Deep Pocket Search Failed

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When an accident results in serious injuries, the injured party’s attorneys look for other defendants, regardless of how weak the argument may be to bring other plaintiffs.

In Delores Zepeda v. Central Motors, Inc., no. 2021-SC-0204-DG, Supreme Court of Kentucky (August 18, 2022) The Supreme Court of Kentucky ruled that a car dealer who sold a car to another and only a few days before the full registration. of the transfer of title documents, it must be held that he is the owner of the vehicle and, therefore, he is responsible for the injuries.

The petition related to the legal ownership of the BMW between Garcia and Central Motors which governed whether Zepeda could be covered by Central Motors’ insurance.


Dolores Zepeda (Zepeda) was seriously injured in a car accident. He sued Central Motors, Inc. (Central Motors) stating that he was the legal owner of the 2002 BMW in which he was riding at the time of the accident. The Supreme Court ruled in favor of Central Motors, stating that it strictly complied with KRS 186A.220 when it sold the vehicle to Juan Garcia (Garcia) and was no longer the legal owner of the vehicle. Zepeda appealed and the Court of Appeal upheld the lower court’s decision.

Central Motors purchased the vehicle from Loan Portfolio Services in Tennessee on March 19, 2014 and delivered the vehicle to Kentucky the same day. Central Motors did not file a seizure notice with the Fayette County Clerk within fifteen (15) days per KRS 186A.220(1). Garcia purchased the vehicle from Central Motors on July 24, 2014 and provided the sales finance, online agreement and security agreement for the purchase. As part of the transaction, Garcia also issued a power of attorney, appointing Central Motors as his attorney-in-residence so that he could provide a certificate of title and other documents to make a request for registration and a certificate of title on behalf of Garcia. Central Motors obtained proof of insurance from Garcia and transferred the vehicle to him on July 24, 2014.

On August 11, 2014, Central Motors paid the required fees and submitted an application for a Kentucky certificate of title and registration and filed a Tennessee certificate of title with the Fayette County Clerk. Central Motors then filed a bond with the Woodford County Clerk on August 13, 2014. Woodford was the county where Garcia resided.

Juan Garcia was the father of Darley Morales (Morales). Although Morales did not have a driver’s license, Garcia allowed Morales to drive the car. On August 14, 2014, Morales was driving a 2002 BMW when he was involved in a one-vehicle accident. Morales had a blood alcohol content (BAC) of 0.145. The crash killed Morales and left his passenger, Zepeda, paralyzed. The title was issued in Garcia’s name the next day on August 15th and the registration was completed on the 18th, three days later.

Zepeda sued the Estate of Morales seeking compensatory and punitive damages; against Garcia for negligence; against Allstate Property & Casualty Insurance Company (Allstate) for providing motorist insurance; and against Central Motors as the alleged owner of the vehicle.

Central Motors filed for summary judgment. The trial court ruled that Central Motors substantially complied with the statute when it filed its application for a certificate of title and prior title. The trial court held that Central Motors served notice under KRS 186A.220(1) on the Fayette County Clerk when it filed the aforementioned documents. Therefore, the court decided, under the decision of the Supreme Court of Kentucky in Travelers Indem. Co. v. Armstrong, 565 SW3d 550 (Ky. 2018), that there was substantial compliance with KRS 186A.220.


In this case Central Motors was responsible but Garcia received the BMW following the actual sale on July 24, 2014.

Although Kentucky’s certificate of title is for the purpose of determining ownership and requiring the issuance of liability insurance, KRS 186.010(7)(c) provides an exception to the general rule. If a licensed car dealer delivers the goods to the buyer and complies with KRS 186A.220 then ownership is transferred upon delivery of the car.

By violating the requirements of the provision (which is necessary for 15 days) and still achieving the purpose (informing the clerk about the purchase of the car), the purpose of the law is still being met. Great planning, i.e late compliance, may still allow the seller to take advantage of KRS 186.010(7)(c).

The purpose of KRS 186A.220(1) is to establish proper registration and spelling. If the seller fulfills these requirements late, it does not hinder the main goal. This rule is a directory and the maximum compliance is sufficient for those sections.

A licensed dealer may cure noncompliance in a timely manner by KRS 186A.220, subsection 1 to the extent that if the dealer complied prior to the accident, he may still benefit from KRS 186.010(7)(c).

KRS 186.010(7) states: “’Owner’ means a person who has legal title to a motor vehicle. or the person who intends to sell in good faith has received possession of the vehicle subject to any interest.” and “A licensed motor vehicle dealer who transfers the property of the motor vehicle to the buyer as a result of a bona fide sale, and complies with the requirements of KRS 186A.220, shall not be deemed to be the owner of the motor vehicle by virtue of a deed to his dealer or a certificate of title in the name of the seller. . Instead, in these cases, Ownership will be transferred when the vehicle is delivered to the buyer. . . . (emphasis added)

Central Motors strictly complied with KRS 186A.220 and transferred the vehicle pursuant to a bona fide sale. Likewise, Central Motors was not the owner of the vehicle on the date of the accident.

It stands to reason that Zepeda, now disabled, would want the deep pockets of Central Motors and its insurers. Regardless, the technical argument failed because Central Motors followed the law’s requirements, Zepeda’s attempt to reach deep pockets failed and he was left with his suit against the driver, his father and the existing insurers. He also faces a charge of comparative negligence for riding with a drunk, unlicensed driver who ended up crashing into a tree and dying in the process.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, now limits his practice to working as an insurance consultant specializing in insurance coverage, insurance litigation, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He has practiced law in California for over 44 years as an insurance and claims attorney and over 54 years in the insurance business. He can be reached at

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