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General Electric Capital Auto Lease v. Violante

358 N.J. Super. 171, 817 A.2d 376 (App. Div. 2003)

LIENS; GARAGE KEEPER—A garage keeper’s lien cannot be imposed on a leased car without consent of the leasing company.

A leasing company leased a car to a customer. When the customer failed to make the lease payments, the leasing company sued the customer and asserted its perfected security interest in the car. The leasing company also sued a garage that was holding the car to secure payment of storage charges. The garage claimed that it was entitled to payment of its storage charges from the customer, who incurred the charges, and from the leasing company. The lower court agreed with the leasing company and granted summary judgment in its favor. The Appellate Division affirmed. The lower court found that the Garage Keeper’s Lien Act was not applicable because the 1915 Act grants a lien to a garage keeper who stores, maintains or repairs a vehicle with the consent of the owner or its representative. The lower court found that the leasing company specifically contemplated the imposition of a lien and the lease instructed the customer not to create or allow a lien on the car to be created , and that the Act did not apply to leased cars. The Appellate Division affirmed, citing a 1920 Court of Errors and Appeals case that interpreted the Garage Keeper’s Act. That case held that a lessee of a car, by that reason alone, was not deemed to be a representative of the owner for the purposes of incurring a lien. Even though the Court agreed with the garage owner that the leasing company may have received a benefit by the car being stored, and that the leasing company was in a better position to protect its interest than the garage keeper is in protecting its interests, the 1920 case was still binding law. Absent a Supreme Court ruling or a revision to the statute, a garage keeper’s lien cannot be imposed on a leased vehicle without the consent of the owner or its representative.


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