28-2134

28-2134. Satisfaction of lien or encumbrance;
assignment of obligation by lienholder; civil penalty

A. When a holder of a lien or encumbrance receives payment in full satisfying a
lien or encumbrance recorded under this article, the holder of the lien or encumbrance
shall release the lien or encumbrance and deliver the certificate of title to the next
holder of a lien or encumbrance entitled to possession of the certificate of title or, if
there is not another holder of a lien or encumbrance entitled to possession of the
certificate of title, to the owner of the vehicle at the address shown on the certificate
of title or, if the holder of the lien or encumbrance has been previously notified of
sale or transfer of the vehicle, to the person who is legally entitled to possession.

B. If a holder of a lien or encumbrance assigns the obligation and the holder
lawfully has possession of the certificate of title, the holder shall deliver the
certificate of title at the time of assignment to the holder's assignee. If a holder of a
lien or encumbrance is not entitled to possession of the certificate of title when the
holder assigns the obligation, the holder shall immediately deliver the certificate of
title to the assignee when the holder becomes lawfully entitled to and obtains lawful
possession of the certificate of title. The holder's assignee is entitled to hold the
certificate of title until the obligation is satisfied. When the obligation is satisfied,
the assignee shall deliver the certificate of title to the next holder of a lien or
encumbrance entitled to possession of the certificate of title or, if there is not
another holder of a lien or encumbrance entitled to possession of the certificate of
title, to the owner of the vehicle as prescribed in subsection A of this section.

C. If a holder of a lien or encumbrance who possesses a certificate of title as
provided in this article refuses or fails to surrender the certificate of title to the
person who is legally entitled to possession of the certificate of title on that person's
request and within fifteen business days after the holder receives payment in full
satisfaction of the holder's lien or encumbrance, after an opportunity for an
administrative hearing, the department may impose and collect a civil penalty from the
holder of the lien or encumbrance to be deposited in the state highway fund established
by section 28-6991 as follows:

1. Fifty dollars if the certificate of title is surrendered in accordance with this
subsection within three additional business days.

2. The penalty provided for in paragraph 1 of this subsection plus fifty dollars
for each additional day exceeding eighteen business days that the certificate of title is
not surrendered in accordance with this subsection up to a maximum of five hundred
dollars for each certificate of title.

D. The department may satisfy a lien or encumbrance on its records and on a
certificate of title to a vehicle if the owner of the vehicle furnishes satisfactory
proof of the payment in full of the underlying debt and an affidavit stating the
following:

1. That the owner has made a diligent search to locate the holder of the lien or
encumbrance.

2. With particularity the steps taken in the search.

3. That after the search the holder of the lien or encumbrance could not be found.

E. The department may satisfy a lien or encumbrance against a vehicle on its
records by accepting a certificate of title to the vehicle issued by another jurisdiction
if all of the following conditions exist:

1. The lien previously recorded in this state does not appear on the title
presented from another jurisdiction.

2. The title was issued by the other jurisdiction at least one year before the time
it was presented to this state.

3. The law of the other jurisdiction requires a lien or encumbrance to be recorded
on that state's certificate of title.