Although Title Had Not Yet Formally Passed to the Driver/Owner, the Vehicle Was Covered as a “Newly Acquired” Vehicle Under the Terms of the Policy

The Third Department reversed Supreme Court and held that the insurer could not disclaim coverage of a 1987 Dodge driven by Porter under the terms of the policy.  Porter was driving the vehicle before receiving the title documents from the seller, Elmore:

We consider first whether coverage extended to the 1987 Dodge under the provision for “[a] private passenger auto newly acquired by you.” [The insurer] contended, and Supreme Court held, that this provision did not apply because Porter had not yet received title or registered the Dodge under the Uniform Vehicle Certificate of Title Act (see Vehicle and Traffic Law art 46). The term “newly acquired” is not defined in the policy and, importantly, it is not limited by the policy to completed transactions that were done in full compliance with the Certificate of Title Act. Ownership of a motor vehicle generally passes “when the parties intend that it pass” … .

Here, it is undisputed that, during the month before the accident, Porter had disposed of his 1994 Chevrolet truck and, shortly thereafter, replaced it by trading his ATV (which he had recently purchased for $1,000) to Elmore for the 1987 Dodge. Although Elmore apparently indicated to Porter after the accident that the Dodge was actually owned by his girlfriend’s father, there was no indication that Elmore did not have authority from the owner to make the transaction. At the time of the transaction, Elmore took possession of the ATV and likewise Porter took absolute possession and control of the Dodge, including all of the keys. According to Porter, the trade was final and permanent. Porter testified that Elmore was about to produce documents so he could register the Dodge, but the accident occurred the day before Elmore was going to give him the documents. Nonetheless, upon taking physical possession of the Dodge, Porter had placed the plates from his junked truck on the Dodge and began using it to drive to work. Under the circumstances and considering the pertinent policy language in light of “the reasonable expectations of the average insured” …, the 1987 Dodge fell within the meaning of replacement auto newly acquired by Porter at the time of the accident and, accordingly, was covered under plaintiff’s policy. Nationwide Ins Co of Am v Porter, 2014 NY Slip Op 07029, 3rd Dept 10-16-14