Legal Question in Civil Litigation in California
November 2008 paid cash for a car being sold on consignment. The dealership paid the consignee minus their commission. The dealership said the title would be mailed to me. The consignee kept the money and never paid off the loan. I spoke with the consignee and he said he did in fact receive the money from the sale and that he did not pay off the outstanding loan to Capital One and there was nothing we could do about it because he was continuing to make the payments. I called Capital One and told them that they no longer held the collateral for this loan because the car had been sold. They told me as long as the payments were made they would do nothing....I have all my sales documents but the D.M.V. cannot issue title until the lien has been satisfied to Capital One. I cannot drive my car because I cannot register it with the D.M.V. I paid $26,000 for the car Small Claims is not an option.
2 Answers from Attorneys
You'll need to sue in Superior Court. I'd add a fraud count while you are at it. Include the consignment dealer too.
I would sue the dealer. When the car was placed with them on consignment, the car was subject to the car loan with Capital One. I'm not sure what your paperwork says, but the dealer should have paid the loan off on the car with the proceeds from the sale. Only after the lien was paid off was the seller of the car entitled to any excess proceeds, if any.
Right now, the car is still subject to Capital One's lien. The fact that it was transferred to you does not destroy the lien. I would take your paperwork to see an attorney about suing the dealership.
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