SCOPE:

·         Bibliographic resources relating to secured transactions under Article 9 of the Uniform Commercial Code and types of personal property or fixtures that can be repossessed thereunder in Connecticut.

DEFINITIONS:

·         Secured transaction: “A [business] transaction, regardless of form, that creates a security interest in personal property or fixtures [collateral]

. . . . ” Conn. Gen. Stats. §  42a-9-109(a)(1) (2003).  

·         Security interest: “means an interest in personal property or fixtures which secures payment or performance of an obligation.” Conn. Gen. Stat. §  42a-1-201(a)(37) (2003).

·         Security agreement: “means an agreement that creates or provides for a security interest.” Conn. Gen. Stat. § 42a-9-102(a)(73) (2003).

·         Consumer goods transaction: “means a consumer transaction in which:

(A)   An individual incurs an obligation primarily for personal, family or household purposes; and

(B) A security interest in consumer goods secures the obligation.” Conn. Gen. Stat. § 42a-9-102(a)(24) (2003).

·         Consumer debtor: “means a debtor in a consumer transaction.” Conn. Gen. Stat. § 42a-9-102(a)(22) (2003).

·         Consumer Obligor: “means an obligor who is an individual and who incurred the obligation as part of a transaction entered into primarily for personal, family or household purposes.” Conn. Gen. Stat. § 42a-9-102(a)(25) (2003).

·         Goods: “means all things that are movable when a security interest attaches.” Conn. Gen. Stat. §  42a-9-102(a)(44) (2003).

·         Small Loan Lenders: “No licensee [small loan lenders] shall take . . . security interest in or assignment or pledge of household goods or an assignment of wages as security for any loan made under sections 36a-555 to 36a-573, inclusive. A licensee may take a security interest in chattels or personal property other than household goods, except a security interest in an automobile may not be taken as security for any loan where the cash advance is one thousand eight hundred dollars or less. A licensee may take a security interest in real estate on loans made under said sections where the cash advance is in excess of one thousand eight hundred dollars, but may not take such a security interest in real estate where the cash advance is one thousand eight hundred dollars or less.” Conn. Gen. Stat. § 36a-568  (2003).

·         Household furniture: “Any agreement for security in household furniture owned and in the possession of an individual and used primarily for housekeeping purposes shall be effective only to the extent that the agreement involves a purchase-money security interest as provided in section 42a-9-103a.” Conn. Gen. Stat. § 42a-9-206a (2003).

STATUTES:  

·         Conn. Gen. Stat. (2003)

Chapter 669. Banking Law of Connecticut. Regulated activities

Part XI. Retail installment sales financing

§ 36a-771. General contract requirements

§ 36a-774. Installment loan contract requirements

§ 36a-775. Confession of judgment provision invalid

§ 36a-776. Inclusion of other goods in contract void

§ 36a-777. Acknowledgment of receipt of notice and statement

§ 36a-778. Delinquency and collection charges

§ 36a-779. Assignment of contract

§ 36a-780. Payments after assignment

§ 36a-781. Statement of payments made. Receipts

§ 36a-782. Cancellation of contract on payment in full

§ 36a-783. Rebate and refund upon prepayment of contract

§ 36a-784. Renewals and extensions

§ 36a-785. Foreclosure

(a). Repossession

Title 42a. Uniform Commercial Code

Article 9. Secured Transactions

§ 42a-9-109. Scope

§ 42a-9-202. Title to collateral is immaterial

§ 42a-9-201.General effectiveness of security agreement

§ 42a-9-203. Attachment and enforceability of security interest. Proceeds. Supporting Obligations. Formal requisites

WEST KEY NUMBERS:

·         Secured Transactions # 1-80. Nature, Requisites, and Validity

# 1-40. Nature and essentials

# 41-60. Security agreements

# 61-80. Validity

DIGESTS:

·         Dowling’s Digest: Secured Transactions

1. Introduction

2. What constitutes

3. Validity and operation

4. Rights and remedies of buyer and seller

COURT CASES

·         F. D. I. C. v. Colonial Cromwell Commons LTD. Partnership, 881 F. Supp. 87, 91 (D. Conn. 1995). “’Perfection’ is the process by which a secured party puts third-parties on notice of its interest in an asset. ‘Enforcement,’ however, refers to the steps that secured party must take to enforce its rights in collateral.”

·         Fantry v. Medical Capital Corp., No. CV 00-0596326 (Jan. 4, 2002). “The defendants argue that the loan and option agreement signed by the parties is insufficient to create a valid security agreement because it does not grant a security interest, and, alternatively, that it does not adequately describe the collateral, as required by statute.”

·         New Haven Water Co. Employees Credit Union v. Burroughs , 6 Conn. Cir. Ct. 709, 710-711, 313 A.2d 82 (1973). “Likewise it is clear that the defendant is not considered a ‘retail buyer’ for the purposes of § 42-98. Likewise it is clear that the promissory note executed by the defendant and cosigned by Benjamin Della Camera, whose 1968 automobile was put up as collateral, is neither a ‘retail instalment contract’ nor a ‘instalment  loan contract’ within the meaning of § 42-98. Rather it appears from the record that the defendant obtained a loan and offered as collateral the automobile owned by Della Camera. The defendant was  not purchasing the automobile, and no security interest was taken in any goods for the purchase of which money was loaned.”

ENCYCLOPEDIAS:

·         68A Am. Jur. 2d  Secured Transactions (2003).

§§ 1-132. Introduction

§§ 102-132. Transactions Subject to Article 9

§§ 133-238. Creation of security interest; Security agreement

§§ 239-252. Attachment of security interest

§ 253-258. Assignment of security interest

§§ 259-474. Perfection of security interest

§§ 475-513. Rights, duties, and liabilities of parties prior to default

·         79 C.J.S. Secured Transactions (1995).

§§ 8-21. Nature, requisites and validity

§ 11. Property and rights subject to security interest

·         Annotation, Secured Transactions: What Constitutes “Consumer Goods” Under UCC § 9-109(1), 77 ALR3d 1225 (1977).

·         J. P. Ludington and A. L. Schwartz, Annotation, Construction And Effect of UCC Art 9, Dealing With Secured Transactions, Sales Of Accounts, Contract Rights, And Chattel Paper, 30 ALR3d 9 (1970).

TEXTS & TREATISES:

·         National Consumer Law Center, Repossessions and Foreclosures (5^th ed. 2002).

Chapter 3. Enforceable security interest

§ 3.1. Valid security interest as precondition to seizure of personal property

§ 3.2. Elements of a valid security interest

§ 3.3. Continued enforceability after security interest created

§ 3.4. Non-Purchase money security interests

§ 3.5. Automobile and mobile homes as collateral

§ 3.6. Credit card issuer’s interest in goods purchased with card

§ 3.7. Series of purchases from the same merchant

§ 3.8. Refinancing and consolidations

§ 3.9. Future advance and antecedent debt claims

§ 3.10. Consumer remedies

·      Edward A. Weiss et al., Connecticut Secured Transactions Under Revised Article 9 Of The Uniform Commercial Code (2003).

§ 11.8. Repossession

LAW REVIEWS:

·         Michael F. Maglio and Thomas J. Welsh, Connecticut Revisions To The Official Text Of Revised Article 9 Of The Uniform Commercial Code, 75 Conn. Bar J. 294 (December 2001).

·         David Mellinkoff, The Language of the Uniform Commercial Code, 77 Yale L.J. 185 (1967).

COMPILER:

Lawrence Cheeseman, Supervising Law Librarian, Connecticut Judicial Department, Law Library at Middletown, One Court Street, Middletown, CT 06457. (860) 343‑6560.

Lease (Article 2A)

vs.

Security Interest (Article 9)

§         “Whether a transaction creates a lease or a ‘security interest’ is determined by the facts of each case; however, a transaction creates a "security interest" if the consideration the lessee is to pay the lessor for the right to possession and use of the goods is an obligation for the term of the lease not subject to termination by the lessee, and

(a)     the original term of the lease is equal to or greater than the remaining economic life of the goods,

(b)     the lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become owner of the goods,

(c)     the lessee has an option to renew the lease for the remaining economic life of the goods for no additional consideration or nominal additional consideration upon compliance with the lease agreement, or

(d)     the lessee has an option to become the owner of the goods for no additional consideration or nominal additional consideration upon compliance with the lease agreement.”

Conn. Gen. Stats. §  42a-1-201(37) (2003).

§         National Consumer Law Center, Repossessions and Foreclosures (5^th ed. 2002).

Chapter 14. Consumer Leases

§ 14.1. General

§ 14.1.2. When is a lease covered by UCC Article 9

§ 14.1.3. Applicable laws when Article 9 does not apply

§ 14.1.3.1. UCC Article 2A

§ 14.1.3.2. The Federal Consumer Leasing Act

§ 14.1.3.3. State consumer statutes which govern leases

§ 14.1.3.4. State deceptive practices and debt collection statutes

§ 14.2. Automobile leases

§ 14.2.2. Does Article 9 or Article 2A regulate lease repossession?

§ 14.3. Rent-to-Own Transactions

Civil Rights and repossession of automobile

·         “The initial, and here the key question is whether or not the defendant Bank's peaceful repossession of the plaintiff's automobile on August 23, 1972, constitutes 'state action' so as to support a claim under 42 U.S.C. § 1983.” Shirley v. State Nat. Bank of Connecticut, 493 F.2d 739, 741 (C.A.2 (Conn.) 1974).

·         “We see no other theory of state involvement here which is possibly applicable.  We recognize that the problems involved in determining whether 'state action' is present are not susceptible of solution by facile formulae.  Our examination of the Supreme Court decisions, as well as those of our own and other circuits, compels the conclusion, however, that none is present here.” Ibid., 745.

Late Payments, past acceptance of

“The plaintiff next claims that because Midland repeatedly demanded and accepted late payments it lost the right to repossess the vehicle without first giving the plaintiff written notice that the payment schedule would be strictly enforced and that late payments would no longer be tolerated. The gravamen of the plaintiff's argument is that Midland should not be permitted to invoke a formal provision of the agreement that the plaintiff reasonably believed would not be enforced.

     Subsequent to the trial of the present case, our Supreme Court in Gaynor v. Union Trust Co., 216 Conn. 458, 468-70, 582 A.2d 190 (1990), held that a creditor's toleration of one or more defaults does not

Page 461 require a creditor to indulge subsequent late payments.” Velazquez v. Marine Midland Auto. Fin. Corp., 24 Conn. App. 455, 460-461, 590 A.2d 116 (1991).

Notice of rights in repossession

“The plaintiff next claims that the notice sent by Midland after repossessing her car failed to satisfy the UCC and RISFA. She contends that the postrepossession notice misrepresented her redemption rights and inaccurately stated her accelerated balance. The plaintiff further maintains that Midland failed to send her notice of the sale proceeds as required by RISFA. We reject the plaintiff's arguments.” Velazquez v. Marine Midland Auto. Fin. Corp., 24 Conn. App. 455, 461, 590 A.2d 116  (1991).

Personal property in a repossessed automobile

“After review of the loan agreement, the court determined that the plaintiff had not consented to the defendant’s possession of the personal property. The court concluded that the defendant was liable for conversion.”  Clark v. Auto Recovery Bureau Conn., Inc., 889 F. Supp. 543, 548 (D. Conn. 1994).

Strict compliance is mandatory

“In consumer transactions, strict compliance with statutory provisions that prescribe the informational content of retail installment contracts is mandatory and is not excused by inadvertence . . . . Although the trial court did not find that the plaintiffs had sustained actual damages, the defendant nonetheless statutorily forfeited its right to recover both its repossession and its storage costs because of the inaccuracy of its notice. The trial court should have reduced the defendant's recovery to reflect this statutory mandate in its entirety.” Gaynor v. Union Trust Co., 216 Conn. 458, 475-476, 582 A.2d 190 (1990)

SCOPE:

·         Bibliographic resources relating to default as a precondition of repossession.

DEFINITION:

·         “In consumer transactions, strict compliance with statutory provisions that prescribe the informational content of retail installment contracts is mandatory and is not excused by inadvertence.” Gaynor v. Union Trust Co., 216 Conn. 458, 475582 A.2d 190,  (1990).

·         Default: “When the retail buyer is in default in the payment of any sum due under the retail installment contract or installment loan contract, or in the performance of any other condition which such contract requires him to perform, or in the performance of any promise, the breach of which is by such contract expressly made a ground for the retaking of the goods, the holder of the contract may retake possession thereof.” Conn. Gen. Stat. §  36a-785(a) (2003).

·         Unaccelerated amount due: During such [redemption] period the retail buyer, upon payment or tender of the unaccelerated amount due under such contract at the time of retaking and interest . . . and upon payment of the actual and reasonable expenses of any retaking and storing, may redeem such goods and become entitled to take possession of the same and to continue in the performance of such contract as if no default had occurred.” Conn. Gen. Stat. § 36a-785(c) (2003)

STATUTES:   

·         Conn. Gen. Stat. (2003)

Chapter 669. Banking Law of Connecticut. Regulated activities

Part XI. Retail installment sales financing

§ 36a-785. Foreclosure

(a). Repossession

(b). Notice of intention to repossess

WEST KEY NUMBERS:

·         Secured Transactions # 221-243. Default and enforcement

# 221. Rights and remedies of secured parties in general

# 222. Default of debtor

DIGESTS:

·         Dowling’s Digest: Secured Transactions

4. Rights and remedies of buyer and seller

COURT CASES

·         Gaynor v. Union Trust Co., 216 Conn. 458, 467, 582 A.2d 190 (1990). “We therefore construe 42-98 (a) as requiring no special contractual language to communicate the consequences of a default in payments, such as occurred in this case, or a nonperformance of a condition. The legislature might logically have deemed it important to require a consumer contract expressly to give warning of the risk of retaking in the event of a failure to perform "any promise" because consumer buyers might otherwise not have understood that they might lose their collateral even though their payments were current and they had fulfilled all the conditions in their installment contract. That is not this case. We conclude, accordingly, that the defendant had the statutory authority to retake the plaintiffs' car.”

ENCYCLOPEDIAS:

·         68A Am. Jur. 2d  Secured Transactions (2003).

§§ 514-726. Default of debtor; Rights, remedies, duties, and liabilities of parties upon default

§§ 521-528. Rights and remedies of debtor upon default

§§ 529-682. Rights, remedies, duties, and liabilities of secured creditor and other interested parties upon default

·         79 C.J.S. Secured Transactions (1995).

§§ 144-189. Default and enforcement

·         Jay M. Zitter, Annotation, Secured Transactions: Right Of Secured Party To Take Possession Of Collateral On Default Under UCC § 9-503, 25 ALR5th 696 (1994).

TEXTS & TREATISES:

·         National Consumer Law Center, Repossessions and Foreclosures (5^th ed. 2002).

Chapter 4. Default as precondition to default

§ 4.1. Default and acceleration

§ 4.2. State and federal credit statutes may limit grounds for default and acceleration

§ 4.3. Creditor’s waiver of right to declare default

§ 4.4. Creditor’s obligation to seek credit insurance policy before declaring default

§ 4.5. Yo-Yo (Spot delivery) Sales

§ 4.6. Relationship between default to consumer’s defenses or counterclaims

§ 4.7. Unconscionable and bad faith acceleration

§ 4.8. The right to cure a default

§ 4.9. Remedies

·         Edward A. Weiss et al., Connecticut Secured Transactions Under Revised Article 9 Of The Uniform Commercial Code (2003).

§ 11.8. Repossession

LAW REVIEWS:

·         Michael F. Maglio and Thomas J. Welsh, Connecticut Revisions To The Official Text Of Revised Article 9 Of The Uniform Commercial Code, 75 Conn. Bar J. 294 (December 2001).

·         David Mellinkoff, The Language of the Uniform Commercial Code, 77 Yale L.J. 185 (1967).

COMPILER:

Lawrence Cheeseman, Supervising Law Librarian, Connecticut Judicial Department, Law Library at Middletown, One Court Street, Middletown, CT 06457. (860) 343‑6560.

SCOPE:

·         Bibliographic resources relating to self-help procedures that lenders may follow to repossess goods under Connecticut Retail Installment Sales Financing Act (RISFA) and Connecticut’s version of Article 9 of the Uniform Commercial Code (UCC).

SEE ALSO:

·         Repossession by notice of intent

DEFINITION:

·         History:  “Private self-help remedies extend as far back as ancient Greece, where those entitled to seize chattels from a debtor were not prohibited from breaching the peace or physically injuring the debtor in the course of repossession . . . . Early Roman law permitted similar self-help remedies, including the right to seize the person of a debtor, without court action, after a default in payment . . . . Later, the right to repossess goods was recognized in the common law of England.” State v. Indrisano, 29 Conn. App. 283, 286, 613 A.2d 1375 (1992).

·         “Today, the same common law principle is embodied in General Statutes 42a-9-503 [see 42a-9-609], which permits a secured party to forgo the judicial process and resort to self-help repossession, but without breaching the peace. Enticing as this mode of recovery may be to creditors, nonjudicial repossession nevertheless presents 'an element of inherent danger.' Sanchez v. MBank of El Paso, 792 S.W.2d 530, 532 (Tex. App. 1990). Because the repossessor may commit a trespass in attempting to recover goods without the owner's consent and, often, against his will, there is a considerable risk that breach of the peace, assault or other violence may occur. Id. With this brief historical background in mind, we commence our analysis.” Ibid., pp. 286-287.

·         "After default, a secured party may sell, lease, license or otherwise dispose of any or all of the collateral in its present condition or following any commercially reasonable preparation or processing." Conn. Gen. Stat. § 42a-9-610(a) (2003).

STATUTES:  

·         Conn. Gen. Stat. (2003)

Chapter 669. Banking Law of Connecticut. Regulated activities

Part XI. Retail installment sales financing

§ 36a-785. Foreclosure

(a). Repossession

Title 42a. Uniform Commercial Code

§ 42a-9-609. Secured party’s right to take possession after default. Use of electronic self-help restricted.

LEGISLATIVE:

·         Daniel Duffy, Redeeming A Repossessed Motor Vehicle, Connecticut General Assembly, Office of Legislative Research, OLR Research Report no. 2002-R-0270 (February 26, 2002).

URL: http://www.cga.ct.gov/2002/olrdata/gl/rpt/2002-R-0270.htm

PLEADINGS:

·         Sample Complaint Alleging Violation of 42 U.S.C. § 1983, Conversion, and Breach of Peace, Appendix D.4, National Consumer Law Center, Repossessions and Foreclosures (5^th ed. 2002).

·         Threats Of Violent Repossession,[Consumer Law Pleadings, Number Five (1999)] National Consumer Law Center, Repossessions and Foreclosures (5^th ed. 2002), CD-ROM Disc at back of volume.

WEST KEY NUMBERS:

·         Consumer Protection

# 4. Prohibited practices, in general

# 9. Motor vehicle sales, service, and rental

DIGESTS:

·         Dowling’s Digest: Secured Transactions

1. Introduction

2. What constitutes

3. Validity and operation

4. Rights and remedies of buyer and seller

CASES:

·         Wormer v. Charter Oak Federal Credit Union, No. 114865 (Aug. 23, 2000). "The UCC in § 42a-9-503 talks about the secured party's right to take possession after default of a condition of the security agreement. Again, the statute says 'in taking possession,' the secured party can proceed without judicial process if this can be done 'without breach of the peace or may proceed by action.'"

·         State v. Indrisano, 29 Conn. App. 283, 291-292, 613 A.2d 1375 (1992). “Finally, we note that although the defendant may have been entitled to repossess the copy machine in the manner prescribed by Article 9 of our commercial code, the right to engage in self-help does not license lessors and their agents to abuse physically any person in the course of repossession . . . . While it is true that the law has long recognized the right to forgo often costly and time-consuming judicial procedures in favor of peaceful, self-help repossession of chattels, it must not be forgotten that this ‘freedom given creditors in repossession must be balanced with the need to avoid possibly violent confrontations . . . .’ Riley State Bank v. Spillman, 242 Kan. 696, 703, 750 P.2d 1024 (1988).”

·         Gaynor v. Union Trust Co., 216 Conn. 458, 467, 582 A.2d 190 (1990). “We therefore construe 42-98 (a) [now 36a-785] as requiring no special contractual language to communicate the consequences of a default in payments, such as occurred in this case, or a nonperformance of a condition. The legislature might logically have deemed it important to require a consumer contract expressly to give warning of the risk of retaking in the event of a failure to perform ‘any promise’ because consumer buyers might otherwise not have understood that they might lose their collateral even though their payments were current and they had fulfilled all the conditions in their installment contract. That is not this case. We conclude, accordingly, that the defendant had the statutory authority to retake the plaintiffs' car.”

·         State v. Messier, 16 Conn. App. 455, 462, 549 A.2d 270 (1988). “A defendant in pursuit of the repossession of his property cannot burglarize another's home and assault him with impunity. We conclude, therefore, that a defendant cannot expect to avoid a conviction by employing such a defense.”

ENCYCLOPEDIAS:

·         68A Am. Jur. 2d  Secured Transactions

§ 546. Creditor’s right to take possession generally

·         79 C.J.S. Secured Transactions (1995).

§§ 144-189. Default and enforcement

·         Cause Of Action For Conversion Of Collateral Based On Wrongful Self-Help Repossession, 15 COA 347 (1988).

·         Jay M. Zitter, Annotation, Secured Transactions: Right Of Secured Party To Take Possession Of Collateral On Default Under UCC § 9-503, 25 ALR5th 696 (1994).

·         Gary D. Spivey, Annotation, Validity, Under State Law, Of Self-Help Repossession Of Goods Pursuant To UCC § 9-503, 75 ALR3d 1061 (1977).

·         Russell J. Davis, Annotation, Private Person’s Enforcement Of Lien Through Self-Help As Act “Under Color Of State Law” Within Meaning Of 42 USCS § 1983, 32 ALR Fed 431 (1977).

·         Gary D. Spivey, Annotation, Validity, Under Federal Constitution And Laws, Of Self-Help Repossession Provision Of § 9-503 Of Uniform Commercial Code, 29 ALR Fed 418 (1976).

TEXTS & TREATISES:

·         National Consumer Law Center, Repossessions and Foreclosures (5^th ed, 2002).

Chapter 6. Self-Help Repossessions

§ 6.1. Introduction

§ 6.2. Representing the client before repossession

§ 6.3. Bars to repossession

§ 6.4. Repossession must not breach the peace

§ 6.5. Other self-help repossession restrictions

§ 6.6. Debtor’s affirmative remedies and credit defenses for wrongful repossession

·         Edward A. Weiss et al., Connecticut Secured Transactions Under Revised Article 9 Of The Uniform Commercial Code (2003).

§ 11.8. Repossession

PAMPHLETS:

·         Statewide Legal Services, Repossessions (2001).

http://www.larcc.org/pamphlets/consumer/repossessions.htm

LAW REVIEWS:

·         Michael F. Maglio and Thomas J. Welsh, Connecticut Revisions To The Official Text Of Revised Article 9 Of The Uniform Commercial Code, 75 Conn. Bar J. 294 (December 2001).

·         David Mellinkoff, The Language of the Uniform Commercial Code, 77 Yale L.J. 185 (1967).

COMPILER:

Lawrence Cheeseman, Supervising Law Librarian, Connecticut Judicial Department, Law Library at Middletown, One Court Street, Middletown, CT 06457. (860) 343‑6560.

SCOPE:

·         Bibliographic resources relating to repossession in Connecticut through the use of a notice of intent to repossess under Conn. Gen. Stat. § 36a-785(b) (2003)

TREATED ELSEWHERE:

·         Self -help repossessions in Connecticut

DEFINITION:

·         “When the retail buyer is in default in the payment of any sum due under the retail installment contract or installment loan contract . . . the holder of the contract may retake possession thereof . . . ." Conn. Gen. Stat. § 36a-785(a) (2001).

·         Notice of intent to repossess: “Not less than ten days prior to the retaking, the holder of such contract, if he so desires, may serve upon the retail buyer, personally or by registered or certified mail, a notice of intention to retake the goods on account of the buyer's default. The notice shall state the default and the period at the end of which such goods will be retaken, and shall briefly and clearly state what the retail buyer's rights under this subsection will be in case such goods are retaken." Conn. Gen. Stat. § 36a-785(b)(2003).

·         Without right of redemption:  "If the notice [of intent to repossess] is so served and the buyer does not perform the conditions and provisions as to which he is in default before the day set for retaking, the holder of the contract may retake said goods and hold such subject to the provisions of subsections (d), (e), (f), (g) and (h) of this section regarding resale, but without any right of redemption.” Ibid.

STATUTES:  

·         Conn. Gen. Stat. (2003)

Chapter 669. Banking Law of Connecticut. Regulated activities

Part XI. Retail installment sales financing

§ 36a-785(b). Foreclosure. Repossession. Notice of intent to repossess

Title 42a. Uniform Commercial Code

§ 42a-9-609. Secured party’s right to take possession after default. Use of electronic self-help restricted.

LEGISLATIVE:

·         Daniel Duffy, Redeeming A Repossessed Motor Vehicle, Connecticut General Assembly, Office of Legislative Research, OLR Research Report no. 2002-R-0270 (February 26, 2002).

URL: http://www.cga.ct.gov/2002/olrdata/gl/rpt/2002-R-0270.htm

WEST KEY NUMBERS:

·         Secured Transactions

# 128. Possession by secured party

DIGESTS:

·         Dowling’s Digest: Secured Transactions

1. Introduction

2. What constitutes

3. Validity and operation

4. Rights and remedies of buyer and seller

COURT CASES

·         Condor Capital Corp. v. Michaud, No. CV 99-0588911-S (Jul. 25, 2000). "RISFA sets forth the steps that the holder of a retail instalment sales contract must undertake when it seeks repossession of consumer goods purchased under a retail instalment contract. See General Statutes § 36a-785. Specifically, § 36a-785 (b) provides that the holder of such a contract may, but is not required to, serve upon the retail buyer personally or by certified or registered mail a notice of intention to repossess on account of the buyer's default. If the holder chooses this option, it must state the nature of the default and the period of time at the end of which the goods will be taken if the default is not cured. If the retail buyer does not cure the default with the period of time set forth in the notice, the holder can then retake the goods and resell them in accordance with subsections (d), (e), (f), (g) and (h) of the statute without any right of redemption. This notice must be served on the retail buyer not less than ten (10) days prior to the time set for repossession and must "briefly and clearly state" what the buyer's rights are under this subsection should the goods be retaken. See General Statutes § 36a-785 (b).

·         Moye v. Credit Acceptance Corp., No. X01-99-0157073 (Nov. 3, 2000). "In Count One, plaintiffs . . . allege both that the post-repossession notice CAC provided to them violated RISFA by stating that the plaintiffs must pay the accelerated debt plus repossession costs and storage charges in order to redeem their vehicles. RISFA, at § 36a-785 (b), does not require a pre-repossession notice to the retail buyer but makes provision of such a notice discretionary with the holder of the contract: "Not less than ten days prior to the retaking, the holder of such contract, IF HE SO DESIRES, MAY serve upon the retail buyer . . . a notice of intention to retake the goods . . ." Failure to provide such a notice is therefore not a violation of RISFA. The plaintiffs have alleged the lack of such a notice apparently only as preamble to the allegation of a violation of a requirement that applies where a holder has elected not to provide prior notice of a repossession."

·         Cadle Co. v. Prodoti, 45 Conn. Sup. 325, 326, 716 A.2d 965 (1998). On November 8, 1991, the bank wrote to Prodoti informing him that he owed $661.66 and that it intended to repossess his automobile unless he paid that sum by November 18, 1991. It further informed him that if repossession occurred, the property would be sold at private sale pursuant to General Statutes (Rev. to 1991) § 42-98 (now codified as amended at General Statutes § 36a-785) and that he would be responsible for any deficiency pursuant to § 42-98 (g). Prodoti made no payment, and the bank repossessed the automobile. (The actual repossession date does not appear in the documents submitted by the parties.) The automobile was sold on February 20, 1992, leaving a deficiency balance allegedly owed by Prodoti."

·         GE Capitol Auto Lease, Inc. v. Blackwell, No. CV97 0059201S (Sep. 5, 2001). "In several cases, judges of the Superior Court have recognized that the issue of whether a transaction is a sale or a lease is a question of fact which must be decided before the court can determine whether RISFA applies to the transaction."

ENCYCLOPEDIAS:

·         68A Am. Jur. 2d  Secured Transactions

§ 546. Creditor’s right to take possession generally

·         79 C.J.S. Secured Transactions (1995).

§§ 144-189. Default and enforcement

TEXTS & TREATISES:

·         National Consumer Law Center, Repossessions and Foreclosures (5^th ed, 2002).

·      Edward A. Weiss et al., Connecticut Secured Transactions Under Revised Article 9 Of The Uniform Commercial Code (2003).

PAMPHLETS:

·         Statewide Legal Services, Repossessions (2001).

http://www.larcc.org/pamphlets/consumer/repossessions.htm

LAW REVIEWS:

·         Michael F. Maglio and Thomas J. Welsh, Connecticut Revisions To The Official Text Of Revised Article 9 Of The Uniform Commercial Code, 75 Conn. Bar J. 294 (December 2001).

·         David Mellinkoff, The Language of the Uniform Commercial Code, 77 Yale L.J. 185 (1967).

COMPILER:

Lawrence Cheeseman, Supervising Law Librarian, Connecticut Judicial Department, Law Library at Middletown, One Court Street, Middletown, CT 06457. (860) 343‑6560.

SCOPE:

·         Bibliographic resources relating to redemption

TREATED ELSEWHERE:

·         Default

DEFINITION:

·         “ Provisions of redemption are designed to avoid forfeiture of the amount paid by the conditional vendee and prevent unjust enrichment of the vendor on terms fair to both.” Auto Acceptance Corporation v. Veneziano, 2 Conn. Cir. Ct. 708, 713, 205 A.2d 788, cert. den. 152 Conn. 729 (1964).

·         Redemption: "If the holder of such contract does not give the notice of intention to retake, described in subsection (b), he shall retain such goods for fifteen days after the retaking within the state in which they were located when retaken. During such period the retail buyer, upon payment or tender of the unaccelerated amount due under such contract at the time of retaking and interest, or upon performance or tender of performance of such other condition as may be named in such contract as precedent to the retail buyer's continued possession of such goods, or upon performance or tender of performance of any other promise for the breach of which such goods were retaken, and upon payment of the actual and reasonable expenses of any retaking and storing, may redeem such goods and become entitled to take possession of the same and to continue in the performance of such contract as if no default had occurred." Conn. Gen. Stat. § 36a-785(c) (2003).

·         Curing the default: “This period of fifteen days (ten days in New York and New Jersey) is a grace period in which the buyer may cure his default.” Auto Acceptance Corporation v. Veneziano, 2 Conn. Cir. Ct. 708, 713, 205 A.2d 788, cert. den. 152 Conn. 729 (1964).

·         Computation: “In the computation of the fifteen-day retention period, the day of the taking must be excluded and the last day included; the must fully expire before a sale may be had; the buyer has until midnight of the fifteenth day in which to redeem; the statute requires the seller to retain the goods ‘for fifteen days’ not ‘until the fifteenth day.’” Ibid., p.712

·         3 days after retaking: "The holder of such contract shall within three days of the retaking furnish or mail, by registered or certified mail, to the last known address of the buyer a written statement of the unaccelerated sum due under such contract and the actual and reasonable expense of any retaking and storing. For failure to furnish or mail such statement as required by this section, the holder of the contract shall forfeit the right to claim payment for the actual and reasonable expenses of retaking and storage, and also shall be liable for the actual damages suffered because of such failure.

·         Perishable goods: "If such goods are perishable so that retention for fifteen days as herein prescribed would result in their destruction or substantial injury, the provisions of this subsection shall not apply and the holder of the contract may resell the goods immediately upon such retaking."

STATUTES:  

·         Conn. Gen. Stat. (2003)

Chapter 669. Banking Law of Connecticut. Regulated activities

Part XI. Retail installment sales financing

§ 36a-770. Applicability of commercial code. Filing and recording. Definitions

“(a) Uniform Commercial Code. A transaction subject to sections 36a-770 to 36a-788, inclusive, 42-100b and 42-100c is also subject to the Uniform Commercial Code, title 42a, but in case of any conflict the provisions of sections 36a-770 to 36a-788, inclusive, 42-100b and 42-100c shall control.”

§ 36a-785. Foreclosure

(a). Repossession

 (c). Redemption

(d). Compulsory resale

(e). Proceeds of resale

(f). Deficiency on resale

(g). Fair market value

(h). Election of remedy

(i). Recovery of part payments

(j). Waiver of statutory protection

(k). Loss

§ 36a-786. Recovery of charges barred by wilful violations

§ 36a-787. Penalty

§ 36a-788. Enforcement action

Title 42a. Uniform Commercial Code

§ 42a-9-609. Secured party’s right to take possession after default. Use of electronic self-help restricted.

§ 42a-9-610. Disposition of collateral after default

WEST KEY NUMBERS:

·         Secured Transactions

§ 241. Redemption of collateral

DIGESTS:

·         Dowling’s Digest: Secured Transactions

4. Rights and remedies of buyer and seller

COURT CASES

·         Connecticut Bank & Trust Co. v. Incendy, 207 Conn. 15, 23540 A.2d 32,  (1988). “The basic rationales for these holdings are that (a) the mandatory nature of the notice provisions of 9-504 (3) of the Uniform Commercial Code require that when a creditor elects the remedy of repossession and subsequent sale, it is the creditor's obligation to notify the debtor and it is the creditor's burden to establish the reasonableness of such notice, and (b) the notice provisions were specifically adopted for the benefit of the debtor, to protect the debtor's interest in his statutory right to redeem the collateral, thereby helping to ensure that the best possible price will be obtained for the collateral, that the sale will be conducted in a commercially reasonable manner, and that the debtor will immediately be placed on notice of the possibility of a deficiency for which he may ultimately be held liable.”