Texas Court of Appeals 2012 Tex. App. LEXIS 7274 (Tex. App. 2012)

FACTS: Price Auto hired David Chad Kuykendall, doing business as Chads Auto Recovery, to repossess a 1998 Cadillac DeVille owned by Carlous Sanders, who was in default on his motor vehicle retail installment sales contract. On May 11, 2009, Kuykendall went to the apartment complex where Sanders lived and located the Cadillac in a parking space facing Sanders apartment. Using a key provided by Price Auto, Kuykendall entered the car and started the engine. Sanders testified that he was descending the stairs from his apartment when he first heard his cars ignition and then saw a person inside his car backing the vehicle out of its parking space. Believing his car to be in the process of being stolen, Sanders approached the vehicle. As Sanders approached the drivers side door, the car moved onto his foot, causing him to fall to the ground and suffer a head injury. The car then rolled over Sanders leg as it exited the parking lot. Kuykendall did not stop to render aid and exited the apartment complex. Kuykendall proceeded to attach the vehicle to his tow truck and deliver it to Price Auto.

ISSUE: Sanders sued Price Auto and Kuykendall for his injuries, alleging that they were liable for the breach of the peace that occurred during the repossession. Sanders was awarded $20,281.39 in damages at trial. Price Auto appealed on the basis that the repossession was complete before any alleged breach of the peace occurred.

REASONING: The court agreed with Sanders and upheld the trial courts award of damages. The court held that a secured party may take possession of collateral after a default without judicial process if it proceeds without breach of the peace. This rule recognizes that societys interest in preserving the peace is more important than a secured partys right to possession. When a secured party chooses to pursue a non-judicial repossession, it assumes the risk that a breach of the peace might occur. In this case, the evidence did not conclusively establish that the repossession was complete before Sanders suffered his head and leg injuries. Thus, Price Auto did not demonstrate reversible error in connection with the trial courts determination that a breach of the peace occurred in the process of the repossession. In reaching this conclusion, the court cited two cases. In the first case, the recovery agent towed the vehicle out of sight of the debtors premises and subsequently discovered the debtors two children inside the vehicle. He immediately returned to the debtors home and returned the vehicle and children. There was no breach of the peace in this case as the recovery agent removed the vehicle from a public street without confrontation or trespassing on the debtors premises and immediately terminated repossession efforts and returned the children upon learning of their presence. By contrast, in the second case, the vehicles owner mistook the recovery agent for a car thief and, along with a coworker, attempted to stop her from leaving with the vehicle. The recovery agent struck the coworker and seriously injured him while driving away from the premises. In this case, the court held that the owner had a right to object to the attempted repossession as it was no longer peaceable. This case was very similar to the facts concerning Price Autos repossession of Sanders vehicle.

DECISION AND REMEDY: The court held that the evidence presented at trial was sufficient to support the trial courts decision and thus affirmed the judgment against Price Auto. SIGNIFICANCE OF THE CASE: This case illustrates the difficulties creditors may encounter in attempting to repossess collateral upon the occurrence of a default. Although Sanders was in default on his obligations to Price Auto, it was nevertheless required to proceed in a manner to repossess the collateral without breaching the peace. As illustrated in this case, repossession can lead to confrontations which may turn physical and result in injuries to one or both parties. Adding to the complications is the use of recovery agents to perform the actual repossession. The actions of these individuals may be attributable to the secured party, as occurred in this case, and thus care in their selection, utilization, and supervision is important.

QUESTION: What is the argument that this judge is making? How good are his reasons? Is there any information that you feel he left out that would help you come to a conclusion on the issue presented in this case?