Present: All the Justices 

ALLSTATE INSURANCE COMPANY 

v. Record No. 992352 

ATLANTA CASUALTY COMPANY 

 OPINION BY 

JUSTICE LAWRENCE L. KOONTZ, JR. 

June 9, 2000 

NATIONWIDE MUTUAL INSURANCE COMPANY 

v. Record No. 992354 

ATLANTA CASUALTY COMPANY, ET AL. 

FROM THE CIRCUIT COURT OF THE CITY OF NORFOLK 

William F. Rutherford, Judge 

These appeals, which we have consolidated, involve a 

dispute among three insurance companies concerning the potential 

coverage of their respective motor vehicle liability and 

uninsured/underinsured motorist insurance policies. The 

dispositive issue is whether, and to whom, ownership of a 

particular automobile was transferred as the result of the owner 

endorsing the certificate of title for that vehicle but leaving 

the name of the transferee blank.1

 

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For this reason, it is unnecessary to relate in detail the 

specific policy provisions of the insurance policies involved. 

It is sufficient to simply note that these provisions are those 

standard in the motor vehicle insurance industry. 
BACKGROUND 

The parties do not dispute the principal facts. Shannon 

Scarborough (Scarborough) was at one time the owner of a 1982 

Buick Regal automobile (the Buick). The Buick had been 

purchased for her by Lawrence Ferrell (Ferrell’s father), the 

father of her boyfriend Sean P. Ferrell (Ferrell). Scarborough 

was living in the Ferrell household at the time. Ferrell’s 

father had the Buick titled in Scarborough’s name. In December, 

1996, Nationwide Mutual Insurance Company (Nationwide) issued a 

motor vehicle liability insurance policy to Scarborough on the 

Buick. 

According to Ferrell’s father, although the Buick was 

purchased for Scarborough to drive “back and forth to work,” he 

intended “to give the car to both Shannon and to [his] son.” 

The Buick was “available for both of them to drive,” but was 

titled in Scarborough’s name alone because his son’s driving 

record would have resulted in a higher insurance rate for the 

vehicle had it been titled in his son’s name. Ferrell and 

Scarborough each had a set of keys for the Buick, and Ferrell 

drove the Buick “pretty much” whenever he wanted. 

In January 1997, Scarborough planned to move to Georgia to 

live with her father. Ferrell’s father “told her we were going 

to sell [the Buick] and since it was in her name she’d have to 

sign the title.” Scarborough thought that “[t]he car didn’t 

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belong to me . . . and once [I’d] gone [to Georgia] I’d go ahead 

and sign the title over to [Ferrell’s father].” While Ferrell’s 

father “was out of town,” Ferrell and Scarborough “got into an 

argument, and she signed [the certificate of title]” leaving it 

and the Buick with Ferrell and moved to her sister’s house. 

Regarding the circumstances of Scarborough’s signing the 

certificate of title, according to Ferrell “[s]he said that she 

was leaving and I asked her if she would sign the title over to 

me because a friend of mine, . . . wanted to buy the [Buick].” 

Scarborough signed her name and entered the date on the 

certificate of title. However, she did not complete the 

assignment of title by filling in the name of the intended 

transferee in the space provided for that purpose on the 

certificate. Scarborough understood that she was not to receive 

any money from the transfer of ownership of the Buick.2

After Scarborough signed the certificate of title to the 

Buick and left the vehicle with him, Ferrell “[u]sed [the Buick] 

when [he] needed to” without “ask[ing] anybody’s permission to 

drive the car.” According to Ferrell, his father had a set of 

keys only to “move [the Buick] in our yard.” Ferrell made 

 

2

Although the certificate of title was not produced as an 

exhibit at trial, it is undisputed that the space for entering 

the transferee’s name remained blank at all times relevant to 

these appeals. 

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premium payments to Nationwide on Scarborough’s insurance policy 

because “she didn’t want me to get caught driving [the Buick] 

without insurance.” Ferrell also “purchased a city sticker, 

inspection sticker and paid the personal property tax and 

everything in February so that it would still be legal.” 

On March 28, 1997, Ferrell, while operating the Buick, was 

involved in an accident with a motor vehicle occupied by Steve 

Vitek and Martha Vitek, resulting in alleged personal injuries 

to the Viteks. At that time, Ferrell was the named insured 

under a motor vehicle liability insurance policy issued to him 

by Atlanta Casualty Company (Atlanta Casualty) on his 1979 

Plymouth Volare. At that same time Allstate Insurance Company 

(Allstate) was the issuer of an automobile liability insurance 

policy, including uninsured/underinsured motorist coverage, on 

the Viteks’ vehicle. Martha Vitek filed a lawsuit against 

Ferrell, alleging that he negligently caused the accident and 

her injuries. During the pendency of that lawsuit and in 

anticipation of a potential lawsuit by Steve Vitek, Atlanta 

Casualty filed a declaratory judgment suit against Ferrell, the 

Viteks, Nationwide, and Allstate. Atlanta Casualty sought a 

declaration that it was not required to provide a defense to 

Ferrell or to provide coverage for any liability he might incur 

as a result of the accident. Atlanta Casualty asserted that the 

Buick was owned by Scarborough at the time of the accident and 

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was not a qualified “non-owned vehicle or substitute vehicle 

within the confines of the declaration of [Ferrell’s] policy” 

with Atlanta Casualty. 

Thereafter, Nationwide filed its grounds of defense, 

denying that Scarborough was the owner of the Buick at the time 

of the accident. Allstate filed an “answer,” asserting that it 

should be dismissed from the proceedings because the motion for 

declaratory judgment made no claim for relief against it. 

Following a hearing at which evidence in accord with the 

above-recounted facts was received ore tenus by the chancellor, 

the parties presented their respective positions to the 

chancellor in oral argument supplemented by trial and letter 

briefs. In summary, Atlanta Casualty contended that the 

attempted transfer of ownership of the Buick by Scarborough had 

failed because no transferee’s name was entered on the 

certificate of title. Thus, because the Buick was a non-owned 

vehicle regularly furnished for Ferrell’s use, it was subject to 

an exclusion in his insurance policy with Atlanta Casualty, and 

primary coverage rested with Nationwide as the insurer of the 

Buick under Scarborough’s policy. Nationwide contended that the 

transfer of ownership was effective and, thus, that the Buick 

was no longer owned by Scarborough, its named insured. Allstate 

maintained that regardless of whether the transfer of ownership 

had been effective, the Buick qualified as a “non-owned vehicle” 

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subject to coverage under Ferrell’s policy with Atlanta 

Casualty. 

By letter opinion dated May 7, 1999 and subsequently 

incorporated by reference in the final order, the chancellor 

ruled that “the Buick . . . was owned at the time [of the 

accident] by Shannon Scarborough. She had failed to correctly 

and fully endorse the title certificate. Scarborough’s ‘gift’ 

of the car failed because of an unspecified donee.” 

Accordingly, the chancellor ruled that Nationwide is responsible 

for defending and indemnifying Ferrell for any and all claims 

and lawsuits arising out of the March 28, 1997, motor vehicle 

accident involving Ferrell and the Viteks. The chancellor 

further ruled that “the Atlanta [Casualty] policy has no 

coverage in this case since the car was owned by Scarborough and 

Ferrell was not using the Buick as a ‘temporary substitute 

vehicle.’ ” 

Prior to the entry of the final order, Allstate sought 

reconsideration by the chancellor of the issue whether coverage 

under Atlanta Casualty’s policy was not also available. 

Allstate asserted that the ineffective attempt to transfer 

ownership of the Buick did not amount to permission by 

Scarborough for regular use of the vehicle by Ferrell and, thus, 

that his policy with Atlanta Casualty would afford coverage for 

his casual use of the Buick. 

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In a final order dated July 13, 1999, the chancellor denied 

Allstate’s motion to reconsider and entered judgment for Atlanta 

Casualty in accord with the rulings of his May 7, 1999 letter 

opinion. We awarded appeals to both Nationwide and Allstate. 

DISCUSSION 

The focus on the determination of the ownership of the 

Buick by the parties here and in the trial court is for the 

obvious reason that “[t]here is no insurance separate and 

distinct from the ownership of the car.” Nationwide Insurance 

Company v. Cole, 203 Va. 337, 341, 124 S.E.2d 203, 206 (1962) 

(citation omitted). Accordingly, in its appeal, Nationwide 

contends that the chancellor erred in ruling that Scarborough 

remained the owner of the Buick after she signed the certificate 

of title and surrendered possession and control of the vehicle. 

Allstate contends that regardless of whether the transfer of 

ownership was effective, Ferrell’s use of the Buick was only 

casual and not expressly with the owner’s permission and, thus, 

was not subject to the exclusion in his policy relied upon by 

Atlanta Casualty. As will become clear, we need address only 

the first of these two issues regarding the ownership of the 

Buick. 

In order to complete the sale of a motor vehicle, it is 

essential that the owner deliver to the transferee a proper 

assignment of title. Thomas v. Mullin, 153 Va. 383, 391, 149 

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S.E.2d 494, 497 (1929). Code § 46.2-628 governs the manner in 

which a proper assignment of title is made and provides, in 

pertinent part, that “[t]he owner of a motor vehicle . . . when 

transferring or assigning his title . . . shall fully and 

correctly endorse the assignment and warranty of title on the 

certificate of title of the motor vehicle . . . to its purchaser 

. . . and shall deliver the certificate to the purchaser or 

transferee at the time of delivering the motor vehicle.”3

However, Code § 46.2-630 further provides that “[t]he 

transferee shall write his name and address in ink on the 

certificate of title and . . . shall within thirty days forward 

the certificate to the Department with an application for the 

registration of the motor vehicle . . . and for a certificate of 

title.”4 (Emphasis added.) Accordingly, it is the 

 

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Code § 46.2-629 also requires the owner to enter the 

vehicle’s odometer reading on the certificate of title at the 

time of transfer. Failure by an owner to comply with Code 

§ 46.2-629 can result in criminal liability and can prohibit the 

transferee from obtaining a new certificate of title. The 

certificate of title to the Buick was not produced as an exhibit 

at trial and the record is silent as to whether the odometer 

reading was recorded thereon. However, as the issue was not 

raised before the chancellor, we do not consider it on appeal. 

Rule 5:25. 

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Code § 46.2-631 provides an express exception to the 

requirement of Code § 46.2-630 for a transferee who is “a dealer 

who holds [the vehicle] for resale and operates it only for 

sales purposes under a dealer's license plate.” Similarly, a 

dealer or other person may receive an unendorsed title along 

with the transferor’s “power of attorney . . . for the purpose 

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responsibility of the transferee, not the owner, to enter on the 

received certificate of title the name in which the new 

certificate of title will be issued. Common experience tells us 

that the purchaser or transferee of a motor vehicle often will 

desire to have the vehicle titled, either jointly or separately, 

in the name of another. Indeed, that is what occurred in this 

case when Ferrell’s father purchased the Buick and had it titled 

in Scarborough’s name. Thus, Scarborough’s failure to complete 

the assignment of title by entering the name of the transferee 

on the certificate of title does not, per se, defeat the 

transfer of her ownership of the Buick. Accordingly, we must 

look to the specific circumstances in this case to determine if, 

and to whom, Scarborough’s ownership of the Buick was 

transferred. 

In order to effect a transfer of the ownership of a motor 

vehicle, two things are required: (1) the owner must actually 

deliver the endorsed certificate of title to the transferee, and 

(2) the owner must deliver possession of the vehicle to the 

transferee. See Nationwide Insurance Company v. Storm, 200 Va. 

526, 528-29, 106 S.E.2d 588, 589-90 (1959)(holding that delivery 

 

of assigning the transferor’s interest.” Code § 46.2-629. 

Accordingly, we emphasize that the views expressed in this 

opinion do not apply to transfers of motor vehicles to dealers 

or to the delivery of an unendorsed certificate of title to an 

attorney-in-fact. 

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of possession of vehicle without delivery of certificate of 

title did not transfer ownership even though full payment had 

been received). Although Scarborough testified that the Buick 

“didn’t belong to” her, the record is clear that she was the 

sole owner of the Buick, as evidenced by the certificate of 

title, even though Ferrell’s father had actually purchased the 

car and “intended to give the car to both [her] and to [his] 

son.” Accordingly, only Scarborough could transfer ownership of 

the Buick. Therefore, the subsequent desire of Ferrell’s father 

to have the Buick sold and Scarborough’s acquiescence at the 

time he told her “she’d have to sign the title” are not 

relevant. 

It is clear on this record that following an argument with 

Ferrell, Scarborough desired to leave the Ferrell household and 

Ferrell “had her sign the title.” Scarborough knowingly signed 

and dated the certificate of title as the owner of the Buick, 

delivered the certificate of title to Ferrell, and left the 

Buick in his sole possession and control. In doing so, 

Scarborough’s signature constituted the required owner’s 

endorsement under Code § 46.2-628. Her delivery of the 

certificate of title to Ferrell so endorsed at the time she also 

left the Buick with Ferrell satisfied the further requirements 

of that statute. Accordingly, Scarborough effected a transfer 

of ownership of the Buick to Ferrell. Thereafter, it was 

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Ferrell’s responsibility under Code § 46.2-630 to complete the 

blank space designed for the transferee on the certificate of 

title. 

The evidence in the record supports the further conclusion 

that Ferrell fully understood that ownership of the Buick had 

transferred to him. Ferrell thereafter treated the Buick as his 

own. He drove the Buick whenever he needed to and without 

seeking permission to do so. Ferrell also paid property taxes 

and a local licensing fee on the Buick, had the vehicle 

inspected as required by law, and paid the inspection fee. He 

also attempted to maintain insurance on the vehicle by paying 

premiums on Scarborough’s insurance policy. It is true that he 

failed to apply for a new certificate of title within the time 

period required by law; however, while this might subject him to 

criminal liability, the failure to apply for a new certificate 

of title does not void the transfer of ownership of a motor 

vehicle. 

CONCLUSION 

For these reasons, we hold that the chancellor erred in 

ruling that Scarborough remained the owner of the Buick because 

her “‘gift’ of the car failed because of an unspecified donee.” 

Thus, we will reverse the chancellor’s determination that 

Nationwide has a duty to defend Ferrell and provide coverage for 

any liability he might incur as a result of the accident. 

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Ferrell’s ownership of the Buick moots any inquiry into 

Allstate’s contention that the “non-owned vehicle” coverage in 

Ferrell’s insurance policy with Atlanta Casualty would apply. 

Because the chancellor did not consider whether Atlanta Casualty 

would have a duty to defend Ferrell and provide liability 

coverage under his insurance policy if he were the owner of the 

Buick, we will remand the case for further proceedings 

consistent with the views expressed in this opinion. 

Reversed and remanded. 

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