Customer Inside Vehicle During a Repossession is a “Breach of Peace”

In Shue v. JMAC Distrib., LLC, a 2024 Massachusetts District Court lawsuit, a breach of peace occurred during a vehicle repossession when the repossessing agent attempted to tow the vehicle while the customer was physically inside. This lawsuit underscores the legal boundaries surrounding repossession practices and the significant role of maintaining public peace, particularly when repossessions are carried out through “self-help” methods. The court ruled that attempting to repossess a vehicle with the owner still inside constitutes a breach of peace, violating both state law and federal protections under the Fair Debt Collection Practices Act (FDCPA).

Background

The customer had financed a 2013 BMW through a loan from Bridgecrest Acceptance Corporation. After the customer defaulted on their loan payments, Bridgecrest retained Loss Prevention Services (LPS) to repossess the vehicle. LPS, in turn, subcontracted the repossession to JMAC Distribution, a third-party agent who actually recovered the vehicle.

When JMAC attempted to repossess the BMW, the customer was inside the vehicle. Despite the customer’s objections, JMAC proceeded to hook the BMW to a tow truck, physically lifting the car with the customer still seated inside. The customer refused to exit the vehicle, leading JMAC to call the local police for assistance. The police arrived on the scene and ordered the customer to leave the vehicle or face arrest. Ultimately, the customer exited the car under threat of arrest, and JMAC completed the repossession.

Following the repossession, the customer filed a lawsuit against JMAC Distribution, alleging that the attempted repossession constituted a breach of peace, in violation of Massachusetts law and the FDCPA.

Legal Issues: Breach of Peace in Repossession

The central legal issue in this case was whether JMAC’s attempt to repossess the vehicle while the customer was still inside constituted a breach of peace. Under both state and federal law, creditors and their agents are permitted to repossess vehicles without a prior court hearing, provided the repossession does not disturb the public order or involve any form of coercion or violence. Most finance and lease agreements also contain a clause titled and known as a “self-help” repossession.

However, the law places limits on a “self-help repossession,” particularly under Massachusetts General Laws, ch. 106, § 9-609, and the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692f(6)(A). Both statutes prohibit any repossession that results in a breach of peace, which can include physical altercations, threats of violence, or actions that provoke law enforcement intervention.

1. Massachusetts General Laws ch. 106, § 9-609: This statute allows secured creditors to repossess collateral, such as a vehicle, without a court order but explicitly states that repossession must be done without breaching the peace.
2. FDCPA, 15 U.S.C. § 1692f(6)(A): The FDCPA prohibits unfair practices during the collection of a debt, including any repossession that involves a breach of peace or the use of force. Repossession agents cannot use law enforcement or threats of arrest to coerce compliance from the debtor.

In Shue v. JMAC Distrib., the customer argued that attempting to repossess the vehicle while they were inside, and then calling the police to assist in the repossession, constituted a breach of peace. The court agreed, finding that JMAC’s actions violated both state and federal law.

Court’s Ruling: Attempting Repossession with Occupant Inside Violates Both Federal and State Law

The court ruled in favor of the customer, determining that JMAC Distribution’s actions amounted to a breach of peace. Specifically, the court held that attempting to tow the BMW while the customer was physically inside the vehicle violated the provisions of Massachusetts General Laws ch. 106, § 9-609, which requires repossession to occur without disturbing public order.

The court emphasized that repossessing a vehicle with the owner still inside is inherently coercive and can lead to confrontations that escalate into a breach of peace. Even though JMAC called the police to assist with the repossession, the court found that involving law enforcement to compel the customer to exit the vehicle constituted an independent breach of peace. The court noted that law enforcement should not be used as a tool to aid in private repossession efforts, especially when the customer is still in physical possession of the vehicle.

“A secured creditor can only repossess collateral without a prior hearing if the repossession can be accomplished without a breach of the peace. Attempting to repossess a vehicle while the owner is physically inside can constitute a breach of the peace.ˮ

This ruling highlights the critical distinction between lawful repossession and actions that cross the line into unlawful practices. By forcing the customer out of the vehicle and involving the police, JMAC created a scenario that violated both the customer’s rights and the peace that should have been maintained during the repossession process.

The Role of Law Enforcement in Repossessions

One key aspect of this case was JMAC Distribution’s decision to call the police to assist in the repossession. While law enforcement can sometimes be involved in repossession situations to maintain public order, they should not be used to facilitate or expedite the repossession itself. Involving the police to compel a customer to leave a vehicle or to enforce the repossession is problematic, as it shifts the situation from a private civil matter into a potential law enforcement action.

The court underscored that the involvement of the police in a self-help repossession may independently constitute a breach of peace, especially when law enforcement is used to intimidate or coerce the debtor into compliance. In this case, the police threatened the customer with arrest if they did not exit the vehicle, further escalating the situation and contributing to the breach of peace.

Implications for Repossession Agents and Creditors

This case has significant implications for repossession agents and creditors who use third-party services to recover collateral. First, it reinforces the legal limitations on self-help repossession and emphasizes the importance of avoiding confrontations that could result in breaches of peace. Repossession agents must be mindful of the customer’s physical presence in the vehicle and should avoid any actions that could provoke altercations or require police intervention.

Second, the ruling serves as a reminder that creditors and their agents must comply with both state laws and federal protections, such as those outlined in the FDCPA. Attempting to repossess a vehicle with the owner inside or using law enforcement to force the customer out of the vehicle may expose the creditor and the repossession agent to legal liability, including claims for damages related to the breach of peace.

Conclusion

The Shue v. JMAC Distrib., LLC lawsuit illustrates an important legal principle regarding the boundaries of self-help repossession and the protections afforded to consumers under both federal and state law. Attempting to repossess a vehicle while the owner is physically inside can constitute a breach of peace, which may violate state law as well as the FDCPA. Additionally, involving law enforcement in repossession efforts may independently lead to a breach of peace.

For repossession agents and creditors, this case emphasizes the need to conduct repossessions carefully and in compliance with all applicable legal requirements. Any action that provokes a physical confrontation or law enforcement intervention can lead to legal challenges and claims for damages. For consumers, the ruling provides clarity on their rights during repossession attempts and reinforces the protections against unlawful repossession practices.