Minor v. Chase Auto Finance Corporation

Mose Minor (plaintiff) financed the purchase of a 2003 Toyota Tundry with funds from Chase Auto Finance Corporation (Chase) (defendant). The agreement required Minor to make 66 monthly payments by the fourteenth of every month. Under the agreement, modifications had to be in writing and signed by both parties. Also, Minor agreed that if Chase were to take partial payments or extend Minor’s due date, these actions would not constitute a waiver of Chase’s right to require strict performance of the contract as written going forward. Minor was late for his first payment and various payments thereafter. At one point, right before Chase was about to repossess the vehicle, Chase and Minor agreed to extend the length of the agreement by two months. The agreement regarding the extension made clear that all other provisions of the contract remained in force. In November 2004, Minor petitioned for bankruptcy under Chapter 7. Chase acknowledged that Minor’s past debt was discharged but indicated that if Minor wanted to keep the vehicle, he would need to continue making payments. Minor fell behind in his payments by three months, and Chase repossessed the vehicle. Minor sued Chase in circuit court. Among other things, Minor argued that by Chase repeatedly accepting late payments, Chase had established a pattern of conduct that changed the contract, resulting in a waiver of Chase’s right to strictly enforce the contract by repossessing the vehicle without first notifying Minor that strict compliance with the contract would be required going forward. Chase countered that because of the nonwaiver clause and the clause preventing unwritten modifications, it was not required to notify Minor that it would strictly enforce the contract. The circuit court granted Chase’s motion for a directed verdict. Minor appealed, and the appellate court certified a question to the Arkansas Supreme Court regarding the impact of nonwaiver clauses and clauses preventing unwritten modification of a contract if the creditor had established a pattern of accepting late payments.