Repossession companies don’t have the best reputation and a case recently decided by the Colorado Court of Appeals isn’t going to help change that.
In that case, Omid Shekarchian put himself in the driver’s seat of a BMW ultimate driving machine with help from BMW Financial Services. When Shekarchian defaulted on his loan (or lease), BMW FS hired Maxx Auto Recovery to repossess the vehicle. After the repossession, Maxx parked the vehicle in its fenced and locked storage facility.
Shekarchian paid his debt to BMW FS and went to Maxx’s to retrieve his car. After paying a storage charge of $1,000, Shekarchian was told he couldn’t have his car back until he signed a document confirming he “carefully” inspected his vehicle and found no damage, and releasing Maxx from any liability.
Shekarchian insisted on seeing his car before signing the document. However, Maxx’s on-site employee, demonstrating a notable lack of diplomatic skills, told Shekarchian he could stand there “all day” but would not see his car until he signed the form — “end of story.” Shekarchian, not wanting to confirm in writing a false fact (and exercising remarkable restraint under the circumstances), left Maxx without his car — to see his lawyer.
Shekarchian then sued Maxx and sought the return of his car (what lawyers call a “replevin” action) plus damages against Maxx under the Colorado Consumer Protection Act, a law that prohibits deceptive trade practices having a public impact. The trial judge agreed with Shekarchian and ordered Maxx to return the car. As a result, Shekarchian was back in his BMW, seven months after the repossession.
The case moved to damages, with Shekarchian telling the judge that, not only had he been unable to use his vehicle for seven months, but those months in Maxx’s open-air storage lot had not been kind to his car. The trial judge awarded damages and, as the Consumer Protection Act allows in a circumstance where the defendant acted in “bad faith,” tripled the damage award. Maxx appealed to the Colorado Court of Appeals.
The appeals court backed the trial judge’s decision, except for one thing. The standard of proof under the Consumer Protection Act for treble damages is “clear and convincing” evidence, but in this case the judge applied a lesser standard — preponderance of the evidence.
The appeals court sent the case back to the trial court to rule on bad faith, using the clear and convincing standard. (Under the Consumer Protection Act, bad faith is defined as “fraudulent, willful, knowing or intentional conduct.”)
To add further to your possibly useful knowledge of repossession law, you should know that a creditor doesn’t need a court order to repossess a vehicle, and chicanery is allowed.
However, a breach of the peace isn’t allowed. That means the repo man can’t break down your garage door, take your keys at gunpoint, or hold your children (or Labrador retriever) hostage. But he can follow you to the supermarket and tow away your car while you’re buying groceries.
Jim Flynn is with the Colorado Springs firm of Flynn & Wright LLC. Contact him at firstname.lastname@example.org.