In Nuvision Federal Credit Union v. Beliciu, 2014 WL 3670006 (Cal.App. 2 Dist. 2014), the Court of Appeal for the Second Circuit in an unpublished decision affirmed a trial court’s finding that a buyer of a car at a lien sale was not a bona fide purchaser because the buyer knew of the secured party’s lien and conspired to void it.    But, the Credit Union had to prosecute an 8-day court trial and defend the appellate proceedings in order to prevail. The facts were as follows and, frankly, rather unremarkable to similar fact patterns auto finance companies face:

On May 17, 2010, Theus had her car towed to appellant Peytchev’s Mercedes repair shop. Peytchev gave Theus a written estimate of $756 to make the car operable and asked for a $50 deposit. Theus did not pay the deposit and asked Peytchev for more time. When Theus came to the repair shop a second time, she again did not pay the deposit and asked for more time. Peytchev claimed he believed Theus would pay and ordered the necessary parts to make the repair. Peytchev contacted Theus on May 28, 2010, to pay for the car repairs but Theus said she needed more time. After the end of May, Theus’s phone number was disconnected and Peytchev stated he was unable to contact her. Theus never returned to the shop for her car and never paid the final billed amount of $745.50. On or about July 6, 2010, Peytchev contacted a lien company to handle the sale of Theus’s Mercedes. The lien company mailed a notice to Theus and to respondent Nuvision on July 9, 2010, indicating that a lien sale was scheduled for August 9, 2010. Nuvision received the notice on July 12, 2010, but did not file a timely opposition to the sale. According to testimony from a Nuvision’s employee, from July 20 to August 9, 2010, Nuvision contacted Peytchev’s shop six times requesting information about Theus’s car and for a breakdown of costs to claim the vehicle, speaking to Peytchev as well as an employee of his shop. In the conversations, Peytchev and his employee asked Nuvision for $3,100 to claim the car and Nuvision offered $1,250, which Peytchev and his employee rejected. Respondent Beliciu – a car reseller for whom Peytchev had done car repair work for on prior occasions – saw the notice of the lien sale Peytchev posted at his shop and asked Peytchev about buying Theus’s Mercedes. Peytchev told Beliciu what he thought the mechanical issues were with the car and also told Beliciu that he was “getting a few calls from Nuvision” or “that the credit union was bothering [him] regarding this car.” At the August 9, 2010 lien sale, Beliciu bid on and purchased Theus’s car for $800. Beliciu took possession of the car the next day. On August 24, 2010, Nuvision filed a complaint against Theus, Peytchev and various Doe defendants seeking damages, a declaration of the validity of its lien and to enjoin transfer or sale of the Mercedes or a change in its registration. On November 12, 2010, Nuvision identified Beliciu as one of the Doe defendants. Peytchev and Beliciu filed cross-complaints against Nuvision. From January 30, 2012 to February 8, 2012, the court conducted an eight-day bench trial. On June 18, 2012, the trial court issued a statement of decision in favor of Nuvision. In the statement of decision, the trial court rejected Beliciu’s contention that he was a bona fide purchaser of the Mercedes and therefore entitled to keep the vehicle. Specifically, the trial court stated: “Beliciu denied that he had any knowledge before the sale of Nuvision’s interest in the Subject Vehicle. This testimony is not credible. Beliciu is a convicted felon – convicted of receiving stolen property. He is experienced in buying and selling used cars – Beliciu operates a wholesale used car business…. This is his occupation. Beliciu personally knows Peytchev and has done business with him in the past. In addition, notwithstanding Beliciu’s testimony that he paid Peytchev $800 for the Subject Vehicle, no canceled check was presented at trial to corroborate this claim. “The court finds that based on the evidence ad-duced from the trial and from the reasonable inferences from the evidence, Peytchev and Beliciu concocted a scheme for Beliciu to acquire the Subject Vehicle for either free or for a nominal amount, free of lien from the legal owner, Nuvision. Moreover, the court finds that before Beliciu purportedly acquired the Subject Vehicle at the lien sale, Beliciu knew of Nuvision’s interest in the Subject Vehicle because Peytchev told him. The court finds that the lien sale was a sham – it was a procedure adopted by Peytchev and Beliciu to permit Beliciu to acquire from Peytchev a vehicle abandoned by Theus at Peytchev’s Automotive.” The trial court also found that there was “no credible evidence that Theus authorized the repair,” stating that it did not believe Peytchev’s testimony that Theus signed the estimate for repairs and that the court had compared the purported signature of Theus on the repair estimate with Theus’s signature on another document not under dispute and it was clear the signatures were not the same.

Yes, you read it correctly, an eight day bench trial. The Court of Appeal held:

Also on June 18, 2012, the trial court issued a judgment voiding the transfer and purported lien sale of the Mercedes to Beliciu and finding Beliciu was “not a bona fide purchaser” of the car. The judgment was also against Theus for the unpaid balance of the loan and interest, less the value of the Mercedes which was returned to Nuvision. The judgment was for Nuvision on Peytchev’s and Beliciu’s cross-complaints and also awarded Nuvision its costs against all defendants and attorney fees against Peytchev under Civil Code section 3068 and Vehicle Code section 10652.5.“ ‘The elements of bona fide purchase are payment of value, in good faith, and without actual or constructive notice of another’s rights. [Citation.]’ [Citation.] ‘The absence of notice is an essential requirement in order that one may be regarded as a bona fide purchaser.’ [Citation.]” ( Gates Rubber Co. v. Ulman (1989) 214 Cal.App.3d 356, 364.) Here, the trial court did not find to be credible Beliciu’s claim that he was unaware of Nuvision’s security interest in Theus’s car and credited Peytchev’s statement that he told Beliciu about Nuvision. We are bound by the trial court’s credibility determinations and neither reweigh the evidence nor reassess credibility determinations, as “ ‘[t]he Court of Appeal is not a second trier of fact….’ [Citation.]” ( In re Marriage of Balcof (2006) 141 Cal.App.4th 1509, 1531; Estate of Young (2008) 160 Cal.App.4th 62, 76.) In addition, under Business and Professions Code section 9884.9, subdivision (a), “The automotive repair dealer shall give to the customer a written estimated price for labor and parts necessary for a specific job. No work shall be done and no charges shall accrue before authorization to proceed is obtained from the customer.” The trial court did not believe Peytchev’s claim that Theus signed the written repair estimate, thereby authorizing him to make the repairs, and concluded, “there is no credible evidence that Theus authorized the repair.” Again, we do not reweigh the evidence or reassess the trial court’s credibility determinations.FN9 ( Marriage of Balcof, supra, 141 Cal.App.4th at p. 1531; Estate of Young, supra, 160 Cal.App.4th at p. 76.) “A dealer who fails to comply with section 9884.9 may not recover under any theory. [Citation.]” ( Hibbs v. Allstate Ins. Co. (2011) 193 Cal.App.4th 809, 817.) Accordingly, we affirm the trial court’s judgment determining that Beliciu was not a bona fide purchaser and voiding the purported lien sale and transfer of Theus’s car.