An unrecorded lien cost Prestige Toyota of Billings, Mont., a judgment of approximately $20,000.
Minneapolis-based Arcadia Financial Ltd. owned the title on a 1994 Hyundai Excel that Prestige sold in 1995. However, Prestige failed to record the lien on the title when it sold the car.
When the buyer, James Knight, filed for Chapter 7 bankruptcy after making three payments, the bankruptcy trustee voided Arcadia's lien and later approved the sale of the Excel for $2,200.
Arcadia sued. The Montana Supreme Court agreed that its lien was valid and ordered the dealership to reimburse Arcadia for the $7,232 unpaid balance of the loan, plus interest and attorney fees.
Arcadia's lawyer, David Wagner of Billings, said the judgment was worth about $20,000.
Prestige's lawyer, Peter Stanley of Billings, said, 'Dealers always need to be very cautious about not delivering title within the time restriction of the retail installment sales contract.'