By Lisa M. Goolik, J.D.
A Florida appellate court has held that a debtor’s action against a repossession company and its employee was not extinguished under the initial and subsequent tortfeasor doctrine by the release of the debtor’s action against the creditor that hired the repossession company. The court concluded that even if the doctrine applied, there was no earlier injury by the creditor that could have been aggravated by the employee’s subsequent repossession attempt. As a result, the repossession company and its employee may be liable for violating the repossession requirements of Article 9 of the Florida Uniform Commercial Code (Daniel v. Morris, Dec. 4, 2015, Berger, J.).
The debtor owned and operated a limousine company with her business partner. BankFirst held a purchase-money security interest in a bus owned by the company from a loan it made to the debtor’s partner. After her partner’s death, the limousine company defaulted. Thereafter, BankFirst obtained a judgment against her partner’s estate and hired Associated Investigators to repossess the bus.
After an initial attempt at repossession was unsuccessful, an employee of Associated Investigators made a second attempt on March 6, 2012. When he entered the company’s premises, he allegedly ignored the debtor’s request to leave, forced his way onto the bus, and pushed the debtor from the bus, violating Section 9-609 of the Florida UCC.
The section provides that a secured party may take possession of its collateral with or without judicial process if it can be done without a breach of the peace. Creditors electing peaceful repossession are liable for any negligence during the repossession.
The debtor filed an action against BankFirst, Associated Investigators, and the employee, alleging negligence and a trespass to land and chattels stemming from the March 6, 2012, repossession attempt.
After the debtor agreed to settle and release her claim against the bank, Associated Investigators and its employee filed a motion for summary judgment, arguing that when the debtor released her claims against BankFirst, she failed to preserve her claims against them. They asserted that Associated Investigators and its employee were subsequent tortfeasors of BankFirst because the repossession aggravated an earlier trespass during the initial repossession attempt. Thus, they contended, under the initial and subsequent tortfeasor doctrine, the release of BankFirst discharged them from liability.
Although the court noted that the initial and subsequent tortfeasor doctrine can apply outside the context of medical malpractice, the court found that the doctrine did not apply to the instant case. Notably, the court determined that BankFirst was not an initial tortfeasor because it had no fault and would have been permitted to seek indemnification against Associated Investigators and its employee. As a result, BankFirst and, collectively, Associated Investigators and its employee, were not initial and subsequent tortfeasors.
Even if the doctrine applied, the court concluded that their theory failed because the facts provided in the complaint did not allege a breach of the peace before March 6, 2012, as the repossession attempt stopped when the debtor refused entrance. Thus, there was no injury to aggravate on the second repossession attempt.
As a result, the debtor’s release of BankFirst did not operate to release the debtor’s action against Associated Investigators and its employee.
The case is No. 5D14-1658.
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