Court Opinion

ID: 9729601
Source: CourtListenerOpinion
Date Created: 2023-08-26 14:43:49.915441+00
Date Added: 2024-06-11T18:25:59.924484
License: Public Domain

DAVID M. GLOVER, Judge, concurring. I join the majority in affirming the trial judge for correctly applying current law to undisputed facts. However, I disagree with the majority’s dicta regarding which party is best equipped to investigate title irregularities and to bear the risk of forged title documents. Here, the basic facts were stipulated. Though this case involves the sale and the multiple resale of one used vehicle, it centers on the handling by the Department of Finance and Administration (DFA) of a forged “State of Arkansas Official Release of Lien on Permission to Issue a Replacement Title.” Before us, the parties are the initial seller, a used-car dealership, and after two intermediate sales, the final buyer. At trial, neither side alleged wrongdoing by the other. This case involves an interplay between the sale of goods under our Uniform Commercial Code and the perfection of liens under our uniform motor vehicle act (the “act”). Our interpretation of Arkansas law, although correct, begs for legislative review of Ark.Code Ann. § 27-14-805. This writer finds there is a gap within the Uniform Motor Vehicle Administration, Certificate of Title, and Antitheft Act, Ark. Code Ann. § 27-14-101 et seq., specifically the interaction between section 27-14-909, “Release of lien by lienholder — Disclosure of Information” subsection (b)(2) and section 27-14-805, “Constructive notice.” This case turns on the constructive-notice provision, section 805. Here, the initial seller, the dealer, followed the act and protected the financed balance owed to it by properly perfecting its lien on the title. (§ 27-14-802-804). Before the initial seller received final payment and satisfied its lien (§ 27-14-909(a)), a forged “official” release of lien was presented to DFA, resulting in a new certificate of title showing no lien being issued by DFA pursuant to section 805. That action on the part of a single DFA employee, activated the constructive-notice of section 805 (which is not actual notice) to the initial seller, the dealer, who in good faith and full reliance on the uniform act had perfected its title retaining a lien under the sister sections 802-804 of the act. It is contemplated under the act that local DFA revenue-office employees are to serve the gatekeeper function to protect or release otherwise valid liens against vehicle titles on file with that agency. In this case, the forged “official” release of lien that was presented to the DFA revenue-office employee bore an unknown, unverified signature by an imposter who did not even indicate above his signature that he was acting in an agency or representative capacity of the dealer whose name and address also appeared at the top of the one-page “official” document offered. At the least, if constructive notice, instead of actual notice, is all that is required to be given to the lienholder when his valid lien is released, the constructive-notice statutorily imposed language should be bolstered by the requirement of more elaborate verification of identification, authority, and representation. Sellers and buyers are entitled to equal confidence in the documents of title. Sellers include new-car dealers, used-car dealers, financial institutions and individuals, all of whom are also likely lenders with perfected liens. The buyer’s confidence in the validity of the certificate of title (issued through a local revenue office) should not exceed the seller’s confidence in the security afforded by a perfected lien against the title (also filed at a local revenue office). Even “lawyers and used-car dealers” need protection on occasion. The task of equally protecting legitimate interests of both buyers and sellers of used motor vehicles is a legislative function.