Dealer sold me a car they don't have a title for???

[DaveInAZ]

I can't believe I'm in this situation. I bought a 2016 Mazda on 9/1/17 from a large & well respected Tucson Honda dealer. I am pleased with the deal and the car. But, as is typical for buying a car from a dealer in Arizona the dealer issued me a 30 day temporary licence & registration which expired 10/16. As the expiration neared I called the salesman and he told me it was the finance guy who handled this. The "finance guy" never answers or returns calls, I left him 4-5 voicemails. So on the 16th I called the DMV to ask where my registration is. The rep searched by VIN# and tells me the car is titled is in the state of Kansas and no documentation has ever been submitted for title & registration in AZ.

More calls to the dealership with no response, so I decided to get their attention by filing a complaint with the Tucson chapter of the Better Business Bureau and the AZ Association of Automotive Dealers. That worked, within an hour I had a call form the dealership Director of Finance. He tells me they took the Mazda as a trade-in in July, with Kansas registration & plates. The customer told them he didn't have the title with him, so the dealer filed for a duplicate title from Kansas. Then he tells me "not to worry" as he's sending me a 90 day temp plate & registration, which I got by email.

I just replied this morning saying that I do not accept the 90 day temp registration, the Jan. 18 2018 expiration if far to long for them to provide me legal permanent title & registration. I noted that in the Sales Contract that they warrant that  "Seller holds title to the Vehicle", and that was not true, apparently the State of Kansas holds the title in the name of the customer who traded it in.

So as I see the situation:

1- They just accepted the trade-in guy's word that he owned the car free & clear. For all the dealer knows their could be a loan lien on the title in Kansas. And this may be the case, maybe the dealer just isn't telling me everything.

2- They had a month & a half to get the title before they sold it to me. Now they've had 3 months and still no title

3- If I had bought this from "Joe's Corner Bargain Lot" I'd be worried. But this dealer also has dealerships for Audi, Accura, VW, Porsche & Mercedes Benz, so they're not going out of business anytime soon.

4- I would think I'm entitled to return this car for full refund, but I'm happy with the car & my deal and would rather keep it. The salesman had previously sent me another 30 day temp registration good until 11/19, and that's my date for resolving this. If no title by then I think I have no choice but to return the car and demand full refund. But I'm thinking perhaps I should talk to an attorney about seeking some $$$ damages for my trouble, their incompetence, and selling a car they had no title to

Thoughts?

EDIT: In researching I filed a Consumer Fraud Complaint with the AZ State Attorney's Office to put more pressure on the dealership.

[pizza1]

The ball was clearly dropped on the dealers end. I assumed that before vehicle exchanges are made/bought, that the dealer does a VIN/title search first, and see's any current liens if applicable.

Kansas is an electronic title holding state, which means they hold all titles electronically, even if theres a if theres a lien holder. Your dealership had ample time to research the car and get the title transferred to them from the state of Kansas.

You could go to your local DMV/police department and ask them to run the tag/VIN for any hits back. What a pain!

[DaveInAZ]

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@pizza1 wrote:
The ball was clearly dropped on the dealers end. I assumed that before vehicle exchanges are made/bought, that the dealer does a VIN/title search first, and see's any current liens if applicable.

Kansas is an electronic title holding state, which means they hold all titles electronically, even if theres a if theres a lien holder. Your dealership had ample time to research the car and get the title transferred to them from the state of Kansas.

You could go to your local DMV/police department and ask them to run the tag/VIN for any hits back. What a pain!

---

Your post made me realize there's a pattern here. I traded in my 2013 Mazda to them. I paid it off on Wednesday and did the deal on Friday. The small CU was holding the funds for 5 days before sending in the lien release to the DMV, if the dealer had run a VIN check on my car they would have seen the lien but they never mentioned it. They seem pretty sloppy on checking things, perhaps under pressure to meet sales goals.

[DaveInAZ]

I found out so more info. I bought a Carfax report. The State of Kansas reported a release of lien on their title for the vehicle on 9/12/17, 11 days after I bought it in AZ. Then I bought a vehicle report from the AZ DMV, as of 10/25 still no record of the vehicle being titled or registered in AZ.

The dealer made 2 mistakes: 1)Hoping they got the title taken care of before my temp registration expired and I figured out what was going on, and 2) Messing with the wrong guy. I filed a lawsuit today, asking for the purchase price of $17,500 in Personal Damages and Punitive Award.

A.R.S. 28-4409: (Arizona Revised Statutes)
"A dealer or manufacturer shall not offer for sale or sell a motor vehicle, trailer or semitrailer until the dealer or manufacturer has obtained a certificate of title to the motor vehicle".

[Anonymous]

I don't have much to add... May I ask how you paid for the car? (Cash, outside loan, dealer loan, etc.?)

Best of luck.

[Anonymous]

You're going to win a $7500 settlement in pretrial negotiations.  I would bet $500 that it'll happen because the dealership definitely does NOT want a court result showing they violated state law -- I bet it can affect their licensing.

Good job finding that law, and I'd suggest hitting the court library to pull some prior cases so you have some good legal verbiage to throw around in negotiations.

As I'm sure you're aware, you are now morally barred from discussing this with the dealership or their attorneys over the phone.  If they want to discuss it, you pick the time and place and have them come to you, not vice versa.  If they push, you tell them to cease and desist calling you and you expect them to discuss matters via USPS mail only, including any discussion as to where they will come to you and when.

You have the dealership by the jewels -- make sure to keep as much in writing as possible and negotiate the full $7500 if you can.  I'd probably accept 60% for a quick settlement, but I would also only offer a discount rate if they were able to get you the title free and clear by a certain date.

The ownership of the car itself shouldn't be negotiated as you bought it with good faith efforts -- getting the title AND a cash payout for their violations of state law is just a nice way to teach them to abide the law in the future.

[DaveInAZ]

Thanks for the encouragement, ABCD2199. Before filing the court case against them one of the first things I did was file a complaint with the local Tucson chapter of the Better Business Bureau. My 30 day temp registration & plate expired 10/16 and I wasn't getting any response from many messages left for the dealer, so I thought a complaint to the BBB would get their attention. It did, their Director of Finance called me within a few hours, first with B.S. about how they were trying to get a dupe title from Kansas, but he got me a 90 day temp registration so I can keep driving the car.

But this morning I got an email from the BBB that the dealer had responded to my complaint. I clicked and saw that they apologized for the "delay in processing paperwork" and offered to refund the $399 Dealer Documentation Fee they tacked on in the sales contract.I had an option to Accept or Reject the response so I rejected, thinking if I accepted the $399 they could claim that I had accepted that as compensation for the issue. It's gonna cost them alot more than that!

I'm thinking this is an "inside job". The owner has several car dealerships in Tucson & Phoenix with top brand car makes and wouldn't be stupid enough to jeopardize his business & reputation selling cars without titles. I think it's the Finance Dept. at this one dealership playing loose & fast with titles to maximize sales, and once the top management realizes what's going on heads will roll and they'll offer a nice pre-trial settlement to sweep things under the rug & avoid publicity.

I'm sure I'll get the title. That the loan lien on the title in Kansas was release on 9/12, 11 days after my 9/1 purchase, makes me think that their plan was to use the proceeds from my purchase to pay off the loan in Kansas, get the title in their name, and then issue me an AZ title before my 30 day temp registration expired. If they had I've never known anything was amiss. But, that's usually how crooks get caught, things don't go as planned. . . . .

Checking the status of title & registration through the DMV is only $3 per pull in AZ, so I'll keep checking & follow the progress.

[Anonymous]

Yeah, it's a tough timing matter -- I personally would have drafted up the usual "intent to sue" letter (I'm a pro at these now after having rebuilt my credit twice now in 20 years, lol) and offering a settlement option if they decided to go that route, but honestly, if they violated your rights and the law, the court clerk is probably your friend here.

Getting served is a very very fast way for their attorneys to roll into their offices to explain to them what might happen if you win, or worse, if you start the discovery process (and the subpoena process).

Discovery is ugly for people hiding legal facts.  The last thing they need is that data entering the public records.

[DaveInAZ]

Bumpity bump-bump.

So, I filed a lawsuit pro se (no attorney, self representation) against the car dealer on Oct. 27, finally have first court appearance next Tuesday, really looking forward to it. The dealer has several high end dealerships in Tucson (Mercedes, Lexus, etc.) and also in Phoenix, so they have some pretty high end lawyers. They immediately filed Motion to Dismiss, and that's what Tuesday hearing in Superior Court is about. I have no legal education or training but love learning new things and have done hours of research on my response. For those interested in the legal stuff read on:

To file legal action you must have 1) Cause and the Right of legal Action, and 2) Suffered Harm as a result of the actions of the defendant. In Motion to Dismiss dealer's lawyers claim I have no Right of Action because the state law requiring licensed car dealers to possess a title prior to offering a vehicle for sale or selling it is "statutory" in nature, it grants no right of private action for a violation, only the Director of the Dept. of Transportation has the right to bring action for a violation. And they claim I suffered no Harm because they delivered the title - over 2 weeks after I filed my suit, 2 1/2 months after I bought the car. And since I suffered no Harm, I have no Cause of Action.

The state law requiring a dealer to have a title to sell a car classifies a violation of the law as a Class 3 misdemeanor. A misdemeanor is still a criminal act, so I was pretty sure I had to right to bring legal action when harm was caused by the misdemeanor. So I found a state law in the Game & Fish section that trying to prevent or interfere with a licensed hunter from "taking wildlife" was a Class 3 Misdemeanor, and the hunter has to right to bring legal action and recover damages.  So I'm citing the Equal Protection clause of the 14th Amendment to the U.S. Constitution. Under Equal Protection, a state may not grant one class of citizens a right and then deny any other class of citizens the same right. So I have the same right to bring legal action against the dealer as hunters do for a class 3 misdemeanor. The Equal Protection clause of the 14th Amendment was cited by the U.S. Supreme Court in Brown v. Board of Education in ending racial discrimination in public schools, so it's a pretty important one.

The Harm part is easy. I think the dealer's lawyers just claimed "no harm" to scare me off, thinking since I didn't have an attorney I was too poor or to dumb to fight them. Naw, I like a challenge. In AZ dealers have the authority to issue customers a 45 day temporary registration permit to give them time to transfer them the title. Mine expired Oct. 16, so  I could no longer legally drive the car until until they finally sent me the title & permanent registration on Nov. 14. That just weeks after paying the dealer $17,500 for a car I could no longer legally drive it is clearly Harm. To rub it in I'm (truthfully)  saying that I had to park the new car & drive my much older, barely drivable car to get around. I live in a rural area and I'm too old & crippled (knee problems) to walk 10 miles each way to get to a store to buy food. 

I'll let you know how it turns out.

[Anonymous]

I'm hanging on every word, best of luck!!!

I wouldn't be surprised if one of their lawyers shows up on your doorstep in an attempt to settle.

Feel free to send a "tip" to a local TV station or two as well before the court date.