I just went threw this with some bonehead in VT, although laws in your state may vary.
I just called the DMV over lunch. Apparently in Nebraska a duplicate title supersedes all previous titles - so the fact that the original title indicates a transfer of ownership is meaningless.
So, I don't know what would prevent some unscrupulous person from getting a duplicate title immediately after selling the car. They said there's no grace period or anything.
In my case it has been over two months so it's not like I'm screwing the guy over on purpose.
And I don't think it would even be a bill of sale from the towing place, since I still have the title. More like a Release Of Lien or something.
Something still doesn't seem right, though.
A couple of guys I work with know the guy, so I heard the story. I guess he just watched them tow it out of his lot, then went to the office to see where it went, and they told him where it got towed to. This happened on the first of October, I guess they had left a notice/warning on the car for two weeks beforehand. And I guess he just didn't care, or couldn't afford the $200 fee (at the time) because the tower says they haven't heard from anyone else but me.