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  1. #1

    Default Cross State Title Issue

    My question involves a consumer law issue in the State of: Kentucky

    Yesterday, after 48 hours of negotiation online, I, a resident of the state of Ohio, purchased a vehicle from a resident of the state of Kentucky. I did sign a notarized transfer document and take possession. It was a rushed arrangement because the notary offices were closing in seconds. The seller handed me a folded title and we parted ways. Upon going to the DMV in Ohio this morning, I was informed that the title from Kentucky Is what is called a “junk title” (for a vehicle an insurance agency has deemed “unsaveable”) - which Ohio will not recognize and which means the state of Ohio will not title it to me. I did not know this was a junk Kentucky vehicle when it was purchased because it was did not disclosed - although it is in small print on the title, but being an out-of-state resident I didn’t see it. In talking with the previous owner he refuses to work with me to either rectify the title issue (make it a salvage title, which would require some work on his end), or return my investment. I cannot work on the title in KY because I’m not a resident. I can’t GET a title from either state. Do I have any options? Can I sue and win based on fraud/non-disclosure?

  2. #2
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    Default Re: Cross State Title Issue

    Quote Quoting DonInCincinnati
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    Do I have any options? Can I sue and win based on fraud/non-disclosure?
    Did he at any time represent to you that the title was a "clear title"? A clear title is one that is not a branded title (e.g. one in which the title is branded by the state as a salvage, junk, or lemon, etc vehicle). The types of branded titles vary a bit from state to state. Did you ever ask the seller about whether it was a clear or branded title? If you did, did you get whatever representations were made in writing?

    The thing about fraud is that the seller has to have misrepresented a material fact to you upon which you relied in making the deal. There is no responsibility for the seller in a private used car deal to volunteer that the car has a branded title either under federal law or under Ohio or Kentucky law either (and it's not clear in what state the deal was actually done). Thus, the seller not mentioning it by itself is not fraud. Private used car sales are all "as is" unless the parties agree otherwise, which means that absent fraud it is on you as the buyer to fully investigate the car before you enter into the contract to buy it. Never rush a deal like this. If a seller is rushing you, that should set off warning bells in your head that something is probably not be right. You want to have the time to get the car inspected and to review all documents in the deal carefully. The fact that the title was branded was disclosed on the title you got. So if you had had the time to read it over carefully you would have spotted that and known there was a problem. The bottom line here is that unless the seller actually represented to you that the title was a clear title — and you can prove it — you won't have any recourse against the seller on the title issue alone. The title he gave you disclosed the problem. You just had to read it to find that out.

    That said, it wouldn't hurt for you to consult a consumer law attorney to review the details of the deal and see if you have anything you can do. Perhaps something you have not said here would make a difference. Most attorneys will give you a free initial consultation so you have only a little time to lose in consulting one.

  3. #3
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    Default Re: Cross State Title Issue

    Quote Quoting DonInCincinnati
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    I did sign a notarized transfer document and take possession. It was a rushed arrangement because the notary offices were closing in seconds.
    What was the nature of this "transfer document," and why did you have it notarized?


    Quote Quoting DonInCincinnati
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    I did not know this was a junk Kentucky vehicle when it was purchased because it was did not disclosed
    And because, apparently, you did not make any reasonable inquiry or read the title document before going through with the sale.


    Quote Quoting DonInCincinnati
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    but being an out-of-state resident I didn’t see it.
    Please elaborate on this. What does you not being a Kentucky resident have to do with you not seeing the statement on the document? It's not like they use a different language in Kentucky. You had just as much ability to see it as a resident of Kentucky would have had, didn't you?


    Quote Quoting DonInCincinnati
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    I cannot work on the title in KY because I’m not a resident.
    Please explain this as well. The State of Kentucky cannot constitutionally refuse to allow a non-resident to take care of something like this, so what's the issue?


    Quote Quoting DonInCincinnati
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    Can I sue and win based on fraud/non-disclosure?
    What fraud? You admit that the car's status was written on the title document, so there isn't even non-disclosure.

    Quote Quoting Taxing Matters
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    The thing about fraud is that the seller has to have misrepresented a material fact to you upon which you [reasonably] relied in making the deal. . . . The bottom line here is that unless the seller actually represented to you that the title was a clear title — and you can prove it — you won't have any recourse against the seller on the title issue alone. The title he gave you disclosed the problem. You just had to read it to find that out.
    And, because the car's status was disclosed on the written title document, even if the OP could convince a court that a "clear title" representation was made, it might not be enough because relying on a representation that is contradicted by the title document would not be reasonable.

  4. #4

    Default Re: Cross State Title Issue

    Quote Quoting Taxing Matters
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    Did he at any time represent to you that the title was a "clear title"? A clear title is one that is not a branded title (e.g. one in which the title is branded by the state as a salvage, junk, or lemon, etc vehicle). The types of branded titles vary a bit from state to state. Did you ever ask the seller about whether it was a clear or branded title? If you did, did you get whatever representations were made in writing?

    The thing about fraud is that the seller has to have misrepresented a material fact to you upon which you relied in making the deal. There is no responsibility for the seller in a private used car deal to volunteer that the car has a branded title either under federal law or under Ohio or Kentucky law either (and it's not clear in what state the deal was actually done). Thus, the seller not mentioning it by itself is not fraud. Private used car sales are all "as is" unless the parties agree otherwise, which means that absent fraud it is on you as the buyer to fully investigate the car before you enter into the contract to buy it. Never rush a deal like this. If a seller is rushing you, that should set off warning bells in your head that something is probably not be right. You want to have the time to get the car inspected and to review all documents in the deal carefully. The fact that the title was branded was disclosed on the title you got.
    According to KY statues I’ve since found:
    (8)  A motor vehicle owner or a motor vehicle dealer licensed in this state who offers for sale, trade, or transfer a motor vehicle which carries a title brand, as set forth in subsection (2) or (6) of this section, shall disclose the nature of the brand to any prospective buyer or transferee, prior to the sale, and according to the following:

    (a) Dealer disclosure shall be located on a sticker placed on the vehicle.  The sticker wording shall be printed in at least ten (10) point, bold face type, on a background of obviously different color, and shall include the following:  “THIS IS A REBUILT VEHICLE.”  This disclosure information shall not appear on vehicles that do not have a branded title.  Dealer disclosure shall also be located on a buyer's notification form to be approved by the Transportation Cabinet.  The form shall inform the buyer that the vehicle is a rebuilt vehicle and may include any other information the cabinet deems necessary.

    (b) Nondealer disclosure shall be made in accordance with the procedures provided for in KRS 186A.060 .  The Department of Vehicle Regulation shall ensure that disclosure information appears near the beginning of the application for title and informs the buyer that the vehicle is a rebuilt vehicle.

    (9)  Failure of a dealer to procure the buyer's acknowledgment signature on the buyer's notification form or failure of any person other than a dealer to procure the buyer's acknowledgment signature on the vehicle transaction record form shall render the sale voidable at the election of the buyer.  The election to render the sale voidable shall be limited to forty-five (45) days after issuance of the title.  This provision shall not bar any other remedies otherwise available to the purchaser.

    Those were not done. My title, whii I le it has a red border (meaningless to me) and says “water damaged” does NOT say salvage or rebuilt or junk. It says type of title: TRANSFER

    At the top it says COMMONWEALTH OF KENTUCKY - certificate of title - may not be eligible for titling in all states

  5. #5
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    Default Re: Cross State Title Issue

    Quote Quoting DonInCincinnati
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    According to KY statues I’ve since found:
    (8)  A motor vehicle owner or a motor vehicle dealer licensed in this state who offers for sale, trade, or transfer a motor vehicle which carries a title brand, as set forth in subsection (2) or (6) of this section, shall disclose the nature of the brand to any prospective buyer or transferee, prior to the sale, and according to the following:

    (a) Dealer disclosure shall be located on a sticker placed on the vehicle.  The sticker wording shall be printed in at least ten (10) point, bold face type, on a background of obviously different color, and shall include the following:  “THIS IS A REBUILT VEHICLE.”  This disclosure information shall not appear on vehicles that do not have a branded title.  Dealer disclosure shall also be located on a buyer's notification form to be approved by the Transportation Cabinet.  The form shall inform the buyer that the vehicle is a rebuilt vehicle and may include any other information the cabinet deems necessary.

    (b) Nondealer disclosure shall be made in accordance with the procedures provided for in KRS 186A.060 .  The Department of Vehicle Regulation shall ensure that disclosure information appears near the beginning of the application for title and informs the buyer that the vehicle is a rebuilt vehicle.

    (9)  Failure of a dealer to procure the buyer's acknowledgment signature on the buyer's notification form or failure of any person other than a dealer to procure the buyer's acknowledgment signature on the vehicle transaction record form shall render the sale voidable at the election of the buyer.  The election to render the sale voidable shall be limited to forty-five (45) days after issuance of the title.  This provision shall not bar any other remedies otherwise available to the purchaser.

    Those were not done. My title, whii I le it has a red border (meaningless to me) and says “water damaged” does NOT say salvage or rebuilt or junk. It says type of title: TRANSFER

    At the top it says COMMONWEALTH OF KENTUCKY - certificate of title - may not be eligible for titling in all states
    The big type above should have clued you in. Interestingly enough KRS 186A.060 mentions nothing I can find that has anything to do with how a none dealer is supposed to disclose.

    https://casetext.com/statute/kentuck...rwork-required

    I'm assuming the seller was a non-dealer.

  6. #6
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    Default Re: Cross State Title Issue

    Quote Quoting DonInCincinnati
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    (b) Nondealer disclosure shall be made in accordance with the procedures provided for in KRS 186A.060 .  The Department of Vehicle Regulation shall ensure that disclosure information appears near the beginning of the application for title and informs the buyer that the vehicle is a rebuilt vehicle.

    (9)  Failure of a dealer to procure the buyer's acknowledgment signature on the buyer's notification form or failure of any person other than a dealer to procure the buyer's acknowledgment signature on the vehicle transaction record form shall render the sale voidable at the election of the buyer.  The election to render the sale voidable shall be limited to forty-five (45) days after issuance of the title.  This provision shall not bar any other remedies otherwise available to the purchaser.
    You may be in luck. You quoted from KRS § 186A.530. There is a problem with the statute in that subsection (8) states that disclosure by a nondealer shall be "made in accordance with the procedures provided for in KRS 186A.060." The problem is that KRS § 186A.060 does not provide any specific requirements for that disclosure. So the legislature somehow missed putting in anything specific for the disclosure. Rather, § 186A.060 simply is a general provision stating that the "Department of Motor Vehicle Regulation" (which is now the Department of Motor Vehicle Licensing" is to create forms for motor vehicle titling and transfers. One could infer that the Department should have come up with some form that the seller is to use to make the disclosure, but I could find any such form on its web site.

    That problem could result in two possible outcomes: (1) that the failure of the Legislature and the Department to come up with a required way to make the disclosure means that the seller isn't required to do anything or (2) that any reasonable method of disclosure by the seller would work. If its (2), then the issue is whether allowing you to see the title document itself would be a reasonable method of disclosure or whether the seller must do something else.

    So I did some digging and there is one case that answers the first part clearly: the seller does have an affirmative obligation to disclose the branded title prior to the sale. The Kentucky Court of Appeals states that as follows:

    The statute's disclosure requirements are applicable to individuals (nondealers) as well as to automobile dealers in the mandatory language. KRS 446.010(29) provides that as used in the statutes, “shall” is mandatory unless the context requires otherwise. See also, Alexander v. S & M Motors, Inc., Ky., 28 S.W.3d 303 (2000). Significantly, disclosure must be made “prior to the sale” to “any prospective buyer or transferee.”

    Preferred Auto. Sales, Inc. v. Sisson, 44 S.W.3d 818, 820 (Ky. Ct. App. 2001). As to the second part, whether the branding on the title is enough to meet that requirement, the case suggests that the answer to that, too, is no. In the case the negotiations for the sale took several days. The car was in the possession of the buyer during those several days and thus the buyer could have looked at the title any time while negotiating it and discovered the title was branded. The seller argued that should be good enough to meet the disclosure requirement. The Court trial court agreed with the seller, but the appeals court did not. It said the seller had an affirmative obligation to make the disclosure — he had to do something himself to tell the buyer of the branded title. As the Court said:

    Sisson argues that “[i]f the owner, salesman and bookkeeper all failed to notice on the Certificate of Title that the truck was rebuilt, they should be charged with that knowledge because it was available to them.” We disagree. The plain words of the statute require the owner/seller of a motor vehicle “to disclose the nature of the brand” to the buyer prior to sale and “to procure the buyer's acknowledgment signature on the buyer's notification form.” In no way does the statute permit or countenance the duplicitous conduct involved in this case. The legislative intent can be satisfied only by actual disclosure. Sisson could not be relieved of his statutory duty because he left the title in the glove compartment of the truck but remained silent when he had an affirmative statutory duty of disclosure.

    Preferred Auto. Sales, Inc. v. Sisson, 44 S.W.3d 818, 821 (Ky. Ct. App. 2001).

    So, if the seller fails to disclose the branded title and the buyer does not sign off on the buyer's notification form the sale becomes voidable at the buyer's election. That means you can return the car and get your money back from the seller. But you must do that within 45 days from the date of the sale.

    Note two things though. First, if the car was more than 10 years old the statute does not require the notification. So if it's an old car, you are out of luck. See subsection (10) of the statute. Second, if the sale took place in Ohio rather than Kentucky it is likely that the statute does not apply and that instead Ohio law would govern the sale. So in what state did the actual sale take place?

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