In this case, an Ohio Bankruptcy Court held that a creditor’s lien noted on an automobile’s certificate of title had priority over a subsequent artisan’s lien obtained by a repair shop.

Here, the debtors pledged their automobile as security for a loan. The lien was properly placed on the vehicle’s title.

Thereafter, the vehicle was repaired by the Etna Battery Company, who had possession of it when the debtors filed a Chapter 13 Bankruptcy.

The Etna Battery Company claimed a superior secured lien on the vehicle for the costs of repair, which totalled $1,078.95.

The bank objected to the repair shop’s secured interest and the Court held that the lender’s secured interest was superior to the repair shop lien, even though the repair shop had possession of the vehicle when the bankruptcy was filed.

The Court further held that the repair shop only had an unsecured claim for the cost of the repair. Upon sale of the vehicle, the lender received all of the sale proceeds. In re Jerry Hawkins, Jr., 129 B.R. 503.

Author: Charles R. Harroun, Attorney at Law