Title: Salisbury Livestock Co. v. Colorado Cent. Credit Union

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Salisbury Livestock Co. v. Colorado Cent. Credit Union1990 WY 62793 P.2d 47Case Number: 89-147Decided: 06/13/1990Supreme Court of Wyoming
SALISBURY LIVESTOCK 
COMPANY, A WYOMING CORPORATION, 

APPELLANT 
(PLAINTIFF),

v.

COLORADO CENTRAL CREDIT 
UNION, A COOPERATIVE ASSOCIATION OF THE STATE OF COLORADO; AL WELTZHEIMER; TOM 
CLARK; GORDON SROCK; AND DARREN BOLING, APPELLEES (DEFENDANTS).

Appeal from the District 
Court, Carbon County, Larry L. Lehman, J.

Frederick J. 
Harrison, Rawlins, for appellant.

Kaye Willis, 
Laramie, for appellees Tom Clark, Gordon Srock and Darren 
Boling.

Woon Ki Lau and 
Margaret S. Choi of Lau & Choi, P.C., Denver, Colo., for appellees 
Colorado Cent. Credit Union and Al Weltzheimer.

Before 
CARDINE, C.J., THOMAS, URBIGKIT and GOLDEN, JJ., and ROONEY, J. 
(Retired).

GOLDEN, Justice.

[¶1]      This is an appeal 
from a directed verdict granted to appellees Colorado Central Credit Union, and 
Al Weltzheimer, Tom Clark, Gordon Srock, and Darren Boling, (all appellees will 
be referred to as Colorado Central in the analysis) in a trespass action 
resulting from a vehicle repossession that occurred on appellant Salisbury 
Livestock Company's lands. The district court granted the directed verdict after 
finding that Colorado Central's entry to conduct the repossession was privileged 
and that reasonable men could not differ on the verdict. We do not agree. We 
reverse the directed verdict and remand for a new trial.

FACTS

[¶2]      Salisbury 
Livestock Company (Salisbury Livestock) initiated the trespass action in 
response to Colorado Central's repossession of vehicles owned by George 
Salisbury III (young Salisbury) from Wyoming property of Salisbury Livestock. 
Salisbury Livestock is a family corporation run by young Salisbury's father, 
George Salisbury, Jr.; it is registered in Wyoming and possesses land in Wyoming 
and in Colorado. The disputed repossession of the vehicles took place on 
Salisbury Livestock's Ladder Ranch, which is on the Wyoming side of the 
Wyoming-Colorado state border.

[¶3]      Young Salisbury 
had pledged the repossessed vehicles, along with three others, as collateral for 
a $13,000 loan from Colorado Central in October of 1984. This loan was made 
while he was living in the Denver area. He defaulted on the loan in March, 1986. 
He had defaulted on the loan once before, in October of 1985, and Colorado 
Central had repossessed one of his vehicles, which he subsequently redeemed. 
Colorado Central had then given young Salisbury an extension until February 15, 
1986, meaning that he paid only interest from October, 1985, until February, 
1986. He made the February, 1986 payment, but did not make any further 
payments.

[¶4]      At some time in 
early 1986 young Salisbury left Denver and returned to Slater, Colorado, where 
he resided near the Salisbury Livestock Wyoming property on which his mother and 
father lived. Colorado Central sent notice of default to his Slater, Colorado 
mailing address in May, 1986, but did not receive a response. In July, 1986, 
Colorado Central decided to repossess the vehicles pledged as security on the 
loan. Weltzheimer, Colorado Central's credit manager, hired C.A.R.S.-U.S.A., a 
car repossession company to retrieve the vehicles.

[¶5]      On the evening of 
July 27, 1986, C.A.R.S.-U.S.A. owner Clark and employees Srock and Boling (and 
one other C.A.R.S.-U.S.A. employee not made a party to the action) left Denver 
with two tow trucks to repossess young Salisbury's vehicles. Before leaving 
Denver, Clark had called young Salisbury's Slater, Colorado home and received 
directions for finding it from an unidentified woman. The repossession crew 
arrived at young Salisbury's home about 5:00 the next morning. They found one of 
the vehicles, a van, parked just off the highway in front of the house and with 
the key in the ignition. Clark looked inside a small shed or garage on the 
property and scouted the area around the house for the other vehicles, but did 
not find them.

[¶6]      Taking the van, 
they drove a short distance back up the road they had just travelled, Colorado 
Highway 129, to a large "Salisbury" sign that had been mentioned as a landmark 
by the unidentified woman Clark talked to on the telephone, and which they had 
noticed on their way to young Salisbury's home. The sign was adjacent to a 
private drive or roadway. Although they could not see any vehicles from the 
highway, the repossession crew turned down the drive. After travelling about 
fifty yards they spotted several vehicles in the ranch yard. When they reached 
the vehicles they identified two from their assignment form, a Corvette and a 
conversion van. They pushed the Corvette onto the drive so that they could reach 
it with one tow truck, backed up to the conversion van with the other tow truck, 
hooked both vehicles up, and towed them away.

[¶7]      At the time, it 
was light, and appellees reported that they heard people stirring in a nearby 
building. They did not attempt to obtain permission to enter the property or to 
take the vehicles. Clark testified that he did not plan on contacting anyone as 
it was his intention to avoid a confrontation. George Salisbury, Jr. testified 
that after the repossession he discovered that the repossessors had apparently 
broken a two-by-four that was lying on the ground near the repossessed 
vehicles.

[¶8]      After the 
repossession young Salisbury explained his financial problems to his father. The 
two agreed on a loan that permitted young Salisbury to redeem the vehicles on 
August 4, 1986, with a check drafted by his father. Salisbury Livestock, owner 
of the Wyoming property from which the Corvette and conversion van were towed, 
then initiated this trespass action.

STANDARD OF 
REVIEW

[¶9]      We apply the same 
standard to review a directed verdict as was employed by the district court in 
deciding the motion for the directed verdict. That is, "we must, without 
weighing the credibility of the witnesses or otherwise considering the weight of 
the evidence, determine whether there can be but one conclusion as to the 
verdict that reasonable jurors could have reached." Anderson v. Foothill 
Industrial Bank, 674 P.2d 232, 238 (Wyo. 1984). In so doing, we consider the 
evidence in the light most favorable to the nonmoving party and give that party 
the benefit of all reasonable inferences from the evidence. Id. We give no 
deference to the findings of the trial court. Id.

ANALYSIS

[¶10]   Salisbury Livestock contends that 
the directed verdict was improper, as entry was without privilege under W.S. 
34-21-962 (July 1986 Repl.) (secured party's right to take possession after 
default) because an entry on lands of another without consent is a trespass, 
which is itself a breach of the peace. It argues that, if Restatement (Second) 
of Torts § 198 (1965) applies, the repossessors failed to make a demand for the 
vehicles, and that the time and manner of entry were otherwise unreasonable, so 
that the entry was not privileged. It disputes Colorado Central's assertion that 
it should be charged with knowledge of the loan to young Salisbury, and it 
claims that it is an innocent third party.

[¶11]   Colorado Central and the individual 
appellees respond that the trial court was correct that their entry was 
privileged by W.S. 34-21-962. They point specifically to the statute's second 
sentence, which states, "[i]n taking possession a secured party may proceed 
without judicial process if this can be done without a breach of the peace." 
Appellees claim that their entry to repossess the pledged vehicles was therefore 
privileged because they did not breach the peace. They further rely on the 
district court's finding that W.S. 34-21-962 is underlain by Restatement 
(Second) of Torts § 198. Finally, responding to Salisbury Livestock's assertion 
that the corporation is a third party not involved in the loan transaction 
between Colorado Central and young Salisbury, they point to young Salisbury's 
statement on his loan application that he was a part owner of Salisbury 
Livestock, which, they argue, means the corporation had constructive knowledge 
of the loan. The argument proceeds that, if Salisbury Livestock is charged with 
knowledge of the loan, then consent in the loan agreement provides another good 
defense to the trespass claim.

[¶12]   Our review convinces us that 
Salisbury Livestock is entitled to have a jury decide the merits of its 
argument. There is no real disagreement as to whether a trespass occurred.1 The crux of this dispute is whether 
the entry to repossess was privileged either by the self-help statute or by 
consent. From our review of the evidence in a light favorable to Salisbury 
Livestock, we conclude that a reasonable jury could find that it was 
not.

[¶13]   In determining the application of 
our self-help statute, W.S. 34-21-962, there are three initial considerations. 
First, that statute is Wyoming's verbatim codification of Uniform Commercial 
Code § 9-503 (1981). Section 9-503, in turn, incorporates the preexisting right 
of extrajudicial repossession. Comment, Breach of Peace and Section 9-503 of the 
Uniform Commercial Code - A Modern Definition for an Ancient Restriction, 82 
Dickinson L.Rev. 351, 354 (1978). The drafters of the Uniform Commercial Code 
did not intend that § 9-503 create new rights or obligations concerning the 
self-help remedy. Id. In the same vein, this court has said before that we will 
not presume that a statute changes the common law unless it does so explicitly. 
State v. Stovall, 648 P.2d 543, 548 (Wyo. 1982). The underlying common law 
governing this entry to repossess is expressed, as was recognized by the trial 
court, in Restatement (Second) Torts § 198.2

[¶14]   Second, because the Wyoming statute 
is the enactment of a uniform law, our interpretation is governed by W.S. 
8-1-103(a)(vii) (June 1989 Repl.): "Any uniform act shall be interpreted and 
construed to effectuate its general purpose to make uniform the laws of those 
states which enact it." Consequently, to make a consistent application in this 
case, we must consider what self-help acts our sister jurisdictions have found 
protected by the same, or similar, statutory language.

[¶15]   Finally, we agree with the 
statement that "courts disfavor self-help repossession because, if abused, it 
invades the legitimate conflict resolution function of the courts." Note, Is 
Repossession Accompanied by Use of Stealth, Trickery or Fraud a Breach of the 
Peace Under Uniform Commercial Code Section 9-503?, 40 Ohio St. L.J. 501, 504 
(1979). While recognizing that W.S. 34-21-962 extends a conditional self-help 
privilege to secured parties, we will read the statute narrowly to reduce the 
risk to the public of extrajudicial conflict resolution. Although it is apparent 
that the self-help remedy is efficient for creditors and results in reduced 
costs of credit for debtors, Id. at 506, we must seek a reasonable balancing of 
that interest against private property interests and society's interest in 
tranquility.

[¶16]   We then look to the language of 
W.S. 34-21-962 to establish the parameters of the protection it offers to 
secured parties who seek to repossess collateral without judicial process. The 
statute provides in pertinent part that "[i]n taking possession a secured party 
may proceed without judicial process if this can be done without breach of the 
peace * * *." Obviously, the key to whether a self-help repossession is 
privileged by the statute is whether the peace has been breached. Colorado 
Central agrees, but argues that the facts demonstrate that there was no breach 
of the peace. Salisbury Livestock would have us define breach of the peace as 
including simple trespass.

[¶17]   W.S. 34-21-962 does not define 
breach of the peace, and there is no definition offered elsewhere in the Wyoming 
statutes that address rights of secured parties.3 In our review of decisions from 
other jurisdictions we find no consistently applied definition, but agree with 
the analysis of the Utah Supreme Court in Cottam v. Heppner, 777 P.2d 468, 472 
(Utah 1989), that, "[c]ourts have struggled in determining when a creditor's 
trespass onto a debtor's property rises to the level of a breach of the peace. 
The two primary factors considered in making this determination are the 
potential for immediate violence and the nature of the premises intruded upon." 
These factors are interrelated in that the potential for violence increases as 
the creditor's trespass comes closer to a dwelling,4 and we will focus our analysis on 
them. It is necessary to evaluate the facts of each case to determine whether a 
breach of the peace has occurred. Walker v. Walthall, 121 Ariz. 121, 588 P.2d 863, 864 (Ct.App. 1978).

[¶18]   We agree with the trial court that 
the Restatement (Second) of Torts § 198 reasonableness requirement provides 
appropriate criteria for evaluating whether a creditor's entry has breached the 
peace. If, as here, there was no confrontation and the timing and manner, 
including notice or lack of notice, are found reasonable, the entry is 
privileged. If the jury should find that the manner or timing of this entry was 
unreasonable because it may have triggered a breach of the peace, it in effect 
finds the entry a breach of the peace and unprivileged. We foresee the 
possibility that a rational jury could reach the conclusion that this entry was 
unreasonable.

[¶19]   As asserted by Salisbury Livestock, 
one specific inquiry is whether, as discussed in Comment d, § 198, a demand for 
the property is required. The comment waives the requirement if such demand 
would be futile, but there must be a determination whether demand would have 
been futile in these circumstances. Young Salisbury had not responded to 
Colorado Central's demands for payment, but Salisbury Livestock, on whose 
property the vehicles were found, was not given an opportunity to deliver the 
pledged vehicles to Colorado Central or its representatives. Notice is not an 
express requirement of the statute, but is a common law element which helps to 
determine the reasonableness of the repossessors' actions. Because we recognize 
that there was no intent to alter the common law of repossession with W.S. 
34-21-962, we believe the Utah Supreme Court's discussion of the § 198 notice 
requirement in Mortensen v. LeFevre, 674 P.2d 134 (1983) is applicable. Although 
that case did not involve a repossession, it did involve the § 198 "Privileges 
Arising Irrespective of Any Transaction Between the Parties," which is the 
situation with repossession from third party property.

[¶20]   Neither of the Cottam factors, nor 
the Restatement reasonableness analysis, requires or suggests that a trespass is 
necessarily a breach of the peace. Property owners may be entirely unaware of a 
trespass, so that there is no potential for immediate violence. Likewise, a 
peaceful, inadvertent trespass on lands remote from any home or improvements is 
unlikely to provoke violence. Therefore, we do not agree with Salisbury 
Livestock's contention that a trespass without more is a breach of the peace. A 
trespass breaches the peace only if certain types of premises are invaded, or 
immediate violence is likely.

[¶21]   However, we cannot agree with 
Colorado Central's assertion that there can be no finding of a breach of the 
peace because there was no confrontation. Confrontation or violence is not 
necessary to finding a breach of the peace. The possibility of immediate 
violence is sufficient. Thompson v. Ford Motor Credit Company, 324 F. Supp. 108, 
115 (D.S.C. 1971); and Wade v. Ford Motor Credit Company, 8 Kan. App. 2d 737, 
668 P.2d 183, 189 (1983). Two elements of this case create questions which we 
believe might lead reasonable jurors to a conclusion at odds with the trial 
court's directed verdict. First, this was an entry onto the premises of a third 
party not privy to the loan agreement. Particularly if there was no knowledge of 
young Salisbury's consent to repossession, this could trigger a breach of the 
peace. The few reported cases involving repossession from third party properties 
suggest that such entry is acceptable. See, e.g., Thompson, and Ford Motor 
Credit Company v. Ditton, 52 Ala. App. 555, 295 So. 2d 408 (1974). However, these 
cases do not address third party residential property. When entry onto third 
party property is coupled with the second unusual element, the location and the 
setting of this repossession, the possibility of a different verdict becomes 
more apparent.

[¶22]   We have not located any cases 
addressing a creditor's entry into the secluded ranchyard of an isolated ranch 
where the vehicles sought are not even visible from a public place. The few 
cases involve urban or suburban driveways, urban parking lots, or business 
premises. See, e.g., Thompson; Ditton; Oaklawn Bank v. Baldwin, 289 Ark. 79, 709 S.W.2d 91 (1986); Ragde v. Peoples Bank, 53 Wn. App. 173, 767 P.2d 949 (1989). 
We believe that the location and setting of this entry to repossess is 
sufficiently distinct, and the privacy expectations of rural residents 
sufficiently different, that a jury should weigh the reasonableness of this 
entry, or whether the peace may have been breached by a real possibility of 
imminent violence, or even by mere entry into these premises: the area next to 
the residence in a secluded ranchyard.

[¶23]   Because these are factual questions 
on which reasonable minds may differ, it was error to grant the motion for a 
directed verdict. The jury must determine whether the peace was breached by this 
creditor's entry because of the premises entered or the real possibility of 
immediate violence given the setting and location of the repossession. The 
reasonableness of the time and manner of the entry must be considered in the 
context of the third party property status and the rural setting. Whether notice 
is necessary is also an appropriate consideration when evaluating the manner of 
repossession. If either time or manner, or both, are found unreasonable then the 
entry is not privileged.

[¶24]   The jury may also consider whether 
Salisbury Livestock had constructive knowledge of young Salisbury's consent to 
repossession because of his ownership interest in the corporation and the 
statements he made concerning his interest on the loan application. If Salisbury 
Livestock is charged with constructive knowledge of the consent, that knowledge 
privileges the entry to repossess against a claim of trespass. Consent of the 
possessor or another authorized to consent is an absolute defense to trespass. 
Belluomo v. Kake TV & Radio, Inc., 3 Kan. App. 2d 461, 596 P.2d 832, 840 
(1979) (quoting Fletcher v. Florida Publishing Company, 319 So. 2d 100, 104 
(Fla.App. 1975)).

[¶25]   We are sensitive to the usefulness 
of self-help remedies for secured parties, and recognize that W.S. 34-21-962 
authorizes secured parties to proceed by action if self-help will not result in 
a breach of the peace. However, we must balance this concern with our 
recognition of society's interest in tranquility, and the right of those not 
involved with the security agreement to be free from unwanted invasions of their 
land, which trespass law generally protects against.5 To achieve an equitable balance 
where there is conflict, the finder of fact must weigh the particular facts and 
determine whether the repossession was conducted reasonably.

[¶26]   We need not, and so do not, reach 
the question of exemplary damages. Any question of damages awaits a prerequisite 
finding that the repossessors committed an unprivileged trespass.

[¶27]   Reversed and remanded for a new 
trial.

 

CARDINE, Chief Justice, 
dissenting.

[¶28]   I would affirm. The court in this 
opinion notes that the few reported cases in point would find this entry of 
directed verdict "acceptable." So would I.

[¶29]   Appellant seeks to recover damage 
because appellees' agent, while driving on appellant's gravel road, broke a 2 X 
4 board. Thereafter, without a breach of the peace, appellees took possession of 
cars that they were entitled to possess. This they were privileged to do 
pursuant to W.S. 34-21-962, which provides:

"In taking possession a 
secured party may proceed without judicial process if this can be done without 
breach of the peace * * *."

Undertaking to 
repossess these cars under the circumstances here existing may have been risky, 
but that is often the case with repossession by exercise of self help. It is not 
uncommon for the secured creditor to take possession of property from the debtor 
or from his presence without judicial process. If taking possession can be 
accomplished without a breach of the peace, it is entirely lawful.

[¶30]   The secured party in this case, 
Colorado Central Credit Union, took possession without a breach of the peace. 
This was lawful, and the judgment should be affirmed.

 

 FOOTNOTES

1 A trespass against real 
property is simply defined as, "consist[ing] of an interference with the 
possessor's interest in excluding others from the land." Restatement (Second) of 
Torts § 163 (1965). In its ruling on the motion for a directed verdict the 
district court said, "I don't think that there's any doubt under any law that 
[the entry to repossess] was a trespass, because there was an intentional 
entering of the land of another."

2 Colorado Central argued 
that § 183 should apply instead of § 198. While both sections are located in 
Chapter 8, "Privileged Entries On Land", they are found in separate topics. 
Section 198 is found under Topic 2, "Privileges Arising Irrespective of Any 
Transaction between the Parties", which applies to these facts. Section 183 is 
included under Topic 1, "Privileges Based on Past Consent-Irrevocable License," 
which does not apply absent a showing of consent.

3 Wyoming's criminal 
breach of the peace statute, W.S. 6-6-102(a) (June 1988 Repl.), reads, "[a] 
person commits breach of the peace if he disturbs the peace of a community or 
its inhabitants by using threatening, abusive or obscene language or violent 
actions with knowledge or probable cause to believe he will disturb the peace." 
Restatement (Second) of Torts § 116 is more useful in arriving at what 
constitutes a civil breach of the peace: "A breach of the peace is a public 
offense done by violence, or one causing or likely to cause an immediate 
disturbance of public order." We note that, although actual violence is not 
required to find a breach of the peace, a disturbance or violence must be 
reasonably likely, and not merely a remote possibility.

4 Decisions elsewhere have 
established a general rule that a creditor's entry into a residence without 
permission is a breach of the peace. J. White & R. Summers, Handbook of the 
Law Under the Uniform Commercial Code 26-6 (2d ed. 1980).

5 See, e.g., W.S. 
6-3-303(a) (June 1988 Repl.):

(a) A person is guilty of 
criminal trespass if he enters or remains on or in the land or premises of 
another person, knowing he is not authorized to do so, or after being notified 
to depart or to not trespass. For purposes of this section, notice is given 
by:

(i) Personal 
communication to the person by the owner or occupant, or his agent, or by a 
peace officer; or

(ii) Posting of signs 
reasonably likely to come to the attention of intruders.