vehicles
required to be registered under the motor vehicle laws of this or any other
state, notice containing the information required in § 3903(b) of this title
shall be given to the registered owners and known lienholders at their addresses
of record with the Division of Motor Vehicles or similar agency and the
return receipt, signed or unsigned, shall be held and considered as prima
facie evidence of service of such notice. The lienholder shall notify the
appropriate Delaware auto theft unit. (61 Del. Laws, c. 367, § 1.)
§ 3907. Priority of lien.
(a) All liens created pursuant to § 3901 or § 3902 of this title shall be
superior to any lien, title or interest of any person who has a security
interest by virtue of a conditional sales contract or a prior perfected
security interest in accordance with Article 9 of Title 6.
(b) Notwithstanding the provisions of subsection (a) of this section, any
person who stores or safekeeps any motor vehicle towed at the request of
a party other than the owner of the vehicle may attain priority of lien
as follows:
(1) By providing notice by certified mail to a title holder of record
within 7 business days of the date upon which possession is taken;
(2) By providing notice by certified mail to lienholders of record within
7 business days of the date upon which possession is taken; and
(3) By providing notice by telephone or in person to the appropriate police
agency. (61 Del. Laws, c. 367, § 1; 68 Del. Laws, c. 315, § 1.)
§ 3908. Remedy of owner. The owners or other
persons claiming an interest in the property, in addition to the right
to a hearing as provided herein, shall have the right to file an action
in replevin at any time in accordance with Chapter 95 of Title 10, and
no bond shall be required to be posted as a prerequisite to the filing
of such an action or the issuance of the writ of replevin. (17 Del. Laws,
c. 620, § 2; Code 1915, § 2864; 34 Del. Laws, c. 193; Code 1935, § 3345;
25 Del. C. 1953, § 3902; 61 Del. Laws, c. 367, § 1.)
§ 3909. Jurisdiction. Except where a lienholder's
business establishment is located within the city limits of Milford or
within 3 miles of said limits in which case Justice of the Peace Court
No. 5 in Milford shall have exclusive jurisdiction, the Justice of the
Peace Court in the county in which the lienholder's business establishment
is situated shall have exclusive jurisdiction of all petitions for sale
or replevin under this chapter, notwithstanding any monetary amount which
is claimed by the lienholder. (61 Del. Laws, c. 367, § 1; 65 Del. Laws,
c. 42, § 1.)
§ 3910. Rules. The Justice of the Peace Court
may adopt appropriate and specific rules to effectuate the intent and
purpose of this chapter. (61 Del. Laws, c. 367, § 1.)
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