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Unformatted text preview: niform commercial code. As a party to a
creditor-debtor relationship governed by [**7] the commercial code, the Bank was
obligated to ensure its efforts to repossess the Nichols' car by self-help methods did not
create any risk of harm to its debtor, Gary Nichols. Cf. Steichen v. First Bank Grand, 372
N.W.2d 768, 773 (Minn.Ct.App.1985), for rev. denied (Minn. Oct. 18, 1985) ("A secured 25 lender must supervise its employees and provide proper policy and instruction on lawful
self-help repossession, and not allow its collectors to act with a free hand in attempting to
collect from its customers."). The Bank also was obligated to ensure repossession of the
Nichols' car did not create a risk of harm to other persons, including Kim Nichols, who
were neither debtors of the Bank nor legal owners of the collateral. Cf. General Finance
Corp. v. Smith, 505 So. 2d 1045, 1048 (Ala.1987) (the statutory responsibility to
repossess collateral without breach of the peace is a nondelegable duty, the violation of
which rendered the finance company liable for the debtor's damages).
Our construction of section 336.9-503 is strict, in part because "self-help repossession is a
harsh remedy," and in part because "strict application of the law is [**8] necessary to
prevent abuse and to discourage illegal conduct." See Steichen, 372 N.W. 2d at 773; see
also Bloomquist v. First National Bank of Elk River, 378 N.W.2d 81, 84
(Minn.Ct.App.1985), pet. for rev. denied (Minn. Jan 31, 1986) (forcible entry into an
unoccupied garage by removing a cracked window pane constituted a breach of the peace
within the meaning of section 336.9-503).
The district court erroneously concluded the Bank was not liable for the actions of its
independent contractor, R.J. Control Service. The Bank's duty to repossess the Nichols'
car "without breach of the peace" was a nondelegable duty; the Bank therefore is liable
for any damages caused by R.J. Control Service and its workers. The district court erred
by granting the Bank's summa...
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This note was uploaded on 09/30/2012 for the course ENC 102 taught by Professor Deria during the Spring '08 term at FIU.
- Spring '08