Thompson v. Ford Motor Credit Co., 76-3349

• Decision Date: 08 April 1977
• Docket Number: No. 76-3349,76-3349
• Citation: 550 F.2d 256
• Parties: 21 UCC Rep.Serv. 907 Mary J. THOMPSON, Plaintiff-Appellee, v. FORD MOTOR CREDIT COMPANY, a corporation, et al., Defendants-Appellants. Summary Calendar. *
• Court: U.S. Court of Appeals — Fifth Circuit

Page 256

550 F.2d 256

21 UCC Rep.Serv. 907

Mary J. THOMPSON, Plaintiff-Appellee, v. FORD MOTOR CREDIT COMPANY, a corporation, et al Defendants-Appellants.

No. 76-3349

Summary Calendar. ^*

United States Court of Appeals Fifth Circuit.

April 8, 1977.

N. T. Braswell, III, Montgomery, Ala., for Ford Motor Credit Co.

Richard W. Whittaker, Enterprise, Ala., for plaintiff-appellee.

Appeal from the United States District Court for the Middle District of Alabama.

Before AINSWORTH, MORGAN and GEE, Circuit Judges.

AINSWORTH, Circuit Judge:

This Alabama diversity case arose when appellee Mary J. Thompson defaulted on her automobile installment contract and appellant Ford Motor Credit Company repossessed the automobile. Mrs. Thompson sued Ford for conversion and, in the alternative, for trespass to chattels. The jury awarded Mrs. Thompson $5,000. We find that the proof will not sustain the verdict, and reverse.

Mrs. Thompson bought a Ford Pinto automobile from the local Ford dealer in her home town of Enterprise, Alabama, on May 8, 1974. The dealer financed the purchase and Mrs. Thompson executed a retail installment contract which the dealer assigned to Ford Motor Credit Company. Mrs. Thompson soon fell behind in her payments on the contract. She was notified of her arrears by letter and by a visit from an employee of Ford. Mrs. Thompson does not dispute that she was in default on the contract in May 1975. The contract provided in part that in the event of default,

Seller shall have all the rights and remedies of a Secured Party under the Uniform Commercial Code, including the right to repossess the Property whenever the same may be found with free right of entry, and to recondition and sell the same at public or private sale.

Mrs. Thompson damaged the automobile and took it to Hines Phillips 66 Service Station in Enterprise for repairs. While it was at the service station on May 22, 1975, it was noticed by Glenn Coles, a Ford employee who among other duties repossesses automobiles. Coles ascertained that the automobile was the one purchased by Mrs. Thompson, and then informed James Hines, the garageman, of his intention to repossess it. Hines testified that he replied, "No, you cannot repo it unless you contacted her (Mrs. Thompson) and it is okay." Hines testified that Coles then told him "he had seen her, and it was okay." Coles testified that he could not remember whether Hines asked him whether he had contacted Mrs. Thompson, but that he was "positive" that he did not tell Hines that he had Mrs. Thompson's permission to repossess the automobile. Hines and Coles agree that Hines then told Coles that Coles could have the automobile if he would pay the repair bill. Coles did pay the bill and repossessed the automobile on May 23, returning it to the Ford dealer.

On June 11, 1975, Mrs. Thompson filed an action in Alabama state court alleging the wrongful taking of the automobile and of a tape player, tapes, an umbrella, and personal papers which were in the automobile when it was repossessed. Mrs. Thompson later added as defendants Hines and the Phillips Petroleum Company; a motion for summary judgment was granted as to Phillips. On Ford's motion the cause was removed to federal district court, where it was tried on July 12 and 13, 1976. The jury returned a verdict against Ford in the amount of $5,000 and against Hines in the amount of $500. The trial judge dismissed the action as to Hines after the verdict was returned. Judgment was entered against Ford, and Ford appeals.

On appeal Ford argues that Mrs. Thompson lacked the requisite entitlement to the automobile to maintain an action in conversion, and that its repossession of the automobile did not involve a "breach of the peace" making its repossession wrongful. Mrs. Thompson argues that Coles' alleged lie to Hines concerning Mrs. Thompson's consent to repossession was sufficient breach of the peace to make the repossession wrongful.

To sustain an allegation of conversion in Alabama the plaintiff must be able to show legal title and the immediate right of possession to the property in question. Automotive Acceptance Corp. v. Powell, 45 Ala.App. 596, 234 So.2d 593, 600 (1970). Upon default title and the right to possession pass to the creditor. Harmon v. Dothan Nat'l Bank, 186 Ala. 360, 64 So. 621, 622 (1914). In such circumstances the creditor may repossess the property by self-help. Rainey v. Ford Motor Credit Co., 294 Ala. 139, 313 So.2d 179, 182 (1975); Ala.Code tit. 7A, § 9-503 (1958). ¹ Because the creditor in this case, Ford, had legal title and lawful right to possession following Mrs. Thompson's default and the right to repossess by self-help, Mrs. Thompson cannot recover for conversion. First Nat'l Bank of Butler v. Sturdivant, 288 Ala. 133, 258 So.2d 715, 717 (1972).

Even following a default the law of Alabama provides for recovery if the repossession is accompanied by a "breach of the peace," thereby constituting a wrongful taking or trespass to chattels. Automotive Acceptance Corp. v. Powell, supra, 234 So.2d at 600; Ala.Code tit. 7A, § 9-503 (1958). This provision has recently been construed in circumstances very similar to those in the present case. Ford Motor Credit Co. v. Ditton, 52 Ala.App. 555, 295 So.2d 408 (1974), involved a repossession by the same Ford agency in Enterprise, the same Alabama town involved in the present case. In Ditton the defaulter explicitly refused Ford permission to repossess an...