## Facts

- Michael Davenport bought a 1995 Chevrolet Corvette from Rick Bates d/b/a RB Auto Sales in 2000 and later bought a 1997 Chevrolet Silverado from Bates in 2003.
- Each sale was governed by a written installment contract requiring monthly payments, and Bates retained a security interest in the vehicle.
- The contracts included language allowing Bates to “waive any default before or after the same has been declared without impairing his right to declare a subsequent default.”
- Davenport made a history of late and/or partial payments, which Bates accepted; the parties disputed whether late fees were required and whether Bates demanded them.
- For the January 2004 Corvette payment, Davenport told Bates he could not pay on the due date and testified he said he would pay on January 9; Bates testified Davenport only said he would pay when he could and that Bates warned he would no longer accept late payments and would repossess.
- Bates repossessed the Corvette on January 6, 2004.
- Davenport later allowed Bates to repossess the Silverado.
- After repossession, Bates sold the vehicles; Davenport asserted he did not receive written notice of the intended disposition.
- Davenport sued in Davidson County Circuit Court alleging wrongful repossession (including under the Tennessee Consumer Protection Act) and intentional and outrageous conduct seeking punitive damages.
- The trial court directed a verdict for Bates on most claims, including the TCPA claim, punitive damages, and wrongful repossession of the Silverado (based on Davenport’s consent), but sent the Corvette wrongful-repossession claim to the jury.
- The jury found the Corvette was wrongfully repossessed because Bates had waived strict enforcement by routinely accepting late payments, and also found Bates failed to provide required written notice before selling the repossessed vehicles.
- The jury set the Corvette’s value at repossession and determined a deficiency amount on the Silverado; the trial court entered a net judgment after applying damages, a statutory consumer-goods penalty for lack of notice, and the truck deficiency.

## Issues

1. Whether Bates’s repeated acceptance of late Corvette payments supported a finding that he waived strict compliance and could not repossess for lateness, despite the contract’s waiver/nonwaiver clause.
2. Whether the evidence supported the jury’s finding that Bates failed to give Davenport the written notice required before disposing of the repossessed vehicles.
3. Whether the Corvette qualified as “consumer goods” based on its primary use, allowing consumer-goods statutory remedies for notice violations.
4. Whether the jury’s determinations of the Corvette’s value at repossession and the Silverado deficiency were supported by the evidence.
5. Whether the trial court properly directed a verdict for Bates on Davenport’s Tennessee Consumer Protection Act claim (and related punitive-damages theory).

## Decision

- The Court of Appeals affirmed the verdict that the Corvette repossession was wrongful because the evidence supported waiver through Bates’s pattern of accepting late payments.
- The court held the waiver/nonwaiver clause did not require overturning the verdict where the parties’ conduct supported the jury’s conclusion and credibility choices were for the jury.
- The court affirmed the finding that Bates failed to provide the required written notice of disposition, leaving the jury’s resolution of disputed proof undisturbed.
- The court upheld treating the Corvette as consumer goods because the proof supported a finding that its primary use was personal rather than business, supporting the statutory consumer-goods penalty for notice noncompliance.
- The court affirmed the jury’s valuation and deficiency findings as supported by material evidence.
- On Davenport’s cross-appeal, the court affirmed the directed verdict dismissing the TCPA claim (and the trial court’s rejection of punitive damages).
- The judgment was affirmed as modified to correct the monetary calculation while leaving the liability rulings intact.

## Legal Principles

- A secured creditor’s repeated acceptance of late or partial payments can support a finding that the creditor waived strict enforcement of payment deadlines; the factfinder may require the creditor to give reasonable notice before returning to strict enforcement.
- Contract language stating that waiver of one default does not waive later defaults is relevant, but it does not automatically defeat a waiver finding when the parties’ course of performance shows otherwise.
- Under Article 9, a secured party generally must send the debtor reasonable written notice before disposing of repossessed collateral; whether notice was sent may turn on credibility and other fact questions for the jury.
- “Consumer goods” status depends on the collateral’s primary use; mixed use does not bar consumer-goods treatment if the trier of fact finds the main use is personal, family, or household.
- Appellate courts do not reweigh jury determinations on value and deficiency when supported by material evidence.
- Alleged UCC or contract violations, without proof of deceptive or unfair practices, may be insufficient to submit a Tennessee Consumer Protection Act claim to the jury.

## Conclusion

Davenport v. Bates affirmed a jury verdict that Bates wrongfully repossessed Davenport’s Corvette after waiving strict payment enforcement by regularly accepting late payments, and it also affirmed liability and consumer-goods statutory remedies for failing to give written notice before selling repossessed vehicles; the court likewise affirmed dismissal of the TCPA and punitive-damages theories and modified only the final arithmetic of the net judgment.


Davenport v. Bates, 2006 WL 3627875 (2006)