West Virginia Legislative Claims Commission

Volume Number: 30
Opinion Issued July 30, 2013
     Claimant appeared pro se.
     Gretchen A. Murphy, Assistant Attorney General, for Respondent.
      Claimant, Jody Johnson, the sole proprietor of an automobile dealership, brought this action to recover damages which occurred when the Respondent, Division of Motor Vehicles (“DMV”), processed and delivered certificate of title to the Claimant’s buyer, because the title should have been delivered to Claimant, as lien holder, pending full satisfaction of the financing agreement, and because the buyer converted and sold the vehicle without first having satisfied the security agreement. The Court is of the opinion to grant an award in this claim for reasons more fully stated below.
      Claimant is the sole proprietor of a “buy here/pay here” automobile dealership located in Charleston, Kanawha County. On March 23, 2010, a buyer entered into a financing agreement with Claimant for the purchase of a van. Claimant purchased the van at an automobile auction for the amount of $2,310.00. Claimant sold the van for the retail price of $4,250.00, and the buyer agreed to make installment payments of $228.24 until the full purchase price of the van was satisfied. On March 24, 2010, buyer made the first installment payment and took control of the van. Claimant testified that he submitted the vehicle title to Respondent agency so that it could issue a new title with the appropriate lien holder information. The Respondent processed the title on April 16, 2010; however, title was sent directly to the buyer without the necessary lien holder information.
      On April 25, 2010, buyer missed an installment payment. While organizing the buyer’s information in order to attempt collection, Claimant noticed that he had not received a title from the Respondent. Claimant then inquired of Respondent as to why a title was not issued back to Claimant. The Claimant stated that the Respondent admitted that it had issued the certificate of title directly to the buyer without placing the lien information on the title certificate for the van. Despite Claimant’s diligent and good faith efforts to locate the buyer, he was unsuccessful. Claimant learned later that the buyer had moved to Greenbrier County where she subsequently transferred clear title to the van to a third party. Respondent sent Claimant a new title with the proper lien holder information on April 29, 2010. Claimant now seeks lost profits from Respondent based on its failure to issue the proper certificate of title with the lien to the buyer, which allowed the buyer to transfer title to a new buyer free and clear.
      Respondent’s witness, Michael L. Maggard, Director of Motor Vehicle Services, admitted in his testimony that a mistake was made and that the issue was corrected fourteen (14) days later. Based on Respondent’s admission that it acted negligently, the only issue for the Court is whether and to what extent, if any, the Claimant is entitled to damages.
      Under the Uniform Commercial Code, claims for lost profits on a breach of contract action are routinely upheld and proper. However, in the present case, we are presented with a fact scenario that involves a third party to a contract who negligently interfered with the contract between Claimant and buyer. Thus, the remedy of lost profits cannot apply to this claim, because this cause of action is not breach of contract, and the claim is not against the buyer. It follows, therefore, that any measure of damages must be the actual cost of the van when purchased from the automobile auction less the first installment payment received from buyer.
      Based on the foregoing, it is the opinion of the Court of Claims that the State has a moral obligation in this claim, and the Claimant should be awarded the sum of $2,081.76.
      Award of $2,081.76.

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