Gunnison Valley Bank v. Madsen (Utah 1984)

Citation: 685 P.2d 543 (Utah 1984) · Court: Supreme Court of Utah (No. 18817) · Decided: July 5, 1984 · Opinion: per curiam

Source note (2026-10-18):

• Links on this page to https://static.case.law/p2d/685/cases/0543-01.json are an (unofficial Caselaw Access Project copy, retrieved before 2026-10-18; host disallows automated access); no official or otherwise permitted full-text copy was located on 2026-10-18.

Case page. Legal information, not legal advice. Last verified: 2026-10-16. Source: Caselaw Access Project scan of the Pacific Reporter, Second Series (https://static.case.law/p2d/685/cases/0543-01.json), retrieved 2026-10-16. Cited by the Utah State Tax Commission in Appeal No. 97-0871 (https://files.tax.utah.gov/tax/commission/decision/97-0871.htm).

Facts

Jerry Madsen pledged two tractors and a lowboy trailer to Gunnison Valley Bank. The equipment was used in Neely Construction’s business and, when it needed repairs, went to Interwest Service and Supply. Learning that Madsen had filed bankruptcy and that the bank had an interest, Interwest contacted the bank and finished the repairs after receiving a July 14, 1981 letter from the bank’s vice president instructing Interwest not to release the vehicles to Madsen because the bank was repossessing and reselling them. The bank refused to pay; Interwest kept the equipment and counterclaimed to foreclose its repairman’s lien. The trial court found the bank had “authorized” the repairs and ruled Interwest’s lien superior.

Holding

Affirmed. Under § 38-2-3 a repairman’s lien is “subject and subordinate to the rights and interests of any secured parties … unless such secured party has requested” the work; “to authorize repairs is tantamount to requesting repairs be made,” and substantial evidence supported the finding.

Reasoning

The case turned on the statute’s single exception. The bank’s letter was “admittedly ambiguous” about payment, “[n]evertheless, the implication is clearly there”; the bank’s officer admitted he may have wanted the vehicles repaired to show to a buyer, and Interwest had insisted on written authorization before continuing work.

Practical impact

In Utah the default rule is the reverse of UCC § 9-333: a repairman’s lien loses to a secured party unless the secured party asked for (or authorized) the work. A buyer at a § 38-2-4 repair-lien sale of a financed vehicle or machine therefore usually takes subject to the lender’s lien — the Tax Commission’s TC-839R certificate of sale requires the buyer to satisfy or carry the registered lien, and the Commission has denied clear title on that basis (Appeal No. 97-0871).

Good-law status

No citator check run this session (needs_verification). Section 38-2-3’s current text (last amended 1977 per le.utah.gov, retrieved 2026-10-16) matches the version quoted in the opinion.

Applies in →

utah, towing-storage-and-mechanics-lien-sales, equipment-and-machinery