Summary
holding that sale of motor vehicle that did not include transfer of the certificate of title as required by statute was void
Summary of this case from In re DixonOpinion
Docket No. 63998.
Decided October 11, 1983. Leave to appeal applied for.
Googasian, Hopkins Forhan (by Stephen J. Hopkins), for plaintiff.
Marston, Sachs, Nunn, Kates, Kadushin O'Hare, P.C. (by David K. Barnes, Jr.), for defendant Reddig.
Defendants appeal from the trial court's order granting plaintiff's motion for summary judgment pursuant to GCR 1963, 117.2(3).
On November 22, 1978, defendant Gregory Szymanski was driving a 1972 Chevrolet Nova, an uninsured car, when he collided with another vehicle, killing its driver, Uwe Reddig. Defendant Marlene Reddig, the personal representative of the estate of the deceased, brought a wrongful death action against Szymanski and plaintiff. Plaintiff denied coverage and instituted this declaratory relief action.
Plaintiff had issued a policy of insurance to George Baubie and Diane Baubie which was in effect at the time of the accident. Szymanski is the brother of Diane Baubie and was a resident of the Baubies' household at the time of the accident. Marlene Reddig sought recovery under that policy pursuant to the following provisions:
"Persons Insured: The following are insured under Part I:
* * *
"(b) with respect to a non-owned automobile,
* * *
"(2) any relative, but only with respect to a private passenger automobile * * * provided his actual operation * * * is with the permission, or reasonably believed to be with the permission, of the owner and is within the scope of such permission * * *
"`non-owned automobile' means an automobile * * * not owned by or furnished for the regular use of either the named insured or a resident of the same household as the named insured * * *".
The dispute between the parties was whether Szymanski was the owner of the Nova. If he was, then he could not be afforded coverage under the "non-owned automobile" clause reproduced above. At the time of the accident, defendant Dennis Elwart was the registered owner and title holder of the Nova. However, Elwart and Szymanski had earlier agreed that Szymanski would purchase the vehicle from Elwart for $100. Szymanski had paid $60 on the purchase price and the car had been delivered to Szymanski's residence. Elwart, however, had not transferred the certificate of title to Szymanski because he could not locate it. He had also not registered the sale with the Secretary of State.
On April 8, 1982, the trial court granted plaintiff's motion for summary judgment on the ground that Szymanski was a conditional vendee and thus the owner of the Nova under MCL 257.37; MSA 9.1837.
"`owner' means: * * *
"(b) A person who holds the legal title of a vehicle or in the event a vehicle is the subject of an agreement for the conditional sale or lease thereof with the right of purchase upon performance of the conditions stated in the agreement and with an immediate right of possession vested in the conditional vendee * * * then such conditional vendee * * * shall be deemed the owner."
Defendants contend that the trial court erred in granting the plaintiff's motion for summary judgment because, under the undisputed facts, Szymanski was not the owner of the Nova at the time of the accident inasmuch as Elwart had not yet delivered the certificate of title to Szymanski.
In Endres v Mara-Rickenbacker Co, 243 Mich. 5; 219 N.W. 719 (1928), the Court considered whether a person who purchased a vehicle without receiving the certificate of title was the owner of that vehicle. The Court noted that the motor vehicle laws, as then written, required that the seller of a motor vehicle deliver the certificate of title to the purchaser and further provided for criminal punishment for anyone who failed to meet that requirement. The Court pointed out that the purpose of the statute containing those provisions was to "discourage and to prevent stealing of automobiles, to protect the public against crime". 243 Mich. 8. It then cited the general rule that,
"`where statutes enacted to protect the public against fraud or imposition, or to safeguard the public health or morals, contain a prohibition and impose a penalty, all contracts in violation thereof are void.'" Endres, supra, p 8, quoting Cashin v Pliter, 168 Mich. 386, 389; 134 N.W. 482 (1912).
Since the sale, unaccompanied by the delivery of the certificate of title, was in violation of the statute, the Court held that it was void and that the seller remained the owner of the vehicle. See, also, Karibian v Paletta, 122 Mich. App. 353, 357; 332 N.W.2d 484 (1983).
Although the motor vehicle laws have been rewritten since Endres was decided, at the time of the accident involved in the present case they continued to require the seller to surrender the certificate of title, MCL 257.233(d); MSA 9.1933(d). They also provided that it shall be a misdemeanor to fail to properly deliver the certificate. MCL 257.239; MSA 9.1939. We also perceive no change in the purpose of the statute. Consequently, we hold that, at the time of the accident, a sale of a motor vehicle which did not include a transfer of the certificate of title as required by the statute was void. Under such circumstances, the seller remained the owner.
The statute has since been amended by 1980 PA 398, § 1. The old statute gave the seller the option of delivering the certificate of title to either the purchaser, transferee or appropriate department within the office of the secretary of state. The new statute requires delivery to the purchaser or transferee:
"The owner shall indorse on the back of the certificate of title an assignment of the title with warranty of title in the form printed on the certificate with a statement of all security interests in the vehicle or in accessories on the vehicle and deliver or cause the certificate to be mailed or delivered to the purchaser or transferee at the time of the delivery to the purchaser or transferee of the vehicle. The certificate shall show the payment or satisfaction of any security interest as shown on the original title." MCL 257.233(4); MSA 9.1933(4).
In the present case, Elwart did not properly transfer the certificate of title before the date of the accident. The sale to Szymanski was, therefore, void and Elwart remained the owner. The trial court erred in ruling otherwise, and, for that reason, summary judgment is reversed.
In light of our disposition of this case, we decline to address defendants' remaining claim.
Reversed and remanded for proceedings consistent with this opinion. Costs to appellants.
I would reverse the summary judgment on the basis that there are genuine disputes as to material facts.
The policy provisions indicate that three determinations are crucial in finding coverage: (1) the vehicle must in fact be "non-owned" by the relative, (2) and not furnished for his regular use, and (3) the vehicle must have been operated with the permission, or reasonably believed to be with the permission, of the owner.
Even if appellant Szymanski is found to be a non-owner, there is a dispute as to whether the car had been "furnished for his regular use". Elwart, in his deposition, stated that the vehicle was turned over to Szymanski so he could make repairs on it and, diversely, that the title was not transferred because Elwart could not locate the certificate of title. The former statement indicates the vehicle was not turned over for Szymanski's regular use whereas the inference from the latter statement is that it was.
Whether the vehicle was being driven with the permission of the owner depends upon the understanding of the parties to the sale since "permission" also encompasses the reasonable belief that it was with permission. Even if the vehicle was not turned over to Szymanski for his regular use in that he did not have permission to use the vehicle, if he had a reasonable belief that he had permission to use the 1972 Nova on a limited basis, coverage would be afforded. In short, there is a genuine dispute as to a material fact, for where the truth of the material factual assertion depends on the credibility of a deponent, movant, or affiant, "there inheres a genuine issue to be decided at a trial by the trier of fact and a motion for summary judgment cannot be granted". Brown v Pointer, 390 Mich. 346, 354; 212 N.W.2d 201 (1973).
Finally, the question of whether Szymanski had an immediate right to possession must still be resolved. Possession does not equal the "immediate right of possession", as required by MCL 257.37; MSA 9.1837. The Szymanski affidavit, attached to defendants' motion for reconsideration of plaintiff's motion for summary judgment, raises a factual dispute on this issue. Summary judgment was inappropriate, and defendants should not be precluded from proving the specific facts which would entitle them to relief.
I also make no determination of the second issue.