Repossession. Leroy Headspeth bought a car under an installment ...

[yoroshambo]

Repossession. Leroy Headspeth bought a car under an installment sales contract that expressly permitted the creditor to repossess the car if the debtor defaulted on the payments. The seller assigned the contract to Mercedes Benz Credit Corp (MBCC). When Headspeth defaulted on the payments, an agent of Laurel Adjustment Bureau, Inc (LAB), went onto Headspeth's property and repossessed the car on MBCC's behalf. Headspeth filed a suit against MBCC and LAB, contending in part that LAB trespassed onto his property to retake the car and that therefore the repossession was wrongful. Headspeth admitted that the repossession occurred without confrontation. Can a secured creditor legally retake possession of collateral, on the debtor's default, by entering onto the debtor's land, or would that be an illegal breach of the peace? How will the court rule? Explain.

Question 2

Emile owns Emile's Used Car Emporium. Several people work for him at the Emporium. When Emile is gone, he leaves one of his best salespersons, Meg, in charge. Over the years, Emile has given Meg the authority to contract with vendors, negotiate sales, and conclude car sales contracts in his name. One August, Emile takes a long vacation, leaving Meg in charge. While he is gone a hurricane hits Florida where the Emporium is located, causing severe damage. Because Emile is floating down the Amazon, Meg cannot reach him for instructions. She decides that rather than leave the place in shambles, she will hire people to repair the Emporium. Meg hires a carpenter to rebuild a wall that was blown down by the storm. Phil, the carpenter, is busy at work on his scaffold when Meg's Scottish terrier Adam, who she keeps with her at work, plows into the scaffolding while chasing a cat. Phil is knocked off the scaffold and falls ten feet to the ground, suffering a broken leg. Meg is Emile's agent. They appear to have created their agency relationship by:
 a. a consensual agreement
  b. application to the state government c. executing a power of attorney
  d. application of federal laws
  e. transgressing the common law

[amcvicar]

Answer to Question 1

Repossession
The court granted a summary judgment in favor of the defendants (MBCC and LAB), and Headspeth appealed. The District of Columbia Court of Appeals upheld the lower court's judgment. The appellate court held in part that under Article 9 a secured creditor may enter upon the debtor's land to repossess the collateral where it can be accomplished without confrontation or objection, and it does not amount to a breach of the peace. The court emphasized that in this case it is not disputed that the repossession occurred without confrontation or incident. This was a sufficient basis for the grant of summary judgment. The court drew a distinction between this case and cases in which a party breaks into a debtor's home or in which a debtor confronts a party attempting to repossess property. In those other cases, a breach of the peace may be held to have occurred. (This case was decided before the effective date of the revision of Article 9, but the result under the revised Article 9 would likely have been the same.)

Answer to Question 2

c