RENDERED: AUGUST 18, 2022

TO BE PUBLISHED

Supreme Court of Kentucky

2021-SC-0204-DG

DELORES ZEPEDA APPELLANT 

ON REVIEW FROM COURT OF APPEALS

V. NO. 2019-CA-0650

SCOTT CIRCUIT COURT NO. 18-CI-00096

CENTRAL MOTORS, INC. APPELLEE

OPINION OF THE COURT BY JUSTICE CONLEY

AFFIRMING 

Dolores Zepeda (Zepeda) was grievously wounded in an automobile 

accident on August 14, 2014, in Scott County. She filed a claim against Central 

Motors, Inc. (Central Motors) alleging it was the statutory owner of the 2002 

BMW in which she was a passenger at the time of the accident. The trial court 

granted summary judgment in favor of Central Motors, holding it had 

substantially complied with KRS 186A.220 when it sold the vehicle to Juan 

Garcia (Garcia) and was no longer the statutory owner of the vehicle. Zepeda 

appealed and the Court of Appeals affirmed the lower court’s ruling. Zepeda 

filed a motion for discretionary review which we granted. We affirm the Court of 

Appeals.
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I. FACTS AND PROCEDURAL BACKGROUND

This appeal is solely concerned with determining the statutory ownership

of the vehicle involved in the crash, the 2002 BMW, as between Garcia and 

Central Motors. Therefore, understanding the title and sales history of the

vehicle is essential.

Elite Motors, of Clarksville, Tennessee, sold the vehicle to Kevin and 

Shantell Cook on August 23, 2012. Tennessee issued a certificate of title with a 

lien held by Elite Motors on August 24, 2012. The Cooks defaulted on the loan 

and the vehicle was repossessed. Loan Portfolio Services bought the vehicle 

from Elite Motors on March 14, 2014.

Central Motors purchased the vehicle from Loan Portfolio Services in 

Tennessee on March 19, 2014 and brought the vehicle into Kentucky the same 

day. Central Motors did not file a notice of vehicle acquisition with the Fayette 

County Clerk within fifteen (15) days per KRS 186A.220(1).1 The vehicle was 

inspected by Larry Van Diver on behalf of Central Motors on April 10, 2014. 

Garcia purchased the vehicle from Central Motors on July 24, 2014 and 

executed a bill of sale, retail installment contract and security agreement for 

the purchase. As part of the transaction, Garcia also executed a power of 

1 KRS 186A.220(1) provides, as follows:

Except as otherwise provided in this chapter, when any motor vehicle 

dealer licensed in this state buys or accepts such a vehicle in trade, 

which has been previously registered or titled for use in this or another 

state, and which he holds for resale, he shall not be required to obtain a 

certificate of title for it, but shall, within fifteen (15) days after acquiring 

such vehicle, notify the county clerk of the assignment of the motor 

vehicle to his dealership and pay the required transferor fee.
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attorney, designating Central Motors as his attorney-in-fact so it could deliver 

the assigned certificate of title and other documents to make the application for 

registration and certificate of title on Garcia’s behalf per KRS 186A.220(5)(b).2

Central Motors obtained proof of insurance from Garcia and then transferred 

physical possession of the vehicle to him on July 24, 2014.

On August 11, 2014, Central Motors paid the required fees and 

submitted an application for a Kentucky certificate of title and registration and

delivered the assigned certificate of title from Tennessee to the Fayette County 

Clerk. Central Motors then filed a title lien statement with the Woodford 

County Clerk on August 13, 2014. Woodford was the county in which Garcia 

resided.

Juan Garcia was the father of Darley Morales (Morales). Though Morales 

did not possess a valid driver’s license, Garcia let Morales drive the vehicle. On 

August 14, 2014, Morales was driving the 2002 BMW when he caused it to

crash in a single vehicle accident. Morales had a blood alcohol level (BAC) of 

0.145. The accident killed Morales and left his passenger, Zepeda, paralyzed. 

The title was issued in Garcia’s name the next day on August 15th and the 

registration was completed on the 18th, three days later.

2 KRS 186A.220(5)(b) provides,

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.
4

Zepeda filed suit against the Estate of Morales seeking compensatory and 

punitive damages; against Garcia for negligent entrustment; against Allstate 

Property & Casualty Insurance Company (Allstate) for underinsured motorist 

coverage; and against Central Motors as the purported statutory owner of the 

vehicle. 

Central Motors filed a motion for summary judgment and Zepeda filed a 

cross-motion for summary judgment. Zepeda alleged Central Motors, as the 

holder of the title, was the statutory owner of the vehicle because it had not 

filed a notice of vehicle acquisition form, the TC 96-183, which Zepeda claimed 

is required under KRS 186A.220(1).

3 After holding oral arguments, the trial 

court granted summary judgment for Central Motors and held it was not the 

owner of the vehicle at the time of the accident. The trial court ruled Central 

Motors had indeed failed to file the notice of vehicle acquisition form, the TC96-183, with the Fayette County Clerk after purchasing the vehicle. But it had 

substantially complied with the statute when it submitted an application for 

certificate of title along with the previous title. The trial court reasoned Central 

Motors provided notice under KRS 186A.220(1) to the Fayette County Clerk 

when it submitted the aforementioned documents. Therefore, the trial court 

reasoned, under this Court’s decision in Travelers Indem. Co. v. Armstrong, 565 

S.W.3d 550 (Ky. 2018), that there was substantial compliance with KRS 

186A.220.

3 The Kentucky Transportation Cabinet provides a form, the “TC 96-183.” The 

plain language of KRS 186A.220(1) does not require the use of this form, only that the 

dealer notify the county clerk and pay the required fees. 
5

Zepeda appealed. The Court of Appeals affirmed the lower court ruling 

on the same grounds citing Travelers. Zepeda filed a motion for discretionary 

review which we granted. We now address the merits of the appeal.

II. Analysis

Zepeda contends the Court of Appeals erred when it affirmed the lower 

court’s summary judgment. She argues that even under the standard of 

substantial compliance as allowed by Travelers, Central Motors failed to comply 

with the requirements as set forth in KRS 186A.220.

4 Since Zepeda also filed a 

motion for summary judgment, she is not arguing that summary judgment was 

inappropriate, only that the lower court’s ruling was in error. Because

summary judgment is reached as a matter of law and there are no material 

facts that are in dispute, the standard of review on appeal is de novo. Scifres v. 

Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996).

The sole issue in this appeal is to determine whether the lower courts 

correctly determined the statutory owner of the 2002 BMW on the date of the 

accident on August 14, 2014. “Owner” is defined by KRS 186.010(7)(a):

a person who holds the legal title of a vehicle or a person who 

pursuant to a bona fide sale has received physical possession of 

the vehicle subject to any applicable security interest.

In this case Central Motors was the title holder but Garcia had received 

physical possession of the BMW pursuant to a bona fide sale on July 24, 2014. 

KRS 186.010(7)(c) states:

4 Zepeda concedes in her brief on page 7 that Central Motors complied with 

KRS 186A.220(2)-(4).
6

A licensed motor vehicle dealer who transfers physical possession 

of a motor vehicle to a purchaser pursuant to a bona fide sale, and 

complies with the requirements of KRS 186A.220, shall not be 

deemed the owner of that motor vehicle solely due to an 

assignment to his dealership or a certificate of title in the 

dealership's name. Rather, under these circumstances, ownership 

shall transfer upon delivery of the vehicle to the purchaser. . . .

Despite Kentucky being a certificate of title state for the purpose of determining 

ownership and for requiring liability insurance coverage, KRS 186.010(7)(c)

provides an exception to the general rule. Travelers, 565 S.W.3d at 556 (citing 

Auto Acceptance Corp. v. T.I.G. Ins. Co., 89 S.W.3d 398, 401 (Ky. 2002)). If a 

licensed motor vehicle dealer delivers physical possession to the buyer and 

complies with KRS 186A.220 then ownership transfers upon physical delivery 

of the vehicle. Id. at 557.

Compliance with KRS 186A.220 requires licensed motor vehicle dealers 

to perform certain acts to take advantage of this statutory exception. However,

our decision in Travelers makes it clear that substantial compliance with the 

statute is sufficient for the exemption to apply. As this Court explained:

By violating the strict requirements of the provisions (namely, the 

15 day requirement) but still accomplishing the goal (notifying the 

clerk of the acquisition of the vehicle), the intention of the statute is 

still upheld. We note that, in describing this statute as directory, 

this does not mean non-compliance is permissible. If the dealer fails 

to comply, at all, then there is no compliance with KRS 

186A.220 and the dealer is still the “owner.” However, substantial 

compliance, i.e., late compliance, may still allow the dealer to take 

advantage of the exception in KRS 186.010(7)(c).

Travelers, 565 S.W.3d at 567. 

Zepeda argues since Central Motors did not file the “TC 96-183” it should 

be considered the statutory owner. The statute does not mention this form nor 
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require any specific form. It is undisputed that Central Motors never filed the 

form the Transportation Department provides, the “TC 96-183,” but KRS

186A.220(1) requires only that the dealer “notify the county clerk of the 

assignment of the motor vehicle to his dealership and pay the required 

transferor fee.” Our decision in Travelers is clearly focused on accomplishing 

the intention of the legislature. The purpose of the KRS 186A.220(1) is:

to effectuate an efficient registration and titling process. If a dealer 

complies with these requirements late, it does not vitiate the 

overarching goal. Thus, the statute is directory and substantial 

compliance is sufficient for those sections. A licensed dealer, 

therefore, can cure an untimely compliance with KRS 186A.220, 

sections 1 through 4, by complying at a later date. If an accident 

occurs before the dealer has complied (in which case, at that point, 

there would be no compliance rather than substantial compliance), 

that dealer will still be the statutory “owner” of the vehicle. If the 

dealer has complied before the accident, it can still avail itself of 

the exception in KRS 186.010(7)(c).

Id. Zepeda’s approach imposes a requirement simply not found in the plain text 

of the statute. This elevates form over substance, an approach this Court 

rejected in Travelers. The Fayette County Clerk’s office was notified of Central 

Motors’s acquisition of the BMW because the dealership had submitted the 

assigned certificate of title from Tennessee and application for certificate of title 

on August 11, 2014, prior to the accident. At that point, Central Motors had 

substantially complied with KRS 186A.220.

Zepeda also makes much of the fact that Central Motors did not pay the 

fee that KRS 186A.220(1) requires when a dealer notifies the county clerk. 

This is clearly a requirement of the statute, but it is the responsibility of the 

county clerk’s office to collect those fees. Its failure to do so should not
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preclude a party from transferring ownership, nor does it negate that 

notification had been sufficiently given.

Zepeda also contends that the transfer of the ownership was not

complete until the certificate of title was delivered to Garcia. The earliest 

possible date that could have occurred, Zepeda argues, was August 15, the 

date the certificate of title was issued which was one day after the accident.

Zepeda urges this court to apply the holding of this Court’s decision in Nantz v. 

Lexington Lincoln Mercury Subaru, 947 S.W.2d 36, 37 (Ky. 1997) to this case.

Zepeda points to the holding of Nantz and KRS 186A.220(5)(a),

5 and (d),6 which 

state ownership transfers upon delivery of the documents to the buyer. But 

Zepeda ignores the multiple changes made to these statutes since 1994. The 

General Assembly amended this statute in 1994 and again in 2016. The issues 

this Court decided in Nantz were governed by the pre-1994 statute. Subsection 

5(b), the applicable subsection in this case, became law in 1994. Subsection 

5(d) was also not in effect at the time of the accident. It was enacted in 2016. 

KRS 186A.220(5)(b) states:

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 

5 Subsection (5)(a) states, “[W]hen a dealer assigns the vehicle to a purchaser 

for use, he shall deliver the properly assigned certificate of title, and other documents 

if appropriate, to such purchaser, who shall make application for registration and a 

certificate of title thereon.”

6 Subsection (5)(d) states, “[W]hen a dealer assigns a vehicle to a purchaser for 

use under paragraph (a) of this subsection, the transfer and delivery of the vehicle is 

effective immediately upon the delivery of all necessary legal documents, or copies 

thereof, including proof of insurance as mandated by KRS 304.39-080.”
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of insurance as mandated by KRS 304.39-080 before delivering 

possession of the vehicle.

Garcia appointed Central Motors as his attorney-in-fact at the time of purchase 

to effectuate the transfer of ownership and delivered the documents directly to 

the county clerk as allowed by subsection 5(b). Central Motors delivered all the 

required documents on August 11, 2014, and the new certificate of title was 

processed the same day, several days before the accident. Subsection 5(d), 

which states the transfer is “immediately upon delivery of all necessary legal 

documents,” is explicitly conditioned upon adherence to subsection 5(a). That 

subsection applies only where the purchaser is to make the application for 

certificate of title and registration. 

Zepeda’s erroneous reliance on Nantz also ignores KRS 186.010(7) which

was also amended in 1994. The definition of owner under KRS 186.010(7)(a)

was modified. The current definition, with the 1994 amendment in bold, is:

"Owner" means a person who holds the legal title of a vehicle or a 

person who pursuant to a bona fide sale has received physical 

possession of the vehicle subject to any applicable security 

interest.

The General Assembly also added a new subsection in 1994 that applies to 

licensed motor vehicle dealers which we cite here once more. KRS 186.010(7)(c)

states:

A licensed motor vehicle dealer who transfers physical possession of 

a motor vehicle to a purchaser pursuant to a bona fide sale, and 

complies with the requirements of KRS 186A.220, shall not be 

deemed the owner of that motor vehicle solely due to an assignment 

to his dealership or a certificate of title in the dealership's name. 

Rather, under these circumstances, ownership shall transfer upon 

delivery of the vehicle to the purchaser. . . .
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(Emphasis added). At the time of the accident Central Motors, a licensed motor 

vehicle dealer, had submitted all the required documents to the Fayette County 

Clerk, obtained proof of insurance from Garcia, and notified the County Clerk 

of its acquisition of the vehicle before the crash occurred. Therefore, Central 

Motors substantially complied with KRS 186A.220 and transferred physical 

possession of the vehicle pursuant to a bona fide sale. As such, Central Motors

was not the statutory owner of the vehicle on the date of the accident.

III. CONCLUSION

The Court of Appeals correctly affirmed the summary judgment of the 

Scott County Circuit Court which held that Garcia was the statutory owner of 

the vehicle at the time of the accident on August 14, 2014. Based on this 

Court’s decision in Travelers, we affirm the Court of Appeals and hold Central 

Motors substantially complied with KRS 186A.220 and delivered possession of 

the vehicle pursuant to a bona fide sale, thereby making Garcia the statutory 

owner of the vehicle.

Minton, C.J., Keller, Lambert, Nickell, VanMeter, JJ., sitting. All concur. 

Hughes, J., not sitting. 
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COUNSEL FOR APPELLANT: 

Joseph Rugg

David Noble

Morgan & Morgan, PLLC

COUNSEL FOR APPELLEE: 

R. Craig Reinhardt

Reinhardt & Associates, PLC