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Quinn’s Uniform Commercial Code Commentary and Law Digest states: the secured
party using deceit in order to affect an Article 9 (self-help) repossession is well advised
to check out the developing law in this area and to proceed with caution.

In considering Breach of Peace, many courts will look at whether violence might
“conceivably” occur “during” the repossession. In Jordan v. Citizens & So. Nat’l
Bank of S.C., 35 U.C.C. Rep. 722 (S.C. 1982), creditors Recovery Agent seized a truck
in the middle of the night and drove away; the debtors awoke and chased the Recovery
Agent in another vehicle for 30 minutes. The court found no Breach of Peace occurred
because the repossession occurred peacefully. The conduct following the repossession
was not considered incident to the actual repossession.

Courts will virtually always find a Breach of the Peace when a Recovery Agent is
accompanied by a law enforcement officer during a self-help repossession and the
law enforcement officer does not have authorization by the court (Replevin, etc.)
Courts usually refer to such acts as being committed under “Color of Law.” Under Title
18 USC, Section 242 (Deprivation of Rights Under Color of Law). This federal law
makes it a crime for any person acting under color of law, statute, ordinance,
regulation, or custom to willfully deprive or cause to be deprived from any person
those rights, privileges, or immunities secured or protected by the Constitution and
laws of the United States.

Acts under “Color of Law” includes acts not only done by federal, state or local officials
within the bounds or limits of their lawful authority, but also acts done without and
beyond the bounds of their lawful authority: providing that, in order for unlawful acts of
any official to be done under “Color of Law”, the unlawful acts must be done while
such official is purporting or pretending to act in the performance of his/her official
duties. In the self-help repossession process such cases of “Color of Law” usually result
from a law enforcement officer assisting a Recovery Agent when the law enforcement
officer does not have authorization (as stated above). Such action clearly gives the
impression of legal authority and is usually considered to be a Breach of the Peace
resulting in a Wrongful Repossession.

Another important aspect of Wrongful Repossession is the requirement by some states
that certain written notices, often referred to as “cure notices,” be sent to the debtor prior
to the attempt to repossess. The Recovery Agent and Recovery Agency owner should
be familiar with whether that is a requirement in their area(s) of operation and
whether those required notices have been sent. It is possible for creditors to neglect
this requirement on occasion and they will appreciate the Recovery Agent bringing it to
their attention.

Caution also must be observed by the creditor and Recovery Agent as to statements made
at, or near, the time of repossession. The creditor may be bound by representations
made by the creditor’s employees or by the Recovery Agent, and this can lead to a
charge of Wrongful Repossession or a loss of the creditor’s deficiency rights. The
Recovery Agent should make no statements to the debtor regarding redemption rights or
deficiencies without the express written permission of the creditor.