BEFORE THE UTAH STATE TAX COMMISSION
Petitioner : FINDING OF FACTS,
: CONCLUSIONS OF LAW
v. : AND FINAL DECISION
MOTOR VEHICLE DIVISION OF THE : Appeal No. 91-0852
UTAH STATE TAX COMMISSION :
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. Alan Hennebold, Presiding Officer, heard the matter for and on behalf of the Commission. XXXXX, participated by telephone on behalf of the Petitioner. XXXXX represented the Respondent.
Based upon the stipulated facts submitted by the parties, as well as the evidence and testimony presented during the hearing, the Commission hereby makes its:
FINDINGS OF FACT
1. XXXXX, Petitioner entered into a retail installment contract and security agreement with XXXXX and XXXXX. Petitioner thereby obtained a security interest in the XXXXX automobile.
2. The vehicle was impounded on XXXXX by the XXXXX for expired motor vehicle registration.
3. On XXXXX, Respondent mailed the first of two notices to XXXXX and XXXXX, stating that the vehicle had been impounded and explaining the procedures for its release. The notice stated that "failure to claim the vehicle within 30 days from the original date of impoundment" would result in the public sale of the vehicle.
4. On XXXXX Respondent accessed the XXXXX, thereby obtaining a report that verified the XXXXX ownership of the vehicle, but showed no security interests or liens against it.
5. On XXXXX, Respondent mailed a second notice to XXXXX and XXXXX, again explaining the procedure for the vehicle's release and advising of the potential of public sale.
6. On XXXXX, the vehicle was listed in a XXXXX Notice of Public Sale of Impounded Vehicles.
7. On XXXXX the vehicle was sold at public auction to the highest bidder for XXXXX, an amount representing XXXXX, in excess of the towing and storage fees.
8. On XXXXX, Petitioner was informed by XXXXX that the vehicle had been sold at XXXXX in Utah.
9. On or about XXXXX, Petitioner filed its claim to the proceeds from the vehicle's sale, based upon its security interest in the vehicle.
CONCLUSIONS OF LAW
The Motor Vehicle Division or any peace officer may seize any vehicle which is being operated with improper registration. (Utah Code Ann. §41-10115). The Division may then store the vehicle until its registration has been properly completed and the appropriate fees have been paid, or until the ownership of the vehicle is established to the satisfaction of the department. (Utah Code Ann. §41-1-116.)
If the impounded vehicle's owner or lien holder does not reclaim the vehicle within 30 days from the date of seizure, or if the Division is unable to determine the owner or lien holder through reasonable efforts, the Division is required to sell the vehicle, with the proceeds to be distributed as provided by law. (Utah Code Ann. .§41-1-117.)
If ownership of the impounded vehicle cannot be determined, the proceeds of sale must be deposited with the state treasurer in a suspense account for return to the vehicle's owner upon a claim being filed within one year of date of sale. If no claim is filed within one year from the date of sale, the proceeds must be paid into the General Fund. (Utah Code Ann. §41-1-136.)
DECISION AND ORDER
The issue before the Commission is Petitioner's claim to proceeds from Respondent's sale of an impounded vehicle against which Petitioner claimed a security interest.
Petitioner raises two points in support of its claim to the sale proceeds. First, that Respondent failed to take the "reasonable steps" required by Utah Code Ann. §41-1-117 to notify Petitioner of the vehicle's pending sale. Second, that the one year limitation established by Utah Code Ann. §41-1-136 on claims for refund should be waived due to Petitioner's lack of notice of the vehicle's sale.
The parties, through their stipulation, have agreed that Respondent notified the vehicle's registered owner that the vehicle would be sold at auction unless it was reclaimed.
Respondent also verified the vehicle's ownership through the XXXXX system, which typically discloses any security interests in such vehicles. In this case, the XXXXX did not reveal Petitioner's interest in the vehicle. Respondent proceeded to sell the vehicle on XXXXX, realizing net proceeds of XXXXX. Petitioner did not file its claim to the sale proceeds until XXXXX.
With respect to the adequacy of Respondent's efforts to notify interested parties of the vehicle's pending sale, Respondent provided actual notice to the vehicle's registered owner and used reliable means (the XXXXX) to discover any other interests in the vehicle. The Commission finds that Respondent took reasonable efforts to determine Petitioner's interest in the vehicle.
As to Petitioner's request that the Commission waive the time limitation for claiming the sale proceeds, the Commission has no such authority absent some demonstrated defect in the conduct of the sale.
Based on the foregoing, the Commission affirms Respondent's determination that Petitioner is not entitled to the proceeds from the sale of the vehicle in question. It is so ordered.
DATED this 25th day of February, 1992.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes