Auto Insurance Claims: total loss car, settlement check, lien holder

Question
This is long so here it is..
My husband and i had a 1998 kia got in accident totaled the
car out. Bought a 2004 kia in feb 08. So in April we
received a letter from DOL of Washington State stating our
2004 was the car we totaled. so i just called my insurance
(framers) and thought they took care of it. Well last
sunday we randomly get pulled over come to find out our
2004 kia is still in computer as total loss. So i get my
insurance to send letter to DOL and come to find out that a
insurance company in California DID in fact total out our
2004 kia with the previous owner. Well now we have a car
that can be driven and we have to get it inspected by the
state and repay all license and fees to keep the car. So
the insurance company did not report the car as a total
loss until April. They were suppose to report it in 15
days. Im not sure who i go after if its the insurance
company or the dearler who sold us the car. The previous
owner got his settlement check on feb 21 about a week after
we bought the car. I need all the advice i can get. Thanks
alot

Answer
The insurance company that totaled the car is bound by state law to send in the total loss paperwork within a specified time.  The question here would be whether they had the paperwork to file or not.  If the previous owner of that vehicle or their lien holder took months to provide the title to the insurance company, then the insurer's hands were tied.  
The other issue is that this was an issue that you were not party to.  An insurance company's obligation is only to their insureds and claimants.  You were neither.

Depending on your state's laws, the dealer may be liable.