2020 Georgia Code
Title 40 - Motor Vehicles and Traffic
Chapter 3 - Certificates of Title, Security Interests, and Liens
Article 3 - Security Interests in and Liens on Motor Vehicles
§ 40-3-54. Mechanics' Liens; How Asserted and Foreclosed

1. All mechanics of every sort shall have a special lien on any vehicle required to have a certificate of title by Code Section 40-3-20 for work done, or for work done and materials furnished, or for materials furnished in repairing or servicing such vehicle. Perfection of the lien by recording shall be as provided in Code Section 40-3-53. The lien may be asserted by retention of the vehicle, and all contracts for repairs or service to vehicles shall be deemed to incorporate a right of retention by the mechanic to protect this lien until it is paid or satisfied through foreclosure as provided in this Code section. The lien may also be asserted by surrendering the vehicle, giving credit, and foreclosing the lien claim in the manner provided in this Code section. If he surrenders possession of the vehicle to the debtor, the mechanic shall record his claim of lien as provided in Code Section 40-3-53. Such special lien shall be superior to all liens except for taxes and such other liens and security interests of which the mechanic had actual or constructive notice before the work was done or material furnished. The validity of the lien against third parties shall be determined in accordance with this chapter.
2. If possession is retained or the lien recorded, the owner-debtor may contest the validity of the amount claimed to be due by making written demand upon the lienholder. If upon receipt of such demand the lienholder fails to institute foreclosure proceedings pursuant to this Code section or Article 1A of Chapter 11 of this title within 30 days, the lien is forfeited.
3. The lien shall be foreclosed in the following manner:
   1. A person asserting the lien, either for himself or as a guardian, administrator, executor, or trustee, may move to foreclose it by making an affidavit to a court of competent jurisdiction showing all the facts necessary to constitute a lien under this Code section and the amount claimed to be due;
   2. Upon such affidavit being filed, the clerk or a judge of the court shall serve notice upon the owner, the recorded lienholders and security interest holders, and the lessee, if any, of the vehicle of a right to a hearing to determine if reasonable cause exists to believe that a valid debt exists, and that such hearing must be petitioned for within five days after receipt of the notice and that, if no petition for such hearing is filed within the time allowed, the lien will conclusively be deemed a valid one and foreclosure thereof allowed;
   3. If a petition for a hearing is filed within the time allowed, the court shall set a probable cause hearing within ten days of the filing of the petition. If, at the probable cause hearing, the court determines that reasonable cause exists to believe that a valid debt exists, the mechanic shall be given possession of the vehicle or the court shall obtain possession of the vehicle, as ordered by the court. The owner-debtor may retain possession of the vehicle by giving bond and security in the amount determined to be probably due and the costs of the action;
   4. Within five days of the probable cause hearing, a defendant must petition the court for a full hearing on the validity of the debt if a further determination of the validity of the debt is desired. If no such petition is filed, the lien on the amount determined reasonably due shall be conclusively deemed a valid one and foreclosure thereof allowed. If such a petition is filed, the court shall set a full hearing thereon within 30 days of the filing of the petition. Upon the filing of such petition by thedefendant, neither the prosecuting mechanic nor the court may sell the vehicle, although possession of the vehicle may be retained;
   5. If, after a full hearing, the court finds that a valid debt exists, then the court shall authorize foreclosure upon and sale of the vehicle subject to the lien to satisfy the debt if the debt is not otherwise immediately paid;
   6. If the court finds the actions of the mechanic in retaining or seeking possession of the vehicle were not taken in good faith, the court, in its discretion, may award damages to the owner, the lessee, or any person deprived of the rightful use of the vehicle due to the deprivation of the use of the vehicle;
   7. Any proceeding to foreclose a mechanic's lien on a vehicle must be instituted within one year from the time the lien is recorded or is asserted by retention.

(Ga. L. 1961, p. 68, § 23; Ga. L. 1962, p. 79, § 13; Ga. L. 1969, p. 92, § 6; Ga. L. 1975, p. 489, § 1; Ga. L. 1985, p. 149, § 40; Ga. L. 1990, p. 2048, § 3; Ga. L. 2019, p. 872, § 3/HB 307.)

The 2019 amendment, substituted "pursuant to this Code section or Article 1A of Chapter 11 of this title within 30 days" for "within ten days where possession has been retained, or within 30 days where possession has been surrendered," in the middle of the second sentence of subsection (b). See the Editor's note for effective date.

- Special liens of mechanics and materialmen on personal property for work done and material furnished, § 44-14-363.

- Ga. L. 2019, p. 872, § 8/HB 307, not codified by the General Assembly, provides: "This Act shall become effective upon approval by the Governor or upon its becoming law without such approval for purposes of developing the required forms and shall become effective on September 1, 2019, for all other purposes." This Act was approved by the Governor on May 7, 2019.

- For article surveying developments in Georgia torts law from mid-1980 through mid-1981, see 33 Mercer L. Rev. 247 (1981).

JUDICIAL DECISIONS

Purpose of section.

- Evident purpose of O.C.G.A. § 40-3-54 is to ensure a prompt resolution of disputes regarding the validity of mechanic liens' as well as to provide for prompt enforcement of those liens which are determined to be valid. Carpet Transp., Inc. v. Fisher, 166 Ga. App. 450, 304 S.E.2d 540 (1983).

- Former portion of Ga. L. 1969, p. 92, § 6 (see now O.C.G.A. § 40-3-54) which provided that a foreclosure on mechanics' liens must be in the manner provided by former Code 1933, § 67-2401 was unconstitutional. Mason v. Garris, 360 F. Supp. 420 (N.D. Ga. 1973), clarified, 364 F. Supp. 452 (N.D. Ga. 1973).

- O.C.G.A. § 40-3-54 requires that a petition be made within five days of a hearing and makes no provision for the late filing of a petition after receipt of a delayed ruling. Whatever period of time a hearing might encompass, it does not include that period of time after all evidence has been introduced when the trial judge has taken the litigated issues under advisement. First Nat'l Bank v. Strother Ford, Inc., 188 Ga. App. 749, 374 S.E.2d 203 (1988).

- Trial court erred by finding that the petition for a full hearing on the validity of the debt was untimely because the clerk's office closed early on the day the petition was due because of weather, preventing the petition from being filed on time and the petition was filed the next day. Prince v. Rawls, 346 Ga. App. 254, 816 S.E.2d 123 (2018).

- Vehicles referred to in Ga. L. 1962, p. 79, § 13 (see now O.C.G.A. § 40-3-54) as being subject to mechanics liens are those which are required to have certificates of title, and those not subject to being retained by a mechanic are those exempt from those provisions by former Code 1933, § 68-404a (see now O.C.G.A. § 40-3-4). Peoples, Inc. v. DeVane, 114 Ga. App. 597, 152 S.E.2d 649 (1966).

Towing and estimate charges were not for "repairing or servicing" a vehicle within the meaning of O.C.G.A. § 40-3-54. Southern Gen. Ins. Co. v. Auto Transformation, Inc., 206 Ga. App. 243, 424 S.E.2d 883 (1992).

Towing a vehicle and preparing an estimate of repair costs may not be considered work done or materials furnished in repairing or servicing a vehicle; the operator of a towing service was not entitled to a lien on a vehicle for towing and storage fees. Purser Truck Sales, Inc. v. Horton, 276 Ga. App. 17, 622 S.E.2d 405 (2005).

- When a repairman has a valid possessory lien for work done and materials furnished under Ga. L. 1975, p. 489, § 1 (see now O.C.G.A. § 40-3-54), it is illegal to grant possession of the vehicle to the security interest holder without payment of the amount due the repairman; but the repairman may lose priority if the repairman knew of the security interest at the time the materials were furnished. Atlanta Truck Serv., Inc. v. Associates Com. Corp., 146 Ga. App. 170, 246 S.E.2d 2 (1978).

- When a certificate of title provided constructive notice to future debtors that the motor vehicle was encumbered by a security interest in favor of plaintiff, plaintiff's first security interest was superior to defendants' later asserted mechanics' lien. Hull v. Transport Acceptance Corp., 177 Ga. App. 875, 341 S.E.2d 330 (1986); First Nat'l Bank v. Alvin Worley & Sons, 221 Ga. App. 820, 472 S.E.2d 568 (1996).

Trial court erred by holding that defendant's mechanic's lien was superior to bank's perfected security interest in motor home where the security interest was noted on the certificate of title, providing constructive notice to future creditors, and where it was undisputed that the repairs made by the defendant to the motor home were performed well after the certificate of title for the motor home was issued. Washington State Employees Credit Union v. Robinson, 206 Ga. App. 782, 427 S.E.2d 15 (1992).

- Owner must be notified of institution of mechanic's lien foreclosure proceedings involving the owner's motor vehicle under paragraph (c)(2) of Ga. L. 1975, p. 489, § 1 (see now O.C.G.A. § 40-3-54). Imperial Body Works, Inc. v. Waters, 156 Ga. App. 887, 275 S.E.2d 822 (1981).

- Because the vehicle owner contested the validity of the amount claimed to be due and it is undisputed that the body shop failed to institute foreclosure proceedings within ten days, the body shop lien was forfeited. Haire v. Suburban Auto Body, Inc., 204 Ga. App. 16, 418 S.E.2d 163 (1992).

Letters from the owner of motor vehicles and equipment to the lienholder contesting the validity of the debt and demanding return of the property constituted proper written demand and the lienholder forfeited the lien by the lienholder's failure to timely institute foreclosure proceedings. Neal v. Natural Gas of Tenn., Inc., 222 Ga. App. 774, 476 S.E.2d 73 (1996).

Burden of establishing proper service under O.C.G.A. § 40-3-54(c)(2) rests upon the mechanic lienholder who seeks to gain by the institution of foreclosure proceedings. Imperial Body Works, Inc. v. Waters, 156 Ga. App. 887, 275 S.E.2d 822 (1981).

- Security interest on a vehicle which is perfected pursuant to Ga. L. 1969, p. 92, § 6 (see now O.C.G.A. § 40-3-54) is superior to a mechanic's lien on a vehicle which is perfected under the provisions of former Code 1933, § 67-2003 (see now O.C.G.A. § 44-14-363). Gwinnett Sales & Serv. v. Trust Co., 130 Ga. App. 31, 202 S.E.2d 255 (1973).

- Mechanic, who conditionally parted with possession of a vehicle for the purposes of providing for the mechanic's continued storage as property subject to a lien, neither lost nor waived its lien as it did not unconditionally part with possession or control of the lien property. First Nat'l Bank v. Strother Ford, Inc., 188 Ga. App. 749, 374 S.E.2d 203 (1988).

- Lien asserted under the authority of O.C.G.A. § 40-3-54 is a statutory mechanic's lien; however, when the lien is perfected by the mechanic's retention of the vehicle, it becomes a statutory lien whose vitality is dependent on the continuation of that retention. First Nat'l Bank v. Strother Ford, Inc., 188 Ga. App. 749, 374 S.E.2d 203 (1988).

- Owner of property was not required to file a counter affidavit of the lienholder in order to preserve defenses to the affidavit of the lienholder. Neal v. Natural Gas of Tenn., Inc., 222 Ga. App. 774, 476 S.E.2d 73 (1996).

- For a valid debt to exist on a motor vehicle the work must have been done or the supplies furnished by a contract with the owner or by the authority of the owner. P & B Corp. of Am., Ltd. v. One 1983 BMW, 175 Ga. App. 462, 333 S.E.2d 633 (1985).

- Court was authorized to conclude from the evidence that the plaintiff's repair charges were valid and that the plaintiff was consequently authorized to assert a lien against the vehicle even though it was apparent that the actual contract for the repairs was between the plaintiff and the insurance adjuster rather than the plaintiff and the defendant, there was evidence that the defendant expressly authorized the adjuster to enter into this contract and then knowingly surrendered possession of the vehicle to the plaintiff for the purpose of allowing the repairs to be made. Carpet Transp., Inc. v. Fisher, 166 Ga. App. 450, 304 S.E.2d 540 (1983).

- Date upon which body shop's lien was forfeited is the proper date from which the jury must calculate the amount owed to the vehicle owner for reasonable hire. Haire v. Suburban Auto Body, Inc., 204 Ga. App. 16, 418 S.E.2d 163 (1992).

- Because paragraph (c)(5) of O.C.G.A. § 40-3-54 provides for immediate enforcement of the mechanic's lien as part of the foreclosure proceedings, nothing is to be gained by ordering the Motor Vehicle Division to record the lien on the certificate of title. Carpet Transp., Inc. v. Fisher, 166 Ga. App. 450, 304 S.E.2d 540 (1983).

- No lien may be asserted when the contract price has been paid in full. Davis v. State, 167 Ga. App. 701, 307 S.E.2d 272 (1983).

- Paragraph (c)(5) of O.C.G.A. § 40-3-54 clearly contemplates that the determination of the validity of the debt will be made by the court, and no provision is made for the intervention of a jury, nor is a right to trial by jury in such proceedings mandated by the Georgia Constitution. Carpet Transp., Inc. v. Fisher, 166 Ga. App. 450, 304 S.E.2d 540 (1983).

Cited in Wooden v. Michigan Nat'l Bank, 117 Ga. App. 852, 162 S.E.2d 222 (1968); Mason v. Garris, 360 F. Supp. 420 (N.D. Ga. 1973); Mason v. Garris, 364 F. Supp. 452 (N.D. Ga. 1973); Roberts v. International Harvester Credit Corp., 143 Ga. App. 206, 237 S.E.2d 697 (1977); Szczepanski v. GMAC, 558 F.2d 732 (5th Cir. 1977); Roush v. Dan Vaden Chevrolet, Inc., 155 Ga. App. 372, 270 S.E.2d 902 (1980); Turner v. Jackson, 157 Ga. App. 31, 276 S.E.2d 92 (1981); Davison's Auto Serv. Co. v. Security Ins. Co., 187 Ga. App. 220, 369 S.E.2d 538 (1988).

OPINIONS OF THE ATTORNEY GENERAL

Superiority of automobile mortgage.

- Properly recorded automobile mortgage is superior to mechanic's lien for subsequently provided services and materials. 1975 Op. Att'y Gen. No. U75-51.

Magistrate court has jurisdiction to foreclose a motor vehicle mechanic's lien under O.C.G.A. § 40-3-54 if the amount demanded or the value of the property claimed does not exceed $5,000. 1991 Op. Att'y Gen. No. U91-8.

RESEARCH REFERENCES

Am. Jur. 2d.

- 38 Am. Jur. 2d, Garages, Service Stations, and Parking Facilities, § 105 et seq.

- 61A C.J.S., Motor Vehicles, § 1830.

- Lien for repairs to or services in connection with automobile, 62 A.L.R. 1485.

Secured transactions: priorities as between previously perfected security interest and repairman's lien on motor vehicle under Uniform Commercial Code, 69 A.L.R.3d 1162.

Loss of garageman's lien on repaired vehicle by owner's use of vehicle, 74 A.L.R.4th 90.