WHO IS LIABLE IN AN ACCIDENT IN THIS ODD SCENARIO

If Jason has the deep pockets... I don't even have to answer.

 

NOTE: Anyone can sue anyone they want; doesn't mean it will hold up in court though, or that you'll find an attorney to handle the case!

 

Yes there is liability.

The person suing would sue the person driving as well as the owner.


Motorcyclist Billy Lane was given a promotional vehicle by Chrysler. He killed a guy DUI and he AND Chrysler got sued over it.

 

You said she had full coverage. I'd think they'd go after her insurance company. No different than if you wrecked and did damage in a rental car.

 

They are both in trouble, for driving a corvette.

 

Not only can Jason be sued for negligent entrustment, Kristen could have a problem collecting under his insurance policy as he has no insurable interest in the Vette since it is not titled in his name. Hopefully for him his insurance company will not question his ownership and pay the claim without asking any questions.

 

Can the guy argue that he was acting solely as the bank?

If you buy a car and 100% finance, the bank is technically the cars owner (only name on the title). Yet, if the buyer crashes the car, the bank holds no liability.

I know that the explanation you gave is right, as I have heard that before. But, why is the scenario I described different? The guy was acting as the "bank." He was no longer the legal owner?

 

I don't think that is true. the car is in the driver's name and the bank is listed as the first lein holder.

 

Not true...if you finance through a bank your name goes on the title as the owner...the bank is only listed as the lien holder, hence no legal liability on the bank. In this scenario however, the owner who financed the car never had his name removed from the title, so he is in fact still the legal owner regardless of any private agreement he had with the guy buying the car...

 

If sued, that would be an argument you could make and it would be up to the jury to decide. That being said, it is never a good idea not to just give the new owner the title in his name and you listed as the lien holder if you are also financing the purchase. Otherwise, you could face not only potential legal liability exposure in the event of an accident, but the buyer who's name is not on the title has an insurable interest problem he may have with his insurance carrier...especially if the vehicle is totaled when the insurance company requires the title before paying for the totaled car...

 

I am no lawyer (thank god) but I don't think the above argument would hold water, and I'd think any lawyer worth his salt would punch enough holes in that to make it like swiss cheese in about 10 seconds.

I am surprised Kristen was able to insure a vehicle not titled in her name. Furthermore, if it is registered in Jason's name, he clearly knows about it since he is paying excise taxes on it, no? I think it would be very hard for Jason to make the case that he had no knowledge of what was going on. Presumably Jason DID know what was going on, but is looking to absolve himself from liablity... the only way to do that is sell Kristen down the river and claim he didn't know she was driving on his registration. Not only is that a lie (presumably), Kristen is going to object, and if the house of cards comes tumbling down, it's not going to look good to a judge/jury that Jason lied to try to get out of the situation.

There has to be (or should be) some other element to cross-check ownership. Here in MA, you have to get proof of insurance before you can register the vehicle. You go to the insurance office, they stamp your application for registration with a stamp identifying the insurance co. You take that to the registry and walk out with your registration showing who the insurer is.

If other states let you insure a vehicle without being the registrant, that opens up the possiblity of all kinds of fraud... purchasing a vehicle that you never actually register and driving on someone else's plates. There HAS to be a mechanism for preventing this?

If nothing else, it would be questioned why Jason didn't remove the plates and cancel the registration? Here in MA, I'd never let someone drive a car on my plates... because whatever they do, that is tied to me. I've done it for family/friends, but anytime I sell a car, I remove the plates and tell the purchaser to either get it insured/registered before pick-up, or they can take a plate off another of THEIR cars and drive home illegally at their own risk.