60-164 Department; implement electronic title and lien system for vehicles; liens on motor vehicles; when valid; notation on certificate; inventory, exception; priority; adjustment to rental price; ho - Nebraska Statutes

60-164. Department; implementelectronic title and lien system for vehicles; liens on motor vehicles; whenvalid; notation on certificate; inventory, exception; priority; adjustmentto rental price; how construed; notation of cancellation; failure to delivercertificate; damages; release.(1) The department shall implementan electronic title and lien system for vehicles no later than January 1,2011. The director shall designate the date for the implementation of thesystem. Beginning on the implementation date, the holder of a security interest,trust receipt, conditional sales contract, or similar instrument regardinga vehicle may file a lien electronically as prescribed by the department.Beginning on the implementation date, upon receipt of an application for acertificate of title for a vehicle, any lien filed electronically shall becomepart of the electronic certificate of title record created by the county clerk,designated county official, or department maintained on the electronic titleand lien system. Beginning on the implementation date, if an application fora certificate of title indicates that there is a lien or encumbrance on avehicle or if a lien or notice of lien has been filed electronically, thedepartment shall retain an electronic certificate of title record and shallnote and cancel such liens electronically on the system. The department shallprovide access to the electronic certificate of title records for motor vehicledealers and lienholders who participate in the system by a method determinedby the director.(2) Except as provided in section 60-165, the provisions of article9, Uniform Commercial Code, shall never be construed to apply to or to permitor require the deposit, filing, or other record whatsoever of a security agreement,conveyance intended to operate as a mortgage, trust receipt, conditional salescontract, or similar instrument or any copy of the same covering a vehicle.Any mortgage, conveyance intended to operate as a security agreement as providedby article 9, Uniform Commercial Code, trust receipt, conditional sales contract,or other similar instrument covering a vehicle, if such instrument is accompaniedby delivery of such manufacturer's or importer's certificate and followedby actual and continued possession of the same by the holder of such instrumentor, in the case of a certificate of title, if a notation of the same has beenmade electronically as prescribed in subsection (1) of this section or bythe county clerk, designated county official, or department on the face ofthe certificate of title or on the electronic certificate of title record,shall be valid as against the creditors of the debtor, whether armed withprocess or not, and subsequent purchasers, secured parties, and other lienholdersor claimants but otherwise shall not be valid against them, except that duringany period in which a vehicle is inventory, as defined in section 9-102, UniformCommercial Code, held for sale by a person or corporation that is requiredto be licensed as provided in theMotor Vehicle Industry Regulation Act and is in the business ofselling such vehicles, the filing provisions of article 9, Uniform CommercialCode, as applied to inventory, shall apply to a security interest in suchvehicle created by such person or corporation as debtor without the notationof lien on the certificate of title. A buyer of a vehicle at retail from adealer required to be licensed as provided in the Motor Vehicle Industry Regulation Act shalltake such vehicle free of any security interest. A purchase-money securityinterest, as defined in section 9-103, Uniform Commercial Code, in a vehicleis perfected against the rights of judicial lien creditors and execution creditorson and after the date the purchase-money security interest attaches.(3) Subject to subsections (1) and (2) of this section, all liens, securityagreements, and encumbrances noted upon a certificate of title or an electroniccertificate of title record and all liens noted electronically as prescribedin subsection (1) of this section shall take priority according to the orderof time in which the same are noted by the county clerk, designated countyofficial, or department. Exposure for sale of any vehicle by the owner thereofwith the knowledge or with the knowledge and consent of the holder of anylien, security agreement, or encumbrance on such vehicle shall not renderthe same void or ineffective as against the creditors of such owner or holderof subsequent liens, security agreements, or encumbrances upon such vehicle.(4) The holder of a security agreement, trust receipt, conditional salescontract, or similar instrument, upon presentation of such instrument to thedepartment, or to any county clerk or designated county official, togetherwith the certificate of title and the fee prescribed for notation of lien,may have a notation of such lien made on the face of such certificate of title.The owner of a vehicle may present a valid out-of-state certificate of titleissued to such owner for such vehicle with a notation of lien on such certificateof title and the prescribed fee to the county clerk, designated county official,or department and have the notation of lien made on the new certificate oftitle issued pursuant to section 60-144 without presenting a copy of the lieninstrument. The county clerk or designated county official or the departmentshall enter the notation and the date thereof over the signature of the personmaking the notation and the seal of the office. If noted by a county clerkor designated county official, he or she shall on that day notify the departmentwhich shall note the lien on its records. The county clerk or designated countyofficial or the department shall also indicate by appropriate notation andon such instrument itself the fact that such lien has been noted on the certificateof title.(5) A transaction does not create a sale or a security interest in avehicle, other than an all-terrain vehicle,a utility-type vehicle, or a minibike, merely because it providesthat the rental price is permitted or required to be adjusted under the agreementeither upward or downward by reference to the amount realized upon sale orother disposition of the vehicle.(6) The county clerk or designated county official or the department,upon receipt of a lien instrument duly signed by the owner in the manner prescribedby law governing such lien instruments together with the fee prescribed fornotation of lien, shall notify the first lienholder to deliver to the countyclerk or designated county official or the department, within fifteen daysafter the date of notice, the certificate of title to permit notation of suchother lien and, after notation of such other lien, the county clerk or designatedcounty official or the department shall deliver the certificate of title tothe first lienholder. The holder of a certificate of title who refuses todeliver a certificate of title to the county clerk or designated county officialor the department for the purpose of showing such other lien on such certificateof title within fifteen days after the date of notice shall be liable fordamages to such other lienholder for the amount of damages such other lienholdersuffered by reason of the holder of the certificate of title refusing to permitthe showing of such lien on the certificate of title.(7) Beginning on the implementation date of the electronic title andlien system, upon receipt of a subsequent lien instrument duly signed by theowner in the manner prescribed by law governing such lien instruments or anotice of lien filed electronically, together with an application for notationof the subsequent lien, the fee prescribed in section 60-154, and, if a printedcertificate of title exists, the presentation of the certificate of title,the county clerk, designated county official, or department shall make notationof such other lien. If the certificate of title is not an electronic certificateof title record, the county clerk, designated county official, or department,upon receipt of a lien instrument duly signed by the owner in the manner prescribedby law governing such lien instruments together with the fee prescribed fornotation of lien, shall notify the first lienholder to deliver to the countyclerk, designated county official, or department, within fifteen days afterthe date of notice, the certificate of title to permit notation of such otherlien. After such notation of lien, the lien shall become part of the electroniccertificate of title record created by the county clerk, designated countyofficial, or department which is maintained on the electronic title and liensystem. The holder of a certificate of title who refuses to deliver a certificateof title to the county clerk, designated county official, or department forthe purpose of noting such other lien on such certificate of title withinfifteen days after the date when notified to do so shall be liable for damagesto such other lienholder for the amount of damages such other lienholder sufferedby reason of the holder of the certificate of title refusing to permit thenoting of such lien on the certificate of title.(8) When a lien is discharged, the holder shall, within fifteen daysafter payment is received, note a cancellation of the lien on the certificateof title over his, her, or its signature and deliver the certificate of titleto the county clerk or designated county official or the department, whichshall note the cancellation of the lien on the face of the certificate oftitle and on the records of such office. If delivered to a county clerk ordesignated county official, he or she shall on that day notify the departmentwhich shall note the cancellation on its records. The county clerk or designatedcounty official or the department shall then return the certificate of titleto the owner or as otherwise directed by the owner. The cancellation of lienshall be noted on the certificate of title without charge. For an electroniccertificate of title record, the lienholder shall, within fifteen days afterpayment is received when such lien is discharged, notify the department electronicallyor provide written notice of such lien release, in a manner prescribed bythe department, to the county clerk, designated county official, or department.The department shall note the cancellation of lien and, if no other liensexist, issue the certificate of title to the owner or as otherwise directedby the owner or lienholder. If the holder of the title cannot locate a lienholder,a lien may be discharged ten years after the date of filing by presentingproof that thirty days have passed since the mailing of a written notice bycertified mail, return receipt requested, to the last-known address of thelienholder. SourceLaws 2005, LB 276, § 64; Laws 2007, LB286, § 14; Laws 2008, LB756, § 3; Laws 2008, LB953, § 3; Laws 2009, LB202, § 15; Laws 2010, LB650, § 17; Laws 2010, LB816, § 5. Cross ReferencesMotor Vehicle Industry Regulation Act, see section 60-1401. Annotations1. Priority of liens2. Notation of lien on certificate3. Miscellaneous1. Priority of liensIf procedure of this section followed, lienor's interest shall take priority and marshalling of assets cannot be required. Platte Valley Bank of North Bend v. Kracl, 185 Neb. 168, 174 N.W.2d 724 (1970).Conditional sales contract shown on certificate of title is superior to artisan's lien. Allied Inv. Co. v. Shaneyfelt, 161 Neb. 840, 74 N.W.2d 723 (1956).Attorney who paid off balance taxpayer owed on purchase of automobile and took taxpayer's equity as payment for prior legal fee was subrogated to amount of encumbrance discharged, and, as to such, attorney, whose interest in vehicle was otherwise junior to federal tax lien, was entitled to priority over the government. Gallup v. United States, 358 F.Supp. 776 (D. Neb. 1973).2. Notation of lien on certificateA manufactured home is within the scope of this section as a class of "cabin trailer" pursuant to section 60-614. Therefore, a manufactured home is considered to be a motor vehicle for purposes of this section, and a security interest is perfected when such interest is listed on a certificate of title to the manufactured home. A fixture filing is not needed to perfect a security interest in a manufactured home. Green Tree Fin. Servicing v. Sutton, 264 Neb. 533, 650 N.W.2d 228 (2002).Claims of a purchase money mortgage, a conditional interest established by an agreement, and other security interests not shown on the certificate of title are invalid as to subsequent purchasers under the express terms of the certificate of title act. Nelson v. Cool, 230 Neb. 859, 434 N.W.2d 32 (1989).The practice of filing and recording chattel mortgage on motor vehicles has been eliminated and under that section security interests must be noted on the certificate of title itself. Cushman Sales & Service of Nebraska, Inc. v. Muirhead, 201 Neb. 495, 268 N.W.2d 440 (1978).There is no legal requirement that a lien be noted on a certificate of title purportedly covering property not subject to the Certificate of Title Act, even though a certificate of title for such property has been issued. Cushman Sales & Service of Nebraska, Inc. v. Muirhead, 201 Neb. 495, 268 N.W.2d 440 (1978).A security interest noted on the certificate of title to a vehicle is valid against creditors of the debtor whether armed with process or not. White Motor Credit Corp. v. Sapp Bros. Truck Plaza, Inc., 197 Neb. 421, 249 N.W.2d 489 (1977).An unrecorded lien is invalid as to a subsequent purchaser or lienholder. First Nat. Bank v. Provident Finance Co., 176 Neb. 45, 125 N.W.2d 78 (1963).Filing of conditional sales contract is not required, but notation on certificate of title is. Universal C.I.T. Credit Corp. v. Vogt, 165 Neb. 611, 86 N.W.2d 771 (1957).Chattel mortgage was void as to creditors where notation on certificate of title was made after levy of execution. Alliance Loan & Inv. Co. v. Morgan, 154 Neb. 745, 49 N.W.2d 593 (1951).3. MiscellaneousThis section applies to dealers as well as general purchasers. Bank of Keystone v. Kayton, 155 Neb. 79, 50 N.W.2d 511 (1951).Legislature intended to eliminate the previous practice of filing chattel mortgages on motor vehicles in the chattel mortgage records. Securities Credit Corp. v. Pindell, 153 Neb. 298, 44 N.W.2d 501 (1950).For purpose of perfecting security interest in mobile homes manufactured by debtor and assigned to trust, debtor corporation's president could not act as agent of trust and president's possession of homes and certificates of origin was not possession of trust and did not give trust possession sufficient to perfect interest. In re North American Builders, Inc., 320 F.Supp. 1229 (D. Neb. 1970).