North Carolina Department of Justice
North Carolina Department of Justice
North Carolina Department of Justice
Submit this request

May 20, 1988

Subject:

Motor Vehicle Registration; Salvage Titles; Chapter 607, 1987 Session Laws (G.S. 20-71.2 et seq.)

Requested by:

James E. Rhodes, Director Vehicle Registration Section Division of Motor Vehicles North Carolina Department of Transportation

Question:

(1) Is there any procedure which allows DMV to avoid branding the title of any motor vehicle, which has been branded in another state, with the nearest applicable brand specified in the new North Carolina statute?

Conclusion:

No. The requirement in § 20-71.3 is mandatory and does not authorize reevaluation of the branding decision that was made in another state.

Question:

(2) Is there any basis for DMV to relax the 75% of repair cost factor in determining if a vehicle is a salvage vehicle under G.S. 20-71.3(d)?

Conclusion:

No. The standard is mandated by statute.

Question:

(3) Must a vehicle which has been declared a total loss by an insurer also meet the 75% test to be a salvage vehicle?

Conclusion:

No. The tests are independent.

Question:

(4) Is a vehicle which is a constructive total loss now defined as a salvage vehicle under G.S. 204.01(33)(d)?

Conclusion:

Yes.

The North Carolina Supreme Court has held that "when the language of a statute is clear and unambiguous, it must be given effect and its clear meaning may not be evaded by an administrative body or a court under the guise of construction." Utilities Comm. v. Edmisten, Atty. General, 291 N.C. 451, 465, 232 S.E.2d 184 (1976). In such cases the courts and administrative agencies "are without power to interpolate, or superimpose, provisions and limitations not contained therein." State v. Camp, 286 N.C. 148, 152, 209 S.E.2d 754 (1974). The first three questions are essentially answered by the application of these principles.

The requirement of G.S. 20-71.3 is that "any motor vehicle which has been branded in another state shall be branded with the nearest applicable brand specified in this section, except that no junk vehicle or vehicle that has been branded junk in another state shall be titled or registered." (emphasis supplied). This language is mandatory and does not call for discretionary application by D.M.V. The decision of another state to brand a vehicle is required to be given full credit by this language.

If there is any doubt as to that, the statutory declaration of purpose lays it to rest:

§ 20-71.2. Declaration of purpose.

The titling of salvage motor vehicles constitutes a problem in North Carolina because members of the public are sometimes misled into believing a motor vehicle has not been damaged by collision, fire, flood, accident, or other cause or that the vehicle has not been altered, rebuilt, or modified to such an extent that it impairs or changes the original components of the motor vehicle. It is therefore in the public interest that the Commissioner of Motor Vehicles issue rules to give public notice of the titling of such vehicles and to carry out the provisions of this part of the motor vehicle laws of North Carolina.

By this language the General Assembly clearly indicated that its main objective in enacting the bill was to preserve information regarding the prior history of damaged vehicles for the benefit of subsequent buyers. Any reading of the statute contrary to that purpose would be inappropriate.

Section 2 of the new act, Chapter 607, 1987 Session Laws, rewrites G.S. 20-4.01(33) to define Flood Vehicle, Non-U.S.A. Vehicle, Reconstructed Vehicle, Salvage Motor Vehicle, Salvage Rebuilt Vehicle and Junk Vehicle. The definition of Salvage Motor Vehicle is as follows:

(d) Any motor vehicle damaged by collision or other occurrence to the extent that the cost of repairs to the vehicle and rendering the vehicle safe for use on the public streets and highways would exceed seventy-five percent (75%) of its fair retail market value, or a motor vehicle that has been declared a total loss by an insurer. Fair market retail values shall be as found in the NADA Pricing Guide Book, or other publications approved by the Commissioner.

The answer to the second question is evident from reading the definition. There simply is no room to construe the statute in a way that would permit avoidance of salvage title branding when the repair costs exceed 75% of a vehicle's fair retail market value.

Likewise, a reading of paragraph (d), which superimposes the seventy-five percent test on the total loss declaration test, is not justified by the language of the statute or the purpose of the act. To interpret it thus would require reading the first sentence as if it read as follows: "Any motor vehicle damaged by collision or other occurrence to the extent that the cost of repairs to the vehicle and rendering the vehicle safe for use on the public streets and highways would exceed seventy-five percent (75%) of its fair retail market value, whether or not the motor vehicle has been declared a total loss by an insurer." Had the General Assembly intended this result it would have written the statute accordingly. By writing the sentence with two disjunctive clauses the legislature evinced its intent to create two independent tests.

Analysis of the fourth issue is more complex. Before the enactment of Chapter 607 the statutory law concerning salvage titles was contained solely in G.S. 20-109.1, which was narrowly construed by the Court of Appeals in Allen v. American Security Ins. Co., 53 N.C. App. 239, 280 S.E.2d 471 (1981). The Court of Appeals held in that case that "G.S. 20-109.1 applies only to the payment of an actual total loss claim, and thus is inapplicable to the case sub judice where a substantially lower constructive total loss claim was paid." 53 N.C. App. at 242. In reaching its decision the Court noted that it could not find any hint of a broad purpose in the statute "to protect consumers from those who would repair wrecked vehicles and sell them at the higher price of an unwrecked vehicle without disclosing to the buyer that the vehicle had ever been wrecked." Id.

G.S. 20-109.1 was not repealed by the General Assembly when it enacted Chapter 607 of the 1987 Session Laws. However, the General Assembly has now supplied the statement of purpose the Court of Appeals had found missing in Allen, as well as creating a new definition of salvage motor vehicle.

The new definition and G.S. 20-109.1 must be read in pari materia. Statutes dealing with the same subject matter must be harmonized, if possible, to give effect to each, since the presumption is against repeal by implication. Charlotte City Coach Lines, Inc. v. Brotherhood of Railroad Trainmen, 254 N.C. 60, 118 S.E.2d 37 (1961). However, where two statutes are in irreconcilable conflict, the statute first enacted must give way to the latter to the extent of the conflict, the last expression of the legislative will on the matter being the law. Bland v. Wilmington, 278 N.C. 657, 180 S.E.2d 813 (1971).

Much of G.S. 20-109.1 has to do with the procedures for dealing with salvage vehicles by insurance companies. These provisions, as well as the provisions relating to theft loss, do not raise much potential for conflict. However, G.S. 20-109.1(a)(1) says that a vehicle is deemed a salvage vehicle "when an insurance company as a result of having paid a total loss claim acquires title to a vehicle, and obtains possession or control of a vehicle, for any cause other than theft, . . ." while the new G.S. 20-4.01(33)(d) defines salvage motor vehicle in pertinent part to be "a motor vehicle that has been declared a total loss by an insurer." Do these provisions conflict? Or, is the new definition merely redundant? See, In re Watson, 273 N.C. 629, 161 S.E.2d 1 (1968) (words of a statute should not be deemed merely redundant if they can reasonably be construed so as to add something to the statute which is in harmony with its purpose."

When the Allen case and the legislative purpose of Chapter 607 are juxtaposed, it 'seems significant that the new statute uses the word "declared" rather than saying that a salvage vehicle is "a motor vehicle that is a total loss." The significance is that the General Assembly now intends to include "constructive total loss" vehicles as well as "actual total loss" vehicles within the definition of salvage motor vehicle. As the Court of Appeals held in Allen, "Simply stated, the vehicle is considered a constructive total loss any time repair becomes economically impractical." 53 N.C. App. at 242. More particularly, a vehicle is a "constructive total loss" when the "cost of repairing the vehicle (including, where applicable, the cost of repairing latent defects as yet undiscovered but reasonably anticipated) added to the salvage value of the automobile exceeds the actual cash value of the vehicle prior to the collision." Id.

An insurer treats a wrecked vehicle as a constructive total loss, thereby declaring it a total loss, when it has determined that the vehicle cannot economically be repaired. In such a case the insurer must (1) pay the insured the preaccident value (less deductible) in exchange for title to the car, (2) replace the vehicle, or (3) pay the consumer the preaccident value less the deductible and salvage value but leave the vehicle with the insured. The insurer must take the first approach if the insured requests it and the vehicle "is damaged an amount [sic] which equals or exceeds 75 percent of the preaccident actual cash value." N.C. Ins. Reg. .0408, Total Losses on Motor Vehicles, Para. (5). In the last case the insurer must supply the insured "with the name and address of a salvage dealer who will purchase the salvage for the amount deducted." Id. Para. (3).

With this interpretation the two statutes are harmonized in a way that (a) is in keeping with the legislative purpose, (b) does not repeal G.S. 20-109.1(a)(1) by implication and (c) does not render the "declaration of total loss" test in G.S. 20-4.01(33)(d) merely redundant.

Lacy H. Thornburg Attorney General

James C. Gulick Special Deputy Attorney General