Kirksey v. Theilig

• Decision Date: 30 November 1972
• Docket Number: No. C-4203,C-4230.,C-4203
• Citation: 351 F. Supp. 727
• Parties: William KIRKSEY, Plaintiff, v. Gene THEILIG, as agent of The East Colorado Springs National Bank and The East Colorado Springs National Bank, a Colorado corporation, Defendants. Gerald CHASE, individually and for all others similarly situated, Plaintiff, v. CHRYSLER CREDIT CORP. and Gary Ford, as agent for Chrysler Credit Corp., Defendants.
• Court: U.S. District Court — District of Colorado

351 F. Supp. 727

William KIRKSEY, Plaintiff, v. Gene THEILIG, as agent of The East Colorado Springs National Bank and The East Colorado Springs National Bank, a Colorado corporation, Defendants.

Gerald CHASE, individually and for all others similarly situated, Plaintiff, v. CHRYSLER CREDIT CORP. and Gary Ford, as agent for Chrysler Credit Corp., Defendants.

Nos. C-4203, C-4230.

United States District Court, D. Colorado.

November 30, 1972.

James Robert Barash and James W. Kin, Pikes Peak Legal Services, Colorado Springs, Colo., for plaintiff Kirksey.

Goodbar, Goodbar & Fischer by Mr. William D. Goodbar, Colorado Springs, Colo., for defendants Theilig and The East Colorado Springs National Bank.

Loa E. Bliss, Pikes Peak Legal Services, Colorado Springs, Colo., for plaintiff Chase.

Hellerstein & Hellerstein, P. C., by Stephen A. Hellerstein and Martin H. Shore, Denver, Colo., for defendant Chrysler Credit Corp.

MEMORANDUM OPINION AND ORDER

ARRAJ, Chief Judge.

These two cases have not been consolidated, but because they present identical questions, we will deal with both cases in this one opinion. The questions are (1) whether defendants' self-help repossessions of plaintiffs' automobiles, pursuant to their respective agreements and as authorized by Colorado's Uniform Commercial Code, C.R.S. § 155-9-503 (1963), were actions "under color of" state law within the meaning of 42 U.S. C. § 1983 (1964), and its jurisdictional counterpart, 28 U.S.C. § 1343(3) (1958); and, (2) if so, did the repossessions, made without prior notice or an opportunity for a hearing, violate plaintiffs' rights to due process under the Fourteenth Amendment of the United States Constitution.

In Chase, plaintiff alleges that on July 19 of this year, defendant Chrysler Credit Corporation, through its agent, defendant Gary Ford, repossessed plaintiff's car from a parking lot in Colorado Springs, Colorado, without prior notice or an opportunity for a hearing. It appears that Chrysler Credit was the assignee of a security agreement covering plaintiff's car. The security agreement provided for repossession by the secured party upon default, as authorized by § 9-503 of the U.C.C., and presumably defendant was acting pursuant to the agreement and the statute when the car was repossessed. Plaintiff, in an amended complaint, has sought to expand his action to one on behalf of a class of persons who have had their cars similarly repossessed by defendant Chrysler Credit.

Plaintiff in Kirksey alleges that on July 6, 1972, his car was also towed away from a parking space without prior notice or an opportunity for a hearing. In this case defendant Theilig, acting as agent for defendant East Colorado Springs National Bank, made the repossession. According to the complaint, prior to the repossession, indeed before his payment was due in June, plaintiff had encountered financial difficulty and had arranged with Theilig to make a double payment in July. Theilig, however, decided to go ahead and repossess the car before this next payment came due. It appears that plaintiff had entered into a loan agreement with defendant East Colorado Springs National Bank for the purchase of his car and that the bank's agent was acting pursuant to a clause in that agreement authorizing repossession without notice upon default. Plaintiff alleges that defendant also relied upon § 9-503 of the U.C.C. in making the repossession.

In both cases plaintiffs pray for injunctive and declaratory relief and damages. The cases come before us now on cross motions for summary judgment and on defendants' motions to dismiss for lack of jurisdiction and for failure to state a claim upon which relief can be granted.

The question to be answered first is whether plaintiffs have alleged facts which constitute action "under color of" state law within the meaning of 42 U.S. C. § 1983 and 28 U.S.C. § 1343(3).¹ The thrust of plaintiffs' argument is that the existence of § 9-503 of the U. C.C.² authorizes self-help repossession without prior notice or an opportunity for a hearing, encourages such repossessions, and thereby sufficiently involves the state in the acts of the defendants in these cases for their actions to constitute action "under color of" state law. Plaintiffs also point to several other state statutes which they contend authorize, encourage, and thereby involve the state in the acts of the defendants in these cases: C.R.S. § 155-9-504, authorizing and establishing the procedure for sale by the secured party after repossession; C.R.S. § 13-6-12, authorizing the Director of Motor Vehicles to issue a new title to the creditor after repossession; and C.R.S. § 13-6-44, providing that the secured party must notify the local police within 12 hours of the repossession or be subject to criminal sanctions.³

In dealing with the question of whether repossessions by private individuals authorized by these state statutes constitute action "under color of" state law, it might be useful at the outset to attempt to state what these cases do not involve. First, it is clear that the cases before us do not involve a state law which requires or compels private wrongful acts. See, e. g., Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 92 S.Ct. 1965, 32 L.Ed.2d 627 (1972); Adickes v. Kress, 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Lombard v. Louisiana, 373 U.S. 267, 83 S.Ct. 1122, 10 L.Ed.2d 338 (1963); Peterson v. City of Greenville, 373 U.S. 244, 83 S.Ct. 1119, 10 L.Ed.2d 323 (1963); cf. Robinson v. Florida, 378 U.S. 153, 84 S.Ct. 1693, 12 L.Ed.2d 771 (1964). Nor do these cases involve the state putting its force behind private unconstitutional acts. See, e. g., Shelley v. Kraemer, 334 U.S. 1, 68 S.Ct. 836, 92 L.Ed. 1161 (1948). Nor were the acts in these cases taken in active concert with state officials. See, e. g., United States v. Price, 383 U.S. 787, 86 S.Ct. 1152, 16 L.Ed.2d 267 (1966); United States v. Guest, 383 U.S. 745, 86 S.Ct. 1170, 16 L.Ed.2d 239 (1965).

Though more disagreement may be encountered on the subject, we further feel that, since the self-help repossessions made here appear to have been made without a breach of the peace,⁴ these cases cannot be said to involve private parties acting under a semblance or pretense of being the state's agent, exercising its force and authority. See, e. g., Williams v. United States, 341 U.S. 97, 71 S.Ct. 576, 95 L.Ed. 774 (1950); Griffin v. Maryland, 378 U.S. 130, 84 S. Ct. 1770, 12 L.Ed.2d 754 (1964). Moreover, since retaking of property by private persons under the same or similar circumstances as occurred here has a long, established heritage,⁵ the repossessions in these cases cannot be easily compared to acts of private individuals performing essentially governmental or public functions. See, e. g., Evans v. Newton, 382 U.S. 296, 86 S.Ct. 486, 15 L.Ed.2d 373 (1966); Terry v. Adams, 345 U.S. 461 (1953); Marsh v. Alabama, 326 U.S. 501, 66 S.Ct. 276, 90 L. Ed. 265 (1946); Nixon v. Condon, 286 U.S. 73, 88, 52 S.Ct. 484, 76 L.Ed. 984 (1932).⁶

Nevertheless, plaintiffs contend that state authorization and encouragement of the private self-help repossessions is sufficient state involvement in the private acts of defendants for those acts to constitute action "under color of" state law. To support this proposition plaintiffs rely primarily on the case of Reitman v. Mulkey, 387 U.S. 369, 87 S.Ct. 1627, 18 L.Ed.2d 830 (1967). In that case the California Supreme Court found that the state statute in question, which provided that every person had the right to rent or sell his property to whomever he in his sole discretion chose, was passed in order to overturn prior anti-discrimination statutes. Because of this fact, the court concluded that the statute would "significantly encourage and involve the state in private discriminations." The United States Supreme Court agreed with these conclusions and held that the private discriminations under the statute involved state action and were therefore unconstitutional.

Reitman is similar to the cases before us in that the statutes in question here do authorize the self-help repossessions; indeed, unlike Reitman they do so on their face.⁷ However, Reitman is quite dissimilar from our present cases in at least two respects. First, in Reitman it was found that the purpose of the statute was to authorize what had been formerly expressly prohibited. Because of this legislative background, the statute was found to encourage racial discrimination. It changed the red light on discrimination in the housing market to a green light. Thus, the state might be said to have been an accomplice in, if not the instigator of, the private discriminations. Cf. Anderson v. Martin, 375 U.S. 399, 84 S.Ct. 454, 11 L.Ed.2d 430 (1964); Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S. Ct. 856, 6 L.Ed.2d 45 (1961). In our cases, on the other hand, any kind of encouragement of the private acts by the state is nearly non-existent.⁸ Hence the state is not involved (if authorization can be called involvement) in the private repossessions in these cases in any way near the manner or degree it was involved in the private discriminations in Reitman.

Second, we are not convinced that the resolution of the state action question in Reitman can be directly applied to the situation here. That case involved racial discrimination; these cases do not. That fact is significant because in cases involving racial discrimination, there is a long history of state attempts to do indirectly what the states knew they were prohibited from doing directly—encouraging or enforcing racial discrimination. See, e. g., Anderson v. Martin, supra, 375 U.S. at 404, 84 S.Ct. 454; Smith v. Allwright, 321 U.S. 649, 64 S.Ct. 757, 88 L.Ed. 987 (1944) and Rice v. Elmore, 165 F.2d 387 (4th Cir. 1947), cert. denied, 333 U.S. 875, 68 S.Ct. 905, 92 L.Ed. 1151 (1948). Thus there is an element of intentional circumvention in Reitman and other similar cases...