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A Better Partnership
August 04, 2016

COA – Boat seller is no longer an "owner" after delivery of title to a purchaser

In Williams v. Kennedy, No. 325267, the Michigan Court of Appeals held that the seller of a boat does not qualify as an “owner” during the period after the seller delivered the certificate of title to the purchaser but before transfer of title has been registered with the Secretary of State.
 
This case stems from a boating accident in which the minor plaintiff was struck by a boat piloted by defendant.  Defendant purchased the piloted boat from Michael Metcalf on August 26, 2013.  In exchange for payment, Metcalf delivered to defendant the “Watercraft Certificate of Title,” which contained a provision for “Title Assignment by Seller.”  Defendant twice attempted to register the title with the Secretary of State, but due to long lines failed to complete the process.  Then on September 1, 2013, defendant piloted the boat striking plaintiff and causing injuries.  Finally, on September 5, 2013, defendant completed the registration of the boat with the Secretary of State, with the transfer-of-title documents listing the boat’s purchase date as August 26, 2013.  Plaintiff’s mother, as next friend, filed the instant case against both defendant and Metcalf, claiming that Metcalf was still an owner of the boat at the time of the accident, and thus liable for damages caused at the time of the accident.  Metcalf moved for summary disposition arguing that he did not own the boat at the time of its negligent operation.  The trial court denied Metcalf’s motion, which he then appealed.
 
The Natural Resources and Environmental Protection Action (NREPA), MCL 324.101 et seq., governs the procedures for selling and transferring title to watercraft.  NREPA requires that the seller of a watercraft deliver a certificate of title which includes an assignment to the purchaser, which then must be registered by said purchaser within fifteen days of purchase.  Here, the Court of Appeals found, Metcalf delivered the certificate of title, which included an assignment, and defendant registered the transfer of title within fifteen days with the Secretary of State.  Furthermore, NREPA implies that defendant was the owner at the time of the accident because “legal transfer is impossible if the Secretary of State is not satisfied that ‘the applicant is the owner’ of the watercraft.”  Moreover, NREPA provides a definition of “owner,” namely: “a person who claims or is entitled to lawful possession of a vessel by virtue of that person’s legal title or equitable interest in a vessel.”  In this case, Metcalf did not claim lawful possession, nor was he entitled to lawful possession by virtue of an equitable interest.  The Court held that Metcalf did not qualify as an “owner” of the boat and reversed and remanded the case for entry of judgment in favor of Metcalf.

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