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Barnes v. Northwest Repossession, LLC

United States District Court, N.D. Illinois, Eastern Division

September 26, 2016

Nicole Barnes, Plaintiff,
Northwest Repossession, LLC, Austin Car Credit, Inc., and Bob Soltani, Defendants.


          John Robert Blakey, United States District Judge.

         In July 2012, Plaintiff Nicole Barnes (“Plaintiff”) purchased a 2003 Buick Park Avenue from Defendant Austin Car Credit, Inc. (“Austin”). In April 2013, Defendant Northwest Repossession, LLC (“Northwest”) repossessed the vehicle at Austin's request. Plaintiff alleges that Northwest's repossession was unlawful and now brings suit under both federal and state statutory and common law. On March 10, 2016, Northwest moved for summary judgment on all counts. Northwest's Mot. Summ. J. [90]. The same day, Plaintiff cross-moved for partial summary judgment on the issue of liability as to Count I. Pl.'s Mot. Summ. J. [94]. For the reasons stated below, Northwest's motion [90] is granted in part and denied in part; Plaintiff's motion [94] is granted.

         I. Background[1]

         A. Plaintiff's Purchase from Austin

         On July 10, 2012, Plaintiff purchased a used 2003 Buick Park Avenue from Austin. PSOF [96] ¶ 11. The cash price for the vehicle was $2, 600. PSOF [96] Ex. G. After added costs for delivery and handling, sales tax, and license plates, the total amount owed to Austin equaled $3, 000. Id.; NSOF [92] ¶ 8.

         The same day, Plaintiff traded in a used 2000 Mercedes Benz for a $2, 000 credit towards the purchase of the Buick, which reduced her amount owed to $1, 000. PSOF [96] ¶¶ 16-17; PSOF [96] Ex. G. In addition to the trade-in, Plaintiff provided $200 in cash, resulting in a final unpaid balance of $800. PSOF [96] ¶ 17. Plaintiff agreed to pay the remaining $800, interest free, in four, bi-weekly payments of $200 starting on August 1, 2012 and ending on September 26, 2012. Id. The “Memorandum of Installment Sale” provided to Plaintiff at the time of her purchase stated that Austin would impose a $50 late charge on every late payment. PSOF [96] Ex. G.

         B. Plaintiff's Payment History

         Between July 11, 2012 and late January 2013, Plaintiff failed to make any additional payments to Austin. PSOF [96] ¶ 19. As a result, Austin imposed $50 late fees at the beginning of August, September, October, November, December, and January, which, according to Austin's account ledger, increased Plaintiff's overall balance to $1100. PSOF [96] Ex. K.

         On January 3, 2013, Austin mailed Plaintiff a “Final Notice of Intent to Collect Payment.” NSOF [92] Ex. H. The Final Notice identified the 2003 Buick Park Avenue and stated the following:

This notice is intended for above named or parties with the security/property listed above. This notice is to inform you that the above named or parties are behind on their payments for the sum of $1050.00.[2] Failure to comply will result in repossession of the property and the opportunity to cure the breach. Thank You.


         Due to a change of address, Plaintiff did not receive the Final Notice. PSOF [96] ¶ 21. Nevertheless, on January 28, 2013, Robert Jackson (“Jackson”), Plaintiff's boyfriend, made a $100 cash payment to Austin, which reduced her balance to $1, 000.[3] Id. ¶ 23; PSOF [96] Ex. K; PSOAF [133] Ex. 2 at 2. The same day, Austin gave Plaintiff a $50 late fee credit, further reducing Plaintiff's total unpaid balance to $950. PSOF [96] Ex. K.

         Between January 29, 2013 and March 8, 2013, Austin accepted several more $100 cash payments from Jackson.[4] PSOF [96] ¶ 23; PSOF [96] Ex. K; PSOAF [133] Ex. 2. As of March 8, 2013, Austin's account ledger reflected a remaining balance of $150. PSOF [96] ¶ 24; PSOF [96] Ex. K.

         C. The Alleged Final Payment and Release of Lien

         Plaintiff alleges that, on March 11, 2013, Jackson made a final cash payment of $150 for the remaining balance on the Buick. PSOF [96] ¶ 25. Northwest denies that this final payment occurred. R. PSOF [129] ¶ 25.

         Northwest admits, however, that the same day, Vicki Thompson (“Thompson”), an Austin employee, signed the Release of Lien section of the Buick's Certificate of Title and gave the Certificate of Title to Jackson. R. PSOF [129] ¶¶ 26-27; PSOF [96] Ex. L. The Release of Lien section states, “[t]he lienholder on the vehicle described in this Certificate does hereby state that the lien is released and discharged.” PSOF [96] Ex. L.

         Northwest maintains that Thompson's signing of the Release of Lien and her delivery of the Certificate of Title to Jackson was a mistake, a claim Plaintiff disputes. NSOF [92] ¶ 28; R. NSOF [133] ¶ 28. Northwest does not allege, however, that Austin sent additional notices to Plaintiff notifying her of the mistake or demanding immediate payment of the supposed $150 outstanding.

         D. The Repossession of Plaintiff's Vehicle

         On or about January 29, 2013, Austin hired Northwest to repossess the Buick from Plaintiff. NSOF [92] ¶ 20; NSOF [92] Ex. I at 6, 11; PSOF [96] Ex. E at 21; PSOF [96] Ex. R at 8. Austin did not maintain a standing contract with Northwest, PSOF [96] ¶ 34, but had hired Northwest approximately thirty times in the past. PSOF [96] Ex. F at 3. Northwest assigned one of its employees, Zach Miller (“Miller”), to the job. NSOF [92] ¶ 31. Austin did not cancel its order to repossess, despite accepting Jackson's late payments between January 28, 2013 and March 8, 2013. See NSOF [92] Ex. G at 21:20-22:7; 27:22-29:22.

         At approximately 3:00 a.m. on April 30, 2013, Miller located Plaintiff's Buick on the street in front of Plaintiff's residence. NSOF [92] ¶ 31. Without notifying Plaintiff, Miller loaded the vehicle onto his tow truck and began driving away. R. NSOF [133] ¶ 31. At the same time, Jackson, who was residing with Plaintiff, awoke to get a glass of water. PSOF [96] ¶ 40. While up, Jackson saw Plaintiff's Buick being towed down the street. Id. Believing that a theft was in progress, Jackson quickly awoke Plaintiff and the two gave chase in another vehicle. Id. ¶¶ 42-43. By the time the couple reached Miller's tow truck, Plaintiff and Jackson were approximately two blocks from Plaintiff's residence. NSOF [92] ¶ 35. At that point, Miller was stopped on the side of the road and attempting to re-secure the Buick, which had come unattached, back onto the tow truck. PSOF [96] ¶¶ 44-45.

         Jackson pulled the vehicle he was driving in front of the tow truck, boxing it in from the front. Id. ¶ 45. Jackson exited his vehicle and approached Miller, who continued to re-secure the Buick. Id. ¶ 46; NSOF [92] ¶ 38. Jackson asked Miller “what the fuck he was doing” with the vehicle. NSOF [92] ¶ 38.

         Plaintiff claims that, in response, Miller told him, “I'm repo-ing this bitch.” PSOF [96] ¶ 48. Plaintiff further asserts that as Jackson got closer to Miller, Miller pushed Jackson out of the way and returned to the cabin. Id. Northwest disputes both of these claims. R. PSOF [129] ¶ 48. The parties agree, however, that Miller never provided Jackson or Plaintiff with any form of identification or repossession paperwork. PSOF [96] ¶ 49.

         After re-securing the Buick, Miller placed the truck in reverse, made a U-turn, and drove away in the opposite direction. NSOF [92] ¶ 40. Jackson returned to his vehicle, and he and Plaintiff continued to pursue Miller. Id. ¶ 41. Jackson's pursuit of Miller continued for multiple hours, and ended only when Jackson was forced to stop to refuel. Id. ¶ 42. Miller ultimately towed the vehicle to Northwest, where it was subsequently returned to Austin. Id. ¶ 44.

         II. Legal Standard

         Summary judgment is appropriate if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Spurling v. C & M Fine Pack, Inc., 739 F.3d 1055, 1060 (7th Cir. 2014). A genuine dispute as to any material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The party seeking summary judgment has the burden of establishing that there is no genuine dispute as to any material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A court “is not required to grant summary judgment as a matter of law for either side when faced with cross-motions for summary judgment.” Crespo v. Unum Life Ins. Co. of Am., 294 F.Supp.2d 980, 991 (N.D. Ill. 2003) (citing Market St. Assocs. Ltd. P'ship v. Frey, 941 F.2d 588, 590 (7th Cir. 1991)). Rather, the court must “evaluate each motion on its merits, resolving factual uncertainties and drawing all reasonable inferences against the movant.” Id.

         III. Analysis

         Plaintiff's First Amended Complaint [70] alleges four causes of action against Northwest: (1) violations of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq.; (2) violations of the Illinois Uniform Commercial Code (“Illinois Commercial Code” or “Commercial Code”), 810 ILCS 5/9-601, et seq.; (3) violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFDPA”), 815 ILCS 505/2, et seq.; and (4) common law tort of trespass to chattel. First Am. Compl. [70]. Each count will be discussed in turn.

         A. Count I: Violations of the Fair Debt Collection Practices Act

         The FDCPA seeks, in part, to “eliminate abusive debt collection practices, ” 15 U.S.C. § 1692, by regulating “the actions a ‘debt collector' is permitted to take in collecting a debt.” Fleming-Dudley v. Legal Investigations, Inc., No. 05-CV-4648, 2007 WL 952026, at *4 (N.D. Ill. Mar. 22, 2007). As a consumer protection statute, the FDCPA “is liberally construed in favor of consumers to effect its purpose.” Ramirez v. Apex Fin. Mgmt., LLC, 567 F.Supp.2d 1035, 1040 (N.D. Ill. 2008).

         Generally, Section 1692a(6) of the FDCPA defines a “debt collector” to include “only those persons or businesses whose principal purpose is the collection of ‘debts.'” Fleming-Dudley, 2007 WL 952026, at *4. Thus, repossession companies- who seek collection of collateral-are “ordinarily beyond the scope of the FDCPA.” Purkett v. Key Bank USA, Inc., No. 01-CV-162, 2001 WL 503050, at *2 (N.D. Ill. May 10, 2001). Section 1692(a)(6), however, contains a limited exception that “[f]or the purpose of section 1692f(6) of this title, [the term ‘debt collector'] also includes any person who uses any instrumentality of interstate commerce . . . in any business the principal purpose of which is the enforcement of security interests.” 15 U.S.C. § 1692a(6). This “last caveat bears emphasis, ” because it subjects Northwest to the FDCPA “solely for purposes of § 1692f(6).” Fleming-Dudley, 2007 WL 952026, at *4 (emphasis removed) (citing Jordan v. Kent Recovery Services, Inc., 731 F.Supp. 652, 657 (D. Del. 1990) (“Such a purposeful inclusion for one section of the FDCPA implies that the term ‘debt collector' does not include an enforcer of a security interest for any other section of the FDCPA.”)).

         Section 1692f(6) prohibits “[t]aking or threatening to take any nonjudicial action to effect dispossession or disablement of property if-(A) there is no present right to possession of the property claimed as collateral through an enforceable security interest; (B) there is no present intention to take possession of the property; or (C) the property is exempt by law from such dispossession or disablement.” 15 U.S.C. § 1692f(6). Here, Plaintiff only alleges violations of subsection (A). First Am. Compl. [70] ¶¶ 114-21.

To determine whether a debt collector had a present right to possession of the property under § 1692f(6), courts in this district and elsewhere have looked to the applicable state self-help repossession statute.

Fleming-Dudley, 2007 WL 952026, at *5. In Illinois, “the applicable self-help repossession statute is § 9-609(b)(2) of the Illinois Commercial Code, ” id., which permits non-judicial repossession of collateral (1) by a secured party; (2) after default; and (3) if the secured party proceeds without breach of the peace. 810 ILCS 5/9-609 (“After default, a secured party . . . may take possession of the collateral . . . without judicial process, if it proceeds without breach of the peace.”). Here, based upon the record, Northwest violated § 9-609(b)(2) because: (1) there is insufficient evidence that Austin-and by extension Northwest-was a secured party; and (2) Plaintiff was not in default of her installment agreement at the time of the repossession.

         1. There Is Insufficient Evidence That Austin Was A Secured Party ...

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