The debtor purchased a vehicle and financed it through a financing agreement with the lender. Fuller v. CIG Fin., LLC, 2022 WL 4071964, 2022 LEXIS 159469, at *2 (N.D. Tex. Sept. 2, 2022). In October 2019, the debtor agreed to pay his monthly payment at the end of the month due to personal circumstances. Id. The debtor received two notices that he must continue making monthly payments in order to remain compliant with the financing agreement. Id. The notices provided that if he failed to make payments, the lender would proceed under the financing agreement as if the debtor had defaulted. Id. He received the first notice in November and made that month’s payment on November 30th. Id. The debtor received the second notice on December 30th. Id. On December 31st, an agent from a repossession company hired by the lender attempted to repossess the vehicle. Id. The debtor objected to the attempted repossession several times over several hours and even physically attempted to stop the repossession. Id. During the attempt, the debtor alleges that the agent’s actions caused the debtor to become injured as a result of the vehicle’s movement. Id. The debtor brought claims under the Fair Debt Collection Practices Act (FDCPA) and related Texas law against the lender. The debtor also claimed negligent hiring, retention, and supervision for willful, wanton behavior, battery, and intentional infliction of emotional distress (“IIED”). The lender moved to dismiss the claims under Fed. R. Civ. P. 12(b)(6) for failure to state a claim for which relief could be granted and alternatively under Rule 12(e) for a more definite statement as to the debtor’s battery claim.
In Fuller v. CIG Fin., LLC, No. 3:22-CV-1289-D, 2023 WL 146251, 2023 U.S. Dist. LEXIS 4045 (N.D. Tex. Jan. 10, 2023) (unpublished opinion), the court granted in part and denied in part the lender’s motion to dismiss and denied the lender’s alternative motion. First, the court found that the debtor plausibly pled FDCPA and related Texas law claims and denied the lender’s motion to dismiss these claims. The FDCPA is violated when a debt collector takes or threatens to take “nonjudicial action to effect dispossession or disablement of property” when there is “no present right to possession of the property claimed as collateral through an enforceable security interest.” 15 U.S.C. § 1692f(6)(A). Whether there is a present right to possession of the property is determined by relevant state law. Under Texas law, the present right to possession exists after a default, and a secured party may take possession without the court's involvement so long as it does not breach the peace. Tex. Bus. & Com. Code Ann. § 9.609. If a debt collector breaches the peace while attempting to repossess property, the collector no longer has a right to repossess under FDCPA. Whether there was a breach of the peace may be determined by whether a confrontation occurred between the debtor and the repossession agent and whether the debtor objected before the agent removed the vehicle. The court found that, accepting the factual allegations as true, because the debtor objected and the agent continued to attempt repossession, the peace was breached, meaning there was no longer a present right to possession by the agent. Therefore, the debtor had a plausible claim that the FDCPA had been violated. Second, the court denied the lender’s motion to dismiss the debtor’s negligent hiring, retention, and supervision claims for “willful, and wonton behavior.” In Texas, a party can be liable for the negligent hiring of an independent contractor. Long v. Assocs. Commercial Corp., 744 S.W.2d 209, 213 (Tex. App.––Texarkana 1987, writ denied). In order to prevail on this claim, Texas law requires that the debtor have suffered “some damages from the foreseeable misconduct of an employee hired pursuant to the [lender]’s negligent practices.” Wansey v. Hole, 379 S.W.3d 246, 247 (Tex. 2012). The court found that the debtor plausibly pled that the lender should have known that the repossession company it hired had a history of “objectionable repossession practices” because a simple inquiry into the company would have revealed such practices due to the several public complaints made. Additionally, the court noted that an employee of the lender was on the phone with either the debtor or an agent for the majority of the time during the attempted repossession, strengthening the lender’s connection with the independent contractor. The court then denied the lender’s motion to dismiss the debtor’s battery claims. In order to prevail on a battery claim, the offending party does not have to intend to injure, but simply intend bodily contact. City of Watauga v. Gordon, 434 S.w.3d 586, 592 (Tex. 2014). Additionally, an employer may be vicariously liable for a battery when the battery is “committed in the accomplishment of a duty entrusted to [an] employee.” G.T. Mgmt. Inc. v. Gonzalez, 106 S.W.3d 880, 884 (Tex. App.––Dallas 2003, no pet.). The court found that the debtor plausibly pled a battery claim by alleging that the repossession agent intended to move the vehicle in a manner that caused contact between it and the debtor’s body. Additionally, the court found that the debtor plausibly pled an agency relationship between the lender and the repossession agent. Next, the court granted the lender’s motion to dismiss the debtor’s IIED claims. The court reasoned that “‘[w]here the gravamen of [a party]’s complaint is really another tort, intentional infliction of emotional distress should not be available.’” Hoffman-La Roche, Inc. v. Zeltwanger, 144 S.W.3d 438, 447 (Tex. 2004). Here, the court found that the debtor failed to allege any additional or separate acts that were not pled for his other claims. Finally, the court denied the lender’s Rule 12(e) motion as to the battery claim, holding that the debtor’s battery claim included adequate detail and was “not so vague that [the lender could not] reasonably be required to frame a responsive pleading.”
By Kristin Meurer: [email protected]
Edited By Ashley Boyce: [email protected]
Edited By Hayden Mariott: [email protected]