Opinion ID: 75888
Heading Depth: 2
Heading Rank: 2

Heading: The Florida Certificate of Title statute

Text: 27 The Florida UCC establishes how a secured creditor may repossess and dispose of any type of secured collateral upon a debtor's default. Where a motor vehicle is the collateral at issue, however, Florida has codified specific legislation regarding ownership, title, and transfer, and we must look at the Florida Certificate of Title statute to determine how it speaks to ownership of repossessed vehicles. See Tug Allie-B, Inc. v. United States, 273 F.3d 936, 941 (11th Cir.2001) ([C]ourts generally adhere to the principle that statutes relating to the same subject matter should be construed harmoniously if possible, and if not, that more recent or specific statutes should prevail over older or more general ones.) (quoting Southern Natural Gas Co. v. Land, Cullman County, 197 F.3d 1368, 1373 (11th Cir.1999) (quotations and citations omitted)). After reviewing the title statute, we are satisfied that its language and Florida case precedent lead to the conclusion that ownership in fact passed to the Creditors upon repossession. 28 The Florida statute generally provides that a certificate of title is required in order to obtain marketable title to sell a vehicle. See Fla. Stat. § 319.22. 6 If the vehicle at issue has been repossessed or otherwise transferred by operation of law, however, the statute provides an exception, allowing the party possessing the vehicle to obtain a certificate of title from the Florida Department of Highway Safety and Motor Vehicles (Florida DMV). See Fla. Stat. § 319.28(1)(a) (In the event of the transfer of ownership of a motor vehicle... by operation of law ... whenever... repossession is had ..., the department may issue to the applicant a certificate of title.). 7 In such a situation, the creditor may submit an affidavit announcing the repossession as proof of ownership. Fla. Stat. § 319.28(2)(b). With this language, the Florida Certificate of Title statute expressly recognizes that ownership transfers upon repossession, 8 see United States v. Carrell, 252 F.3d 1193, 1198 (11th Cir.2001) (In statutory construction, `the plain meaning of the statute controls unless the language is ambiguous or leads to absurd results.') (quoting United States v. McLymont, 45 F.3d 400, 401 (11th Cir.1995) (per curiam)), and we therefore hold that the Debtors lost ownership of their vehicles upon repossession. 29 The bankruptcy court in the Chiodo case interpreted the statute differently, finding that [t]itle does not transfer to a creditor immediately upon repossession, since [n]umerous preliminary steps are required before a creditor with a repossessed vehicle can obtain a new certificate of title and conclude a sale of a car. We are unconvinced. 30 First, under the statute, title typically transfers upon repossession unless affirmative steps are taken to block the transfer of title (not the other way around, as the bankruptcy court found). In fact, the statute lessens the steps a repossessor must take to obtain title. See Fla. Stat. § 319.28(2)(b) (allowing an affidavit to constitute proof of ownership). Moreover, filing a written protest does not prevent ownership from passing as a matter of law; instead, a court order is required to prevent the department from issuing a certificate of title to the creditor after repossession. See id. In the normal course of events, then, title plainly transfers, unless and until the debtor takes action. 31 Second, the statute specifically recognizes that a certificate of title is not even necessary to sell a repossessed vehicle. Normally, one can own a vehicle in Florida without having a certificate of title to it, but an owner cannot transfer ownership of a vehicle to a third party until the certificate of title is in his name. See Fla. Stat § 319.22. There is an exception to this rule: Under Fla. Stat. § 319.28(2)(b), a lienholder that has repossessed a vehicle need not obtain a certificate of title in its name to transfer title, but instead can obtain a certificate of repossession from either the tax collector or the Florida DMV. This streamlined process allows title transfer to occur when the third party purchaser buys the car, so that the name on the title changes directly from the debtor to the third party purchaser. Thus, based on the plain language of this provision, allowing a creditor to transfer ownership without ever being listed as the owner on the certificate of title, we conclude that the bankruptcy court erred in holding that a creditor must be listed as the owner on the certificate of title to become the vehicle's actual owner. 32 Third, Florida courts have acknowledged that no certificate is necessary for ownership; as a result, the fact that the Creditors did not obtain any certificates prior to the bankruptcy filings is immaterial. Indeed, several Florida courts have held that the certificate of title is merely evidence of ownership that may be refuted by other evidence. See, e.g., Ragg v. Hurd, 60 So.2d 673, 674 (Fla.1952) (There is nothing in Chapter 319 to show that the Legislature intended that the provisions thereof respecting the endorsement and transfer of certificates of title or registration upon sale of a motor vehicle provide an exclusive method of transferring title to motor vehicles, and we do not think the Legislature so intended. (emphasis added)); Cooney v. Jacksonville Trans. Auth., 530 So.2d 421 (Fla.Dist.Ct.App.1988) (recognizing that factors other than title, such as who has the beneficial ownership of the car, may be relied upon to determine actual ownership of the car, and in turn to determine who is liable for the negligent operation of the car). 33 Furthermore, the method described in the Florida title statute is not the only way to transfer title, as actual title may pass without changing the name registered with the state. See, e.g., Bunting v. Daly's, Inc., 528 So.2d 106, 107 (Fla.Dist.Ct.App. 1988) (It has been settled law in this jurisdiction for many years ... that the failure of the purchaser to obtain the title certificate at the time of sale does not prevent the passage of title from the seller to the buyer.) ( quoting Correria v. Orlando Bank & Trust Co., 235 So.2d 20 (Fla.Dist.Ct.App.1970)). Under this Florida case law, it is abundantly clear that a creditor can, contrary to the bankruptcy court's determination, own a vehicle without a certificate of title or a certificate of repossession in its name. 34 The Debtors nonetheless argue that because the Creditors recognize that one can own property without having marketable title to it, § 319.28 must concern only the procedure to obtain marketable title, and cannot be relied on as the substantive law governing ownership. Instead, the Debtors say, other substantive law, like the UCC, should be consulted to determine when ownership transfers. 35 We remain unpersuaded. Although marketable title is only evidence of ownership, § 319.28 squarely recognizes that an event of transfer of ownership is repossession. See Fla. Stat. § 319.28(1)(a) (In the event of the transfer of ownership of a motor vehicle ... whenever (3)27 repossession is had upon default in performance of the terms of a security agreement ... and upon ... presentation of satisfactory proof to the department of ownership ... and upon payment of the fee ... and presentation of an application for certificate of title, the department may issue to the applicant a certificate of title thereto.). In fact, § 319.28(2)(b) states that: In case of repossession of a motor vehicle... pursuant to the terms of a security agreement ..., an affidavit by the party to whom possession has passed stating that the vehicle ... was repossessed upon default in the terms of the security agreement... shall be considered satisfactory proof of ownership. At a bare minimum, then, § 319.28 recognizes when ownership transfers, which in this circumstance is upon repossession. 36 Moreover, there is no other substantive law that establishes when ownership transfers. The UCC recognizes repossession, but does not discuss who owns the repossessed property and does not refer to title at all. Therefore, where no other substantive law on the transfer of ownership exists, and § 319.28 recognizes ownership transfer upon repossession, we rely on § 319.28 to speak to the issue. 37 Fourth, if the Florida legislature did not recognize repossession as one event that effects an ownership change before the Florida DMV issues a title, the inclusion of repossession in the Fla. Stat. § 319.28 exception to § 319.22 would make no sense. 9 This exception evinces an intention to carve repossession and other transfers of ownership by operation of law out of the certificate of title requirement, signifying that such transfers by themselves constitute changes of ownership. 38 In short, based on our review of the language of the statute, we reject the bankruptcy court's conclusion that a certificate of title is somehow required for the Creditors to be deemed the owners of the repossessed vehicles. 10 Not only is a certificate of title unnecessary to establish ownership, but Chapter 319 explicitly recognizes repossession as a transfer of ownership. Indeed, the plain language of the statute even refers to an affidavit describing the repossession event as being proof of ownership. Fla. Stat. § 319.28. Moreover, Florida case law holds that a certificate of title is merely evidence of, and is not a requirement of, establishing ownership; thus, the fact that the Creditors in these cases had not yet obtained certificates of title or certificates of repossession is insignificant. 11 We conclude, therefore, that Fla. Stat. § 319.28 recognizes that ownership passes when the creditor repossesses the vehicle. 39 Accordingly, we affirm the judgment of the district court in both cases, and hold that the vehicles repossessed prepetition were not property of the [Debtors' bankruptcy] estate[s] under § 541 of the Bankruptcy Code. 40 AFFIRMED.