*1 al., BANK et EAST Plaintiffs-Appellants, WALTER KOUBA et JOLIET
al., Defendants-Appellees. Third District No. 3 — 84—0392 19, 1985.
Opinion July filed STOUDER, dissenting. J. *2 Bruggeman, Lenox,
Alan R. & Bruggeman, appel- Condon of New lants. Fabrizio, Garrison, Hanson,
James Ltd., Joliet, R. & Fabrizio appellee Garage. Kiester’s Davis,
Russell Thomas, H. Loverude and Wallace, Pamela E. both of Feehan, Ltd., Joliet, & Kaplan, appellee Baron East Joliet Bank.
PRESIDING HEIPLE JUSTICE the opinion delivered of the court:
This is an appeal an order of summary judgment entered in favor of defendants East Kiester, Joliet Bank and Dave d/b/a Kies- ter’s The Garage. bank held interest a Ford Bronco truck purchased plaintiffs, Walter and Acelia Kouba. Because plaintiffs were in default loan monthly payments, bank contracted Unlimited, with Leroy Campbell, d/b/a Recoveries repossess the Mau, truck. in turn Campbell hired defendants Sullivan Schroll, and who went onto recover the plaintiffs’ property to When confronted by plaintiffs, grabbed defendant Mau allegedly neck, Acelia Kouba her ground threw to the and took truck by force. The repossessors then on fire allegedly started the truck and dropped it off of a tow truck hoist shortly police before arrived. Later, the vehicle was destroyed while at being fire stored Kies- ter’s Garage.
Defendants Sullivan and Schroll have never found for been service and were summons dismissed A plaintiffs. default entered defendants Campbell. Mau and
The appeal: (1) submit the issues whether grant summary judgment to the bank contradicts intent Code; of the Uniform Commercial there an issue of (2) whether fact for the tortious conduct of the re- liability the bank’s vicarious have cause of whether possessors; (3) as the third-party Dave Kiester Kiester’s benefi- contract between the bank and ciaries of the bailment Kiester. summary judgment, argued In its motion for pleadings since the as to its liability issue of fact genuine was no contrac independent repossessors affidavits established and sub agency principles to ignore ask this court tors. 9 of the Uniform under article ject statutory the bank 9—101 et seq.). (Ill. Code Commercial of respondeat the doctrine alternative, argue the plaintiffs repossessors superior applicable of the common law torts is liable agents. repossessors. 1983, ch. 9—par. of the
Section 9—503 U.C.C. fol to take 503) a secured permits can be accom judicial process default without lowing beyond dispute of the It is plished without breach in the peace of the hired the bank caused breach However, ag not provide section 9—503 itself does present in section cause of action. The is found grieved debtor with a relief for granting statutory construed as This includes a article 5. breach part violation of (2d 26—14 Code sec. Summers, Commercial 9—503. & White ed. 1980). is con First, if the collateral are twofold. remedies *3 charge plus the credit service
sumer the debtor recover goods, the cash debt, price. 10% of plus 10% of the amount of principal (Sta Second, deficiency judgment. denied party may the secured 3d v. Christie 111 Ill. ley Employee Credit Union (1982), App. with these remedies applying There are a number of problems present of the collat- terms, after applies Section as to here. There is also a
eral. There has no disposition indepen- where an parties cases applies whether 9—507 committing employee charged than an is with dent contractor rather Illi- There are no of section 9—503. in violation breach on point. nois cases find we plaintiffs’ complaint, count I of the examining
After The plaintiffs of 9—507. applicability need not consider we under 9—507. statutory remedy specifically plead have failed re wrongful remedies for on common law rely must they wrongful due is allege i.e., assault, battery, trespass acts of the repossessors, to the tortious law rather with common dealing are now and conversion. Since we first determine whether we must liability, than statutory of others. for the conduct agency the law of responsible An generally indepen not liable for the acts of employer dent contractors. The test of one is an contrac independent whether tor or is the extent of the to control the employee employer’s manner and in which the is to on. (Gunter method work be carried B berg v. & M Co. Transportation 3d (1975), We agree with the bank’s were repossessors indepen assertion dent contractors.
The record reveals that repossessors were not the bank’s payroll paid car, and were on a per flat-fee basis. The ex- repossessors ercised discretion complete as to how and when the vehicles be repossessed and used own tools and had equipment. control.
The plaintiffs concede that fit within the repossessors commonly accepted description independent an contractor in but sist that they agents are also are liable for principals agents. torts of their A master is liable for the acts servant committed scope within the and a employment, principal is liable for the acts of agent performed an within the scope of the but agency, neither liable for the acts of an independent (Gomien v. contractor. Aluminum, Wear-Ever Inc. (1971), 19.) Therefore, 50 Ill. 2d em an ployer is not responsible acts of an physical independent con tractor who happens also an possess powers agent. broker,
An persons auctioneer and similar attorney, employed a single transaction or for a agents, series of transactions are al though to their physical they activities are contrac independent (Hoffman & Morton Co. v. American tors. Insurance Co. Ill. 97; 2d (Second) e, Restatement sec. Agency comment at Thus, 11 (1958).) even if we agreed with the plaintiffs repos sessors were the it agents, regard is clear that to their activities, physical independent contractors.
There are to the rule which exceptions insulate employer the acts of independent contractor, but none applicable An employer here. could be liable he fails rea to exercise selecting sonable care in a competent contractor or if the employer Aluminum, (Gomien orders or Wear-Ever directs act. injurious Inc. Ill. 19.) However, allege *4 negligent bank was or the tor hiring directed tious acts of. complained
The fail to raise issue as to complaint genuine affidavits or accountability tortious acts affirm the order of repossessors. Accordingly, summary judg- we ment entered in favor of the bank.
268 that defendant complaint, plaintiffs alleged
In II of their count of the truck to take reasonable care negligent failing Kiester was it re- being following it from while was stored protect tampering summary his motion for accompanying In an affidavit possession. that truck plaintiffs’ suddenly exploded Kiester stated judgment, morning Kiester’s June being parked after outside me- opinion as auto professional 1982. Kiester stated fire, of the vehicle after chanic and based on an examination explosives. caused an accelerant explosion Company Plaintiffs filed counteraffidavit from Ford Motor consultant, stated that an automobile had been hot-wired who fire wired. There explode improperly could catch unexpectedly to that the truck had fact been hot wired. nothing indicate the trial summary judgment, In motion for granting Kiester’s standing they had no to sue because court ruled default, no contract out of of the truck and had possession short, plaintiffs. Kiester of care to the duty Kiester. In owed with standing claim to Kiester based On sue appeal, con their as beneficiaries of bailment alleged third-party status not challenge tract and Kiester. The between finding they standing they had to sue because court’s follow, For we in default and out reasons which Therefore, we was error. need finding find the court’s second beneficiary argument. plaintiffs’ third-party address to the extent of plaintiffs’ standing depends upon sue Kiester repossession. default and following in the truck property interest location title. takes no position Article U.C.C. Therefore, pre-Code com 202.) ch. par. 9— gov mortgages chattel and conditional sales mon law pertaining erns the of title this Ill.
1-103. to a Illinois, legal property subject it held that title has been he taken to the creditor after has passes interest Co. Ill. following (Matson City default. Market absolute, since However, the creditor’s title is not regarded sale of the surplus proceeds the debtor retains the Also, Ill. (Greenspahn v. Ehrlich collateral. in the collateral under rights has interests debtor claim to absolute further erode common law creditor’s U.C.C. which title. accounting proceeds surplus to an
A debtor 501(3)(a).) Stat. (Ill. Rev. the collateral. *5 debtor redeem the tender prior also collateral the obligations plus fulfillment of all secured ing creditor’s reasonable expenses. the of the secured
501(3)(d).) While collateral possession the risk of accidental on to the ex party, damage loss the debtor tent of deficiency coverage. (Ill. in insurance a 207(b).)Finally, debtor has insurable interest collateral which is not terminated foreclosure repossession. Brown v. Farm Fire Casualty State & Corp. (1975), 889.
It has suggested been debtor should have against a third who collateral default and to the extent of the debtor’s or insurable inter- Secured, est (69 collateral. Am. Jur. 2d Transactions sec. (1973).) above, As discussed retains re- significant rights debtor sponsibilities with regard collateral after default. We believe rights these and liabilities are sufficient to permit a debtor maintain an action a third party who negligently damages collateral after default and repossession by the party.
Since the collateral here has been totally destroyed, plaintiffs should be permitted pursue claim to recover its market value. This so because the collateral stood as for the De- loan. struction collateral meant that its market not value would applied to the loan balance the plaintiffs accordingly would be ob- ligated if, to that extent. And the collateral had fortuitously, been worth balance, more than the loan were further dam- aged to the extent such surplus.
We note I count of their complaint, addition to alleging a cause of action wrongful repossession, allege also is vicariously negli- liable gence However, of Kiester in caring for the truck. appeal allegations reassert these in opposition to the bank’s successful motion for judgment. Therefore, the summary issue is not properly before this court.
The order of the circuit court of Will the East County granting Joliet Bank’s summary judgment motion for is affirmed. The order granting the motion for summary judgment of Dave and Kies- Kiester ter’s is reversed and Garage the cause remanded. in part;
Affirmed reversed in part; cause remanded. WOMBACHER,J., concurs. STOUDER, dissenting:
JUSTICE I that the motion for majority summary with the agree have and I granted, join in favor of Kiester’s should not I has no lia agree in the of that count. do not reversal acknowledged breaching section 9—503 bility breach of dispute plaintiff There is retaking plaintiff’s during her neck the re dragged Acelia Kouba was from the truck con part or that such an action on relies majority upon agency stituted a breach of to relieve the bank of theory potential liability seemingly prem ise did not specifically plead that because *6 of the Uniform Commercial the Code does section 9—507 Code not that the common law must be resorted to. Section 9— apply is 507 is “if it is that the secured not party pro available established the of this Part provisions [part (Ill. in accordance with ceeding 5].” 1981, clearly ch. relief is availa Injunctive 9— the by Merely as as amount alluded to liquidated majority. ble well the may inappropriate the for in section 9—507 provided because relief the liability of this not affect the of under the circumstances case does a tort Furthermore, pursue the choose to bank. because not change section 9—503 does the bank for breach of the As Code the of the bank. the states relationship the the 103, particular of displaced by provision section “Unless 1— provisions.” Act law shall equity supplement principles Therefore, 1981, 26, a failure to (Ill. plead Stat. par. Rev. 1— displaced by not reinstitute former common law under the Code does laws, i.e., and agency nor it affect common principle Code does 9—507 no plead A failure section which Code. supplement and the relationship liability between bearing upon the majority suggests. bank as one Furthermore, refers to “two remedies” majority is denial a deficiency is section 9—507 and other which to the denial of Nowhere in article 9 there reference judgment. for repossession for a a unlawful deficiency judgment remedy (1) Comment under subsection of sec- else. The Illinois Code anything damages available under section discussing tion 9— 9— states: damages under this sub- imposing of cases
“While bulk failure a secured follow party concerned section have notice of sale 504(3) (particularly concerning requirements 9— for viola- damages cases have debtor), imposed several *** in Margo- of Part of Article 9. requirements of other tion Dist. (1st lin 270 N.E.2d v. Franklin 1971), the court a which denied upheld judgment and awarded debtors party deficiency conversion, having ac ground on the the secured party, time, could insist cepted suddenly late not payments some Ann. warning strict timeliness without debtor.” Comment, Stat., Code at 360 Illinois (Smith-Hurd 1974).) that, view, This comment indicates section contrary majority remedies, i.e., 9—507 and denial number of conversion encompasses of a not out in the stat- deficiency judgment, specifically set ute. White and Summers their treatise on the Commercial length pos- Code discuss at not denial of only deficiency-judgment but sible tort of the liability incurred a secured for a breach peace under section 9—503. recovery liquidated amount no means an exclusive for a breach of the case, in this where my opinion, dispute breach of plain- occurred in the attempted repossession of bank, tiff’s truck plaintiff has its choice of remedies under 9—507. Merely plaintiff may compen- not be effectively sated amount or there has liquidated collateral not does foreclose does it means recovery nor that the bank has no failing comply with 9—503. The case, proper action in this when the collateral has little or no value due to its destruction in the hands the secured is conversion. party, Because the accomplished by lawful means *7 acknowledged by both parties, the collateral was in rightfully never bank, possession of the although the bank exercised control certainly over the truck. no Although cases Illinois where a debtor maintained action for conversion for breach of the un- peace 503, der there is considerable other authority jurisdictions maintaining conversion suit against when force or threat of (See force used to obtain possession. A.B. Lewis Co. v. (Tex. Robinson Civ. 1960), 731; 339 App. S.W.2d Thrasher v. First (Fla. 288; National Bank 288 App. 1974), So. 2d Victor Fairchild Corp. (La. 1942), 566; Motor App. Douglas 8 So. 2d Wat- Motor Co. v. 335, son (1942), 68 Ga. App. Thompson S.E.2d and v. Ford Motor (D.S.C. 1971), Credit Co. F. 108.) In Henderson v. Supp. Security National Bank 72 Cal. 3d 140 Cal. App. Rptr. 388, a California court the agency argument confronted upon majority based decision and found that conversion “[does] authorization, depend upon ratification, or upon knowledge, or or 770, 140 (72 3d Cal. intent, App. or faith of the Bank.” Cal. bad Henderson, 388, 391.) indepen- the Bank had Rptr. employed In repossessor) repossess plaintiff’s contractor licensed (a dent door was plaintiff alleged garage Cadillac. The his lock broken section 9503 automobile violation of during in Henderson of the California Commercial Code. court that a proper found conversion action *** longer depends “the redress a conversion action] [in *** the act showing that the did upon defendant motives, even wrongful generally intentionally; speaking, motives, intention, (72 the want defense.” hence of such 764, 770-71, Therefore, Cal. 3d 140 Cal. this Rptr. not a matter of absolute on the bank rather re- imposing but for the dressing injury imposed depriva- unlawful of his tion property.
These cases are consistent with the law conversion Illinois. wrongful is the deprivation The essence of a conversion action not a Malice is to the owner or entitled person Corp. Associates Discount v. Walker necessary (See element. knowledge 188 N.E.2d and, as the is immaterial peace breached the Henderson, ratify the bank need not authorize or court stated in order to be liable conversion. activities repossessor to the truck af- the bank is liable for my opinion, Section 9—503 wrongfully provides ter it repossessed if the is not accomplished can self-help repossession only truck which Plaintiff had a breached. of section prevented operation held The bank unlawfully. therefore, is, at a minimum for dimuni- not the liable plaintiff, I while it was held. believe wrongfully tion in value recovery theory a reasonable plaintiff stated Code, grant- the trial I would reverse court’s decision favor of judgment in the bank. ing summary