Pierce v. Leasing Intern., Inc.
| Decision Date | 04 May 1977 |
| Docket Number | No. 53742,No. 2,53742,2 |
| Citation | 142 Ga.App. 371,23 U.C.C.Rep. 829,235 S.E.2d 752 |
| Parties | , 22 UCC Rep.Serv. 269 G. R. PIERCE v. LEASING INTERNATIONAL, INC., et al |
| Court | Georgia Court of Appeals |
Walter W. Furlong, Atlanta, for appellant.
Jones & Barnwell, Taylor W. Jones, C. Cyrus Malone, III, Atlanta, for appellees.
Pierce sued Leasing International, Inc., and Larry Turner seeking actual and punitive damages for their alleged wrongful repossession of an automobile from his garage without prior demand or notice. Leasing International answered, alleging that Pierce was in default of the "lease agreement" under which he had obtained possession of the car from Leasing International and that the repossession was in accordance with a provision in the agreement authorizing the lessor and its agents "to enter on any premises where the vehicle may be found and to take whatever action necessary to effect the repossession of such vehicles . . ." in the event of default. It also counterclaimed for damages for breach of the lease agreement. Pierce appeals the trial court's grant of summary judgment to Leasing International.
The lease agreement obligated Pierce to make 24 monthly payments of $149.92 and to be responsible for a "depreciated value" of $2,400 at the end of the lease term. If he terminated the lease prematurely, by default or otherwise, he was also responsible for payment of a "premature termination factor" of $115 times the number of months remaining in the lease term. Upon termination, the car would be sold on the wholesale market; and, if the price received exceeded the pre-determined "termination value," he would receive the benefit. If it did not, he would bear the loss. In addition, Pierce was responsible for all maintenance, repairs, insurance premiums, and taxes on the vehicle.
Although Pierce missed several monthly payments during the ten-month period that he held possession of the car, Leasing International accepted monthly payments from him subsequent to the accrual of this arrearage. Pierce stated by affidavit that no demand for this arrearage had been made and that he was never informed that repossession was contemplated. The contract provided that forbearance to exercise remedies in case of breach would not be considered a waiver of the right to exercise those remedies.
The automobile was sold for $3600 following the repossession. The "termination value" at that time was approximately $4138, the $538 difference being included in Leasing International's counterclaim.
1. This transaction was sufficiently analogous to a secured sale to subject it to the provisions of Article 9 of the UCC, Ga.Code Ann. § 109A-9-101 et seq. (Ga.L.1962, pp. 156, 380-426, as amended). Pierce was in effect required to purchase the car at a prearranged price on termination of the lease and was entitled to the full benefit of the actual sale price in return. In Redfern Meats v. Hertz, 134 Ga.App. 381(4), 215 S.E.2d 10 (1975), it was held that an agreement termed a "lease," which required the lessee to purchase the vehicle upon cancellation was equivalent to a secured sale, even though the lessor retained all indicia of ownership and, unlike Leasing International, was responsible for all maintenance and fuel costs, registration, taxes and repairs. This case is controlled by the same principle. See Rollins Communications, Inc. v. Georgia Institute of Real Estate, Inc., 140 Ga.App. 448(2), 231 S.E.2d 397 (1976); Code Ann. § 109A-1-201(37) (Ga.L.1962, pp. 156, 166).
2. Under the circumstances of this case a fact issue exists as to whether Pierce was entitled to receive notice of the intended repossession or a demand for payment of the arrearage prior to the repossession.
Although Code Ann. § 109A-9-503 (Ga.L.1962, pp. 156, 422) allows self-help repossession, as long as it can be accomplished without a breach of the peace, and imposes no requirement of notice or demand, a creditor may impose such a requirement upon himself by pattern or course of conduct. This does not mean, of course, that under the terms of a contract such as this one the creditor waives the default by accepting late payments. Trust Company of Georgia v. Montgomery, 136...
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