Osborne v. Minnesota Recovery Bureau, Inc.

In June 2003, Karla and Robert Osborne (plaintiffs) financed the purchase of a pickup truck with a loan from Ford Motor Credit Company (FMCC) (defendant). The loan was secured by a lien on the truck. The Osbornes defaulted on the loan, and FMCC hired an independent contractor, Minnesota Recovery Bureau (MRB) (defendant), to repossess the truck. MRB assigned the repossession to Todd Davis and Drew Stafford (defendants). At 7:00 p.m. on October 19, 2003, Davis and Stafford drove to the Osbornes’ home to repossess the truck. Davis and Stafford spoke to Robert, who told Davis and Stafford to contact the Osbornes’ lawyer. Robert later claimed that he told Davis and Stafford to leave the property, but Davis and Stafford disputed Robert’s claim. Davis and Stafford left the property but returned one hour later. Davis approached the Osbornes’ garage and shined a flashlight into the garage window. Robert saw the flashlight and thought Davis was a burglar, so Robert tackled Davis. Stafford called 911, and law-enforcement officers responded to the Osbornes’ home. Karla became afraid when she saw that one of the officers had drawn a gun. Davis and Stafford ultimately left the truck on the Osbornes’ property, but Davis and MRB representatives subsequently called the Osbornes numerous times to seek release of the truck to MRB. The Osbornes sued FMCC, MRB, Davis, and Stafford in federal court in Minnesota, asserting claims including violations of Minnesota’s statutory Uniform Commercial Code (UCC). Specifically, the Osbornes asserted that under Minnesota Statute § 336.9-609, the state version of UCC § 9-609, secured creditors could utilize self-help repossession upon a debtor’s default only if the repossession could be accomplished without a breach of the peace. The Osbornes claimed that Davis’s and Stafford’s reentry onto the Osbornes’ property was a trespass that constituted a breach of the peace. The Osbornes sought damages for emotional distress. MRB asserted that the UCC claim should be dismissed because § 9-609 applied only to secured parties, not repossession companies. The parties cross-moved for summary judgment. The district court referred the matter to a magistrate judge, who recommended denying both parties’ summary-judgment motions. The magistrate judge found that Chapter 9 of the Minnesota UCC applied to repossession companies operating on behalf of secured parties. However, the magistrate judge also found that issues of material fact existed regarding whether the Osbornes could prove damages or a breach of the peace. MRB objected to the magistrate judge’s recommendation, and the district court considered the objections.