Droge v. AAAA Two Star Towing, Inc.

• Decision Date: 18 June 2020
• Docket Number: No. 75206-COA,75206-COA
• Citation: 468 P.3d 862
• Parties: James H. DROGE, an Individual; and Cynthia Droge, an Individual, Appellants, v. AAAA TWO STAR TOWING, INC., a Nevada Corporation; Donald Shupp, an Individual; Zane Investigations, Inc., a Nevada Corporation; Mark A. Zane, an Individual; and Kristal M. Romans, a/k/a Crystal Romans, an Individual, Respondents.
• Court: Nevada Court of Appeals

468 P.3d 862

James H. DROGE, an Individual; and Cynthia Droge, an Individual, Appellants,

v.AAAA TWO STAR TOWING, INC., a Nevada Corporation; Donald Shupp, an Individual; Zane Investigations, Inc., a Nevada Corporation; Mark A. Zane, an Individual; and Kristal M. Romans, a/k/a Crystal Romans, an Individual, Respondents.

No. 75206-COA

Court of Appeals of Nevada.

FILED JUNE 18, 2020

Stovall & Associates and Ross H. Moynihan and Leslie Mark Stovall, Las Vegas, for Appellants.

Bremer Whyte Brown & O'Meara, LLP, and Jared G. Christensen and Anthony T. Garasi, Las Vegas, for Respondents Kristal M. Romans, Mark A. Zane, and Zane Investigations, Inc.

Phillips, Spallas & Angstadt, LLC, and Alyce W. Foshee and Robert K. Phillips, Las Vegas, for Respondents AAAA Two Star Towing, Inc., and Donald Shupp.

BEFORE GIBBONS, C.J., TAO and BULLA, JJ.

OPINION

By the Court, BULLA, J.:

Under NRS 104.9609 —part of Nevada's version of the Uniform Commercial Code (U.C.C.)—when a default occurs, a secured party who "proceeds without breach of the peace" can take possession of collateral "[w]ithout judicial process." In other words, this statute authorizes a creditor to enter onto private property to attempt to retrieve collateral in what is commonly referred to as a self-help repossession.

In this appeal, the court is asked to consider an issue of first impression—the question of what conduct, undertaken in the course of a self-help repossession of a vehicle, constitutes a breach of the peace, such that the privilege to enter real property without judicial process and retake collateral afforded by NRS 104.9609 no longer applies to those engaged in the repossession effort. We also consider whether appellants can properly base their tort claims on allegations that both a breach of the peace and trespass occurred, even though they did not plead separate claims for such, or indeed a violation of NRS 104.9609. Finally, this court must examine whether summary judgment was warranted with respect to appellants’ tort claims in light of our resolution of the above issues.

I.

A.

Russell Droge entered into a loan agreement with JP Morgan Chase Bank, N.A., in connection with his purchase of a Dodge Ram pickup truck. Russell was later incarcerated, and his parents, appellants James and Cynthia Droge (referred to collectively as the Droges where appropriate), agreed to store the truck at their home in Pahrump, Nevada. Thereafter, the Droges had possession of the truck, which they kept in their fenced backyard. Although the Droges had possession of the collateral, they have never asserted during these proceedings that they are debtors or obligors with respect to the truck or that they have any security interest in the truck.

While incarcerated, Russell defaulted on his loan. Chase retained respondent Zane Investigations, Inc. (Zane), to perform an involuntary repossession of the truck.¹ Zane, in turn, assigned the matter to respondent Kristal Romans, who was Zane's sole employee in Pahrump and in charge of its repossessions.² In connection with her assignment to repossess Russell's truck, Romans regularly drove by the Droges’ property to assess the feasibility of repossessing the vehicle. Romans was not immediately able to repossess the truck because it was parked in the Droges’ secured backyard.

Several months later, Romans spotted Russell's truck parked in front of the Droges’ home on the driveway, which was not fenced and was therefore accessible. However, because Zane does not have its own tow trucks in Pahrump, Romans could not proceed with the repossession by herself. Instead, Romans parked on a nearby street and contacted respondent AAAA Two Star Towing, Inc. (Two Star), which provides Zane with towing services when it repossesses vehicles in Pahrump. Two Star, in turn, dispatched one of its tow truck drivers, respondent Donald Shupp,³ to meet Romans and tow Russell's truck for Zane. Shupp's training was in the area of towing, but with regard to repossessions, Two Star directed him to follow the repossession agent's instructions, avoid confrontations, and retreat upon demand.

On the day of the attempted repossession, Shupp met Romans on the street where she had parked to assess whether they had an opportunity to repossess the truck. She explained to Shupp that the repossession was involuntary and would be of the "grab-and-go," "no-contact" variety. They then drove to the Droges’ property. Romans parked on the street in front of the Droges’ house and walked to Russell's truck in the driveway while Shupp backed his tow truck onto the driveway behind Russell's truck.

The parties agree, and the record reflects, that upon entering the Droges’ property, Romans confirmed that Russell's truck was the vehicle they were there to repossess by checking its vehicle identification number. Shupp then lowered his tow truck's flatbed and began chaining Russell's truck to the winch so that the truck could be pulled onto the flatbed. Meanwhile, Cynthia and James Droge, who were in their house, became aware of what was transpiring and went outside to confront Romans and Shupp. At some point during the proceeding events, either one or both of the Droges objected to Romans and Shupp repossessing Russell's truck, although the parties vigorously dispute when this actually took place. But ultimately, the attempted repossession continued until James retrieved the keys to Russell's truck, started it, and moved it into the fenced backyard. Either Romans or Shupp then called 9-1-1.

B.

The parties do not agree about much else that transpired during the attempted repossession. Indeed, Romans and Shupp maintain that they followed proper procedures during the attempted repossession and that their entry onto the Droges’ property was privileged under NRS 104.9609. The Droges, on the other hand, contend that Romans and Shupp breached the peace and thereby forfeited the statute's protections. The parties’ positions are based on a number of more specific disputes concerning what happened during the attempted repossession.⁴

For example, the parties disagree whether Romans and Shupp identified themselves and produced the documentation from Chase that authorized them to repossess Russell's truck. The Droges contend that Romans refused Cynthia's request to see her identification and the documentation and instead stepped toward Cynthia in a confrontational manner, proclaiming that she and Shupp were "taking the truck," Romans and Shupp, on the other hand, maintain that, although they were not asked for identification or the documentation, Romans identified herself and explained that they were repossessing Russell's truck, which prompted Cynthia to threaten to call 9-1-1,

The parties also dispute when the Droges objected to Romans and Shupp being on their property in order to repossess the truck, and how Romans and Shupp responded to any objection. According to the Droges, they objected to the repossession as soon as Romans refused to identify herself and produce the repossession order. The Droges further assert that they objected several more times during the incident and that, although Romans eventually walked off of the property and out to the street in front of the Droges’ house, Shupp continued with his efforts to attach a chain to the truck until James moved Russell's truck to the backyard and demanded that Shupp leave the property.

According to Romans and Shupp, Cynthia threatened to call the police, which prompted Romans to tell Shupp to hurry up so they could "hook" the vehicle before the Droges told them to leave the property. But Romans and Shupp do not acknowledge any of the Droges’ specific objections to the repossession, arguing instead that the first time the Droges demanded that they leave the property was after James finished moving Russell's truck into the backyard. Romans and Shupp further maintain that Shupp responded by promptly joining Romans on the street in front of the Droges’ house while leaving his tow truck in the Droges’ driveway, presumably to be retrieved in the aftermath of the 9-1-1 call that Romans or Shupp subsequently made.

Lastly, the parties dispute whether Shupp was struck by Russell's truck while James was attempting to move the vehicle. According to the Droges, James saw that Shupp was working under the back of the truck when James began to move it, but they maintain that James first moved the vehicle forward, which prompted Shupp to stand up and get out of the way, and that James then backed the truck up and proceeded to maneuver the vehicle into the backyard without event. But the Droges acknowledge that, once James parked Russell's truck in the backyard, Shupp stated from the other side of the fence, "[y]ou hit me, man," albeit without further explanation. On the other hand, Romans and Shupp maintain that Shupp was still under the vehicle when James began to back it up, which prompted Romans to scream for Shupp to watch out. This prompted Shupp to look around, but Romans’ warning apparently came too late, as Romans and Shupp indicate that Shupp was struck in the chest by the passenger-side rear wheel of Russell's truck. According to Shupp, he would have been crushed if James had backed Russell's truck up another four inches; however, since he was not injured, he was able to scramble out from under the truck while James continued maneuvering the vehicle into the backyard.

C.

In the aftermath of the failed repossession, a sheriff's deputy responded to the Droges’ home. James admitted to the sheriff's deputy that he knew Shupp was on the ground behind Russell's truck when he began to move it. As a result, the sheriff's deputy concluded that James committed battery with a deadly weapon and arrested him. For the same reason, a deputy district attorney decided to charge James with that crime, and the justice court concluded that there was probable cause to bind James over for trial before the district court. The case proceeded to trial, and the jury ultimately...