District Court (Nev.) Finds FDCPA Inapplicable to Repo Company, Finds Question of Fact as to Whether Repo Company Breached the Peace During Repossession

In  Mkhitaryan v. U.S. Bancorp, 2012 WL 6204840 (D.Nev. 2012), Judge Mahan refused to grant a Plaintiff’s summary judgment motion based on the claim that a repossession agent violated the FDCPA and ‘breached the peace’ during the course of a repossession.  As to the FDCPA, Judge Mahan found it inapplicable.  

The purpose of the FDCPA includes, among other things, the elimination of “abusive debt collection practices by debt collectors.” 15 U.S.C. § 1692(e). “Repossession companies are ordinarily beyond the scope of the FDCPA. The exception to this general rule is set forth in section 1692f(6).” Clark v. Auto Recovery Bureau Conn., Inc., 889 F.Supp. 543, 546 (D.Conn.1994); 15 U.S.C. § 1692a(6) (“For purpose of section 1692f(6) of this title, such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests.”); accord Pflueger v. Auto Finance Group, Inc., No. CV–97–9499, 1999 WL 33740813, at *3 (C.D. Cal. April 26, 1999) (“It thus appears that Congress intended an enforcer of a security interest, such as a repossession agency, to fall outside the ambit of the FDCPA except for the provisions of § 1692(f)(6).”) (quoting Jordan v. Kent Recovery Servs., Inc., 731 F.Supp. 652 (D.Del.19990)); James v. Ford Motor Credit Co., 842 F.Supp. 1202, 12206–07 (D.Minn.1994) ¶  Plaintiffs allege that defendants violated sections 1692(f)(6) and 1692d(1) and (2). Plaintiffs provide no argument as to why, contrary to substantial precedent, defendants as repossession agents could be liable as debt collectors under sections 1692d(1) and (2).

  Judge Mahan also questioned Plaintiff’s side-of-the-story, finding sufficient factual questions to deny summary judgment as to whether the repossession company breached the peace.  

Plaintiffs argue that there was screaming, shouting, threats of violence, defendant McGee wielded a baseball bat as a weapon, and that defendants and the police strong-armed Sergey into turning over the keys to the vehicle. The court is unconvinced that was the actual series of events. It seems just as likely that Sergey overreacted and called the police, McGee elected to wait for the police to arrive, the police arrived, Speedy Recovery’s repossession supervisor Sandoval arrived, and after a conversation among all parties Sergey understood that it was in his best interest to turn over the keys to the vehicle. These major factual discrepancies are for a jury to determine, not a court at the summary judgment stage.    ¶  Next, plaintiffs contend that defendants breached the peace because police aided defendants in forcing Sergey to surrender the BMW to defendants. The court is unconvinced the facts unfolded in this way. It is true that law enforcement cannot accompany repossession agents to effectuate a repossession without prior judicial process. This rule is rooted in due process. Cf. U.S. const. Amends. V, IV; Fuentes v. Shevin, 407 U.S. 67 (1972). However, the police did not accompany defendants to repossess the vehicle. ¶  Sergey called the police and asked for their intervention. After the arrival of police, their alleged handcuffing of Sergey, and Sergey’s conversations with the police and Sandoval, Sergey turned the keys over to Sandoval. It is for a jury to determine, after hearing the facts, whether the police actions blessed the repossession such that Sergey was deprived of due process or whether individual police officers offered a personal opinion and, in the moment, Sergey agreed. It is not clear that the police overrode Sergey’s ability to object to the repossession.  ¶  In sum, plaintiffs’ partial summary judgment for a violation of the FDCPA is denied.