United States District Court, D. Maryland, Southern Division
MEMORANDUM OPINION
GEORGE
J. HAZEL, UNITED STATES DISTRICT JUDGE.
Plaintiff
Darren Trucking Company, ostensibly located in Maryland,
[1]
filed this action in the Circuit Court of Maryland for Prince
George's County against Defendant Paccar Financial
Corporation, a company incorporated and with its principal
place of business in Washington, to resolve a dispute over a
repossessed dump truck. ECF Nos. 1, 1-2. Defendant timely
removed the case to this Court, ECF No. 1, and filed a Motion
to Dismiss, ECF No. 4. No. hearing is necessary. See
Loc. Rule 105.6. For the following reasons, Defendant's
Motion to Dismiss shall be denied.
I.
BACKGROUND [2]
On July
27, 2017 Plaintiff contracted with Defendant to purchase a
dump truck. ECF No. 1-2 ¶ 4. Plaintiff made a down
payment of $20, 500, and made consistent payments on the
balance of $184, 601.34. Id. ¶¶ 5-6. In
late August of 2018, Plaintiff and one of Defendant's
representatives became involved in a dispute regarding the
payments, and on Tuesday, September 18, another of
Defendant's representatives called Plaintiff to inquire
about his next payment. Id. ¶ 8. The next day,
Plaintiff returned the call and stated that payment would be
forthcoming; Defendant's representative agreed to these
terms, as long as payment would be received by that Friday.
Id. ¶ 9.
The
following day, an individual arrived at Plaintiff's
property with a tow truck, intent on repossessing the truck.
Id. ¶ 10. The vehicle was parked
“alongside the residence, behind a gate.”
Id. ¶ 11. Plaintiff “objected
loudly” to the repossession, and the disagreement
between he and the individual escalated until the police were
called. Id. ¶¶ 12-13. The police arrived
and ordered Plaintiff to permit the repossession.
Id. ¶ 14. When pressed to explain why Plaintiff
repossessed the vehicle, Plaintiff cited the late-August
verbal disagreement. Id. ¶ 15.
II.
STANDARD OF REVIEW
On a
motion to dismiss for failure to state a claim pursuant to
Fed.R.Civ.P. 12(b)(6), the Court “must accept the
factual allegations of the complaint as true and construe
them in the light most favorable to the nonmoving
party.” Rockville Cars, LLC v. City of Rockville,
Md., 891 F.3d 141, 145 (4th Cir. 2018). To overcome a
12(b)(6) motion, the “complaint must contain sufficient
factual matter, accepted as true, ‘to state a claim to
relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). Plaintiffs must “provide sufficient
detail” to show “a more-than-conceivable chance
of success on the merits.” Upstate Forever v.
Kinder Morgan Energy Partners, 887 F.3d 637, 645 (4th
Cir. 2018) (citing Owens v. Balt. City State's
Attorneys Ofice, 767 F.3d 379, 396 (4th Cir. 2014)). The
mere recitation of “elements of a cause of action,
supported only by conclusory statements, is not sufficient to
survive a motion made pursuant to Rule 12(b)(6).”
Walters v. McMahen, 684 F.3d 435, 439 (4th Cir.
2012). Nor must the Court accept unsupported legal
allegations. Revene v. Charles Cnty. Commis., 882
F.2d 870, 873 (4th Cir. 1989). A plausibility determination
is a “context-specific inquiry” that relies on
the court's “experience and common sense.”
Iqbal, 556 U.S. at 679-80.
III.
DISCUSSION
Plaintiff
alleges that the repossession of the dump truck violated
Section 9-609(b) of the Maryland Commercial Code because it
constituted a “breach of the peace, ” and thus
breached the contract between the parties and constituted
conversion. Plaintiff also seeks punitive damages.
Maryland
law permits a secured party to take possession of collateral
property “[w]ithout judicial process, if it proceeds
without breach of the peace.” Md. Code Ann. Com. Law
§ 9-609(b)(2). The statute does not define a
“breach of the peace, ” and no Maryland court has
taken the opportunity to expand upon its meaning. This
repossession statute is, however, adopted in whole from the
Uniform Commercial Code, U.C.C. § 9-609, and thus has
been interpreted by myriad state and federal courts across
the country. The Court may thus “look to decisions from
sister states for guidance.” Cooper v. Fulton Bank,
N.A., No. CCB-16-4138, 2017 WL 5478318, at *4 (D. Md.
2017).
Generally,
“[t]he debtor's opposition, however slight and even
if merely oral, normally makes any entry or seizure a breach
of the peace.” See James J. White, Robert S.
Summers & Robert A. Hillman, Uniform Commercial
Code Vol. 4, 585 (6th ed. 2015) (collecting cases). Indeed,
the weight of state court authority holds that a repossession
despite “unequivocal oral protest of the defaulting
debtor” constitutes a breach of the peace. Fulton
v. Anchor Sav. Bank, FSB, 215 Ga.App. 456, 461
(Ga.Ct.App. 1994); see also Hollibush v. Ford Motor
Credit Co., 179 Wis.2d 799, 806-11 (Wis. Ct. App. 1993)
(collecting cases holding that a creditor's repossession
in disregard of a debtor's unequivocal oral protest
constitutes breach of the peace); First and Farmers Bank
of Somerset, Inc. v. Henderson, 763 S.W.2d 137, 140 (Ky.
Ct. App. 1988) (because a breach of the peace also includes
acts likely to induce violence, repossession in the face of
the debtor's objection constitutes a breach of the
peace); Census Fed. Credit Union v. Wann, 403 N.E.2d
348, 352 (Ind.Ct.App. 1980) (“[I]f the repossession is
verbally or otherwise contested at the actual time of and in
the immediate vicinity of the attempted repossession by the
defaulting party or other person in control of the chattel,
the secured party must desist and pursue his remedy in
court.”); Dixon v. Ford Motor Credit Co., 391
N.E.2d 493, 497 (Ill.App.Ct. 1979) (“When a creditor
repossess in disregard of the debtor's unequivocal oral
protest, the repossession may be found to be in breach of the
peace.”); Morrison v. Galyon Motor Co., 64
S.W.2d 851, 853 (Tenn. Ct. App. 1932) (noting that had the
creditor's agent attempted to take possession of the
truck against the borrower's consent, the action would
have provoked a breach of the peace); Wilson v.
Kuykendall, 73 So. 344, 344 (Miss. 1917) (a party may
not “take from the possession of the other party by
force or against the will of the party in possession any
property, even though he may have title thereto”). As
the Hollibush court concluded, “[t]he
underlying theory of the UCC cases is that a verbal objection
to a repossession is the precursor to violence, and that it
should not be necessary for a debtor to resort to violence to
provide the breach of the peace necessary to defeat a
self-help repossession.” 179 Wis.2d 799, 811 (Wis.
1993).
Defendant
cites Chrysler Credit Corporation v. Koontz, 661
N.E.2d 1171, 1173-74 (Ill.App.Ct. 1996) for the proposition
that mere oral disagreement is insufficient to establish a
breach of the peace. Putting aside that the Chrysler
court was reviewing the trial court's determination that
no breach occurred under a lenient “abuse of
discretion” standard, this Court disagrees with its
conclusion that “to rule otherwise would invite the
ridiculous situation whereby a debtor could avoid a
deficiency judgment by merely” objecting orally.
Id. at 1174. First, a creditor always has the option
of repossession pursuant to the judicial process under §
9-609(b)(1). Second, the Court finds no problem limiting
self-help repossessions to those where the debtor is absent,
or consents, or even merely acquiesces to the repossession.
The driving force behind the “breach of the
peace” standard is to avoid precursors to violence-such
as open disagreement-that often escalate into actual
violence. Hollibush, 179 Wis.2d at
811.[3]
Plaintiff
alleges that he “objected loudly” to the
repossession and claimed that Defendant “did not have
the right” to repossess the truck. ECF No. 1-2 ¶
12. Plaintiff further alleges that this disagreement
“intensified” to the point that the police were
called. Id. ¶ 13. Therefore, Plaintiff
plausibly alleges that Defendant violated §
9-609(b).[4]
Turning
to Plaintiff's breach of contract and conversion claims,
Defendant argues only that these claims should be dismissed
because the repossession did not breach the peace, and thus
did not violate the terms of the contract or constitute an
illegal repossession of the vehicle. Having found that
Plaintiff has stated a claim for a violation of §
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