Court Opinion

ID: 3261997
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:32:40.305424+00
Date Added: 2024-06-11T13:59:47.260231
License: Public Domain

The Honorable Tommy E. Mitchum State Representative P.O. Box 2082 Batesville, AR 72501
Dear Representative Mitchum:
This is in response to your request, on behalf of a constituent, for an opinion on whether a particular bonding company would be liable to a used automobile dealer who was paid for the purchase of several vehicles by another used automobile dealer with a check which was drawn on insufficient funds. The bonding company apparently had written a bond for the automobile dealer who purchased the vehicles with the insufficient check.
Arkansas Code Annotated § 23-112-603 states:
  An applicant for license as a motor vehicle dealer in used motor vehicles must file with the director a corporate surety bond in the penal sum of twenty-five thousand dollars ($25,000) on a bond form approved by the director, provided, however, that an applicant for licenses at multiple locations may choose to provide a corporate surety bond in the penal sum of one hundred thousand dollars ($100,000) covering all licensed locations of the same capacity in lieu of separate bonds for each individual location. The bond shall be in effect upon the applicant being licensed and shall be conditioned upon his complying with the provisions of Arkansas law with respect to used car dealerships; and the bond shall be an indemnity for any loss sustained by any person by reason of the acts of the person bonded when such acts constitute grounds for suspension or revocation of his license. The bond shall be executed in the name of the State of Arkansas for the benefit of any aggrieved party; provided that the aggregate liability of the surety for all claimants, regardless of the number of years his bond is in force or has been in effect, shall not exceed the amount of the bond. The proceeds of the bond shall be paid upon receipt by the Director of the Department of Finance and Administration of a final judgment from an Arkansas court of competent jurisdiction against the principal and in favor of an aggrieved party. [Emphasis added.]
Thus, while this section clearly states that a bond is required of all applicants for license as a motor vehicle dealer in used motor vehicles, before an aggrieved individual can collect on the bond for any loss sustained, he must first obtain a judgment from an Arkansas court.
Because I am prohibited by statute from the private practice of law (A.C.A. § 25-19-701) and your question is not one which concerns the operation of government, but rather seeks legal advice for a private individual, I must therefore suggest that you refer your constituent to a private attorney for the counsel sought.
The foregoing opinion, which I hereby approve, was prepared by Deputy Attorney General Elisabeth A. Walker.
Sincerely,
WINSTON BRYANT Attorney General
SD/WB:cyh