Ellis v. Browning Pontiac-Chevrolet-GMC Truck-Geo, Inc.

OPINION

EMBERTON, Chief Judge.

This case arises from an automobile accident that occurred on November 1, 1998, in which Corey Ellis was injured. Ricky Perryman, Jr., the driver of the truck that collided with the vehicle in which Ellis was a passenger, purchased the truck from Browning Pontiac on September 28, 1998. After presenting proof of insurance to Browning, Perryman was given possession of the truck and advised that Browning Pontiac would transfer title; the title, however, was not transferred until November 2, 1998, thirty-nine days after Perryman took possession. The trial court found Perryman to be the owner of the vehicle for insurance purposes. On appeal, we held that although our titling statutes permit a dealer to obtain proof of insurance from the purchaser then deliver the titling documents to the clerk, the lapse of time between the dealer obtaining possession of the documents and delivery to the clerk was not sufficiently prompt; therefore, Browning Pontiac was deemed the owner of the vehicle on the date of the accident.

Browning Pontiac filed a motion for discretionary review with the Supreme Court. After rendering its opinion in Auto Acceptance Corporation v. T.I.G. Insurance Company,1 the Supreme Court vacated this court’s opinion and remanded the case to us for further consideration in light of Auto Acceptance, supra. We have done so and reach the same result.

Auto Acceptance involved the issue of when title to a motor vehicle passes from a commercial dealer to a purchaser. In that case, the purchaser executed a retail sales contract for purchase and a Kentucky application for title and registration on January 21, 1997. At that time, the purchaser offered proof of insurance and the dealer agreed to present the documents necessary to transfer title. The certificate of title from the previous owner of the vehicle was not received until January 30, 1997, and the documents were not presented until February 4, 1997. The accident had occurred on January 22, 1997. Recognizing the 1994 revision to KRS2 186A.220, the court held that Auto Acceptance was not the legal owner of the vehicle merely *308because title had not been transferred. If the dealer verifies that the buyer is insured, the dealer may agree to title the vehicle after relinquishing control to the purchaser.

Although Auto Acceptance was decided after our decision in this case, the language in this court’s opinion mirrors that employed by the Supreme Court. We also recognized the 1994 revisions to KRS 186A.220(5) and the exception created for commercial dealers to retain title to the vehicle but not possession. As we expressly stated, the statute contemplates the custom of a dealer to take the applicable title documents to the county clerk and gives the dealer the option of either delivering the documents or giving them to the purchaser for delivery. Thus, we deem our opinion consistent with the Supreme Court’s holding in Auto Acceptance.

Ultimately in this case, we held the dealer to be the owner, not because of its possession of the title documents, but because it did not promptly and with due diligence deliver the necessary documents to the county clerk. In Auto Acceptance the dealer did not have the documents until nine days after the sale and four days later presented the documents to the county clerk. The promptness issue was not discussed. In our prior opinion in this case we concisely stated that the issue is whether dealers who retain the certificate of title are required to “promptly” transfer title to avoid being deemed the owner for insurance purposes. We held that the promptness requirement of KRS 186A.215(8) applied to all transfers including those covered by KRS 186A.220. A delay of thirty-nine days, for no stated reason, was deemed not prompt and Browning Pontiac was held to be the owner. We specifically noted that unjustified delays in transferring title could potentially result in uninsured drivers on our roadways. Those who presented proof of insurance at the time of purchase may become uninsured during the delay in transfer of title.

We have, as directed by the Supreme Court, again reviewed this case and find that our prior result is not contrary to the result reached in Auto Acceptance, supra. Under KRS 186A.220, Browning could relinquish possession of the vehicle before taking the necessary title transfer documents to the county clerk. However, to comply with the language and intent of the entire titling scheme, it was required to use due diligence in making a prompt transfer. Having failed to do so, Browning is deemed the owner of the vehicle on the date of the accident.

The judgment of the Henry Circuit Court is reversed and the case remanded for further proceedings.

BARBER, Judge, concurs.

KNOPF, Judge, concurs with separate opinion.

. Ky., 89 S.W.3d 398 (2002).

. Kentucky Revised Statutes.