Legal Question in Consumer Law in Virginia

Re: Used Car Dealer Sold Me a Car Without a Title then Went Out of Business

I'm afraid that your assessment of your position

with respect to the owner of record of the vehicle and who still retains title to same is overly roseate, meaning that it's a perspective from a legal point of view which may well be colored by the proverbial rose-colored glasses which are always temptingly at the ready for anyone venturing to evaluate a matter of legal import.

More specifically, I'm suggesting that there's quite a high probability that the correct legal analysis of your situation would likely indicate that when the car dealer failed to remit the proceeds from the sale of the vehicle to the owner of record, he thereby violated the contract of consignment and in all likelihood vitiated the legality of the sale of the vehicle to you. If so, your position, legally speaking, would be little different from that of the hapless folk who unknowingly purchase stolen vehicles from sellers of questionable repute and who then to their dismay are required to return them to their rightful owners when the true ownership status of the vehicles is made known to them (usually by the cops). Your mistake was in not determining before you proceeded ahead with the purchase of the vehicle the consignment sale status of the vehicle and exactly who was in possession of the title. The fact that this apparently dishonest car dealer could not immediately produce the title at the point of sale should've been a red flag for you to walk away from this facially dubious deal.

I would further surmise that if the owner of record were now to institute an action for replevin(recovery) of the vehicle against you, that the court reviewing the matter would likely rule for him and against you.

Re: Used Car Dealer Sold Me a Car Without a Title then Went Out of Business

I would agree with your interpretation. When the original owner placed the car with the used car dealer, it is transparently clear (by irrefutable and unambiguous actions) that the original owner intended to have the used car dealer sell the car for him. And furthermore the original owner assumed the risk that the used car dealer would forward the money to the original owner. The situation stinks. But you are a "bona fide purchaser" in good faith and I believe you own the car. You might have to file some action in court IN EQUITY (not a claim for money) to get a title. I'm not sure off the top of my head what type of action that should be. But it would not be a standard legal action, so make sure you investigate it carefully, hopefully with a lawyer, before wasting your time on the wrong mechanism.

Also, just because the used car dealer went out of business does not necessarily close the book on getting paid. Did they have insurance such as for "errors and omissions?" Was it a corporation or a sole proprietorship? If the conduct was fraudulent with regard to the original owner of the car, the original owner may be able to "pierce the corporate veil" and get the money from the owner of the car dealership.