Howard Pardee, Registrar of 1965 and 1966 Shelby GT350s for the Shelby American Automobile Club (SAAC), was surfing eBay Motors recently to track market trends, when he ran across a nice 1965 Shelby GT350.

The listing identified the car with Shelby serial number and even gave the Ford serial number, which is not visible on the car unless the Shelby VIN or the fenders are removed. Howard gave the car a routine check in the Shelby American factory records. As Registrar, he is the only person who has these records.

The Shelby American factory records listed a different Ford serial number for this car, so Howard ran the Ford number through all his records. He found that it matched a different Shelby serial number. This Shelby was listed as “stolen/never recovered” in the Shelby American World Registries of 1982, 1987, and 1997.

The eBay seller had purchased the car in 1980 with a reproduction Shelby serial number tag and had a clean New York title. Apparently, the thief had taken the Shelby serial number from a prior 1976 Shelby registry listing that indicated no owner for that particular car, so he figured he was safe using the number on his repro tag. The eBay seller stated he had no knowledge that the car was stolen. That seemed to be true, as he wouldn’t have put the Ford serial number in his eBay auction listing if he had known.

After further research, Howard was able to locate the original owner, who confirmed that his Shelby had been stolen in 1979 and never recovered. He was amazed that the same car was apparently available on eBay, at a current bid of $121,000. He was even more amazed when Howard advised him that, based on the condition seen in the photos on eBay, the Shelby’s current market value was likely $150,000–$175,000.

Here the plot thickens into a “Legal Files” story. The original owner had filed a theft claim with his insurance company in 1979. When it became evident that the Shelby was not going to be recovered, the insurance company paid him $6,500 to settle the claim. Assuming he would be able to get the Shelby back, he notified the insurance company that his car had been found and where it was. He then notified police, who contacted the eBay seller. The Shelby was promptly withdrawn from the auction, and the police impounded it, pending resolution of the ownership.

The eBay seller had paid good money to an apparent accomplice of the thief for the Shelby, unaware that it was stolen. But he’s just plain out of luck here, and can’t keep the car. The strength of his ownership interest in the Shelby comes from his seller. Since his seller had no valid ownership interest in the car at all, as it was stolen, he could not transfer any legitimate ownership interest to anyone else. Further, the “valid” New York title was obtained by fraud, and was easily cancelable.

Miraculously, 26 years later, the original owner was ready to be reunited with his long-lost Shelby. “Not so fast,” says the insurance company. “We paid you $6,500 in 1979 when the car was stolen, and you signed the title over to us as a result. It’s our Shelby now.” And they make a very good point.

While this may seem to be an unfair windfall for the insurance company, most stolen cars that are recovered many years later will usually not have appreciated in value. If this had been a base Mustang, not well cared for and worth $500 when recovered, it would not be fair for the insurance company to give it back to the original owner and demand a $6,000 refund. Likewise, the original owner can’t just refund the $6,500 and take the car back.

And, the insurance company would say, don’t cry too hard for the original owner. He got paid a fair amount for the car, and he could easily have used the $6,500 to buy another Shelby GT350 in 1979. If he had chosen to do that, and had kept the Shelby until now, he would have a $150,000–$175,000 automobile. Instead, he chose to use the insurance proceeds in some other way, perhaps even in some other investment that appreciated even more.

The eBay seller is very aware of both sides of this story. He has approached the insurance company and has tried to negotiate the purchase of the Shelby from them, hoping to salvage something from his investment. So far, the insurance company has not decided what it will do. This must be a fun situation for them and a great change of pace from their normal daily routine of writing checks to cover losses. They’re actually going to make some money here, no matter how this turns out.

Word is that the thief has already served terms in prison for other auto thefts and extortion. Although he is clearly guilty and liable here, he may get off the hook. He can’t be prosecuted for a 26-year-old car theft, as the statute of limitations ran out many years ago. Ditto for the title fraud, so he isn’t going to do any jail time for this Shelby.

The eBay seller clearly has a civil claim against both the thief and his accomplice, but that will depend on the statute of limitations. Undoubtedly, the statute of limitations for civil fraud is shorter than 26 years. However, the key question is when the statute starts to run.

Most state laws provide that the statute of limitations will not start to run on a claim of concealed fraud until the fraud is discovered, and that didn’t happen until now. If that is the applicable state law, the eBay seller can sue the thief and accomplice to get his money back, likely with interest.

Nonetheless, some states place an outside limit on how long a cause of action can last, even in the case of concealment. In Oregon, for instance, the claim would be barred 10 years after the fraud occurred, even if it is still concealed and undiscovered at that time. If the eBay seller’s state has a similar law, he could be totally out of luck.

The lesson here is to be very careful not to wind up in the eBay seller’s position. Collector cars have experienced remarkable appreciation in value, and there is ample incentive for thieves to alter serial numbers, etc. The best protection is to thoroughly research a car before buying it. Don’t hesitate to use resources like Howard Pardee and the Shelby Registry ([email protected]) and their equivalents with other marques. Contact previous owners if you can identify them. Get all the documentation you can before you buy. A clean title is not enough, as a sophisticated thief knows how to get one of those.

JOHN DRANEAS is an attorney and car collector in Oregon. His comments here are general in nature and not a substitute for a consultation with an attorney. He can be reached at [email protected]

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