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Doucette v. Belmont Savings Bank

Superior Court of Massachusetts, Essex

April 14, 2017

Darice Doucette
v.
Belmont Savings Bank et al No. 136809

          ORDER ON DEFENDANT BELMONT SAVINGS BANK'S MOTION TO DISMISS

          James F. Lang, Associate Justice of the Superior Court.

         In the instant action, the plaintiff, Darice Doucette, alleges that the defendants Belmont Savings Bank (" BSB") and the Massachusetts Recovery Bureau, Inc. (" MRB") engaged in actionable conduct in connection with the repossession of a Hyundai Elantra automobile that the plaintiff purchased in early 2014 with a loan from BSB. More specifically, she alleges the following: after the plaintiff purportedly defaulted on her loan payment obligations, BSB engaged the services of MRB to repossess the car; on November 5, 2015, an MRB tow truck driver, one Anthony Hannan, entered onto the plaintiff's driveway at her residence and parked behind her car; the plaintiff approached Hannan and he began screaming and cursing at her and demanding that she relinquish the keys to the Hyundai to him; Hannan refused the plaintiff's demand that he leave her property, and he continued to insult and berate her; during the course of their continued interactions, Hannan shoved the plaintiff against his truck and forcefully threw her to the ground, whereupon she summoned the police with a 911 call; a police officer responded and permitted Hannan to tow the Hyundai away when he showed the officer an order from BSB authorizing the repossession; the plaintiff had several items of personal property in the car that she never recovered. Based on those allegations, the plaintiff advances two causes of action against BSB and MRB and three additional causes of action against MRB only. They are: violations of G.L.c. 106, § 9-609, for a breach of the peace during a non-judiciaI repossession (Count I, against BSB and MRB); violations of G.L.c. 255B, § 20B and, by extension, violations of G.L.c. 93A, for a breach of the peace during a non-judicial repossession and for entering onto her property without consent (Count II, against BSB and MRB); battery (Count III, against MRB); conversion (Count IV, against MRB); and, trespass to chattel (Count V, against MRB). BSB has moved pursuant to Mass.R.Civ.P. 12(b)(6) to dismiss the two counts in which it is named. A non-evidentiary hearing on the motion was held on April 13, 2017. The court's review herein of the motion is governed by the principles articulated in Iannacchino v. Ford Motor Co., 451 Mass. 623, 636, 888 N.E.2d 879 (2008).[1]

         The motion to dismiss presents a narrow issue. The plaintiff concedes that Hannan, the MRB employee who engaged in the alleged acts upon which the asserted liability of both defendants is predicated, was not an employee of BSB, but rather, an independent contractor. She further concedes that, in accordance with long-standing principles of Massachusetts common law, one who hires an independent contractor is not typically liable under respondeat superior principles for the subsequent acts of the contractor, which would include the acts of an independent contractor engaged by the principal to repossess collateral.[2] But the plaintiff contends that G.L.c. 106, § 9-609, which is part of the Uniform Commercial Code (" UCC") that Massachusetts has adopted, imposes a nondelegable duty on secured creditors resorting to self-help methods of repossession not to breach the peace in doing so.[3] According to the plaintiff, § 9-609 has displaced the common law in that regard. Conceding that there is a dearth of Massachusetts case law in support of her interpretation of the UCC, she cites to several decisions from appellate courts in other states in which the court held that, under the UCC, a creditor may be held liable for a breach of the peace by an independent contractor it hired to effect a repossession. In response, BSB asserts that the precise principle upon which the plaintiff relies does not appear in the statutory language of § 9-609 itself, but rather in the commentary thereto, i.e., Comment 3 to § 9-609, which states, " courts should hold the secured party responsible for the actions of others taken on the secured party's behalf, including independent contractors engaged by the second party to take possession of collateral." Citing the " settled rule of statutory construction that '(a) statute is not to be interpreted as effecting a material change in or a repeal of the common law unless the intent to do so is clearly expressed, '" Riley v. Davison Construction Co., Inc., 381 Mass. 432, 438, 409 N.E.2d 1279 (1980), quoting Pineo v. White, 320 Mass. 487, 491, 70 N.E.2d 294 (1946), BSB argues that the legislature's adoption of the UCC as a comprehensive whole does not manifest a clearly expressed intention to have Comment 3 supplant the common-law of respondeat superior in the circumstances here presented.

         The court disagrees with BSB. Even without regard to Comment 3, this court construes the express language of § 9-609(b)(2) to clearly prohibit a secured party that is resorting to non-judicial means to repossess collateral from breaching the peace in so doing. See Reading Coop. Bank v. Suffolk Constr. Co., 464 Mass. 543, 549, 984 N.E.2d 776 (2013) (a legislative intent to supplant common law need not be explicitly stated in the statute but may be inferred where a UCC provision specifically defines parties' rights and remedies; " it may be inferred where the UCC provides a comprehensive scheme for enforcement of rights and allocation of losses that would be effectively undermined by application of conflicting common-law principles"). The commentary simply makes unmistakably clear what is otherwise apparent from the statutory language. In adopting this provision, the legislature surely understood that it creates a narrow exception in the circumstances of self-help repossession to the usually applicable principles of respondeat superior. And there are sound reasons for recognizing such an exception. The appellate cases the plaintiff has cited set forth persuasive reasoning for holding that each of their state's identical cognate UCC provision imposes a nondelegable duty on a secured creditor not to breach the peace in the course of a repossession.[4] See Reading, id. at 550 n.7 (" authority from other jurisdictions is especially relevant in the context of the UCC, which seeks to 'make uniform the law among the various jurisdictions'"), quoting G.L.c. 106, § 1-102(2)(c). As the Court of Appeals of Minnesota stated in Nichols v. Metropolitan Bank, 435 N.W.2d 637 (Minn.Ct.App. 1989) (which the Court of Appeal of Florida adopted in full in its ruling in Sammons v. Broward Bank, 599 S.2d 1018, (Fla.Ct.App. 1992), one of the cases that the plaintiff cites),

A principal generally is not liable for physical harm to another caused by an independent contractor's acts or omissions. However, even if R.J. Control Service was an independent contractor, the Bank still may be liable for the Nichols' alleged damages if repossession of the Nichols' automobile by the Bank involved a nondelegable duty or created special risks which were inherent in the contemplated work to be performed by R.J. Control Service. Special relationships or public policy considerations may give rise to nondelegable duties.
The uniform commercial code defines the relationship between secured parties and debtors by establishing specific rights, remedies and duties with respect to repossession and disposition of collateral upon default. See Minn. Stat. § § 336.9-501-.9-508 (1988). The code requires a secured party to exercise its self-help remedy rights only when repossession can be accomplished " without breach of the peace." See Id. § 336.9-503. The conditional nature of the secured party's self-help remedies and the language of section 336.9-503 indicate that a secured party must ensure there is no risk of harm to the debtor and others if the secured party chooses to repossess collateral by self-help methods. The duty to repossess property in a peaceable manner is specifically imposed on a " secured party" by the uniform commercial code and is intended to protect debtors and other persons affected by repossession activities. See Id. (a " secured party" may repossess by self-help methods " if this can be done without breach of the peace"). Accordingly, a secured party may not delegate to third persons the secured party's duty to repossess in a peaceable manner . . .
The Bank had a right to repossess the Nichols' vehicle " without judicial process" because the bank was a " secured party" under the uniform commercial code. As a party to a creditor-debtor relationship governed by the commercial code, the Bank was obligated to ensure its efforts to repossess the Nichols' car by self-help methods did not create any risk of harm to its debtor, Gary Nichols . . .
Our construction of section 336.9-503 is strict, in part because " self-help repossession is a harsh remedy, " and in part because " strict application of the law is necessary to prevent abuse and to discourage illegal conduct."

435 N.W.2d at 640-41 (internal case law citations and parentheticals omitted).

          In construing § 9-609, it is also appropriate for the court to seek to effectuate the underlying purposes of the UCC, " one of which is to 'make uniform the law among the various jurisdictions.'" Rand v. Porsche Financial Services, 216 Ariz. 424, 167 P.3d 111, 120 (Ariz.App. 2007) (quoting the Arizona U.S.C. provision that is identical to G.L.c. 106, § 1-103, A.R.S. § 47-1102(A), (B)(3)). The Court of Appeals of Arizona in Rand noted in that regard that its " review of the relevant decisions indicates that most jurisdictions that have considered this issue have concluded that the UCC statute authorizing self-help repossession imposes a nondelegable duty to avoid breaching the peace." 167 P.3d at 120. See also MBank El Paso, N.A. v. Sanchez, 836 S.W.2d 151, 151-55 (Tex. 1992) (stating that the Texas Uniform Commercial Code should be construed to effect uniformity with other jurisdictions and that other jurisdictions have found the obligation of a repossessing party to avoid breaching the peace to be nondelegable). Consistent with what appears to be the overwhelming weight of authority, this court construes § 9-609 in a like manner.[5]

         For the foregoing reasons, the defendant Belmont Savings Bank's motion to dismiss Counts I and II against it is DENIED.

         SO ORDERED.

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