Jim Williamson, d/b/a Williamson Auto v. Fowler Toyota, Inc.
956 P.2d 858 (1998)
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Rule of Law:
A secured creditor's statutory duty to repossess collateral without a breach of the peace is nondelegable, making the creditor liable for the tortious acts of an independent contractor hired to perform the repossession.
Facts:
- Fowler Toyota, Inc. (Fowler) sold a Chevrolet Chevette to Robert Gilmore, retaining a security interest in the vehicle.
- After becoming ill, Gilmore stopped making payments on the car and donated it to Camp Hudgens.
- A caretaker for Camp Hudgens took the car to Williamson's auto shop to have it examined.
- Fowler hired Clint McGregor, an independent contractor, to repossess the Chevette after Gilmore defaulted on the payments.
- McGregor located the car at Williamson's property, which was secured by a locked and chained gate.
- During the night, McGregor used bolt cutters to cut the chain and lock on Williamson's gate, entered the property without permission, and towed the Chevette away.
- McGregor informed Fowler of the manner in which he repossessed the vehicle.
- Fowler accepted the repossessed Chevette from McGregor, paid him for his services, and later sold the car.
Procedural Posture:
- Williamson sued Fowler Toyota, Inc. in an Oklahoma trial court for trespass and damages.
- A jury returned a verdict in favor of Williamson, awarding him $45.00 in actual damages and $15,000.00 in punitive damages.
- Fowler, as appellant, appealed the judgment to the Oklahoma Court of Civil Appeals.
- The Court of Civil Appeals reversed the trial court's judgment.
- Williamson, as petitioner, sought a writ of certiorari from the Oklahoma Supreme Court, which was granted.
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Issue:
Is a secured creditor liable for trespass and resulting damages when an independent contractor it hired to repossess collateral breaches the peace in violation of 12A O.S.1991, § 9-503?
Opinions:
Majority - Justice Alma Wilson
Yes. A secured creditor is liable for a breach of the peace committed by an independent contractor because the statutory duty under 12A O.S.1991, § 9-503 to repossess collateral peaceably is nondelegable. While an employer is generally not liable for the torts of an independent contractor, an exception exists where the employer owes a defined legal duty to the injured party. The Uniform Commercial Code § 9-503 grants a secured party the right to self-help repossession only if it can be done 'without breach of the peace,' which creates a nondelegable duty. McGregor's act of cutting a lock and chain to enter a secured premises constituted a trespass and a breach of the peace. Because this duty cannot be delegated, Fowler is liable for McGregor's actions, including punitive damages for his wanton and reckless disregard for Williamson's property rights.
Analysis:
This decision solidifies the nondelegable duty doctrine within the context of UCC § 9-503 self-help repossessions in Oklahoma, aligning the state with a growing number of jurisdictions. It prevents secured creditors from insulating themselves from liability for wrongful repossessions by outsourcing the work to independent contractors. The ruling emphasizes the public policy of preventing violence and unauthorized intrusions on property by placing the ultimate responsibility on the party with the security interest. Consequently, creditors must be more diligent in selecting and supervising repossession agents to ensure their conduct remains within legal bounds.
