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Judge: No UM coverage for newly purchased car

Auto Accident Crash Collision MAINEven though the seller of a used car failed to fill out odometer information when he turned over the title, the transfer of ownership was complete and the buyer could not look to the seller’s insurance policy after a devastating crash the next day, a federal judge has ruled.

The buyer’s bid for coverage raised “novel and surprisingly knotty questions of state law,” said Senior U.S. District Judge Glen E. Conrad in ruling for the insurance carrier.

The decision is a setback for a driver who claims permanent disability from injuries suffered in an accident on Route 100 in Carroll County. The accident victim was described by a state trooper as a “sitting duck” in the 2016 head-on collision. His lawyer said he’s undergone more than a dozen surgeries for his injuries.

Conrad’s opinion is Fagg v. Progressive Gulf Ins. Co. (VLW 020-3-009).

Over the line

The parties agreed as to the facts. On April 29, 2016, Preston Scott Fagg of Draper – then 22 – paid $6,000 for a 1999 Suzuki Vitara. The seller – Joseph Lee Horton – signed the certificate of title and gave it to Fagg. The two considered the transaction complete at that point, and Fagg drove off in the car.

Horton did not fill in the blanks for certification of the odometer reading on the title certificate. Fagg did not immediately present the title to the DMV. The accident occurred the next day.

Anthony Lee Thompson, 34, of Pembroke was driving a 1996 Dodge Neon northbound on two-lane Route 100 when his car collided with Fagg’s southbound Suzuki. Fagg saw the other car coming on his side of the road and had no chance to do anything, the trooper told the Carroll News at the accident scene.

“He was a sitting duck,” Trooper J.D. Delp told the paper.

The driver of a pickup truck behind Fagg’s car said it looked like the Thompson car was coming at 90 miles an hour, the trooper said. The truck’s driver also was involved in the wreck.

Thompson was convicted of driving while intoxicated and driving while suspended, according to online court records. Thompson’s insurance carrier denied all coverage, saying his policy “canceled” on April 22, eight days before the accident.

Sources of recovery

Horton – seller of the Suzuki – had a Progressive insurance policy with a $100,000 limit, according to Conrad’s opinion.

Fagg had coverage under a policy issued to him individually and under his mother’s policy, according to his attorney, Timothy E. Kirtner of Pulaski. But Fagg sought additional, uninsured motorist coverage under Horton’s policy.

Fagg’s primary argument was that Horton’s failure to complete the odometer certification made the attempt to assign title to Fagg ineffective. But Conrad agreed with Progressive that Horton transferred ownership with the title form.

No coverage from seller’s policy

Case law on title transfers from the Supreme Court of Virginia is scarce, Conrad noted. Kirtner said that scarcity could be explained by the fact that many coverage questions are resolved in diversity cases in federal court.

Analyzing the Virginia decisions, Conrad concluded that Fagg owned the Suzuki at the time of the accident and that Fagg was not an insured under Horton’s policy.

Conrad relied primarily on a 2000 ruling from the Supreme Court of Virginia, Allstate Ins. Co. v. Atlanta Casualty Co. The state court said transfer of ownership of a vehicle requires two events: (1) delivery of the endorsed certificate of title and (2) delivery of possession of the vehicle.

The applicable statutes did not support Fagg’s contention that the transfer was incomplete for absence of odometer information, Conrad concluded.

The judge noted a tension about the failure to do the DMV paperwork. In its 2000 decision, the Virginia justices said a failure to apply for a new certificate of title did not void transfer of ownership. But a 1942 Virginia Supreme Court ruling said legal title could be transferred only by the Motor Vehicle Commissioner.

“The court will adhere to the Court’s more recent statement,” Conrad said, attributing the apparent tension to evolution of the motor vehicle code over the years.

“In sum, the court holds that Horton no longer held legal title to the Suzuki at the time of the accident in which Fagg was injured. Instead, title to the Suzuki had transferred to Fagg because Horton endorsed and delivered the certificate of title to Fagg, and Fagg took physical possession of the vehicle,” Conrad wrote.

Putting in a final nail, Conrad said Fagg could not have been a permissive user under Horton’s policy. Because Horton had “no remaining interest in or control of the Suzuki, he had no authority to grant Fagg ‘express or implied consent’ to use the vehicle,” Conrad said.

“We wish Judge Conrad had reached a different result but appreciate that the case presented a peculiar set of facts and that there was very little guidance from the Virginia Supreme Court,” Kirtner said.

Progressive was represented by Lindsay L. Rollins of Glen Allen, who was unavailable for comment.