I have been in contact with both parties now they are going through a divorce. He has the money and she has the title. I have offered to sign documentation that he received the money not her so she could get her half of the money through the divorce. I have contacted the police and they tried to contact her but they said they can't force her to sign it the small claims court stated the same. Is our only option here to go to court against both of them for the money?
Essentially, you paid for something you did not receive. You must sue. Which court depends upon the amount you paid. If not Supreme Court, you can only sue for the money back, and then settle for the title.
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