Rand v. Porsche Financial Services – 9/18/2007
Arizona Court of Appeals Division One Holds That A Principal Is Responsible For An Independent Contractor's Breach Of The Peace When Repossessing A Motor Vehicle Under The Self-Help Repossession Statute.
Plaintiff purchased a Porsche on credit, which was repossessed by a repossession company hired by Porsche Financial Services (“PFS”) after the Plaintiff was in default. Following the repossession of their car, the Plaintiffs sued PFS, alleging that the repossession company allegedly breached the peace, committed a trespass, and involved the police to assist with the repossession in a manner that violated the Plaintiff’s civil rights under 42 U.S.C. § 1983. PFS counterclaimed for a deficiency arising out of the Rands breach of the lease agreement with PFS. The trial court granted summary judgment to PFS on all three issues and awarded PFS its attorneys’ fees. The Arizona Appeals Court affirmed the deficiency judgment but reversed the remaining issues.
The Arizona Appeals Court held that summary judgment was improperly granted on the Rands’ § 1983 claim because there was a question of fact as to the conduct of the Glendale police present at the repossession. Although a § 1983 requires state action, state action might exist “where an officer arrives at the scene with the repossessor, giving the impression that law enforcement supported the action and intimidating the property owner from exercising his or her right to resist the repossession.” Once PFS acknowledged that the police “permitted” the repossession company to take control of the Rands’ vehicle, police action arguably constituted state action. Because PFS provided no evidence showing that the police involvement was “unarguably benign,” it was not entitled to summary judgment.
The Arizona Appeals Court likewise found summary judgment on the Rand’s trespass claim improper. Generally, an employer is liable for the negligence of its employees under the doctrine of respondeat superior, but not liable for the negligence of an independent contractor. However, an employer may be held liable when the independent contractor breaches a non-delegable duty. Although the repossession company was an independent contractor, Arizona’s self-help statute, modeled on the U.C.C., imposes a nondelegable duty to avoid breaching the peace. Summary judgment on the trespass claim was therefore improper because PFS could be held liable for the independent contractor’s trespass if any because PFS had a nondelegable duty to repossess its collateral only if it could do so without breaching the peace.
Judge Weisberg authored the opinion; Judges Kessler and Timmer concurred