Chapa v. Traciers & Associates

• Decision Date: 31 July 2008
• Docket Number: No. 14-07-00056-CV.,14-07-00056-CV.
• Parties: Carlos CHAPA and Maria Chapa, Individually and as Next Friend of Carlos Chapa, Jr. and Alex Chapa, Minors, Appellants, v. TRACIERS & ASSOCIATES, Incorporated; Traciers & Associates; Traciers; Paul Chambers; and Ford Motor Credit Corp., Appellees.
• Court: Texas Court of Appeals

267 S.W.3d 386

Carlos CHAPA and Maria Chapa, Individually and as Next Friend of Carlos Chapa, Jr. and Alex Chapa, Minors, Appellants, v. TRACIERS & ASSOCIATES, Incorporated; Traciers & Associates; Traciers; Paul Chambers; and Ford Motor Credit Corp., Appellees.

No. 14-07-00056-CV.

Court of Appeals of Texas, Houston (14th Dist.).

July 31, 2008.

Rehearing Overruled October 9, 2008.

Timothy E. McKenna, Houston, TX, for appellants.

Terry Fitzgerald, The Woodlands, Robert G. Devlin, Houston, TX, for appellees.

Panel consists of Justices YATES, GUZMAN, and BROWN.

OPINION

EVA M. GUZMAN, Justice.

In this appeal, we must determine whether appellants, the parents of two young children, have legally cognizable claims for mental anguish allegedly sustained when a repossession agent towed their vehicle out of sight before he realized their children were inside. The parents filed suit against the financing company, the repossession company it hired, and the repossession agent who towed the vehicle. They asserted claims for mental anguish and its physical manifestations under (a) section 9.609 of the Business and Commerce Code, (b) the Restatement (Second) of Torts, or (c) negligence law, including the law governing bystander claims. The trial court granted summary judgment for the defendants on the parents' claims. Neither parent witnessed the vehicle being towed from the street, and the repossession agent discovered the children and returned them and the vehicle within minutes. On these facts, we conclude that, as a matter of law, appellants Carlos and Maria Chapa do not have a viable claim for breach of the peace under section 9.609 of the Business and Commerce Code. We further hold that the financing company and its agents are not liable to the Chapas under sections 424 or 427 of the Restatement (Second) of Torts. Moreover, we conclude Maria Chapa's bystander and other negligence claims fail as a matter of law. We therefore affirm the trial court's grant of summary judgment.

I. FACTUAL AND PROCEDURAL BACKGROUND¹

Ford Motor Credit Corp. ("FMCC") hired Traciers & Associates ("Traciers")² to repossess a white 2002 Ford Expedition owned by Marissa Chapa, who was in default on the associated promissory note. Traciers assigned the job to its field manager, Paul Chambers, and gave him an address where the vehicle could be found. FMCC, Traciers, and Chambers were unaware that the address was that of Marissa's brother, Carlos Chapa. Coincidentally, Carlos and his wife Maria Chapa also had purchased a white Ford Expedition financed by FMCC. Their vehicle, however, was a 2003 model, and the Chapas were not in default.

On the night of February 6, 2003, Chambers went to the address and observed a white Ford Expedition. The license number of the vehicle did not match that of the vehicle he was told to repossess, and he did not see the vehicle's vehicle identification number ("VIN"), which was obscured. Chambers returned early the next morning and still could not see the Expedition's VIN. He returned to his own vehicle, which was parked two houses away.

Unseen by Chambers, Maria Chapa left the house and helped her two sons, ages ten and six, into the Expedition for the trip to school. Her mother-in-law's vehicle was parked behind her, so Maria backed her mother-in-law's vehicle into the street, then backed her Expedition out of the driveway and parked on the street. She left the keys to her truck in the ignition with the motor running while she parked her mother-in-law's car back in the driveway and reentered the house to return her mother-in-law's keys.

After Chambers saw Maria park the Expedition on the street and return to the house, it took him only thirty seconds to back his tow truck to the Expedition, hook it to his truck, and drive away. Chambers did not leave his own vehicle to perform this operation, and it is undisputed that he did not know the Chapa children were inside.³ When Maria emerged from the house, the Expedition, with her children, was gone. Maria began screaming, telephoned 911, and called her husband at work to tell him the children were gone.

Meanwhile, on an adjacent street, Chambers noticed that the Expedition's wheels were turning, indicating to him that the vehicle's engine was running. He stopped the tow truck and heard a sound from the Expedition. Looking inside, he discovered the two Chapa children. After he persuaded one of the boys to unlock the vehicle, Chambers drove the Expedition back to the Chapas' house. He returned the keys to Maria, who was outside her house, crying. By the time emergency personnel and Carlos Chapa arrived, the children were back home and Chambers had left the scene.

Maria testified that the incident caused her to have an anxiety attack, including chest pain and numbness in her arm. She states she has continued to experience panic attacks and has been diagnosed with an anxiety disorder. In addition, both Carlos and Maria have been diagnosed with post-traumatic stress disorder.

Acting individually and on behalf of their children, Carlos and Maria Chapa sued Traciers, Chambers, and FMCC. Appellees settled the children's claims but contested the individual claims of Carlos and Maria. The trial court granted summary judgment on the parents' claims in favor of Traciers, Chambers, and FMCC, and this appeal ensued.

II. ISSUES PRESENTED

The Chapas present three compound issues for review. In their first issue, they contend that they have legally cognizable causes of action against Traciers and FMCC for the physical and psychological injuries they sustained as a result of the appellees' breach of the duties imposed by (a) section 9.609 of the Texas Business and Commerce Code, (b) the Restatement (Second) of Torts, or (c) the common law governing negligence claims generally. In their second issue, the Chapas argue that, as a bystander, Maria suffered compensable injuries arising from the tort committed against her children. Finally, the Chapas assert in their third issue that the trial court erred in granting summary judgments dismissing their claims.

III. STANDARD OF REVIEW

We review summary judgments de novo,⁴ and where the trial court grants the judgment without specifying the grounds, we affirm the summary judgment if any of the grounds presented are meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872-73 (Tex.2000). We consider all grounds the appellant preserves for review that are necessary for final disposition of the appeal. See Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex.1996). Here, appellees moved for summary judgment on both traditional and no-evidence grounds;⁵ thus, we apply the familiar standard of review appropriate for each type of summary judgment, taking as true all evidence favorable to the nonmovant, and indulging every reasonable inference and resolving any doubts in the nonmovant's favor. See Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 157 (Tex.2004) (traditional summary judgment); King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex.2003) (no-evidence summary judgment).

IV. ANALYSIS

A. Section 9.609 of the Texas Business and Commerce Code

The Chapas first argue that the trial court erred in granting summary judgment against them on their claim that appellees are liable under section 9.609 of the Business and Commerce Code. This statute provides in pertinent part:

(a) After default, a secured party:

(1) may take possession of the collateral (b) A secured party may proceed under Subsection (a):

(2) without judicial process, if it proceeds without breach of the peace.

TEX. BUS. & COM.CODE ANN. § 9.609 (Vernon 2002). The Chapas correctly point out that this statute imposes a duty on secured creditors to take precautions for public safety when repossessing property. See MBank El Paso, N.A. v. Sanchez, 836 S.W.2d 151, 153 (Tex.1992) (interpreting predecessor statute). Thus, the creditor who elects to pursue nonjudical repossession assumes the risk that a breach of the peace might occur. Id. at 154. A secured creditor "remains liable for breaches of the peace committed by its independent contractor." Id. (citing RESTATEMENT (SECOND) OF TORTS, PRECAUTIONS REQUIRED BY STATUTE OR REGULATION, § 424 (1965)). Thus, a creditor cannot escape liability by hiring an independent contractor to repossess secured property.

The Chapas assert that FMCC and Traciers, who employed Chambers as a repossession agent, are liable for any physical or mental injuries sustained by Carlos and Maria as a result of Chambers's breach of the peace. But this argument presupposes that a breach of peace occurred. Although the material facts regarding Chambers's conduct are not in dispute, appellees deny that his conduct constituted a breach of the peace and moved for no-evidence summary judgment on the ground that no such breach occurred. If appellees are correct, then we may affirm summary judgment on the claims asserted under section 9.609 without further analysis. See TEX.R.APP. P. 47.1.

In their arguments concerning breach of the peace and its associated liability, the Chapas rely most heavily on authorities addressing breaches of the peace under Texas criminal law and cases from other jurisdictions discussing breaches of the peace under the Uniform Commercial Code. Because a breach of the peace under the criminal code would also constitute a breach of the peace under the Uniform Commercial Code, we address both sources of authority.

1. Breach of the Peace Under Criminal Law

In support of their argument that Chambers breached the peace, the Chapas rely on the following language from Corpus Juris, adopted by the Texas Court of Criminal Appeals in 1936:

The term `breach of the peace' is generic, and includes all violations of the public peace or order, or decorum; in other words, it signifies the offense of disturbing the public peace or tranquillity enjoyed by the citizens of a community; a disturbance of the public...