The COVID-19 lockdown has had a dramatic effect on our society. Among the many dislocations are that people are driving less, interacting less — and trying to stay out of trouble. Also, the courts are pretty much shut down except for essential business. As a result, there haven’t been any juicy legal files popping up lately. So, in a bit of a back-to-basics approach, we’re going to look at a number of legal vignettes where collector cars have found themselves in the courtrooms across the country, often quite unexpectedly. New-car insurance coverage In 1986, our New Mexico resident protagonist thought it […]
The COVID-19 lockdown has had a dramatic effect on our society. Among the many dislocations are that people are driving less, interacting less — and trying to stay out of trouble. Also, the courts are pretty much shut down except for essential business.
As a result, there haven’t been any juicy legal files popping up lately. So, in a bit of a back-to-basics approach, we’re going to look at a number of legal vignettes where collector cars have found themselves in the courtrooms across the country, often quite unexpectedly.
New-car insurance coverage
In 1986, our New Mexico resident protagonist thought it was time to expand his collection beyond his 1985 Pontiac, so he looked around for a Porsche. He went to California to see a 1983 Porsche, liked it, and told the seller he wanted to buy it. They must have gotten on quite well, or the seller must have been drunk or crazy, as he just gave the keys to the buyer and let him take the Porsche back home to New Mexico. No contract, no money, no nothing.
Amazingly, they kept talking, a deal was struck, and the money was paid seven days later. Six days after that, the title was transferred to the buyer. Then, 23 days later, the buyer got into a crash with the Porsche, and the other party filed suit.
The buyer had never informed his insurance company about the Porsche. Coverage was available only under the automatic new-car-coverage provision, which automatically insures a new car for 30 days. The issue was when to start counting. The crash occurred 36 days after the buyer drove off from California, 29 days after the money was paid, and 23 days after the title was transferred.
The court ruled that the buyer bought the car when he drove off in it, and he had no insurance coverage.
Porsche as deadly weapon
Our next star went into his local Porsche dealer to test-drive a $63,000 1987 Turbo. The salesman drove the car off the lot, and then stopped to trade places with the customer. As the salesman was walking around the back of the car, our guy slid over into the driver’s seat and started to drive off.
The salesman, apparently a tough dude, reacted by grabbing hold of the whale tail, thinking that would make the guy stop. Instead, the driver tried everything he could to throw the salesman off the tail — accelerate flat out to 70 mph, slam on the brakes, dump the clutch and go again, slide around turns at 80 mph, and repeat. The salesman, who said he almost lost his grip at one point, held on for dear life.
This spectacle attracted a couple of other drivers who followed behind, trying to help. They didn’t want to get too close for fear of running over the salesman if he fell off, but they were close enough to hear him screaming, “Get help!” Eventually, one of the drivers got ahead of the Porsche and blocked the road to make the thief stop.
At that point, the thief got out of the car and started beating the salesman, claiming he had a gun and threatening to kill him. Before any of that could happen, the police arrived and arrested the driver.
The issue at trial was whether the crime should be expanded to include using the Porsche as a deadly weapon. The court noted that a Turbo Porsche would not ordinarily be a deadly weapon (no consideration of trailing-throttle oversteer), but the way in which the defendant used the Porsche did make it a deadly weapon under the circumstances.
Porsche by another name
Al Zim and Ed Mayo had a great idea — open a repair shop and dealership that specializes in Porsche cars. The hitch was finding a name that was not only distinctive but gave people an idea of what their business was all about. No word on how long it took, or how much research or liquor they went through, but they came up with the name “Por-sha.”
Porsche came down on them like a load of bricks, with a federal court lawsuit alleging violations of the Lanham Act — using a trade name that caused confusion with Porsche’s registered trademark.
The parties worked together to assemble an agreed-upon summary of all the pertinent facts and presented it to the judge for summary determination. The submissions included some evidence of actual confusion. The defense seemed to be: “The two names are pronounced exactly the same way, but they are spelled totally differently.”
The judge thanked the parties for their professionalism in presenting all their facts and arguments in an extremely fair way to make his job easier — and then ruled in favor of Porsche. (You have to read this to understand who won — you can’t listen to it on audio books.)
Speed bumps
Our next example involves a “mint-condition, maroon-colored 1968 Chevrolet” collector car. The police officer saw the driver accelerate quickly from a stop sign, laying a little rubber on the asphalt. So he followed the Chevy for several miles, hoping for a reason to stop the car to see if the driver had been drinking. But the driving was impeccable.
Eventually, the Chevy pulled into a tightly packed trailer park with a lot of speed bumps to slow traffic. The driver did not slow down very much at all for the speed bumps. The officer reasoned that no owner of such a pristine collector car would drive that way and pulled him over.
The appeals court ruled that the officer had sufficient cause to make the stop, upheld the drunken driving conviction, and got his license suspended.
Give it back
A California couple had a strong enough marriage that the wife used her separate money to buy the husband a 2001 Porsche 996 for about $60,000. We don’t know what contribution the Porsche made, but the car figured prominently in the ensuing divorce. The wife claimed that the Porsche was community property; the husband claimed it was his separate property as a gift.
The court ruled that the Porsche was community property. While legal advice on household items would usually mean it would be divided 50-50, the court ruled that, since the wife’s separate money was used to acquire community property, she was entitled to recover her $60,000 investment from the couple’s community property. That was more than the value of the Porsche at the time of the divorce.
This seems extremely generous for the wife. We hope the husband received some other asset that held its value better.
“An idiot” defense
Another story involves a 1980 Ferrari that was the subject of a federal seizure action in 1987.
The feds brought a forfeiture action against the car as being the proceeds of illegal drug sales. The owner, Oliver, was not charged with any illegal activity, and he defended on the basis that he innocently bought the Ferrari from his on-again, off-again girlfriend, Arlene.
It seems the Ferrari was originally purchased by a known heroin dealer. Actually, his girlfriend bought it with about $50,000 of his cash. She lived in Hollywood, but she titled the Ferrari at a fictitious address in Oregon (perhaps to avoid sales tax?). However, the red Ferrari was kept at her Hollywood home, which had been paid for by the drug dealer, along with a brown Rolls-Royce, also paid for by the drug dealer.
Arlene was the drug dealer’s attorney and took the Ferrari as part of her legal fees. She then flipped it to her boyfriend Oliver for $27,000. No surprise here, but Arlene did not testify in court, nor did she represent Oliver.
The court rejected Oliver’s innocent-purchaser defense — that he had no way of knowing the drug-money history of the Ferrari. The court pointed out that Oliver was a former police officer who worked as a private investigator. Arlene had used him to assist with the drug dealer’s defense in a murder case.
In the course of that work, Oliver went to Hollywood to pick up the Ferrari and drove it back to Oakland. He then procured insurance on the Ferrari in the drug dealer’s name and was reimbursed for the premiums out of Arlene’s client trust account.
It seems the court saw this less as an innocent-purchaser defense and more of an only-an-idiot defense. ♦
John Draneas is an attorney in Oregon. He can be reached through www.draneaslaw.com. His comments are general in nature and are not intended to substitute for consultation with an attorney.