Auto Credit of Nashville v. Wimmer

Auto Credit of Nashville (Auto Credit) (plaintiff) repossessed the vehicle of Melissa Wimmer (defendant) vehicle when she failed to make the payments. On January 18, 2002, Auto Credit mailed Wimmer a notice that the vehicle was going to be resold. The notice was mailed certified with return receipt requested. The post office tried to deliver the letter to Wimmer on three separate occasions. After the third failed attempt, the post office sent the letter back to Auto Credit. However, Auto Credit had no idea that Wimmer did not receive the notice and sold the vehicle at an auction on February 7, five days before the letter was returned. The proceeds from the sale at auction were not enough to cover Wimmer’s debt, so Auto Credit sued Wimmer for the amount of the deficiency. A lower court ruled in favor of Wimmer, and Auto Credit appealed to a circuit court. Wimmer filed a counterclaim seeking statutory damages for Auto Credit’s alleged failure to comply with a Tennessee statute that required that a creditor notify a debtor before selling collateral. The circuit court ruled against Wimmer, granting Auto Credit a deficiency judgment. The circuit court found that after receiving no response from Wimmer and mailing a letter certified with return receipt requested, Auto Credit was permitted to sell the car after 20 days had passed. The circuit court also denied Wimmer’s counterclaim for statutory damages. Wimmer moved for a new trial, which also was denied. Wimmer appealed and asked the appellate court to assess only the lower court’s dismissal of her counterclaim. The appellate court ruled in Wimmer’s favor and granted statutory damages that were reduced by the amount of Auto Credit’s deficiency judgment. Auto Credit appealed.