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HEADSPETH v. MERCEDES-BENZ CREDIT CORP.

March 31, 1998

LEROY B. HEADSPETH, APPELLANT,
V.
MERCEDES-BENZ CREDIT CORPORATION, LAUREL ADJUSTMENT BUREAU, INC., APPELLEES.



APPEAL FROM THE SUPERIOR COURT, DISTRICT OF COLUMBIA, HENRY H. KENNEDY, JR., J. [709 A2d Page 718]

Before Wagner, Chief Judge, and Reid, Associate Judge, and Kern, Senior Judge.

The opinion of the court was delivered by: Wagner, Chief Judge:

Appellant, Leroy B. Headspeth, appeals from an order of the trial court granting summary judgment for appellees, Mercedes-Benz Credit Corporation (MBCC) and Laurel Adjustment Bureau, Inc. (LAB). The controversy arises out of MBCC's repossession of a vehicle Headspeth purchased under a retail installment sales contract after Headspeth defaulted in payments. Headspeth argues for reversal on the ground that the trial court erred in granting summary judgment against him because a disputed issue of fact exits concerning whether MBCC's agent, LAB, trespassed into a fenced area of his property in order to repossess the vehicle. He also contends that the pendency of an action for replevin filed by MBCC against him precluded self-help repossession of the vehicle and the grant of summary judgment as a matter of law. The question raised by Headspeth's first argument under the facts presented is whether a secured creditor may retake possession of the collateral upon default by the debtor by entry onto the debtor's land. We hold that a secured creditor may enter upon the debtor's land to repossess the collateral where it can be accomplished without confrontation or objection, and it does not amount to a breach of the peace within the meaning of D.C.Code § 28:9-503 (1996). We hold further that the filing of a replevin action does not foreclose self-help repossession pursuant to contract under the facts of this case.

I.

In June 1994, Headspeth entered into a retail installment contract with a car dealer to purchase a Mercedes-Benz automobile, which the dealer subsequently assigned to MBCC. The contract required Headspeth to pay for the vehicle in monthly installments of $507.24. The contract has a provision for acceleration of all the remaining payments and repossession of the vehicle upon default in payments. *fn1 Headspeth made the monthly [709 A2d Page 719]

payments in full until October 1994, but thereafter made only one $500.00 payment. As of August 9, 1995, Headspeth owed MBCC $16,249.47.

MBCC filed a complaint in replevin against Headspeth on August 9, 1995 in Superior Court, demanding the return of the vehicle or a judgment for the amount of the outstanding balance due. Headspeth filed an answer stating that he could not pay because he had no money and no employment. Before the trial court took any action on the replevin complaint, MBCC engaged LAB to repossess the vehicle. LAB's employee repossessed the vehicle on November 28, 1995.

On December 12, 1995, Headspeth filed the complaint in this case against MBCC and LAB alleging that they wrongfully trespassed on his private property and carried away his 1991 Mercedes-Benz 190E vehicle and, tools, books, and personal papers. *fn2 Both MBCC and LAB filed a Motion To Dismiss Or In, The Alternative, Motion For Summary Judgment. In support of the motions, MBCC and LAB argued for judgment as a matter of law because Headspeth admitted defaulting on the payments due under the contract, the contract permitted repossession, and repossession of the security had been effected without breaching the peace. In support of these facts, MBCC and LAB attached a copy of the installment contract and the affidavit of Mark Leadbetter. In his sworn affidavit, Leadbetter stated that he repossessed the vehicle at issue from an alleyway near Headspeth's home without confrontation. *fn2 While not disputing that there was no encounter or confrontation with LAB's agent, Headspeth argued that there was a dispute of fact as to whether the vehicle was taken from an alleyway, as Lead-better averred, or from Headspeth's fenced-in property. Concluding that this issue was not material to the determination of the case and that MBCC and LAB were entitled to judgment as a matter of law, the trial court granted the motions.

II.

Headspeth argues that MBCC lost the right to self-help repossession under the contract by filing the replevin action; therefore, MBCC was not entitled to judgment as a matter of law. Specifically, he contends that the terms of the court's order in the replevin action and the doctrine of custodia legis preclude any repossession remedy provided for by contract. Headspeth contends that MBCC lost authority to repossess the vehicle until a final judgment in the replevin action could be entered.

The order entered in the replevin action, upon which Headspeth bases his argument, states in pertinent part:

[I]f the above designated property is in [Headspeth's] possession or control, [he] shall preserve and retain it in his possession or under his control and keep it amenable to the process of this court and shall not conceal it, pending further order of the court. *fn3

Essentially, Headspeth contends that this order required that the property remain under his care to the exclusion of MBCC. We disagree. The language of the order addresses only Headspeth's actions with respect to the property. Under its terms, no limitations are placed on the rights of any others to [709 A2d Page 720]

possession, including MBCC's rights under its conditional sales contract. The order required Headspeth to preserve and retain the property, if it was under his control. It is an order to Headspeth to safeguard and not destroy the property until a final determination by the court of the parties' rights to the property. However, the order did not address the responsibility of MBCC with respect to the property. Nor did it prohibit MBCC from proceeding with any self-help remedies ...


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