A District Court judge in Illinois has granted a plaintiff’s motion for summary judgment on claims that an automobile repossession company violated the Uniform Commercial Code and the Fair Debt Collection Practices Act when it completed the repossession of a vehicle after a breach of the peace had occurred, and awarded the plaintiff more than $24,000 in damages.
The background: The case stemmed from the repossession of a 2018 Chevrolet Equinox after the plaintiff fell behind on payments to a finance company. The lender hired a repossession company to recover the vehicle. When the agent located the car, the plaintiff was sitting inside it. Despite knowing the risks of repossessing an occupied vehicle, the agent extended the tow truck’s grabber arms around the vehicle’s tires and initiated the repossession.
- When the plaintiff refused to exit, the agent called local police. Two armed officers arrived, ordered the plaintiff out of the vehicle, and threatened to remove her by force. Only after the officers’ threat did the plaintiff exit, and the agent completed the repossession.
The ruling: Judge J. Phil Gilbert of the District Court for the Southern District of Illinois ruled that the repossession violated both the Illinois Uniform Commercial Code and the FDCPA because it was carried out after a breach of the peace. The judge noted that beginning a repossession while a debtor is inside the vehicle “plainly constitutes the kind of hazard resulting from confrontation during self-help repossession that the UCC seeks to avoid.”
- Judge Gilbert also found that involving police officers turned the repossession into state-assisted enforcement, writing that “a police officer must not act as a ‘curbside courtroom’ in resolving a dispute between a repossessor and debtor.” The court concluded that the involvement of law enforcement and the threat of force constituted a breach of the peace, which made the repossession unlawful.
- Because of the breach, the repossessor “did not have a present right to possession” of the vehicle under the FDCPA. The court awarded the plaintiff $24,054.13 in statutory damages under the UCC’s formula for consumer goods.
- While the plaintiff prevailed on the UCC and FDCPA counts, the court rejected a separate conversion claim, ruling that because she was in default, she did not have an unconditional right to possession of the vehicle.
