Mich. SC upholds trial court's view of automobile ownership

John O'Brien Apr. 12, 2007, 4:00pm


LANSING, Mich. - Once the two sides sign an application for the title, ownership of an automobile is officially transferred, concluded the Michigan Supreme Court recently.

In a Wednesday opinion, the Court reversed a Court of Appeals judgment and reinstated the trial court's grant of summary disposition for Golling Chrysler Plymouth Jeep, Inc.

"We conclude that the application for title was executed in this case because it was signed by the parties. Defendant was not required to send the application to the Secretary of State in order to complete the execution," wrote Chief Justice Clifford Taylor, part of a 5-2 majority.

The dispute surrounded an automobile accident caused by Ksenia Nichols. Six hours after she signed financing documents, made a down payment and took possession of a Dodge Neon from the dealership, she struck a parked car.

The accident caused irreversible brain damage to Brian Perry, who sued Nichols. The two sides settled for $85,000 and Nichols' release of further liability.

Nichols then sued Golling Chrysler Plymouth Jeep, alleging that it was still the owner of the Neon at the time of the accident. The trial court did not agree, even though the dealership did not assign the title to Nichols until three days after the accident. The new title was not issued by the Secretary of State until eight days after the accident.

The Court of Appeals used the 1995 case Goins v Greenfield Jeep Eagle, Inc, as its basis and reversed the trial court's decision.

The Supreme Court found that Goins was not the proper standard of review. That case involved a sale where the Secretary of State received the application and issued a certificate of title, even though the dealer failed to ensure that the buyer had proper insurance. That should have precluded the title being issued.

"The application for title was executed when defendant sent the necessary forms to the Secretary of State, and the certificate of title was executed when the Secretary of State issued a new certificate in the purchaser's name," the Goins decision says.

Taylor wrote that Perry's case adds to situations like the Goins decision.

"The question the present case poses actually builds on the Goins question and asks: Conceding that execution was surely effected when the application was sent to the Secretary of State, was the execution effective at some point before that?" Taylor wrote. "We believe it was effective even earlier. It was effective at the moment of signing."

Justices Marilyn Kelly and Michael Cavanaugh did not agree with the majority, and Kelly wrote a dissenting opinion. She says the majority distorted the holding of Goins.

"The majority implies that the Goins Court was sloppy in its phraseology," Kelly wrote. "That seems unlikely given that the Goins Court dedicated a significant portion of its analysis to past decisions that emphasized the importance of the transfer of title to the transfer of ownership.

"Considering its detailed discussion of the importance of deciding when title transferred, it is not credible that the Goins Court found it unnecessary to specify the exact moment the title transferred. For that reason, I conclude that the Goins Court meant what it wrote: the application for title was executed, hence title transferred, 'when (the dealership) sent the necessary forms to the Secretary of State.'"

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