Williams v. Ford Motor Credit Company
674 F.2d 717 (1982)
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Rule of Law:
Under UCC § 9-503, a creditor may repossess collateral without judicial process provided it can be done without a "breach of the peace," which occurs only if the repossession is accompanied by force, threats of force, or a risk of invoking violence.
Facts:
- David Williams purchased a Ford Mustang financed by Ford Motor Credit Company (FMCC), with title held in the names of both David and his wife, Cathy Williams.
- Following their divorce, a court granted Cathy Williams title to the car and ordered David to continue making payments to FMCC.
- David defaulted on the payments and subsequently signed a voluntary repossession authorization for FMCC.
- FMCC contracted with S & S Recovery, Inc. (S & S) to repossess the vehicle.
- At approximately 4:30 a.m. on December 1, 1977, S & S agents hooked the Mustang to a wrecker in the unenclosed driveway of Cathy Williams' home.
- Awakened by the noise, Williams went outside and verbally confronted the agents, stating the car was hers and asking what they were doing.
- After the agents identified themselves, they complied with her request to retrieve personal items from the car.
- Williams did not raise any further complaint or objection, and the agents drove away with the car without making any threats or using physical force.
Procedural Posture:
- Cathy A. Williams sued Ford Motor Credit Company (FMCC) for conversion in the United States District Court for the Western District of Arkansas.
- FMCC filed a third-party claim against its repossession agent, S & S Recovery, Inc.
- A jury returned a verdict in favor of Williams for $5,000.
- The district court entered a directed verdict in favor of S & S on FMCC's third-party claim.
- FMCC filed a motion for judgment notwithstanding the verdict (JNOV).
- Before ruling on the JNOV, the district court granted Williams' motion for a nonsuit, which FMCC appealed.
- The U.S. Court of Appeals for the Eighth Circuit reversed the nonsuit and remanded, ordering the district court to rule on the JNOV motion.
- The district court granted FMCC’s motion and entered a judgment notwithstanding the verdict in its favor.
- Williams, as appellant, appealed the judgment notwithstanding the verdict to the U.S. Court of Appeals for the Eighth Circuit, with FMCC as appellee.
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Issue:
Does a non-violent, pre-dawn repossession of an automobile constitute a breach of the peace under UCC § 9-503 when the debtor confronts the repossessors but does not physically resist or strenuously object to the taking?
Opinions:
Majority - Benson, Chief Judge
No. The repossession did not constitute a breach of the peace because it was not accompanied by force, threats, or a risk of invoking violence. Under Arkansas law, which adopts the UCC, self-help repossession is permissible if accomplished peacefully. Citing precedents like Rutledge v. Universal C.I.T. Credit Corp., the court noted that a breach of the peace requires more than a debtor's mere presence and inquiry. Unlike cases where debtors clearly objected, here Cathy Williams did not raise a sufficient objection or protest the taking after her initial confrontation. The agents remained polite and complied with her requests. Therefore, the evidence did not support the jury's verdict that a breach of the peace occurred, as there was no incident which might tend to provoke violence.
Dissenting - Heaney, Circuit Judge
Yes. The repossession created a risk of invoking violence and therefore constituted a breach of the peace. The act of conducting a "night raid" at 4:30 a.m. is inherently confrontational and fraught with the likelihood of resulting violence. Cathy Williams, a single parent, did everything she could to stop the repossession short of resorting to physical force. The law should not encourage repossessors to proceed with a taking after a confrontation has ensued; instead, upon confrontation, they should retreat and utilize judicial process. The majority's rule dangerously invites repossessors to continue until actual violence occurs, undermining the policy behind the "breach of the peace" limitation.
Analysis:
This decision clarifies and arguably narrows the definition of "breach of the peace" in the context of self-help repossession in Arkansas. By holding that a debtor's verbal confrontation without a strenuous objection or physical resistance is insufficient to constitute a breach, the court provides creditors with greater latitude. This precedent suggests that as long as repossessing agents remain polite and avoid explicit threats or force, they may complete a repossession even after being confronted by the debtor. The dissent highlights the contrary view that any late-night, confrontational repossession inherently carries a risk of violence and should be disallowed.
