How Chadwick Law Helped A Client Who Unknowingly Bought A Stolen Vehicle

Author: Paul Chadwick | | Categories: Business Law , Employment Law , Real Estate Transactions , Wills And Estate Planning

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If you are ever conned into purchasing a stolen vehicle, you’re in for a rough few months. No matter how vigilant purchasers are, sometimes even the best can get duped. The trouble usually starts only after the money has been paid, and there’s no going back. It begins with finding that you’ve purchased a stolen vehicle, the police then come and confiscate the car. You are customarily considered the primary suspect but are let off once you prove that you’ve been conned.

However, while you’re off the hook, you won’t get your money back. Even if it was a dealership that sold you a fraudulent vehicle, you can bet that they have insulated themselves from lawsuits and you are going to be out thousands of dollars (or more) for the vehicle. If it was a private individual, then he or she will almost certainly deny that they knew it was stolen or, in some instances, that they even sold it to you. The burden of proof will rest upon you to prove otherwise unless the police have a suspect in mind and evidence to pin the crime on him or her.

Trying to recover some of the money you’ve lost becomes your sole ambition after a dilemma like this and Chadwick Law has helped clients do that to an extent. Keep reading to learn about how I helped a client who had unknowingly purchased a stolen car get some money back.

The Challenge: Getting some amount of the investment back.

I was once approached by a client who unknowingly purchased a stolen car. Despite the fact that this client was an innocent purchaser for value (paid fair market price), one cannot maintain ownership of a stolen car or any other stolen asset. As a result, our client lost the car, as well the money invested in it.

My client had no recourse versus the victim’s insurance company which paid the victim and did, therefore, acquire ownership of the stolen vehicle. The vendor who fraudulently sold our client the car was tried and imprisoned due to the number of auto theft cases registered against the vendor. The government only provided a bond in the total sum of $5,000.00 for all victims of the dishonest vendor, despite the fact that the vendor had more than one million dollars in claims for the sale of stolen vehicles.

After investing a large sum of money into the vehicle, my client sought some reprieve and aimed to recover at least some of the costs incurred. I took up the challenge, knowing that we may not emerge victoriously, but confident that my client won’t walk away empty-handed.

The Solution: Pursuing a settlement with the insurers.

After looking for a remedy for my distraught client, I reviewed her auto insurance policy, the contents of which are mandated, and found that it was an ‘all risks’ policy with certain specific exemptions of coverage. The list of exemptions did not in our minds appear to exempt the coverage for stolen vehicles, and I, therefore, sued the insurance company for coverage, in the hopes that it would settle the claim.

As it turned out, the insurance company would not settle because according to the insurer’s lawyer, I had quite possibly found a loophole in the policy coverage. In order to save the insurer millions of dollars in claims if I was successful, his mandate was to proceed to court and attempt to plug this possible interpretation of the “all risks” coverage and the exemptions. He also advised that if I was successful, his instructions were to appeal.

The insurer had no issue with my client acknowledging that she was an innocent purchaser for fair market value. The lawsuit was a “motion” for judicial interpretation of the insurance coverage, meaning that there were no facts in dispute, and therefore no need for witnesses and evidence, only legal arguments had to be made.

The motion lasted two days, and we came close to winning. The insurer’s legal counsel was concerned that as our client was innocent, the court may well agree with our arguments. However, at the end of the day, the judge hearing the motion arguments decided, most correctly, that my client’s loss was not covered. I never believed that we would win, but as previously stated the object of the lawsuit was to attempt to encourage a settlement.

Though we didn’t win, the insurer’s lawyer declined to request costs against our client which could have totaled thousands of dollars, due to his mandate to plug the possible hole in the policy but not wanting to punish my client any more than the client had already endured.

The highlight of the case was that it was reported in the Ontario Reports (listing of interesting or novel court decisions) and to this day, our case has been relied upon by insurance companies in similar lawsuits vs. insurance coverage as a precedent-setting decision.

The Bottom Line

At Chadwick Law, I have worked in association with experienced lawyers in all areas of the law with an emphasis on all aspects of business law, real estate law, wills and estate administration and employment law. With more than thirty-five years of experience, I can help you through even your toughest times. If you find yourself on the wrong side of the law or need to complete corporate transactions, get in touch with me by clicking here. To learn more about how I can help you, please click here