Part 2: Repossessed Vehicle - Accessions vs. Personal Property
In part one of this blog, we asked some of our dealers for examples of unique items that they found . . .
In part one of this blog, we asked some of our dealers for examples of unique items that they found in a repossessed vehicle. The most frequently cited example was regarding aftermarket tires and wheels. This blog will describe how to handle this and similar situations.
Accessions vs Personal Property
The question as to what to do with aftermarket wheels and tires is a classic legal line drawing issue around when an item becomes an accession. Accession are “goods that are physically united with other goods in such a manner that the identity of the original goods is not lost.”
Courts have been battling with when an accession occurs since before the invention of the automobile. A Texas Supreme Court case from the 1800s held that since wagon wheels could easily be removed from a buggy without damaging the buggy, the wheels were not accessions. In 1940, the Department of Public Safety asked the Texas Attorney General “May the Department of Public Safety issue a Certificate of Title against a motor vehicle upon affidavit of repossession, when there is of record a first lien against tires, radio or other accessories, without requiring from the applicant either a notation on the application of such first lien against tires, radio or other accessories, or evidence that such first lien has been satisfied.”
A few years ago, courts relooked at this issue when an aggressive tire and wheel lienholder filed suits for the wheels and tires. Dealers won some of these suits and lost others, but clear guidance from higher courts was never obtained because the cost of litigating through the courts was much higher than the value of the goods in dispute. Below is a list of what is likely an accession and what is clearly personal property:
|Accession||Less Clear||Personal Property|
|Vehicle was repainted||New wheels||Sunglass|
Whenever possible, dealers should discuss nonlegal solutions with the lienholder or customer to ensure both parties are fairly treated. A common compromise is to exchange the expensive wheel and tires for wheels and tires similar to what was on the vehicle when it was sold. Should you want more information on what to do when faced with an accession or personal property question please take a look at our January 2021 edition of Texas Dealer because Mike Dunagan tackles this question in greater detail in his article Stereos, Tires, Wheels: Personal Property or Accessions?
Next week, we will discuss how to handle other examples dealers might find after repossessing a vehicle, including illegal substances, an ignition interlock device and similar situations.