Court Opinion

ID: 3710146
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:45:18.317312+00
Date Added: 2024-06-11T15:42:46.345469
License: Public Domain

While I concur in the majority's judgment, I disagree with its disposition of the second and third assignments of error.
The majority construes the contract term "legally repossessed" to include the total sequence of events from the time a creditor regains possession of his security until the security is sold to satisfy or partially satisfy the underlying debt owing the creditor. While the majority construes the term to fit the circumstances of this case, their definition of "repossessed" is supported by neither common usage nor by the Uniform Commercial Code. R.C. 1309.46 provides that a secured party "* * * has on default the right to take possession of the collateral." The editor's analysis of the section states:
"This section on self-help repossession came under almost universal attack in the early 1970's as unconstitutional state action in violation of the due process clause. The section gave the debtor no notice and hearing prior to the repossession. * * *"
R.C. 1309.47 describes the duties of the secured party after he has taken possession of the security and paragraph (C) specifically provides for the disposition of the collateral by public or private proceedings. The editor's analysis of R.C.1309.47 states: "Revised Code 1309.47(C) [UCC 9-504] authorizes the secured party to dispose of repossessed collateral by either public or private sale. * * *" While editor's notes are not authority, they do indicate the common usage of the term "repossession."
In the case of Greer v. Zurich Ins. Co. (Mo. 1969),441 S.W.2d 15, at 27, the Supreme Court of Missouri stated as follows:
"* * * Repossession is commonly understood as the act of resuming the possession of property when the purchaser fails to keep up payments on it. Webster's Third New International Dictionary. As used in the policy, the term does not refer to any technical procedure. * * *"
Paragraph 5 of the official comment under R.C. 1309.47 states:
"Both the Uniform Trust Receipts Act and the Uniform Conditional Sales Act required a waiting period afterrepossession and before sale * * *." (Emphasis added.)
Paragraph 6 of the official comment under R.C. 1309.47 states the following:
"Section 19 of the Uniform Conditional Sales Act required that sale be made not more than thirty days after possession taken by the conditional vendor. The Uniform Trust Receipts Act contained no comparable provision. Here again this Chapter follows the Trust Receipts Act, and no period is set within which the disposition must be made, except in the case of consumer goods * * *."
Finally, in Peoples Acceptance Corp. v. Van Epps (1978),60 Ohio App. 2d 100 [14 O.O.3d 75], the Court of Appeals for the Eighth District discussed the commercial reasonableness of the sale of a repossessed automobile and repeatedly made a clear distinction between the repossession and the sale of the repossessed security. While the Uniform Commercial Code unfortunately does not define "repossession," it is clear that the common usage of the term "repossession" is the act of a secured party taking possession of the security from the debtor.
"Common words appearing in a written instrument will be given their ordinary meaning unless manifest absurdity *Page 111 
results, or unless some other meaning is clearly evidenced from the face or overall contents of the instrument." (Alexander v.Buckeye Pipe Line Co. [1978], 53 Ohio St. 2d 241 [7 O.O.3d 403], paragraph two of the syllabus.)
In the contract of insurance the word "legally" defines the word "repossessed." In my opinion, it is much more reasonable to construe the term "legally repossessed" to mean that the secured party has taken possession of the collateral pursuant to R.C.1309.46. Ford Motor Credit took possession of the truck after Smith had defaulted and the taking of the truck was performed without breach of the peace. The truck was therefore legally repossessed. The trial court erred by concluding that the manner of disposition of the truck after the repossession was a legal issue in this case. Clearly it was not.
The majority's construction of the term "legally repossessed" should not be cited as precedent in a subsequent case because it is supported by no case law or other authority but primarily by the principle that an ambiguous term in an insurance contract must be construed strictly against the insurance company. "* * * [S]uch rules of construction and interpretation possess definite limitations. Thus, where the provisions of an insurance policy are clear and unambiguous courts may not indulge themselves in enlarging the contract by implication in order to embrace an object distinct from that contemplated by the parties, * * *."Gomolka v. State Auto Mut. Ins. Co. (1982), 70 Ohio St. 2d 166,168 [24 O.O.3d 274]. There is nothing ambiguous about the term "repossessed," and it is a misconstruction of the word "legally" to conclude that it somehow expands the common definition of "repossessed" to include the disposition of the collateral by the secured party.
The majority concludes that its construction of the term is required by the fact that the insured's insurable interest would not be extinguished until the collateral is disposed of and the sale proceeds applied to the debt. However, there was unrefuted testimony by a representative of Acceleration that, if a debtor, and specifically the plaintiff herein, was to resume payments on his loan, the liability insurance would be reinstated. Said representative testified from his personal knowledge that that was the company's policy and that it had been done on other contracts. That evidence obviates the need for us to specially construe a common term in this case.
The majority's construction of the term "legally repossessed" places the insurance company completely at the mercy of the dealer or the debtor with respect to the disposition of the property. The truck, in this case, sat on the dealer's lot for several months after the dealer took possession. There is no contractual, much less equitable, reason for requiring the insurance company to continue the coverage of the vehicle during that period of time. Acceleration's policy, albeit not contractual duty, of reinstating the insurance coverage if the buyer resumes his payments on the installment contract provides a fair and consistent solution to any inequitable possibility.
While the trial court's decision reflects an understandable empathy to plaintiff, this is a case involving the construction of a contract, not a suit for equitable relief. Plaintiff paid a premium for insurance protection. His disability did not cause him to be in default on the contract with Ford Motor Credit. His payment history can best be described as "late." He paid neither of the monthly installments for the two months preceding his disability. He received nothing less than that to which he was entitled under his insurance contract with Acceleration. *Page 112