In Harley-Davidson Credit Corp. v. Turudic, 2012 WL 3314919 (D.Or. 2012), Harley-Davidson financed an airplane (Ed. no, not a typo). After it repossessed the airplane, it sued on the balance. The debtor claimed that the HDCC owed it a fiduciary duty to maximize recovery, to assist him the sale of the aircraft, and to otherwise protect his financial interest. Judge Hernandez described the facts as follows:
This action arises out of two agreements—the Aircraft Secured Promissory Note (“Promissory Note”) and Aircraft Security Agreement (“Security Agreement”)—entered into between Defendant and Eaglemark Savings Bank (“Eaglemark”) on June 28, 2007. Under the Promissory Note, Eaglemark agreed to lend Defendant $132,000 for the purchase of a Mooney Model M20K aircraft (the “Aircraft”). Compl., Ex. A, pp. 1–2. As security for the loan, Eaglemark and Defendant entered into the Security Agreement under which Eaglemark was granted a security interest in the Aircraft. Compl., ¶ 7; Id., Ex. C, § 1. The Complaint alleges that the Promissory Note and the Security Agreement were assigned to Plaintiff, and indeed, the Promissory Note provides that the Promissory Note would “automatically be assigned” to Harley–Davidson Credit Corp. upon funding of the Aircraft and the Security Agreement provides that it would “automatically be assigned” to Harley–Davidson Credit Corp. upon assignment of the Promissory Note. Compl., 6–7; Id., Ex. A, § 10; Id., Ex. B, § 12. ¶ On April 2, 2011, Defendant repudiated the Promissory Note and stopped making his required loan payments. See Id., 8–9; see also Answer, 47, 89. On November 2, 2011, Plaintiff filed this action alleging breach of contract by Defendant.
Judge Hernandez rejected the contention that HDCC owed Plaintiff any obligation to assist him, explaining:
Defendant’s counter-claim fails because a special relationship does not exist between the parties since Plaintiff and Defendant are considered adversaries, not fiduciaries, to the Promissory Note and Security Agreement. In addition, Defendant’s counter-claim fails because other than Defendant’s conclusory assertion that Plaintiff was required to provide him with a valuation for the Aircraft, assist him in selling the Aircraft, or otherwise protect his financial interest, nothing in the Promissory Note or the Security Agreement requires or implies Plaintiff had such obligations. Furthermore, it is not enough that Defendant believes Plaintiff was required to provide him with a valuation for the Aircraft, assist him in selling the Aircraft, or otherwise protect his financial interest. Defendant alleges no facts supporting his conclusory assertion that Plaintiff was required to provide him with a valuation for the Aircraft, assist him in selling the Aircraft, or otherwise protect his financial interest.
Judge Hernandez also rejected the debtor’s contention that HDCC breached the peace in repossessing the aircraft because it had entered a locked hangar to repossess the aircraft. Judge Hernandez recognized that sometimes entering a locked premises has been held to breach the peace, but since the debtor was not there at the time of repossession, there was no breach of the peace.
Defendant contends that Plaintiff’s breach of the peace when repossessing the Aircraft amounts to conversion. Defendant contends that “Defendant’s locked hangar with the Aircraft inside is a locked building with a vehicle in it, indistinguishable from a locked garage with a car in it [and that] [c]ourts have long held that breaking into a gated and locked garage to repossess collateral is a breach of the peace.” Counter–Mot., p. 22.¶ Defendant’s arguments fail because he has not properly pled a claim for conversion. Although Defendant alleged in his Answer that Plaintiff demanded access to the Aircraft and that he had unencumbered title to the replacement parts to the engine and alternator, such allegations were made in support of his affirmative defense that Plaintiff would be unjustly enriched if it were allowed to keep the engine and alternator. Defendant’s Answer, even when construed liberally, does not properly allege a claim for conversion. ¶ Even if I were to conclude that Defendant sufficiently pled that Plaintiff’s breach of the peace amounted to conversion, his claim would fail. A se-cured party’s right to take possession of property in which it has a security interest is governed by ORS 79.0609. . .Courts in Oregon have not precisely defined the term “breach of the peace”. Notwithstanding the fact that Oregon courts have not explicitly demarcated the term “breach of the peace” and the number of non-Oregon cases cited by Defendant, I conclude that Defendant’s allegations do not support the conclusion that Plaintiff breached the peace in this instance. Defendant fails to meet his burden of demonstrating an absence of a genuine issue of material fact that Plaintiff breached the peace when repossessing the Aircraft. In fact, Defendant readily admits that he was not even present at the time Plaintiff removed the Aircraft from its hangar and did not even know that the Aircraft had been repossessed until after Plaintiff had already taken possession of it. See Answer, ¶ 61. ¶ Defendant’s pleadings are insufficient to support a claim for breach of the peace. Defendant’s motion for summary judgment is therefore denied.