## Facts

- Rosalind Smith financed a vehicle purchase through AFS Acceptance, LLC (AFS) and granted AFS a security interest in the vehicle.
- After Smith defaulted, AFS hired Equitable Services, Inc. (Equitable) to repossess the vehicle.
- On August 16, 2010, Equitable’s agents attempted repossession from Smith’s mother’s driveway while Smith and her daughter, Rashai Jackson, were inside the house.
- Family members confronted the agents; Jackson entered the vehicle and left the door open, but the agents continued lifting/towing the vehicle.
- Smith then entered the vehicle; the agents allegedly towed the vehicle with both occupants inside and the door open while bystanders yelled for them to stop.
- Police arrived, ordered the agents to stop, and the vehicle was returned to the driveway.
- Smith and Jackson sued alleging statutory violations and tort claims based on the manner of repossession.

## Issues

1. Whether plaintiffs plausibly alleged that AFS violated 810 ILCS 5/9-609(b)(2) by repossessing through a “breach of the peace,” and whether AFS could be responsible for Equitable’s conduct even if Equitable acted as an independent contractor.
2. Whether Equitable can be directly liable under 810 ILCS 5/9-609(b)(2), or whether that provision imposes duties only on the “secured party.”
3. Whether the complaint plausibly alleged that Equitable qualified as a “debt collector” and engaged in conduct regulated by the FDCPA during repossession.
4. Whether the alleged conduct stated plausible Illinois claims for negligence, willful and wanton conduct, and intentional infliction of emotional distress (IIED).

## Decision

- AFS’s Rule 12(b)(6) motion was granted in part and denied in part.
- The court denied dismissal of the Illinois UCC repossession claim against AFS, holding a secured party may be held responsible for a breach of the peace committed by repossession agents acting on its behalf, including independent contractors.
- Equitable’s Rule 12(b)(6) motion was granted in part and denied in part.
- The court dismissed the UCC repossession claim against Equitable to the extent the statute applies only to the secured party.
- The court allowed the FDCPA claim and certain tort claims against Equitable to proceed, and allowed significant portions of plaintiffs’ negligence- and willful-and-wanton-based theories to proceed based on the alleged towing conduct.
- The court permitted an IIED theory to proceed at the pleading stage (at least as to Equitable) based on the alleged manner of towing occupants and requiring police intervention.

## Legal Principles

- Under 810 ILCS 5/9-609(b)(2), self-help repossession is permitted only if it occurs “without breach of the peace.”
- In assessing “breach of the peace,” a secured party may be held responsible for actions taken on its behalf by others, including independent contractors engaged to repossess collateral.
- Allegations that repossession agents continued towing while occupants were inside the vehicle, ignored demands to stop, and required police intervention can plausibly support a breach-of-the-peace theory at the pleading stage.
- The statutory repossession duty in § 9-609(b)(2) is directed to the “secured party,” and does not necessarily create a direct statutory cause of action against a repossession company that is not the secured party.
- A repossession company’s conduct may still support FDCPA liability (if it qualifies as a “debt collector” and acted in connection with debt collection) and tort liability under Illinois law.
- Illinois negligence and willful and wanton claims may be stated where repossession conduct plausibly created an unreasonable risk of physical harm or reflected reckless disregard for safety.
- Illinois IIED may be adequately pleaded where alleged conduct could be found extreme and outrageous and likely to cause severe emotional distress.

## Conclusion

The court allowed plaintiffs to proceed on the theory that the repossession’s manner could constitute a breach of the peace, holding the secured party may be liable for misconduct by hired repossession agents, while limiting direct statutory repossession liability for the repossession company but permitting FDCPA and tort claims to continue based on the same alleged events.


Smith v. AFS Acceptance, LLC, 2012 WL 1969415 (N.D. Ill. 2012)