A District Court judge in California has denied a defendant’s motion to dismiss claims it violated the Fair Debt Collection Practices Act and the Rosenthal Fair Debt Collection Practices Act because, as many of you will know, at the motion to dismiss stage, the judge has to accept the claims made in a complaint as true. In doing so, the court allowed claims tied to an allegedly improper vehicle repossession to move forward, offering another reminder of how breach-of-the-peace allegations can derail early dismissal efforts in repossession cases.
The background: The case stems from the repossession of a pickup truck that had been financed through the defendant. After experiencing significant personal and financial hardship, the plaintiff fell behind on loan payments.
- The vehicle was parked on private property behind a locked gate, according to the complaint.
- Repossession agents allegedly accessed the property by cutting the lock securing the gate and attempting to take the vehicle while a third party protested and attempted to stop the repossession.
- The plaintiff later returned home to find the vehicle gone, the gate open, and the lock cut.
- The lawsuit followed, asserting violations of the FDCPA, the Rosenthal Act, and California law governing breach of the peace during repossession against the repossession agency and the bank that made the loan. Only the bank filed this motion to dismiss the case.
The ruling: In denying the motion to dismiss, Judge Troy L. Nunley of the District Court for the Eastern District of California focused on whether the plaintiff had plausibly alleged a breach of the peace, which would extinguish any present right to possess the collateral.
- Judge Nunley emphasized that, at this stage, the court must accept the factual allegations as true and draw reasonable inferences in the plaintiff’s favor. He concluded that allegations the repossession agents cut a lock to gain access to secured private property were sufficient.
- Quoting prior case law, the court noted that “a breach of the peace can extinguish a present right to possession” and cited authority holding that entering secured property without consent can meet that standard.
- The judge also rejected the defendant’s attempt to argue factual nuances about the gate itself, explaining that such disputes are inappropriate at the motion to dismiss stage. One cited case even supported the plaintiff’s position, stating that “the actual breaking of a lock or fastener securing property… constitutes a breach of the peace.”
