Dealership with Title to Vehicle Not Deemed Owner in Certificate of Title State - Greater Cincinnati Automobile Dealers Association

Dealership with Title to Vehicle Not Deemed Owner in Certificate of Title State

By Shelley B. Fowler*

It makes sense to conclude that the party whose name is on a car’s certificate of title is the car’s owner. That’s not always so. In a recent case, a court was asked to decide whether a dealership with title to a car was the car’s owner at the time the car was involved in an accident that killed two people. Let’s see what the court concluded.

Jonathan Elmore was involved in a car accident that killed him and his passenger, Craig Armstrong. Craig’s father, Charles, as administrator of Craig’s estate, sued several parties, including Martin Cadillac, Inc., and Martin Cadillac’s insurer, The Travelers Indemnity Company, for the wrongful death of his son.

Martin Cadillac had received the car in trade and gave it to ABC Bowling Green, LLC, to sell at auction. DeWalt Auto Sales bought the car at auction but did not receive the Kentucky title. Martin Cadillac completed the required Notice to Clerk of Acquisition, which requested that the county clerk record the title assignment to the dealership, 26 days after taking the car in trade. The notice, however, was required to be filed within 15 days of the assignment of the car to the dealership. After Elmore bought the car from DeWalt Auto, Martin Cadillac delivered paperwork transferring title to the car to ABC. At the time of the accident, however, the title was still in Martin Cadillac’s name.

Kentucky is a certificate of title state for purposes of determining ownership of a vehicle. However, an exception applies for a licensed motor vehicle dealer who transfers physical possession of a vehicle to a buyer pursuant to a bona fide sale, so long as certain requirements are met. One of those requirements mandates that a dealer who assigns a vehicle to a “purchaser for use” require proof of insurance before delivering possession of the vehicle.

The trial court found that this requirement did not apply to Martin Cadillac because DeWalt Auto was not a “purchaser for use,” and, therefore, Martin Cadillac’s failure to satisfy this requirement did not prevent it from satisfying the ownership exception. The trial court concluded that Martin Cadillac was not the owner of the car.

The appellate court reversed, finding that the duty to obtain proof of insurance before delivering possession of a vehicle applies even in a dealer-to-dealer sale. The appellate court reversed the grant of summary judgment in favor of Martin Cadillac and Travelers Indemnity and remanded for the trial court to determine whether Martin Cadillac properly complied with its statutory requirements.

The Supreme Court of Kentucky reversed and reinstated the trial court’s order granting summary judgment for Martin Cadillac and Travelers Indemnity. The high court found that the “purchaser for use” language applies to a sale to a consumer rather than a sale to a dealership for resale. The high court added that Martin Cadillac’s untimely filing of the notice requesting a title assignment was not fatal because Martin Cadillac substantially complied with the requirement by complying at a later date. Because, as of the date of the accident, Martin Cadillac had sent the notice of assignment to the county clerk and transferred the necessary paperwork to ABC, Martin Cadillac was not the owner of the car, even though the title was still in Martin Cadillac’s name, and Martin Cadillac and Travelers Indemnity were not responsible for coverage of the car.

Remember that this case was based on the intricacies of Kentucky law. To limit your exposure in a case like this, make sure you are knowledgeable about the titling laws in your state and comply with them when transferring title to a vehicle.

Travelers Indemnity Company v. Armstrong, 2018 Ky. LEXIS 449 (Ky. November 1, 2018).

*Shelley B. Fowler is a managing editor at, LLC. She can be reached at 410.865.5406 or by email at