Legal Question in Business Law in California

My car was hit by a driver. The cost of repair is approximately $5,000. The car was worth approximately $9,000 at the time it was hit, and is a leased vehicle. The driver's insurance co. paid for my car to be repaired. However, upon trying to renew my registration, DMV has now informed me that my car has been declared as a salvage vehicle by the driver's insurance company, and that they cannot renew my registration. When I explained to the DMV that my car was repaired and was never declared to be a total loss, DMV informed me that they will not be able to renew my registration unless the salvage status is removed by the reporting insurance company.

I did some legal research on what constitutes a salvage vehicle in California. it appears that under California law, a vehicle is not considered a salvage vehicle unless the cost of repairs exceeds the precollision market value of the vehicle. This was decided in the case of Martinez v. Enterprise Rent A Car (2004), a published opinion. In this regard, the Martinez court stated:

"Further, a vehicle is not a total loss salvage vehicle unless, based on an objective standard, THE COST OF REPAIRS EXCEEDS THE VEHICLE'S PREDAMAGE RETAIL VALUE. (emphasis added)"

"Further, defining a "total loss salvage vehicle" under section 544 as one where the cost of repairs exceeds the vehicle's predamage fair market value is consistent with section 4453. That section sets forth the information required on a vehicle registration card. Certain vehicles must be specifically identified including "[a] motor vehicle rebuilt and restored to operation that was previously declared to be a total loss salvage vehicle BECAUSE THE COST OF REPAIRS EXCEEDS THE RETAIL VALUE OF THE VEHICLE." (Vehicle Code 4453, subd. (b)(1), emphasis added.)"

"In sum, a "total loss salvage vehicle" as defined by section 544 IS ONE WHERE THE COST OF REPAIRS EXCEEDS ITS PREDAMAGE RETAIL VALUE i.e., it is "uneconomical to repair." Moreover, whether the vehicle qualifies as such is established by objective standards. The retail value can be obtained from a widely accepted source such as the Kelley Blue Book. Cost of repairs can be ascertained through estimates from qualified mechanics. (emphasis added)"

"As discussed above, California law requires a salvage certificate WHEN THE COST TO REPAIR THE VEHICLE EXCEEDS ITS UNDAMAGED RETAIL VALUE. (emphasis added)"

In addition, another published opinion, Moran v. Dept. of Motor Vehicles (2006), upheld the Martinez decision, stating:

"The legal basis for Moran�s claim Esurance wrongly classified his vehicle IS DICTA IN MARTINEZ V. ENTERPRISE RENT-A-CAR CO. (2004) 119 Cal.App.4th 46 (emphasis added)"

Therefore, it appears that the standard to require a salvage certificate under California law is that the car must first be declared a total loss. The standard for a vehicle to be declared a total loss is that the cost of repairs must exceed the undamaged retail value. Since my car does not meet the standard to be a total loss because its cost of repairs did not exceed its undamaged retail value, it also does not meet the standard to qualify as a salvage vehicle and require a salvage certificate, correct? Therefore, the insurance company declaring my vehicle as a salvage vehicle is unlawful, correct? I am now considering suing the insurance company and potentially even the driver. Am I correct that my vehicle is not a salvage vehicle in light of Vehicle Code Section 4453 and the two published opinions provided in the above? Is the insurance company violating California law? Any advice would be appreciated.

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