District Court (Md.) Says Oral Opposition from Debtor During Repossession Can Constitute “Breach of the Peace”

In Darren Trucking Co. v. Paccar Fin. Corp., No. GJH-18-3936, 2019 U.S. Dist. LEXIS 141666, at *4-6 (D. Md. Aug. 20, 2019), Judge Hazel allowed a breach of the peace claim to proceed against a finance company.

Generally, “[t]he debtor’s opposition, however slight and even if merely oral, normally makes any entry or seizure a breach of the peace.” See James J. White, Robert S. Summers & Robert A. Hillman, Uniform Commercial Code Vol. 4, 585 (6th ed. 2015) (collecting cases). Indeed, the weight of state court authority holds that a repossession despite “unequivocal oral protest of the defaulting debtor” constitutes a breach of the peace. Fulton v. Anchor Sav. Bank, FSB, 215 Ga. App. 456, 461 (Ga. Ct. App. 1994); see also Hollibush v. Ford Motor Credit Co., 179 Wis. 2d 799, 806-11 (Wis. Ct. App. 1993) (collecting cases holding that a creditor’s repossession in disregard of a debtor’s unequivocal oral protest constitutes breach of the peace); First and Farmers Bank of Somerset, Inc. v. Henderson, 763 S.W.2d 137, 140 (Ky. Ct. App. 1988) (because a breach of the peace also includes acts likely to induce violence, repossession in the face of the debtor’s objection constitutes a breach of the peace); Census Fed. Credit Union v. Wann, 403 N.E.2d 348, 352 (Ind. Ct. App. 1980) (“[I]f the repossession is verbally or otherwise contested at the actual time of and in the immediate vicinity of the attempted repossession by the defaulting [*5]  party or other person in control of the chattel, the secured party must desist and pursue his remedy in court.”); Dixon v. Ford Motor Credit Co., 391 N.E.2d 493, 497 (Ill. App. Ct. 1979) (“When a creditor repossess in disregard of the debtor’s unequivocal oral protest, the repossession may be found to be in breach of the peace.”); Morrison v. Galyon Motor Co., 64 S.W.2d 851, 853 (Tenn. Ct. App. 1932) (noting that had the creditor’s agent attempted to take possession of the truck against the borrower’s consent, the action would have provoked a breach of the peace); Wilson v. Kuykendall, 73 So. 344, 344 (Miss. 1917) (a party may not “take from the possession of the other party by force or against the will of the party in possession any property, even though he may have title thereto”). As the Hollibush court concluded, “[t]he underlying theory of the UCC cases is that a verbal objection to a repossession is the precursor to violence, and that it should not be necessary for a debtor to resort to violence to provide the breach of the peace necessary to defeat a self-help repossession.” 179 Wis. 2d 799, 811 (Wis. 1993).  Defendant cites Chrysler Credit Corporation v. Koontz, 661 N.E.2d 1171, 1173-74 (Ill. App. Ct. 1996) for the proposition that mere oral disagreement is insufficient to establish a breach of the peace. Putting aside that the Chrysler court was reviewing the trial court’s determination that no breach occurred under a lenient “abuse of discretion” standard, this Court disagrees [*6]  with its conclusion that “to rule otherwise would invite the ridiculous situation whereby a debtor could avoid a deficiency judgment by merely” objecting orally. Id. at 1174. First, a creditor always has the option of repossession pursuant to the judicial process under § 9-609(b)(1). Second, the Court finds no problem limiting self-help repossessions to those where the debtor is absent, or consents, or even merely acquiesces to the repossession. The driving force behind the “breach of the peace” standard is to avoid precursors to violence—such as open disagreement—that often escalate into actual violence. Hollibush, 179 Wis. 2d at 811. Plaintiff alleges that he “objected loudly” to the repossession and claimed that Defendant “did not have the right” to repossess the truck. ECF No. 1-2 ¶ 12. Plaintiff further alleges that this disagreement “intensified” to the point that the police were called. Id. ¶ 13. Therefore, Plaintiff plausibly alleges that Defendant violated § 9-609(b).