Salvage Motor Vehicle Titles; Branded Titles

September 25, 1989 Subject:

Requested By:

Carol Nemitz, Director, Vehicle Registration Section, Division of Motor Vehicles

Questions:

(1): Who is responsible for supplying "satisfactory evidence" that an unbranded title could be obtained in the state where the vehicle is currently classified as "salvage" under N.C.G.S. § 20.71.3?
(2): What would constitute "satisfactory evidence" in order for the Division to issue an unbranded title if the vehicle also met the 75% standard of N.C.G.S. 20-71.3?
(3): Would that evidence have to be vehicle specific or could the Division accept a generalized statement that the titling state has a procedure to issue unbranded titles?
(4): If the titling state has no procedure to issue an unbranded title to a repaired salvage vehicle, does the North Carolina Division of Motor Vehicles have any discretion to issue an unbranded title?
(5): Is the Division required to disclose to an applicant for title that the vehicle has been damaged to the extent of 25% of its fair market value?
(6): Does the date of application for a title determine which law to apply for purposes of processing salvage title vehicles?

Conclusions:

(1): The applicant for a title.
(2): A copy of the titling state’s statutory or regulatory process if clear, otherwise a statement from an authorized official within the titling agency confirming the vehicle meets the criteria of their state for an unbranded title.
(3): It needs to be vehicle specific.
(4): No.
(5): No.
(6): Yes.
(1): N.C.G.S. § 20-71.3, as amended by the 1989 General Assembly provides in pertinent part:

"Motor Vehicle certificates of title and registration cards issued pursuant to N.C.G.S. § 20-57 shall be branded. As used herein ‘branded’ means that the title and registration card shall contain a designation that discloses if the vehicle is classified as (a) Flood Vehicle, (b) Non-U.S.A. Vehicle, (c) Reconstructed Vehicle, (d) Salvage Motor Vehicle, or (e) Salvage Rebuilt Vehicle or other classification authorized by law… Any motor vehicle which has been branded in another state shall be branded with the nearest applicable brand specified in this section, except that no junk vehicle or vehicle that has been branded junk in another state shall be titled or registered. A motor vehicle titled in another state and damaged by collision or other occurrence may be repaired and an unbranded title issued in North Carolina only if the cost of repairs, including parts and labor, does not exceed seventy-five percent (75%) of its fair market retail value and satisfactory evidence is given to the Division that the vehicle would be eligible for the issuance of an unbranded title in the state in which it is titled." (Emplasis added).

It is a basic rule of statutory interpretation that statutes are to be given their plain meaning where the language is clear and unambiguous. State ex rel. Utilities Commission v. Edmisten, 291 N.C. 451, 232 S.E.2d 184 (1977). This language is clear and unambiguous and requires that the applicant for a North Carolina title provide the "satisfactory evidence" of the vehicle’s eligibility for an unbranded title in the state where currently titled.

(2): "Satisfactory evidence" would be evidence satisfactory to the Division that the vehicle which is the subject of the application would meet the requirements of the titling state for a unbranded title if repaired in that state. If another state’s statutes or regulations are clear on this point, copies of their current laws or regulations would be acceptable. If the law or person in the titling agency could provide the necessary clarification.
(3): The evidence would have to be vehicle specific because the amended language set forth earlier in the answer to Question 1 states clearly that "the vehicle" would be eligible for an unbranded title, not "a vehicle" or "any such vehicle." This amendment was offered in the committee and was explained as requiring that each vehicle would be judged individually. As the intent of the Legislature controls the interpretation of a statute, it is clear both from the plain language of the statute and the legislative intent behind it that each vehicle is to be judge separately. In re Hardy, 294 N.C. 90, 240 S.E.2d 367 (1978). A motor vehicle titled in another state as salvage could qualify in the state where currently titled and it meets the requirements of North Carolina law.
(4): If the titling state has no procedure for removing a brand on a salvage vehicle title, North Carolina has no means by which an unbranded title can be issued here. The requirements of the statute are two-fold:
(1): the vehicle must be eligible for an unbranded title in the state where currently titled and (2) it must meet the requirements of North Carolina law for an unbranded title. In this case, the first requirement cannot be met and a North Carolina title would have to reflect the nearest applicable brand as required by N.C.G.S. § 20-71.3.
(5): N.C.G.S. § 20-71.4(a) was also amended by the 1989 General Assemply to require that a

written disclosure of damage that exceeds 25% of the vehicle’s fair market value be given to the buyer prior to transfer. The requirement falls upon "any person who knows or reasonably should know" about the damage. The Division of Motor Vehicles may prepare forms to carry out this section, but there is no requirement that it keep records of the disclosure forms it may create. North Carolina titled vehicles damaged to the extent of 75% of their fair market retail value which are repaired will have branded titles reflecting they are "salvage rebuilt." North Carolina titled vehicles damaged up to 75% will not have branded titles. While there is no statutory requirement on the Division to disclose a prior title history showing the vehicle was once damaged, there is no prohibition against this practice as a public service if the Divison should voluntarily undertake to do it.

(6) The statute refers to the "issuance" of branded titles and registration cards. To insure uniformity, the date of application for a title and registration card should control which law to apply rather than the purchase date of the vehicle or the date of a preliminary or final inspection. The statute could have provided that the new law would apply to salvage vehicles sold on or after 31 July 1989, but it does not. The reference point being the issuance of the title, the application date for that title should control.

LACY H. THORNBURG Attorney General

Jane P. Gray Special Deputy Attorney General