Court Opinion

ID: 9664506
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:20:00.755793+00
Date Added: 2024-06-11T18:15:06.742761
License: Public Domain

HECHT, Justice,
joined by GONZALEZ and CORNYN, Justices, dissenting.
I respectfully dissent. Section 9.503 of the Uniform Commercial Code authorizes a secured creditor to take possession of collateral without judicial process “if this can be done without breach of the peace”. Tex. Bus. & Com.Code § 9.503. The statute does not state that this duty to conduct nonjudicial repossessions peaceably is nondelega-ble. It could; it could add something like: “This duty cannot be delegated to any person acting on behalf of the creditor.” And it might be good policy if it did; the Legislature is certainly empowered to determine that secured creditors should be liable for breaches of the peace caused by independent contractors hired to repossess collateral. But the Legislature has not done so; this Court has.
As justification for its decision, the Court relies upon section 424 of the Restatement (Second) of Torts (1965), which states that a statutory duty “to provide specified safeguards or precautions for the safety of others” is nondelegable. To bring section 9.503 within this rule, the Court must hold that the specified safeguard or precaution is not to breach the peace. This is at best an odd fit. Not to breach the peace may be a general guideline, but it is hardly a specified precaution. I find it very implausible that the Legislature ever had any notion, let alone intent, that by allowing secured creditors the remedy of peaceable nonjudicial repossession it was imposing upon them a nondelegable duty. This view is bolstered by the fact that the cases from other states upon which the Court relies were all decided within the past five years. The Uniform Commercial Code was adopted in each of those states at least 25 *159years ago; yet more than two decades passed before any court in the nation was asked to hold that section 9.503 imposed a nondelegable duty on secured creditors. This is a new judicial idea; it is not simply enforcement of legislative policy.
The consequences of the Court’s decision are unclear. That is always the risk of judicial legislation. Courts cannot conduct hearings and investigate the need for new policies and their likely effects. Nevertheless, it appears that after today, secured creditors may use their own employees more to repossess collateral and attempt to exercise greater control over them. But when collateral has moved out of a creditor’s vicinity, this alternative will not always be viable. Lenders may thus be expected to be more reluctant to make loans secured by distant or readily movable collateral. The Court itself recognizes that the burden of the liability it imposes may sometimes be heavy, and it proposes a solution: “the creditor may seek relief by turning to the courts.” At 154. I would have thought that our courts had plenty to do without handling more repossession cases, and that the expense and delay of litigation was already a heavy enough burden without encouraging more. But I suspect the Court is right: creditors will be more inclined after today to choose the more expensive but less risky course of judicial foreclosure as the means of collecting their debts, rather than the much less expensive but much more dangerous course of nonjudicial foreclosure. Even still, there will be situations in which the creditor will quite innocently incur substantial liability for the actions of others over which it cannot exercise control. All these expenses must be added to the cost of credit, thereby charging all consumers more for loans just so debtors in default will have an additional cause of action against creditors who seek to be repaid. I doubt whether these costs — more cases for the courts, more litigation expense for creditors, and a dramatic increase in liability that is virtually unavoidable in at least some circumstances— are worth the change in policy the Court makes today.
I would hold that section 9.503 does not create a nondelegable duty for secured creditors. This does not leave a debtor without a remedy when a repossession of collateral has been accompanied by a breach of the peace. Such a debtor has a cause of action against the person causing the breach of the peace and any others who are vicariously liable for the offensive conduct. If those other persons are agents or independent contractors for whose conduct the creditor is not liable, a debtor may nevertheless have a cause of action against the creditor for negligent hiring. Debtors are thereby protected, and creditors’ liability is commensurate with the level of their responsibility for any breaches of the peace.
The plaintiff in this case also argues that nonjudicial repossession of collateral is an inherently dangerous activity. Among the things which have been held not to be inherently dangerous activities are: construction work, Agricultural Warehouse, Inc. v. Uvalle, 759 S.W.2d 691, 695-96 (Tex.App.—Dallas 1988), writ denied, 779 S.W.2d 68 (Tex.1989) (per curiam); protection of property, Gessell v. Traweek, 628 S.W.2d 479, 482 (Tex.App.—Texarkana 1982, writ ref’d n.r.e.); use of a forklift or winch line to load oil drilling equipment onto a truck, Gray v. Baker & Taylor Drilling Co., 602 S.W.2d 64, 67 (Tex.Civ.App.—Amarillo 1980, writ ref’d n.r.e.); use of a plumber’s torch, Goolsby v. Kenney, 545 S.W.2d 591, 595 (Tex.Civ.App.—Tyler 1976, writ ref’d n.r.e.); aerial spraying per se, Sun Pipe Line Co. v. Kirkpatrick, 514 S.W.2d 789, 792-93 (Tex.Civ.App.—Beaumont 1974, writ ref’d n.r.e.); use of inflammable paint remover, Olson v. B.W. Merchandise, Inc., 388 S.W.2d 737, 740 (Tex.Civ.App.—Austin 1965, no writ); use of a welding torch, Brownsville Nav. Dist. v. Valley Ice & Fuel Co., 313 S.W.2d 104, 106 (Tex.Civ.App.—San Antonio 1958, no writ); electrical work, Texas Elec. Serv. Co. v. Holt, 249 S.W.2d 662, 667 (Tex.Civ.App.—Fort Worth 1952, writ ref’d n.r.e.); blasting per se, Seismic Explorations, Inc. v. Dobray, 169 S.W.2d 739, 742 (Tex.Civ.App.—Galveston 1943, writ ref’d w.o.m.); and operation of an oil refinery, Hall v. Amoco *160Oil Co., 617 F.Supp. 111, 112 (S.D.Tex.1984). If these activities are not inherently dangerous, neither is nonjudicial repossession.
I join generally in the reasoning in Parts III and IV of Justice COOK’s dissenting opinion. I would reverse the judgment of the court of appeals and affirm the trial court’s summary judgment for the defendant.