## Facts

- Joann Giles bought an automobile under an installment sale contract that was assigned to First Virginia Credit Services, Inc., giving First Virginia a perfected purchase-money security interest in the car.
- The contract required monthly payments and treated a payment more than ten days late as a default.
- First Virginia claimed Joann Giles defaulted and hired Professional Auto Recovery, Inc. to repossess the vehicle under N.C. Gen. Stat. § 25-9-503 (then in effect), which permitted repossession without judicial process only if done without breach of the peace.
- Plaintiffs alleged defendants wrongfully repossessed the vehicle and converted both the car and personal property inside it.
- Plaintiffs alleged First Virginia accepted and later applied a payment immediately before the repossession.
- A neighbor submitted an affidavit stating that around 4:00 a.m. a loud truck arrived, someone approached the vehicle in the driveway, the vehicle “screeched off,” and the neighbor—believing a theft was occurring—called the Gileses and police.
- Plaintiffs asserted additional claims including breach of the peace, negligent hiring (against First Virginia for using the repossession company), unfair or deceptive trade practices, and a constitutional challenge to § 25-9-503.

## Issues

1. Whether a secured creditor’s self-help repossession after default can constitute conversion or other wrongful repossession when the repossession is allegedly not peaceable.
2. Whether the evidence created a genuine issue of material fact on whether the repossession occurred “without breach of the peace” as required by former N.C. Gen. Stat. § 25-9-503.
3. Whether claims for unfair or deceptive trade practices and negligent hiring could be resolved by summary judgment when premised on an allegedly wrongful repossession.
4. Whether plaintiffs were entitled to summary-judgment relief based on their constitutional challenge to § 25-9-503.

## Decision

- The Court of Appeals reversed the grant of summary judgment for First Virginia to the extent it was based on the categorical view that statutory self-help repossession cannot, as a matter of law, support conversion or related liability.
- The court held the neighbor’s affidavit and surrounding circumstances created a genuine issue of material fact on whether the repossession involved a breach of the peace.
- Because the lawfulness of the repossession depended on disputed facts, summary judgment was premature on related theories tied to the alleged wrongful repossession (including unfair or deceptive trade practices and negligent hiring).
- The case was remanded for further proceedings; unchallenged portions of the interlocutory order remained undisturbed.

## Legal Principles

- A secured party may repossess collateral after default without judicial process only if the repossession is accomplished without breach of the peace.  
- “Breach of the peace” in this context includes conduct that disturbs public order or is likely to provoke violence; whether a repossession meets the standard is commonly fact-dependent.
- A security interest and contractual right to repossess do not immunize a creditor from tort or statutory liability if the repossession is conducted unlawfully (including by breaching the peace); such conduct may support conversion and related claims.
- Summary judgment is improper where evidence, viewed in the nonmovant’s favor, shows a genuine dispute of material fact on an element essential to the movant’s entitlement to judgment.

## Conclusion

The court held that self-help repossession is lawful only when conducted without breach of the peace, and evidence of a disruptive early-morning repossession created a triable fact issue that required reversal of summary judgment and remand on conversion and related claims premised on the allegedly non-peaceable repossession.


Giles v. First Va. Credit Servs., Inc., 560 S.E.2d 557 (N.C. Ct. App. 2002)