Opinion ID: 784792
Heading Depth: 3
Heading Rank: 1

Heading: Albin held legal title to the Mercury

Text: 19 Swope did not transfer title to the Mercury to Albin until September 17 or 18, 1998, a day or two after the accident. See Nantz, 947 S.W.2d at 37 ([A]ccording to [Ky. Stat. Ann. §] 186A.215, a transfer of title takes place when the seller completes and signs the assignment of title section of the title certificate and delivers it to the buyer.). Nevertheless, the Kentucky Supreme Court's recent decision in Auto Acceptance Corp. v. T.I.G. Ins. Co., 89 S.W.3d 398 (Ky.2002), convinces this Court that Albin was an owner at the time of the accident under the first statutory definition of owner. 20 In Auto Acceptance, an individual, Wayne Chandler, purchased an Acura Integra from a dealer, J.D. Byrider, Inc. Id. at 400. At the time of the purchase, Chandler presented J.D. Byrider with proof of insurance for another vehicle; Chandler's insurance policy allowed him to add a vehicle to his coverage within 30 days of becoming the vehicle's owner. Id. J.D. Byrider then gave Chandler actual possession of the Acura, even though it had not yet received a certificate of title from the previous owner of the vehicle. Id. J.D. Byrider received the title to the Acura eight days after Chandler was involved in an accident with the car. Id. Under the court's previous holding in Nantz, supra, it appeared to follow that J.D. Byrider was not an owner because it had not been assigned title and received it by the date of Chandler's accident. See Nantz, 947 S.W.2d at 37 ([A]ccording to KRS 186A.215, a transfer of title takes place when the seller completes and signs the assignment of title section of the title certificate and delivers it to the buyer.); see also Kelly v. McFarland, 243 F.Supp.2d 715, 718-19 (E.D.Ky.2001) (holding that the title retained by the dealer must be assigned, and hence fully executed, as prerequisite to effectuating the transfer of title). Yet the court in Auto Acceptance held: 21 Both the trial court and the Court of Appeals correctly determined that, under Nantz, J.D. Byrider was the owner of the Acura for insurance purposes because it retained the title to the vehicle. 22 Auto Acceptance, 89 S.W.3d at 401. Since the court previously had acknowledged that J.D. Byrider did not physically have title at the time of the accident, the only logical interpretation of the court's holding is that J.D. Byrider was the constructive title-holder of the Acura on the day of the accident. 1 23 After holding that J.D. Byrider was the titleholder of the car it had delivered to the purchaser, the court in Auto Acceptance went on to hold that J.D. Byrider did not own the Acura for liability insurance purposes because of Ky. Stat. Ann. § 186A.220(5), which sets forth an exception to the general statutory scheme that makes the title holder the owner of a vehicle for insurance purposes. Id. at 401; see also Ky. Stat. Ann. § 186A.220(5) (providing that dealer shall deliver certification of title to purchaser at time of vehicle's delivery; alternatively, the dealer may deliver the vehicle to the purchaser without title, as long as the purchaser consents to have the dealer apply for a registration and title on the purchaser's behalf: In so doing, the dealer shall require from the purchaser proof of insurance... before delivering possession of the vehicle). Under this exception, J.D. Byrider was not the owner because it had obtained proof of insurance from Chandler and had promised to apply for a registration and title on Chandler's behalf before delivering the Acura to him. Auto Acceptance, 89 S.W.3d at 401. 24 The facts herein are identical to the facts in Auto Acceptance with one crucial distinction — the dealer at issue in the instant case (Albin) cannot take advantage of the exception to the title-holder-as-owner rule. As in Auto Acceptance, there were two prior owners of the vehicle at issue in this case (Swope and Albin) and an individual purchaser (Hammond). As in Auto Acceptance, the dealer herein (Albin) from whom the individual purchaser (Hammond) received the vehicle had not yet received the title from the initial owner (Swope). Accordingly, under Auto Acceptance, it follows that Albin was the constructive title owner of the Mercury at the time of the accident, unless Albin can invoke the exception set forth in Ky. Stat. Ann. § 186A.220(5). It cannot. 25 Like the dealer in Auto Acceptance, Albin did not assign title to Hammond at the time it delivered the Mercury to her, and instead sought Hammond's consent to deliver the title documents to the county clerk on her behalf, thereby triggering the requirement that Albin withhold delivery of the Mercury to Hammond until she provided Albin with proof of insurance. Id. § 186A.220(5). It is undisputed that Albin failed to obtain proof of insurance, as that term is defined by Kentucky regulations. See 806 Ky. Admin. Regs. 39:070 (2002) (listing five different methods of proving motor vehicle insurance). Had Albin complied with § 186A.220(5) (as well as with the requirement in § 186A.220(1) that Albin notify the county clerk of Hammond's purchase within 15 days), Albin would have not have been the Mercury's owner upon delivering it to Hammond. See Ky. Stat. Ann. § 186.010(7)(c) (providing that a dealer who delivers a car 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 vehicle solely due to an assignment to his dealership or a certificate of title in the dealership's name). Since Albin did not comply with these requirements, it remained a constructive title-holder of the Mercury. 26 Treating a licensed dealer like Albin that holds itself out as the true owner of the vehicle with power to convey clear title as a constructive title-holder and charging it with the duty to obtain proof of insurance before delivering an automobile to the purchaser furthers one of the central purposes of Kentucky's titling statute, that of preventing uninsured drivers from taking to the roads. See Auto Acceptance, 89 S.W.3d at 401 (noting that Kentucky's registration and titling scheme is designed to fulfill the important public policy of keeping uninsured vehicles off Kentucky highways, roads, and streets). This approach also is consistent with the Kentucky Supreme Court's announcement that the titling statutes require dealers to obtain insurance coverage for motor vehicles they sell until they transfer title by executing the appropriate legal documents and that until the seller has taken the statutory steps to properly complete the sale it will be considered the owner for purposes of liability insurance. Potts, 864 S.W.2d at 900. Because Albin owned the Mercury at the time of the Hammonds' accident, Vaniqua Hammond was a covered insured under the Motorists Mutual underinsured motorists policy. 27