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NXCESS Motor Cars, Inc. v. JPMorgan Chase Bank, N.A.

The Texas Supreme Court has previously held that a forged certificate of title passes no title to the vehicle. The Austin Court of Appeals has extended this holding to include situations in which the certificate of title itself is not forged, but a release of lien, on which the certificate of title is based, is forged. In this case, the trust foundation's original certificate of title was based upon a forged release of lien; accordingly, the trust did not transfer good title to the buyers, and neither party qualifies as a buyer in the ordinary course of business. Houston's 1st Court of Appeals, No. 01-09-00018-CV, 02-18-2010

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OPINION

This is a suit to resolve the title to a Mercedes S550 and a lien against that title. The trial court granted summary judgment to the lienholder, JPMorgan Chase Bank, N.A. (Chase), on its conversion claims against Xavier Valeri and US Bank, N.A, and severed this judgment from the cause. Valeri and US Bank both had brought third-party claims against NXCESS Motor Cars, Inc. (NXCESS), for breach of warranty and breach of contract. Concerned that the trial court’s summary judgment rulings are dispositive of the claims against it, NXCESS appeals the trial court’s order granting Chase’s motion for summary judgment. NXCESS contends that the trial court erred by (1) failing to find that NXCESS and Valeri were buyers in the ordinary course, (2) failing to find that the Texas Certificate of Title Act conflicted with the Texas Business and Commerce Code, (3) failing to find that the Code preempts the Act, and (4) finding Valeri liable for conversion. Chase moves to dismiss the appeal for lack of standing. We conclude that NXCESS has standing to appeal the judgment, but that the trial court’s rulings were proper. We therefore affirm.

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