What recourse do I have against a used car dealer who sold me a car but never provided me with the title?

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What recourse do I have against a used car dealer who sold me a car but never provided me with the title?

The title was supposed to be sent via overnight mail but never arrived. After

weeks of calls in which they made excuses and promises, we filed a complaint with consumer affairs and discovered up to 30 other people are in the same boat. Apparently the dealer didn’t own the cars he sold us and never paid the previous owners after he took our money. We are unable to register the car. Our phone calls to the dealership are no longer answered, and the building is locked up. As I mentioned, we have filed a complaint with the county consumer affairs office and state motor vehicle commission but they haven’t taken any action so far. I’m concerned that whatever assets remain in the business may be going to others while we’re being overlooked. Should we retain a lawyer to sue the business owner or the salesman who sold us the car, or would that be a waste of money?

Asked on September 9, 2016 under Business Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

If the business was an LLC or corporation, you can only sue the business itself, not the owner(s) or the employees. That in turn means that if the business is closed, out of business, has no assets or is insolvent, etc., then even if you sue and win, you are very unlikely to be paid--you can't get money where there is none, even with a court order or judgment. 
However, if the business was not an LLC or corporation, you can sue the owner(s) directly; in that case, you would have recourse against their personal assets (e.g. their homes, bank accounts) as well as business assets. You could also sue any employees who where "at fault" (e.g. who knew that the business did not have title to the cars) in defrauding you. Of course, any or all of the people whom you sue might file for bankruptcy, which could result in you only getting a fraction (if any!) of the money owed...but if they don't file bankruptcy, in this case, you'd have a chance to at least recover some money.


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