Judges are useless, too

Sebastian has a post today about judicial game playing. I have a few of my own experiences, but one in particular has always bugged me.
Several years ago, a local used car dealer sold my sister a car. She wanted to get rid of her car payments, and traded a new car that she was still making payments on, and applied the $4000 in equity to the purchase price of the car, which paid it in full. (The car was worth $9,000, but she owed $5000) The dealer turned in the title application to the state, unbeknownst to my sister, he had altered the application to add a $50 lien to the title, saying that the purchase price was $4050, and that my sister had made a $4000 down payment, and had $50 outstanding.
The state then sent the title to the lien holder (the dealer) instead of my sister. When the title arrived at the dealer, he went to her job and 'repossessed' the car. My sister went to my mother for help, and the dealer managed to con another $1,000 out of my mother in exchange for the car. Even though he gave them the car, he still refused to give them the title.That is when they called me for help. The police would not do anything about the case, claiming that it was a civil matter, even though we had copies of paperwork before it was altered, and could prove that the dealer had altered the title application. A clear case of fraud.
We sued him in small claims court.
On the day that we went to court, the dealer satisfied the lien, and took it to a title loan establishment, and got a $500 loan on that title, thereby encumbering the title with a third party lien. The dealer, who by now had gotten the car retitled in his name, countersued us for the return of the car.
When we got to court, the judge heard the story, and declared that there was no way that he could order the dealer to hand over the title, because that would cause the title loan store (a third party) to lose their money. He also said that this was not a civil matter, it was a matter for the cops. His exact words were "I am dismissing this case. There is too much fraud going on here." He then ordered us to return the car to the titled owner (the dealer), and ordered the dealer to return the second payment (the $1000 from my mother).
My sister was out the car that she used as a trade in, and the dealer got away with fraud.
So the cops wouldn't prosecute the fraud, the judge wouldn't order the dealer to return the money, and justice was never served by anyone. Hard to see how anarchy could be much worse.