Insurance – Car Theft

Here is one that would be interesting to people in Weatherford, Mineral Wells, Aledo, Azle, Millsap, Brock, Cool, Peaster, Hudson Oaks, Willow Park, Springtown, and other places in Parker and Palo Pinto counties. It involves events after a car theft.
The style of this case is, Jose Manuel Campa Gonzalez v National Insurance Crime Bureau; Progressive Casualty Insurance Co. The opinion was issued on June 7, 2011, by the United States Court of Appeals for the Fifth Circuit. Here is some background on the case.
Gonzalez was arrested and incarcerated for eleven days in Mexico for hawking a car that the Mexican authorities erroneously believed was stolen. Gonzalez later sued National Insurance Crime Bureau (NICB) and Progressive claiming they were legally liable for the actions of the Mexican police. While Gonzalez’s arrest and imprisonment were traumatic and, on hindsight, unnecessary, the court nevertheless agreed with the district court ruling, that it was no fault of NICB or Progressive.
Here is a sequence of events:
In 2005, a Cadillac Escalade was stolen in Queens, New York. Progressive insured the vehicle and compensated the owner for the loss: Progressive in turn took the vehicle’s title. The NCIB investigated the theft and found that the Escalade had been recovered in New Mexico. Progressive placed the Escalade for auction with an auto auctioneer, Copart.
Gonzalez saw the Escalade with Copart and decided to purchase it. Because he did not have a Copart purchasing license, he instructed one of his friends with a license to purchase the Escalade on his behalf. The friend won the auction, paid Copart a cashier’s check and took title to the Escalade. The friend gave Gonzalez the Escalade and the relevant purchase documents, but Gonzalez never officially took title to the Escalade.
Although Gonzalez intended to use the Escalade as a family car, he discovered that the transfer document from Copart was stamped “for export only,” and therefore, he could not register the car in his home of El Paso, Texas. In an effort to recoup his losses, Gonzalez took the Escapade across the border to Juarez, Mexico, where he attempted to sell it at a swap meet for cars. In doing so, Gonzalez attracted the attention of Mexican law enforcement officers, who ran a background check on the VIN. The database on which the background check was conducted, however, apparently had not been updated in some time, and the Escalade was still on file as stolen. Even though Gonzalez presented the sales documents from Copart, the Mexican officials arrested him, and he was prosecuted in Juarez for possession of a stolen vehicle. He spent approximately eleven days in jail before posting bond.
Meanwhile, in reliance on an NICB report, the American Consulate in Juarez requested that the Escalade be returned to the United States. Later, on July 25, 2007, Progressive notified the NICB by letter that the Escalade was no longer stolen at the time of Gonzalez’s arrest.
Gonzalez sued NICB and Progressive under four theories of law.
First, Gonzalez sued for malicious prosecution arguing that NICB and Progressive caused his arrest and incarceration in Mexico because “but for their actions the prosecution would not have occurred.” He argued that his prosecution in Mexico was “clearly foreseeable” to Progressive and the NICB, and their claims of ignorance are unfounded.
The court pointed out that a malicious prosecution claim under Texas law requires a showing of, among other things, “the absence of probable cause for the proceedings” and “malice is filing the charge.” The court said “that the Mexican officials’ information turned out to be outdated does not defeat the fact that they had probable cause at the time of the arrest, in part because Gonzalez had no documents proving his title to the vehicle. Moreover, Gonzalez offered no evidence that Progressive or the NCIB acted with ‘malice’ as the law requires.”
The second claim was for conversion. Gonzalez asserted that Progressive and the NCIB wrongly exercised dominion and control over the Escalade, and that as a result, he was entitled to recover for conversion. As the court said, the evidence showed no exercise of control over the Escalade by Progressive since it was sold through Copart. And there was no evidence that the NICB obtained the Escalade on behalf of Progressive.
It is pointed out by Gonzalez that NICB retrieved the vehicle after Gonzalez arrest. But the court pointed out that NICB never refused to return it to Gonzalez. Thus, Gonzalez had not shown that the NICB took “unauthorized and unlawful exercise of dominion and control” over the Escalade “to the exclusion of, or inconsistent with, Gonzalez’s rights” to the vehicle.
Third, Gonzalez argued that the NICB and Progressive were negligent in failing to disclose the stolen vehicle report for the Escalade at its auction sale. Gonzalez believed further that Progressive and the NICB should have, among other things, reported to other government agencies that the vehicle had been recovered.
The court pointed out that neither Progressive or the NICB had any legal duty to prevent a law enforcement agency from mistakenly arresting Gonzalez.
The fourth and final claim by Gonzalez was fraud. Gonzalez claimed fraud was committed in failing to disclose to Gonzalez that the Escalade had been stolen. The burden on Gonzalez was to show that there was a duty to disclose this information to him. The court pointed out that no such duty existed under the facts of this case.
The lesson to be learned here is: get the title put in your name.

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