Clark v. Auto Recovery Bureau Conn., Inc.

• Decision Date: 27 September 1994
• Docket Number: Civ. No. 5:91CV00294 (WWE).
• Citation: 889 F. Supp. 543
• Parties: Vallorie CLARK v. AUTO RECOVERY BUREAU CONN., INC.
• Court: U.S. District Court — District of Connecticut

889 F. Supp. 543

Vallorie CLARK v. AUTO RECOVERY BUREAU CONN., INC.

Civ. No. 5:91CV00294 (WWE).

United States District Court, D. Connecticut.

September 27, 1994.

COPYRIGHT MATERIAL OMITTED

Joanne Faulkner, New Haven, CT, Herbert I. Mendelsohn, Law Offices of John R. Gamm, North Haven, CT, for Vallorie Clark.

Irwin J. Gordon, Trumbull, CT, for Auto Recovery Bureau Conn., Inc.

MEMORANDUM OF DECISION

EGINTON, Senior District Judge.

Plaintiff, Vallorie Clark, brought this action alleging that defendant, Auto Recovery Bureau Conn., Inc., repossessed her automobile in violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, and the Connecticut Unfair Trade Practices Act ("CUTPA"), Conn.Gen.Stat. § 42-110a-q. Plaintiff also alleges liability for common law conversion. The case was tried to the Court in July, 1994. Pursuant to Fed.R.Civ.P. 52(a), the Court enters the following findings of fact and conclusions of law.

I. FINDINGS OF FACT

Plaintiff and the University of Bridgeport Credit Union, Inc. ("Credit Union"), entered into a loan agreement through which plaintiff gave the Credit Union a security interest in a 1987 Saab. Plaintiff defaulted on her loan payments to the Credit Union. The Credit Union employed the services of defendant to repossess the Saab.

Defendant's principal business is the repossession of collateral for secured creditors. With respect to the repossession of cars, the defendant customarily deploys a two-member repossession crew. The crew members travel together in a tow truck to a given repossession site.

The defendant often uses a tow truck equipped with a towing mechanism known as the "Dynamic Auto Load System" (referred to as "the Dynamic towing system"). This towing device is particularly well-suited for defendant's business. It enables repossession crew members to hook up and remove a car in less than a minute. Moreover, the Dynamic towing system alleviates the need for crew members to get out of the truck. From the cab, crew members can attach a vehicle, lift the front wheels and tow the vehicle away. The towing device therefore diminishes the likelihood of a confrontation between repossession crew members and disgruntled debtors.

On May 13, 1991, at the instruction of the Credit Union, defendant attempted to repossess the Saab which was parked at plaintiff's residence. When plaintiff objected to the repossession, defendant suspended its efforts and informed the Credit Union that plaintiff would not surrender the collateral.

On May 17, 1991, plaintiff attended a picnic on the campus of the University of Bridgeport. The Credit Union learned that plaintiff was at the picnic and that the Saab was parked nearby on a public street. The Credit Union informed defendant of the car's location and asked defendant to repossess it.

At the Credit Union's request, defendant's president, John Pellegrino, instructed two employees to repossess the Saab. A third person accompanied the employees of defendant. In a tow truck equipped with the Dynamic towing system, defendant's crew traveled to the site of the Saab. Operating the towing system from the cab, the crew members lifted the car's front wheels and towed it away. As the truck pulled away with the car, crew member William Bernacchia noticed plaintiff nearing the site of the repossession. He also saw another person, not connected with the repossession, restrain plaintiff. The crew drove away with the Saab in tow.

Inside the Saab were several items of personal property belonging to the plaintiff. In the course of the repossession, the crew members did not afford plaintiff a chance to recover her personal property from the Saab. Instead, they towed away the Saab and the personal property contained therein. Defendant later returned the Saab to the Credit Union, after which the Credit Union returned the personal property to plaintiff.

Plaintiff brought this action alleging that defendant unlawfully repossessed her car and unlawfully failed to return her personal property. She seeks statutory damages, compensatory damages for the replacement of personal property, emotional distress, embarrassment, danger and inconvenience, as well as punitive damages and attorney's fees.

II. CONCLUSIONS OF LAW

A. Fair Debt Collection Practices Act

Plaintiff first claims that defendant's repossession of the Saab constitutes an unfair debt collection practice in violation of the FDCPA. Defendant argues that because it is not a debt collector for purposes of the FDCPA, the statute is inapplicable. Neither position is entirely persuasive.

Repossession companies are ordinarily beyond the scope of the FDCPA. The exception to this general rule is set forth in section 1692f(6) which prohibits "taking or threatening to take any nonjudicial action to effect dispossession or disablement of property if — (A) there is no present right to possession of the property claimed as collateral through an enforceable security interest." 15 U.S.C. § 1692f(6); James v. Ford Motor Credit Co., 842 F.Supp. 1202, 1207 (D.Minn.1994); Jordan v. Kent Recovery Serv., Inc., 731 F.Supp. 652, 654 (D.Del.1990).

The critical question under section 1692f(6) is whether defendant had a "present right" to the Saab via a valid security interest. This issue turns on the provisions of Article Nine of Connecticut's Uniform Commercial Code ("UCC"). See, e.g., James, 842 F.Supp. at 1207 (relying on Minn.Stat. § 336.9-503 to determine whether repossession agency exercised a "present right" to possession of collateral). Pursuant to section 42a-9-503 of the UCC, a secured party has a right on default to take possession of collateral. To exercise the right to take possession, the secured party "may proceed without judicial process if this can be done without breach of the peace...." Id. (emphasis added); see also Parks v. Baldwin Piano & Organ Co., 262 F.Supp. 515, 519 (D.Conn.), aff'd, 386 F.2d 828 (2d Cir.1967). By orally protesting the repossession, a debtor can undermine the creditor's right to repossess collateral. State v. Indrisano, 29 Conn.App. 283, 292 n. 7, 613 A.2d 1375 (1992) (citing J. White & R. Summers, Uniform Commercial Code § 26-6, p. 110-11 (2d ed. 1980)), rev'd on other grounds, 228 Conn. 795, 640 A.2d 986 (1994).

In the present case, there is no dispute that the Credit Union had a valid and enforceable security interest in the Saab. Nor does plaintiff contest the fact that she was in default on her loan payments to the Credit Union.¹ At the Credit Union's instructions, the defendant was entitled to take possession of the car without judicial process as long as the repossession did not engender a breach of peace. Conn.Gen.Stat. § 42a-9-503. If no breach of peace occurred, then defendant exercised a "present right" to possession in compliance with section 42a-9-503 of the UCC and section 1692f(6) of the FDCPA.

Turning first to the attempted repossession of May 13, 1991, the Court concludes that defendant acted appropriately. Defendant's repossession crew sought to repossess the Saab at plaintiff's residence. When plaintiff refused to surrender the car, the crew immediately aborted its efforts. No evidence was presented indicating that the attempted repossession precipitated any violent or disruptive behavior.

The repossession of May 17, 1991, is a closer question. Nevertheless, the Court is satisfied that defendant properly exercised its present right to possess the Saab. With the aid of the Dynamic towing system, defendant's repossession crew removed and towed the Saab without either of the three crew members leaving the truck. The crew members successfully avoided a confrontation with the debtor and thus a breach of peace. The Court concludes that defendant repossessed the Saab in accordance with section 42a-9-503 of the UCC. It follows that defendant exercised a present right to possession of the car in accordance with section 1692f(6) of the FDCPA.

Plaintiff insists that she objected to the repossession and that a physical confrontation ensued. This may be true. Nevertheless, to the extent that any protest or physical contact occurred, the evidence indicates that such conduct did not involve either of the three repossession crew members. Although plaintiff testified that four persons were involved in the repossession, one of whom was outside of the tow truck, the Court finds that just three persons were involved in the procedure. The fourth person who restrained plaintiff was not connected in any way with defendant's repossession of the Saab.

The evidence is inconclusive as to exactly why this fourth person restrained plaintiff. Presumably he was associated with the campus police as evidenced by his possession of a walkie-talkie; presumably he wanted to keep plaintiff from interfering with a moving tow truck. In either case, any confrontation that may have occurred involved plaintiff and a person whose actions cannot be imputed to defendant.

In addition, the objection and ensuing confrontation occurred after defendant repossessed the car. "Once a repossession agent has gained sufficient dominion over collateral to control it, the repossession has been completed." James, 842 F.Supp. at 1209. While at the picnic, plaintiff learned from friends that her car was being towed away. By the time plaintiff arrived at the scene, the repossession crew had already removed the Saab from its parking place. It follows that defendant had sufficient control over the Saab before plaintiff voiced an objection to defendant's actions. Not only was the objection voiced to the wrong person, but it came too late. Defendant had already properly repossessed the Saab.

A similar result obtained in James. There, the defendant repossessed the plaintiff's car from a parking lot. An hour later, the plaintiff caught up with the defendant. After a scuffle and a breach of peace, the plaintiff regained control of the vehicle. The court determined that "once the defendant had...