## Facts

- Cam Trucking LLC (Cam) owned several trucks that were titled in Arizona.
- Cam borrowed money from Auto Title Loans USA, LLC (ATLU) and granted ATLU a security interest in the trucks.
- ATLU perfected its security interest under Arizona’s certificate-of-title system (including notation on the Arizona titles).
- Cam later delivered multiple trucks to Transwest Truck Trailer RV (Transwest), a Colorado repair shop, for repair work.
- Transwest performed repairs in Colorado, retained possession of the trucks, and claimed possessory garageman’s (mechanic’s) liens for unpaid charges.
- Cam entered bankruptcy in the United States Bankruptcy Court for the District of Arizona while Transwest still held the trucks.
- ATLU and Transwest asserted competing interests in the same vehicles: ATLU based on its earlier perfected purchase-money security interest and Transwest based on its later, possessory repair liens.
- The parties litigated lien priority in the bankruptcy case; Transwest argued that UCC § 9-333, as applied through Arizona law, would give its possessory liens priority over ATLU’s security interest.

## Issues

1. Does a Colorado repair shop’s possessory garageman’s lien on Arizona-titled trucks have priority over a previously perfected Arizona security interest under Arizona law (including UCC § 9-333 and Arizona’s garageman-lien statute)?
2. If Colorado law applied instead, would Colorado’s lien statutes and UCC § 9-333 give the repair shop priority over the earlier perfected security interest?

## Decision

- The court held that Transwest’s possessory garageman’s liens did not have priority over ATLU’s previously perfected security interest.
- ATLU’s purchase-money security interest was senior, and Transwest’s liens were junior.
- The court concluded the result would be the same under either Arizona or Colorado law, so the priority outcome did not turn on resolving a contested choice-of-law question.
- Under Arizona law, the garageman-lien statute limits a repair lien’s ability to defeat a preexisting recorded lien absent the record lienholder’s knowledge and consent, and Transwest did not prove such consent by ATLU.

## Legal Principles

- UCC § 9-333 generally provides that a possessory lien securing payment for services or materials furnished with respect to goods has priority over a security interest in the goods, unless the statute creating the possessory lien expressly provides a different priority rule.
- Arizona’s garageman-lien statute for motor vehicles grants a lien for labor and materials but states that the lien does not impair a lien “of record” existing when the work began unless the work was furnished with the record lienholder’s knowledge and consent.
- Colorado law recognizes possessory repair liens, but it does not grant a repair shop automatic priority over an earlier perfected security interest where the governing statutory conditions for priming are not satisfied.
- For motor vehicles subject to certificate-of-title statutes, perfection of a security interest is commonly accomplished through the title system, and priority disputes in bankruptcy are resolved by the applicable nonbankruptcy priority rules.

## Conclusion

In *In re Cam Trucking LLC*, the Bankruptcy Court for the District of Arizona resolved a lien-priority dispute between ATLU’s earlier perfected Arizona purchase-money security interest in Arizona-titled trucks and Transwest’s later, possessory Colorado repair liens, holding that Transwest’s garageman’s liens were subordinate because the relevant state lien statutes did not allow the repair liens to defeat a prior recorded lien without the secured creditor’s knowledge and consent, which was not shown; the court further found the same priority result would follow under either Arizona or Colorado law.


In re Cam Trucking LLC, 84 UCC Rep. Serv. 2d 588 (2014)