Individual (not a dealer) seller does not have duty to verify buyer has insurance and thus not owner for insurance purposes for subsequent collision: GRAHAM V. ROGERS (COA 4/25/2008)

INSURANCE:  Transfer of ownership between non-dealers and proof of insurance

Commonwealth Of Kentucky – 498 
DATE RENDERED: 4/25/2008

CA affirms TC entry of SJ, holding that defendant was not the owner of the car at the time of collision.
Loudon sold his car to Rogers for $400; he accompanied her to the local county clerk’s office, signed the back of the title (in both the "transfer" and "application for title" sections); his signature was notarized by county clerk staff; he turned over possession of the title and the car to Rogers. The car was involved in a hit-and-run approximately 7 weeks after the sale. A witness recorded the license plate number, which was traced to Loudon. Rogers had apparently failed to obtain insurance, submit the application for new title, or re-register the car. With the help of hit-and-run detectives, Loudon got Rogers to execute a bill of sale reflecting the original sale date. Loudon also contacted the clerk’s office to notify them of the sale. Graham filed this claim for property damage, alleging "negligent entrustment" against Loudon and arguing that since Loudon was listed as the owner by the clerk, he was still the owner for insurance purposes. The trial court concluded that Loudon had taken all steps necessary under KY statutes to transfer ownership to Rogers, therefore finding that Rogers was legal owner of the car at the time of the accident and dismissing all claims against Loudon (and State Farm).
CA affirms, holding that statute cited by Graham applies to change in registration and issuance of new title after transfer of ownership takes place. There is no affirmative duty upon the seller to verify buyer has insurance. Also, statute does not place duty upon seller to verify that buyer has timely submitted the necessary documents for transfer of title.
Digested by John Hamlet

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