Life Imitates Art (or at Least My Final Exam)

From the San Jose Mercury News, the headline says it all: "Repo man takes San Jose mom's car with 2-year old in back seat" (courtesy of The Consumerist). Now, a short essay from my Secured Credit final exam:

Cletus and Brandine Spuckler are in your law office and tell you the following tale of woe. They had borrowed money from the Burns Finance Company to pay for their 2007 Ford Expedition but have recently fell behind on their payments. Burns Finance Company has a valid, perfected security interest in the 2007 Ford Expedition. One morning, Brandine found that Cletus’s tractor was blocking the driveway when she needed to take two of their kids to preschool. Consequently, Brandine loaded the two kids in the Expedition, got the tractor keys from Cletus, backed the tractor out, then backed out the Expedition, and then returned the tractor to its place on their driveway. She left the Expedition running in the street, with the keys in the ignition and the kids in the backseat. While Brandine went back inside to return the keys to Cletus, an employee of Burns Finance repossessed the automobile, driving off in it with the kids in the back seat. The employee got about three blocks when he saw the kids, and he promptly returned the Expedition to Brandine, who was emotionally distraught having seen a stranger drive off with her kids. Since that time, both Brandine and the two children have been unable to sleep and are emotionally upset. Putting aside the question of any tort claims, do you think the Spucklers have any valid claims under the Uniform Commercial Code?

I based the question on Chapa v. Traciers & Associates, 267 S.W.3d 386 (Tex. App. 2008). Still, I thought I was making this up. Who knew?

For those who are interested (i.e., those who had to answer that question), here is an excerpt from my own notes on the question:

Under the Uniform Commercial Code, a creditor is allowed to repossess collateral so long as it does so without a breach of the peace, § 9-609. The question is whether this breaches the peace. Students should explore whether the facts suggest a breach of the peace. There was no resistance and on similar facts, a Texas court found no breach of the peace. Chapa v. Traciers & Associates, 267 S.W.3d 386 (Tex. App. 2008). If there is a violation of the UCC, Burns Finance is liable to the debtor for any damages caused thereby. § 9-625(a).

And, for the record, I had to look up the last name for Cletus and Brandine.

Comments

[Patches]

We had one where the debtors were in BK and she was dragged for 1/2 a block. Without looking at the code and the case, my understanding is that when the peace is broken there is a confrontation of some sort. A court order would cure the potential problem(s) of breaking the peace, but alas that would make it expensive..... expensive but legally safe. If its taken without them knowing its done properly. (I think) There seems to be an obvious confrontation here.

People are sometimes followed from place to place also. I hear a lot of that.

[Katie Porter]

I think this was a breach of the peace. She ran after the car screaming, and the repossession agent's actions triggered a significant police response. At minimum, he failed to check the VIN as required by CA state law, which would perhaps have given him time to look inside the car. (it's not like the child was hidden under a blanket; it was sitting in a car seat). That said, the disagreement on this kind of situation illustrates the problem with breach of the peace--and with this kind of jump-in-the-running-car kind of repossession activity.