By: Derek Hawkins//May 5, 2020//
7th Circuit Court of Appeals
Case Name: Nichole L. Richards v. PAR, Inc., et al.
Case No.: 19-1184
Officials: SYKES, HAMILTON, and BRENNAN, Circuit Judges.
Focus: FDCPA Violation
When Nichole Richards defaulted on her car loan, her lender hired PAR, Inc., to repossess the vehicle. PAR subcontracted with Lawrence Towing to carry out the repossession. Richards protested when employees of the towing company arrived at her Indianapolis home and tried to take the car. She ordered them off her property. They summoned the police, and a responding officer handcuffed Richards and threatened her with arrest. The officer removed the handcuffs after the car was towed away.
Richards sued PAR and Lawrence Towing for violating the Fair Debt Collection Practices Act (“FDCPA” or “the Act”). As relevant here, the Act makes it unlawful for a debt collector to take “nonjudicial action” to repossess property if “there is no present right to possession of the property claimed as collateral through an enforceable security interest.” 15 U.S.C. § 1692f(6)(A). Richards concedes the validity of the security interest and admits that she defaulted on her loan. Her argument is that the defendants lacked a present right to possess the vehicle because Indiana law authorizes nonjudicial repossession only if the repossession “proceeds without breach of the peace.” IND. CODE § 26-1-9.1-609. If a breach of the peace occurs, the repossessor must immediately stop and seek judicial remedies.
The district judge viewed the claim as an improper attempt to repackage a state-law violation as a violation of the FDCPA and entered summary judgment for the defendants.
We reverse. Whether a repossessor had a “present right to possession” for purposes of § 1692f(6)(A) can be determined only by reference to state law. Based on the evidentiary record, a reasonable jury could find that the towing company employees did not have a present right under Indiana law to possess Richards’s vehicle when they seized it. Accordingly, she has a viable FDCPA claim.
Reversed and remanded