Opinion
NO. 2018-CA-000133-MR
01-31-2020
ENRIQUE SANDOVAL APPELLANT v. AUTO VENTURE, INC., D/B/A AUTOSMART 2 AND SHYANN WILLIAMS APPELLEES
BRIEFS FOR APPELLANT: Bruce Anderson Louisville, Kentucky BRIEF FOR APPELLEE AUTO VENTURE, INC., D/B/A AUTOSMART 2: Alexander J. Kuebbing Louisville, Kentucky NO BRIEF FOR SHYANN WILLIAMS
NOT TO BE PUBLISHED APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE MITCHELL PERRY, JUDGE
ACTION NO. 13-CI-005313 OPINION
AFFIRMING IN PART, REVERSING IN PART, AND REMANDING
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BEFORE: ACREE, CALDWELL, AND KRAMER, JUDGES. KRAMER, JUDGE: This case asks us to determine who owns a vehicle, for insurance purposes, when it is involved in an accident before its title is transferred to its purchaser by the car dealer who sold it. After thorough review, we affirm in part, reverse in part, and remand.
At the outset, we summarily frame this case by pointing out that over fifteen years ago, we held that a car dealer would be deemed the vehicle's owner in such situation if the dealer did not "use due diligence in making a prompt transfer" of title. Ellis v. Browning Pontiac-Chevrolet-GMC Truck-Geo, Inc., 125 S.W.3d 306, 308 (Ky. App. 2003). Here, Auto Venture, Inc., d/b/a Autosmart 2 did not transfer title to Shyann Williams, the purchaser of a Chevrolet Impala, for almost a month--during which time the Impala collided with a vehicle driven by Appellant Enrique Sandoval. Because Auto Venture failed to use due diligence to promptly transfer title to Williams, we conclude it was the owner of the Impala at the time of the collision.
The material facts of this case are not disputed. Shyann Williams purchased a Cadillac from Auto Venture on July 8, 2013. A Geico insurance policy covering the Cadillac was issued to Williams that day. Sandoval admits Auto Venture properly obtained proof of that Geico policy before letting Williams take possession of the Cadillac. Three days later, Williams returned to Auto Venture and exchanged the Cadillac for a Chevrolet Impala. At that time, Auto Venture received a fax showing Williams was insured by Geico, but the fax listed the Cadillac as the insured vehicle. It is uncontested, however, that Williams' policy covered the Impala.
On July 15, 2013, Geico issued a notice of cancellation to Williams for nonpayment of premiums, to be effective on July 30, 2013. On August 8, 2013, Auto Venture received the title to the Impala from its previous owner. Sixteen days later, Williams, while driving the Impala, collided with Sandoval, injuring Sandoval. On August 31, 2013, Auto Venture executed the title documents transferring title to Williams on the Impala, but it did not present the documents to the county clerk until September 4, 2013. In other words, Auto Venture waited twenty-seven days after it received the Impala's title documents before presenting to the county clerk the documents transferring title to Williams.
In October 2013, Sandoval filed a complaint against Williams and later added claims against Geico and Auto Venture. Sandoval initially only alleged Auto Venture failed to meet its statutory duty to obtain proof of insurance at the time it sold the Impala to Williams. See Kentucky Revised Statutes (KRS) 186A.220(5)(b) ("The dealer may, with the consent of the purchaser, deliver the assigned certificate of title, and other appropriate documents of a new or used vehicle, directly to the county clerk, and on behalf of the purchaser, make application for registration and a certificate of title. In so doing, the dealer shall require from the purchaser proof of insurance as mandated by KRS 304.39-080 before delivering possession of the vehicle."). In August 2015, the trial court granted Geico's motion for summary judgment. In November 2016, the trial court permitted Sandoval to amend his complaint to allege, inter alia, that Auto Venture failed to timely transfer ownership of the Impala to Williams.
KRS 186A.220 was amended in 2016, but for purposes of this appeal, the amendments only renumbered the relevant provisions.
Later in November 2016, the trial court granted Auto Venture's motion for summary judgment. In its opinion and order, the trial court found that Auto Venture had satisfied its statutory duty to verify Williams had insurance before permitting her to take possession of the Impala. Inexplicably, the trial court's opinion and order contains a heading for a section ostensibly devoted to whether Auto Venture timely transferred title of the Impala to Williams, but the order does not cite Ellis or meaningfully discuss the timeliness issue. Presumably because Sandoval still had claims remaining against Williams, the trial court did not make its grant of summary judgment to Auto Venture final and appealable.
Consequently, in May 2017, we dismissed Sandoval's first appeal. Sandoval v. Auto Venture, Inc., d/b/a Autosmart 2, et al., No. 2016-CA-001938-MR (Ky. App. May 11, 2017).
In December 2017, the trial court granted summary judgment to Sandoval on his claims against Williams, who had not participated in the proceedings. Sandoval then filed this appeal, naming Auto Venture and Williams as appellees. Sandoval's substantive appellate claims relate only to Auto Venture, and Williams has not filed a brief or otherwise participated in this appeal.
Our Supreme Court has set forth the following standards of review for summary judgment:
Summary judgment is to be cautiously applied and should not be used as a substitute for trial. Granting a motion for summary judgment is an extraordinary remedy and should only be used to terminate litigation when, as a matter of law, it appears that it would be impossible for the respondent to produce evidence at the trial warranting a judgment in his favor and against the movant. The trial court must review the evidence, not to resolve any issue of fact, but to discover whether a real fact issue exists. This review requires the facts be viewed in the light most favorable to the party opposing summary judgment. . . .Shelton v. Kentucky Easter Seals Soc., Inc., 413 S.W.3d 901, 905 (Ky. 2013) (quotation marks, citations, and footnotes omitted).
Appellate review of a summary judgment involves only legal questions and a determination of whether a disputed material issue of fact exists. So we operate under a de novo standard of review with no need to defer to the trial court's decision.
Sandoval raises two arguments. First, he argues Auto Venture failed to obtain satisfactory proof of insurance from Williams. We disagree. Second, he argues Auto Venture did not timely execute the title documents. We agree.
As to the proof of insurance argument, the main thrust of Sandoval's brief is that Auto Venture was required to obtain proof from Williams listing the Impala as a covered vehicle. But that argument is directly contrary to the materially indistinguishable case of Auto Acceptance Corp. v. T.I.G. Ins. Co., 89 S.W.3d 398 (Ky. 2002). In Auto Acceptance, a purchaser of a vehicle gave the car dealer proof of insurance for a different vehicle--just as herein. That policy allowed the purchaser to add a vehicle to his coverage within thirty days of purchasing it--just as herein. The car dealer then allowed the purchaser to take possession of the vehicle even though the dealer had not yet received the certificate of title from the previous owner--just as herein. After the purchaser obtained possession of the vehicle--but before the dealer transferred title to the purchaser--the purchaser was involved in an accident--just as herein. Id. at 400.
Our Supreme Court held that the statutory scheme whereby a dealer can allow a purchaser to take possession of a vehicle after verifying the purchaser has insurance is "an exception to the general statutory scheme that makes the title holder the owner of a vehicle for insurance purposes." Id. at 401. The Court held that the purchaser was the owner of the vehicle for insurance purposes at the time of the accident because the dealer had complied with its duty to ensure the purchaser had insurance, even though the proof of insurance was for another vehicle. Id. See also Ferguson v. Occidental Fire & Cas. Co., No. 08-59-HRW, 2010 WL 628639, at *4 (E.D. Ky. Feb. 22, 2010) (holding that "[p]roof of insurance on another vehicle is sufficient to satisfy requirements for a transfer of ownership without a simultaneous transfer of title").
As we noted in Ellis, the Auto Acceptance opinion did not discuss whether the dealer had timely transferred title to the purchaser (i.e., "[t]he promptness issue"). 125 S.W.3d at 308. Thus, Auto Acceptance is not germane to Sandoval's timeliness argument.
Cited for illustrative purposes only.
Finally, Sandoval's reliance upon Gainsco Companies v. Gentry, 191 S.W.3d 633 (Ky. 2006), is unavailing. Though some of the facts in Gentry resemble those at hand (vehicle involved in an accident before dealer transferred title to purchaser), there is one crucial, material difference between the case at hand and Gentry: in Gentry, "[a]t the time of the sale [of the vehicle], insurance coverage was not discussed." Id. at 635. Obviously, a dealer cannot satisfy its duty to verify a purchaser has insurance if insurance is never even discussed. Because Auto Venture did not fail to obtain proof of insurance from Williams before giving her possession of the Impala, Gentry is distinguishable and inapplicable. By contrast, Auto Venture's actions are indistinguishable from those taken by the dealer in Auto Acceptance Corp. Thus, we conclude that Auto Venture met its duty to ensure Williams had insurance coverage.
Turning to Sandoval's dilatoriness argument, we begin by noting that KRS 186A.215(3) commands titling documents to "promptly be submitted to the county clerk . . . ." We explained in Ellis that the promptness mandate applies to all transfers, including those involving car dealers, because "unjustified delays in transferring title could potentially result in uninsured drivers on our roadways." Ellis, 125 S.W.3d at 308. Therefore, a dealer is "required to use due diligence in making a prompt transfer." Id. If a dealer fails to use due diligence, it will be deemed the vehicle's owner, for insurance purposes, if there is a pre-title-transfer collision. This is "not because of its possession of the title documents, but because it did not promptly and with due diligence deliver the necessary documents to the county clerk." Id.
Absent an interpretation which would lead to an injustice or a ridiculous result, we must afford unambiguous statutes their plain meaning. Revenue Cabinet v. O'Daniel, 153 S.W.3d 815, 819 (Ky. 2005). "Promptly" plainly means "without delay[,] very quickly or immediately[.]" https://www.merriam-webster.com/dictionary/promptly (last visited November 6, 2019). It would defy logic and common sense to conclude that Auto Venture acted without delay, very quickly or immediately when it inexplicably waited twenty-seven days to submit the title documents to the county clerk.
Indeed, though the subsection does not apply specifically to dealers, KRS 186A.215(4) seems to indicate that the General Assembly generally intended citizens to effectuate title transfers within fifteen days. In addition, KRS 186A.220(1) requires a dealer acquiring a previously registered vehicle which it holds for resale to "notify the county clerk of the assignment of the motor vehicle to his dealership" within fifteen days.
Specifically, KRS 186A.215(4) provides in relevant part:
If it comes to the attention of a transferor that a transferee did not promptly submit the necessary document within fifteen (15) calendar days to the county clerk as required by law in order to complete the transfer transaction, a transferor shall submit to the county clerk, in his county of residence, an affidavit that he has transferred his interest in a specific vehicle, and the clerk shall enter appropriate data into the AVIS system which shall restrict any registration transaction from occurring on that vehicle until the transfer has been processed. . . . This subsection shall not apply to any transactions involving licensed Kentucky motor vehicle dealers.(Emphasis added.)
Lest this opinion be misconstrued, we are not setting forth a bright-line rule that a dealer must always effectuate transfer of title within fifteen days. Each case may present unique facts showing why a dealer needed more time to transfer title. Instead, we hold that Auto Venture's taking twenty-seven days to submit the title documents of the Impala to Williams was a breach of its duty to act promptly with due diligence. Consequently, Auto Venture was the owner of the Impala when Williams collided with Sandoval.
For the foregoing reasons, the Jefferson Circuit Court's grant of summary judgment to Auto Venture is affirmed in part and reversed in part and the matter is remanded for further proceedings consistent with this opinion.
Because the issue is not properly before us, we express no opinion on how, or even if, our holding impacts the judgment against Williams, who did not appeal the judgment entered against her or otherwise participate in this appeal.
ALL CONCUR. BRIEFS FOR APPELLANT: Bruce Anderson
Louisville, Kentucky BRIEF FOR APPELLEE AUTO
VENTURE, INC., D/B/A
AUTOSMART 2: Alexander J. Kuebbing
Louisville, Kentucky NO BRIEF FOR SHYANN
WILLIAMS