In Brooks v. Leon’s Quality Adjusters, Inc., 2016 WL 4539967 (E.D. Cal. 2016), Judge Thurston granted summary judgment to a repossession company under the FDCPA and Rosenthal Act.
Moreover, courts have determined repossession companies, such as Leon’s Quality Adjusters, are not generally “debt collectors” subject to liability under the FDCPA. See, e.g., Montgomery v. Huntington Bank, 346 F.3d 693, 699 (6th Cir. 2003) (“a repossession agency… does not fall within the definition of a ‘debt collector’ ”); James v. Ford Motor Credit Co., 47 F.3d 961, 962 (8th Cir. 1995) (repossession companies are not generally included in the definition of “debt collector” under Section 1692a(6)); Nadalin v. Automobile Recovery Bureau, Inc., 169 F.3d 1084, 1085 (7th Cir. 1999) (observing the term “debt collectors” excludes repossessors and other enforcers of security interests); Jordan v. Kent Recovery Serv., Inc., 731 F.Supp. 652, 656 (D. Del. 1990) (“an enforcer of a security interest, such as a repossession agency, falls outside the ambit of the FDCPA for all purposes, except for purposes of § 1692f(6)”). Because Defendants collected the collateral rather than the debt and are not debt collectors as applied to provisions other than Section 1692f(6), as discussed below, Plaintiff is unable to succeed on claims for violations of the FDCPA under 15 U.S.C. §§ 1692d, 1692e. Specifically, under Section 1692f(6), repossession agencies and other enforcers of security interests are prohibited from: Taking or threatening to take any nonjudicial action to effect dispossession or disablement of property if – (a) there is no present right to possession of the property claimed as collateral through an enforceable security interest; (b) there is no present intention to take possession of the property; or (c) the property is exempted by law from such dispossession or disablement. 15 U.S.C.A. § 1692f(6). Plaintiff contends Defendants violated Section 1962f(6)(A) because they did not have “a present right of possession.” (Doc. 1 at 4, ¶ 16; Doc. 27 at 4-5)
The Court held that entry onto third party private property that was posted with signs stating “No Repo Vehicles,” “No Trespassing,” “Private Property,” and “Check With Guard Before Entering Plant” was insufficient to constitute breach of the peace because otherwise “any debtor in default who is informed that a vehicle will be repossessed could simply place “no trespassing” and “no repo vehicles” signs on their property, or the property of third parties where the vehicles were parked, to thwart repossession without judicial intervention. The District Court also fouund that a breach of the peace can occur if the debtor or third party makes an objection during the repossession. However, in this case, there was not be a breach of the peace because objections were voiced after the repossession was completed. The tow truck had already connected Plaintiff’s vehicle and was the employee parking lot when the objection took place. (Bus. & Prof. Code § 7507.12 (“a repossession is complete if . . . The collateral becomes connected to a tow truck or the repossessor’s tow vehicle”).