## Facts

- Thomas and Silvia Hartley bought a 1994 Mazda pickup in California, financing through Onyx Acceptance Corporation; the California title listed Onyx’s lien.
- The Hartleys stopped paying and disappeared with the truck.
- Arizona later issued certificates of title to successive owners that did not list Onyx’s lien, and the truck passed through Arizona dealers.
- Rick Warner Toyota (a Utah dealer) bought the truck at an Arizona auto auction, brought it to Utah, and sold it to Chris S. Mahana, who financed through Zions Bank and used the truck for nearly three years.
- After learning the truck was in Utah, Onyx hired GLS Recovery, Inc. to repossess it; GLS seized the truck from a parking lot and took Mahana’s personal items inside.
- Mahana and Rick Warner Toyota sued Onyx and GLS for conversion of the truck and Mahana’s personal property.
- Mahana claimed loss-of-use damages based on renting a substitute vehicle for about eighteen months, totaling $11,880 at the rental company’s retail rate.

## Issues

1. Whether Mahana and Rick Warner Toyota were bona fide purchasers with a superior ownership interest despite Onyx’s earlier lien that was omitted from later titles.
2. Whether the trial court could award conversion damages measured by loss of use based on the retail rental value of substitute transportation, rather than limiting damages to the property’s value at the time of conversion plus interest.
3. Whether the collateral source rule barred reducing damages by bond proceeds or other third-party payments.

## Decision

- The Utah Supreme Court affirmed the judgment for Mahana and Rick Warner Toyota.
- It held Mahana and Rick Warner Toyota were bona fide purchasers whose rights were superior to Onyx’s unreflected lien.
- It upheld the loss-of-use award of $11,880 based on the retail rental value for the deprivation period, rejecting a cap tied to the truck’s purchase price.
- It held the collateral source rule barred using bond proceeds or other independent payments to reduce the defendants’ liability.

## Legal Principles

- A good-faith purchaser who acquires a vehicle through a chain of facially valid certificates of title may take priority over a prior lienholder whose lien is not reflected on the later title.
- The general measure of conversion damages is the value of the property at the time of conversion plus interest, but an alternative measure may be used in extraordinary circumstances, including loss-of-use damages.
- Loss-of-use damages for conversion may be proven by reasonable rental value of substitute transportation for the period of deprivation and are not automatically limited to the converted property’s purchase price.
- Under the collateral source rule, a tortfeasor may not reduce damages by showing the plaintiff received compensation from an independent source, including bond proceeds.

## Conclusion

The Utah Supreme Court affirmed that Mahana and the dealer, as bona fide purchasers relying on a clean title chain, held superior rights to the truck; it upheld conversion liability and loss-of-use damages based on retail rental value, and it refused any offset under the collateral source rule for independent payments.


Mahana v. Onyx Acceptance Corp., 96 P.3d 893 (Utah 2004)