TxDMV: Reagor-Dykes Auto Group and 10 finance companies to blame for 100 title complaints

Texas DMV dealing with over 100 title complaints related to RDAG

LUBBOCK, TX (KCBD) - The Texas Department of Motor Vehicles filed documents today with the federal bankruptcy court stating it has sent letters to Chief Restructuring Officer for Reagor-Dykes Auto Group, and to Ford Motor Credit, First Capital, Liberty Capital, Universal Underwriters, Vista Bank, MUSA Auto Finance, U.S. Bank, Gulf States Toyota, Santander and GM.

The letter to CRO Robert Schleizer states the bankruptcy has had a delaying effect on the passage of title from the dealerships to consumers. The letter says there are approximately 100 complaints that the Texas DMV is currently fielding against the dealerships, mostly in regards to titling issues.

According to the Texas Transportation Code, all documents necessary to transfer the title must be filed with the appropriate county tax assessor-collector’s office within 30 days of the date of the sale. The letter says some of the underlying sales at issue in the complaints were completed months ago.

In light of the volume of complaints, TxDMV respectfully requests that the Debtors identify consumers who have lawfully purchased a motor vehicle from one of the affected dealerships, but who have not yet received title, and bring this matter to the attention of their attorneys and to BlackBriar as the Chief Restructuring Office. TxDMV asserts that protocols should promptly be put in place to effectuate the transfer of titles to these innocent purchasers.
Texas Department of Motor Vehicles letter to Robert Schleizer

In the letters to Ford Motor Credit, First Capital, Liberty Capital, Universal Underwriters, Vista Bank, MUSA Auto Finance, U.S. Bank, Gulf States Toyota, Santander and GM, officials with TxDMV say its investigations have found that the above listed companies, not the dealerships, may actually be responsible for the failure to transfer title in some instances.

The Transportation Code does not authorize, nor even contemplate, a company holding a floor plan agreement with a dealership to delay the passing of title to a consumer as leverage on that agreement.

In fact, the issue as to whether a floor planner may withhold title to an innocent motor vehicle purchaser has been litigated in Texas. See First National Bank of El Campo vs. Buss, 143 S.W.3d 915 (Tex. App. - Corpus Christi, 2004, pet. denied). There, the court found the provisions in the Uniform Commercial Code to be dispositive, noting that once a motor vehicle is sold to an innocent purchaser in the ordinary course of business, the security interest of the floor planner does not transfer with the vehicle. Thus, your interest in the above-referenced bankruptcy matter is with the Debtors, not innocent purchasers. 
Texas Department of Motor Vehicles letter to Robert Schleizer

The TxDMV requests Ford Motor Credit, First Capital, Liberty Capital, Universal Underwriters, Vista Bank, MUSA Auto Finance, U.S. Bank, Gulf States Toyota, Santander and GM begin the process of transferring the titles to the “innocent purchasers.”

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