## Facts

- Antwan Anderson bought a used 1993 Jeep Cherokee and financed the balance through Arcadia Financial Ltd., which obtained and properly perfected a lien noted on Anderson’s certificate of title.
- Anderson submitted to the New York DMV a forged release of lien purporting to be from Arcadia and obtained a new “clean” certificate of title showing no lien.
- Anderson sold the Jeep to Four M Sales, Inc., which later sold it to Richard Green, Sr., who financed his purchase through another lender.
- Arcadia, asserting it never executed any lien release and that its perfected security interest remained valid, repossessed the vehicle through an agent.
- Green claimed he purchased in good faith relying on the “clean” certificate of title and took the vehicle free of Arcadia’s lien.

## Issues

1. Whether a properly perfected security interest in a motor vehicle continues under New York’s Vehicle and Traffic Law when the DMV issues a “clean” title based on a forged lien release not executed by the lienholder.
2. Whether the “clean” certificate of title is conclusive as to the absence of liens or only prima facie evidence that may be rebutted by proof of a nonreleased perfected lien.
3. Whether U.C.C. Article 9 priority or purchaser protections apply to a non-dealer-created vehicle security interest governed by New York’s certificate of title statute.

## Decision

- The court denied Green’s motion for declaratory and interim relief.
- The court granted Arcadia’s cross-motion for summary judgment dismissing the complaint.
- The court granted Four M’s motion to dismiss.
- The court held Arcadia’s lien remained valid because Arcadia had properly perfected it and had not executed a release; a forged release and resulting “clean” title did not extinguish the lien.

## Legal Principles

- New York’s Uniform Vehicle Certificate of Title Act governs perfection and release of security interests in automobiles created by persons other than dealers, displacing U.C.C. Article 9 in that setting.
- A vehicle security interest is perfected by the statutory filing process with DMV (VTL § 2118).
- A vehicle lien is released only by filing a release executed by the lienholder; an unexecuted or forged “release” is ineffective (VTL § 2121).
- A certificate of title is prima facie evidence of the facts stated, but it is not conclusive and does not defeat a perfected lien where statutory release requirements were not met (VTL § 2108(c)).

## Conclusion

The court held that Arcadia’s properly perfected lien survived the fraudulent procurement of a “clean” title because no lienholder-executed release was filed as required by the Vehicle and Traffic Law; therefore, Green’s reliance on the title did not cut off Arcadia’s security interest, and Arcadia was entitled to judgment dismissing Green’s claims.


Green v. Arcadia Fin. Ltd., 174 Misc. 2d 411, 663 N.Y.S.2d 944 (Sup. Ct. Erie Cnty. 1997)