Terrence A. Lee v. ECCS Auto Sales, LLC

Judgment rendered April 5, 2022.
Application for rehearing may be filed
within the delay allowed by Art. 2166,
La. C.C.P.

No. 54,371-CA

COURT OF APPEAL
SECOND CIRCUIT
STATE OF LOUISIANA

*****

TERRENCE A. LEE Plaintiff-Appellant

versus

ECCS AUTO SALES, LLC Defendant-Appellee

*****

Appealed from the
Ruston City Court for the
Parish of Lincoln, Louisiana
Trial Court No. 53222

Honorable Danny W. Tatum, Judge

*****

ARTHUR GILMORE, JR. Counsel for Appellant

RICKY LANE CANDLER Counsel for Appellee

*****

Before STONE, COX, and O’CALLAGHAN (Pro Tempore), JJ.

STONE, J.

Terrence A. Lee, the plaintiff-appellant in this case, is the

purchaser/lessee of a motor vehicle under a rental-purchase agreement. The

defendant, ECCS Auto Sales, LLC, is the seller/lessor of that vehicle, who,

upon the plaintiff’s failure to make monthly payments as agreed in the

written contract, repossessed the vehicle with the consent of the plaintiff’s

wife. The plaintiff filed suit for damages in Ruston City Court, and after a

bench trial, his claims were dismissed with prejudice. The plaintiff now

appeals. For the reasons stated herein, we affirm.

FACTS AND PROCEDURAL HISTORY

The plaintiff was married to Cynthia Lee before he purchased/rented

the vehicle through the time of trial. The parties entered the rental-purchase

agreement for the vehicle on December 29, 2017. Cynthia Lee accompanied

the plaintiff to the dealership for this transaction. In the written rental-

purchase agreement, the plaintiff agreed to make monthly installment/rental

payments of $450 for 12 months, in addition to making a $10,000 down

payment.1 The agreement contains specific provisions relating to the

defendant’s rights upon the plaintiff’s default.2 On the front of the contract,

the following provision appears:

9. CLAIM FOR RECOVERY (“REPOSSESSION”):
You the Renter(s) understand that if all payments due are
not in our office to bring the account current and the
property is not back in our lot with the keys included
within ten days (10) after certified mail receipt to your last
known address, we will report the Property stolen as
allowed under applicable Louisiana laws including R.S.
14:220 and R.S. 32:793. Also see paragraph 12, under
Terms of Agreement on the back of this agreement.
1
The plaintiff testified that he has an income of approximately $6,300 per month.
2
The numbering of the paragraphs of the contract starts over at “1.” on the back
of the contract.

…
On the back of the contract, the following provisions appear:

4. OUR TERMINATION RIGHT: We may terminate
this Agreement if you default in making the payment by
the due date set forth above or if you breach any other
material term of this Agreement. If termination occurs, we
shall be entitled to all payments and other charges due up
to the date of termination as well as the reasonable
expenses of recovery of the Property if you fail to return
the Property immediately. In the event that this agreement
is terminated, Renter(s) is obligated to return the Property
in its present condition, fair wear and tear excepted.

12. OWNER’S RIGHT TO TAKE POSSESSION: The
Owner and its agents, upon termination of the agreement
are authorized to recover the Property. The Owner and its
agents are released and discharged any claims or causes of
action arising due to the recovery of the Property, and
Renter(s) agrees further to indemnify Owner and its agents
and hold them harmless and free from all costs, expenses,
and damages, including reasonable attorney’s fees, arising
directly or indirectly from or in any way related to the
recovery of the Property.

Additionally, La. R.S. 32:793(B)(4), in effect, engrafts specified

provisions onto all rental purchase agreements, including:

[a] provision that when a rental consumer is in default on
his rental purchase agreement, the rental dealer will mail a
notice of default to the rental consumer, provided there is
proof of mailing giving the consumer five days to bring
the account current.

La. R.S. 32:793(B)(4)(o).

The plaintiff and defendant also executed a separate document at the

closing of the rental purchase agreement, entitled “REPOSSESSION

AGREEMENT.” It describes the vehicle by year, make, model, color, and

vehicle identification number. Therein, the plaintiff agreed:

YOU ARE AUTHORIZED BY ME AND HAVE THE
RIGHT TO TAKE SAID AUTOMOBILE BACK FROM
ME WITHOUT THE NECESSITY OF COURT ORDER
OR ANY JUDICIAL PROCESS. I FURTHER AGREE
THAT IF IT BECOMES NECESSARY FOR YOU TO
TAKE SAID AUTOMOBILE BACK, YOU ARE
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PERMITTED TO DO SO AT ANY TIME OF THE DAY
OR NIGHT [AND] MAY ENTER AND REMOVE SAID
AUTOMOBILE FROM MY PROPERTY OR ANY
OTHER PROPERTY WHERE THE AUTOMOBILE IS
LOCATED.
…
I AGREE THAT I WILL NOT KEEP ANY PERSONAL
PROPERTY OF ANY SIGNIFICANT VALUE IN SAID
AUTOMOBILE DURING THE TERM OF THIS LOAN,
BUT IN THE EVENT THAT I DO, I ASSUME ANY
AND ALL RESPONSIBILITY FOR ANY PERSONAL
PROPERTY LEFT IN THE AUTOMOBILE BY ME OR
ANY OTHER PERSONS IN THE EVENT THAT THE
PROPERTY SHOULD BECOME LOST OR MISSING
FOR ANY REASON FROM SAID AUTOMOBILE
AFTER IT HAS BEEN REPOSSESSED AND STORED
IN A REASONABLY SAFE PLACE.
I AGREE THAT YOU ARE NOT REQUIRED TO GIVE
ME ANY NOTICE BEFORE YOU TAKE BACK SAID
AUTOMOBILE, AND THAT MY FAILURE TO MAKE
ANY PAYMENT ON TIME ACCORDING TO MY
LOAN CONTRACT, WILL BE MY NOTICE THAT
YOU HAVE THE RIGHT TO REPOSSESS THE
AUTOMOBILE.
I UNDERSTAND THAT I HAVE THE RIGHT TO
HAVE THIS AGREEMENT EXAMINED BY MY
ATTORNEY, IF I DESIRE, BEFORE I SIGN IT.

The plaintiff admitted that he and Cynthia Lee do not have a “prenup”

(separate property agreement). He and his wife have a community property

regime by operation of Louisiana law. The plaintiff used the truck in his

handyman business, a community enterprise.

The defendant’s manager, Courtney Johnson, mailed two letters

notifying the plaintiff of his default on the payments. The first letter, dated

September 10, 2018, stated:

Mr. Terrence Lee,

Hello[,] Mr. Lee hope all is well. I am contacting you
about your past due account on your 2008 Chevrolet
Silverado. The account is a few months behind please
contact the dealership at your earliest convenience to
correct this matter.

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The second letter, dated February 6, 2019, stated:

Mr. Terrence Lee,

Mr. Lee once again I am contacting you about your past
due account on your 2008 Chevrolet Silverado. Your
account is seriously behind and needs immediate attention
please contact the dealership to bring your account current
or return the vehicle.

The defendant also attempted to call the plaintiff at the telephone

number that the plaintiff had provided multiple times over the five-month

period between the letters. These efforts were unsuccessful.

The repossession took place in April of 2019, after a representative of

the defendant serendipitously met Cynthia Lee (the plaintiff’s wife) at the

dollar store and she consented to the repossession and gave the location of

the vehicle. However, at the time of the repossession, the plaintiff was

incarcerated for battering said wife3 and therefore was not present to object

to the repossession. The defendant allowed the plaintiff’s family to remove

any and all of the plaintiff’s tools and other personal property in the vehicle.

However, at the time of trial, some of the tools remained in defendant’s

possession waiting to be claimed by the plaintiff.

The plaintiff sued for damages under the Louisiana Unfair Trade

Practices Act (“LUTPA”), alleging that the repossession was wrongful

because: (1) it was not preceded by a certified letter giving him notice of

default, as he says was stipulated in the contract; (2) his wife lacked

authority to give permission for the repossession because she was

“estranged” and her name was not on the title; and (3) the plaintiff’s tools

were left behind in the truck and are now lost to the plaintiff. After a bench

3
Originally, the plaintiff received probation and suspended sentence, but he was
incarcerated for a probation violation.
4

trial in the Ruston City Court, the trial judge rendered a judgment in favor of

the defendant and against the plaintiff dismissing the plaintiff’s claims at his

cost.

The trial court issued written reasons for judgment. Therein, the trial

court explicitly found that the plaintiff’s testimony was not credible.

Contrarily, the court found that the testimony of Courtney Johnson, manager

of ECCS Auto Sales, was credible. Indeed, the plaintiff contradicted himself

in his trial testimony regarding his payments on the truck. The trial court

specifically found truthful Courtney Johnson’s testimony authenticating and

describing the circumstances of the two letters notifying the plaintiff of his

default on the rental-purchase agreement. (These letters were introduced into

evidence as exhibit D-3 and exhibit D-4).

The plaintiff now appeals, urging the following assignments of error:

(1) plaintiff’s spouse had no authority to consent to repossession; (2) the trial

court erred in finding that defendant did not commit a “breach of the peace”

or violation of La. R.S. 32:793; (3) the trial court erred in finding that the

defendant did not violate LUTPA; and (4) the trial court erred in finding the

plaintiff was not entitled to damages for lost tools, earnings, and attorney

fees.

DISCUSSION

Spousal authority

The plaintiff asserts that the trial court erred in holding that the

plaintiff’s wife had authority to consent to the repossession. The plaintiff

reasons that the vehicle was purchased/rented and titled in his name (as

renter) alone, and that the defendant admitted that “ownership follows title.”

Additionally, the plaintiff argues that, because a spouse’s authority regarding
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a community motor vehicle is not specifically set forth in La. R.S. 32:793

(pertaining to rental-purchase agreements for motor vehicles), that authority

does not exist.

In finding the wife’s consent sufficient to authorize the repossession,

the trial court was applying the general rule of La. C.C. art. 2346. That

article provides that “[e]ach spouse acting alone may manage, control, or

dispose of community property unless otherwise provided by law.” Id. There

are only two ways that the plaintiff could avoid application of the general

rule of La. C.C. art. 2346: (1) proving that the repossessed truck was not

community property; and/or (2) demonstrating the existence of applicable

law providing otherwise.

Property of married persons is either community or separate.4 La. C.C.

art. 2335. All property not classified by law as separate property is

community property. La. C.C. art. 2338. Furthermore, things in possession

of a spouse during the existence of a community property regime are

presumed to be community, but either spouse may prove that they are

separate property. La. C.C. art. 2340. Further yet, La. C.C. art. 2338

provides that community property specifically includes: (1) property

acquired during the existence of the legal regime through the effort, skill, or

industry of either spouse; (2) property acquired with community things or

with community and separate things, unless classified as separate property

under La. C.C. art. 2341.

Separate property is comprised of only the following:

[1] Property acquired by a spouse prior to the
establishment of a community property regime; [2]
property acquired by a spouse with separate things or with

4
That is, except as provided in La. C.C. art. 2341.1.
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separate and community things when the value of the
community things is inconsequential in comparison with
the value of the separate things used; [3] property acquired
by a spouse by inheritance or donation to him
individually; [4] damages awarded to a spouse in an action
for breach of contract against the other spouse or for the
loss sustained as a result of fraud or bad faith in the
management of community property by the other spouse;
[5] damages or other indemnity awarded to a spouse in
connection with the management of his separate property;
and [6] things acquired by a spouse as a result of a
voluntary partition of the community during the existence
of a community property regime.

La. C.C. art. 2341.

The plaintiff admits that the truck was acquired and was in his

possession during his marriage to Cynthia Lee. Therefore, the truck is

presumed to be community property, and the plaintiff has the burden of

disproving that presumption. La. C.C. art. 2340. To that end, the plaintiff

suggests that, because the vehicle was titled in his name alone (as renter), it

was his separate property. This argument fails. “Registration of a motor

vehicle under the Vehicle Certificate of Title Law… is not conclusive… of

ownership.” Hackworth v. Barham, 210 So. 2d 107 (La. App. 2 Cir. 1968).

“The registration of a sales of motor vehicle under the [Vehicle Certificate

of Title Law] does not bear any essential relation to contracts of sale of [or

other transfer of an interest in] motor vehicles.” Whitten v. Travelers Ins.

Co., 141 So. 2d 40 (La. App. 2 Cir. 1962). In other words, it is the sale,

donation, or other transaction which confers the interest in the vehicle on the

transferee or transferees, not the registry of title. The plaintiff has failed to

satisfy his burden of disproving the presumption of community. The truck

being titled in his name alone does not constitute adequate proof that the

truck falls into any of the six enumerated categories of separate property.

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The plaintiff’s argument that La. R.S. 32:793 constitutes an exception

to the general rule of La. C.C. art. 2346 is also erroneous. The former does

not state or imply that a spouse has no authority to consent to repossession

of a community vehicle obtained pursuant to a rental-purchase agreement.

Rather, La. R.S. 32:793 simply does not address the issue.

Therefore, the plaintiff’s wife’s consent validated the repossession,

and it makes no difference if the defendant did not satisfy the prerequisites

for other means of validating the repossession. For this reason alone, the

plaintiff’s claims in this case are without merit, and the trial court judgment

must be affirmed. Nonetheless, we address each of the plaintiff’s remaining

arguments in turn.

Written notice of default

The plaintiff argues that the repossession was invalid because written

notice was sent to him by regular mail, i.e., not by certified mail. In support,

he cites Paragraph 9 on the front of the rental-purchase contract. It states

that, if the account is in default, the owner/lessor may report the vehicle as

stolen if neither the default is cured nor the vehicle returned within 10 days

after receipt of certified mail notifying the lessee of default at his last known

address. Whether or not the defendant reported the vehicle as stolen is not at

issue in this case, and has nothing to do with the validity or invalidity of the

repossession. This argument is unmeritorious.

We also point out that, in sending written notice of default to the

defendant’s last known address by regular mail and waiting at least five days

thereafter before repossessing the vehicle, the defendant complied with La.

R.S. 32:793(B)(4)(o).

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Breach of the peace, La. R.S. 32:793

The plaintiff asserts that the trial court erred “in finding that defendant

did not commit a breach of the peace in repossessing the vehicle and did not

violate La. R.S. 32:793.” The plaintiff offers no factual particulars in

support of these assertions.

La. R.S. 32:793(C)(2), in relevant part, states:

A rental purchase agreement may not contain a provision:
…
(2) Authorizing a rental dealer or an agent of the rental
dealer to commit a breach of the peace in him the
repossession of rental property or to take repossession of
the rental property in any manner other than what is
permitted in R.S. 14:220.

La. R.S. 14:103, in relevant part, enumerates the following acts as

constituting a breach or disturbance of the peace:

(1) Engaging in a fistic encounter; or
(2) Addressing any offensive, derisive, or annoying words
to any other person who is lawfully in any street, or other
public place; or call him by any offensive or derisive
name, or make any noise or exclamation in his presence
and hearing with the intent to deride, offend, or annoy
him, or to prevent him from pursuing his lawful business,
occupation, or duty; or
(3) Appearing in an intoxicated condition; or
(4) Engaging in any act in a violent and tumultuous
manner by any three or more persons; or
(5) Holding of an unlawful assembly; or
(6) Interruption of any lawful assembly of people;

In pertinent part, La. R.S. 14:220 states:

C. It shall be a complete defense to any civil action arising
out of or involving the arrest or detention of any person
renting or leasing a motor vehicle that any representation
made by him in obtaining or retaining possession of the
vehicle is contrary to the fact.

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D. It shall be a complete defense to any civil action arising
out of or involving the arrest or detention of any person,
upon whom such demand was personally made or
personally served, that he failed to return the vehicle to the
place specified in the rental agreement within such
seventy-two hour period.

La. R.S. 32:793, as quoted above, prohibits the rental purchase agreement

from purporting to authorize the seller/lessor to commit a breach of the

peace in repossessing the vehicle, unless that breach of the peace as

described in La. R.S. 14:220(C) or (D).

Assuming arguendo that La. R.S. 32:793(C)(2) invalidates a

repossession obtained by breach of the peace, it still would not do so in this

case. That is because, to say the least, the trial court was not manifestly

erroneous in finding that there was no breach of the peace. The plaintiff does

not even allege any fact that militates in favor of finding that the defendant

committed breach of the peace in repossessing the vehicle. This argument is

unmeritorious.

Notice pursuant to La. R.S. 6:966

The plaintiff also cites La. R.S. 6:966 as imposing certain notice

requirements on repossession pursuant to rental purchase agreements. Title 6

of the Louisiana revised statutes addresses itself to “Banks and Banking,”

and La. R.S. 6:966 is part of chapter 10-a; this chapter is known as the

Additional Default Remedies Act (“ADRA”). La. R.S. 6:965(B) delineates

the scope of the ADRA, as follows:

This Chapter provides additional remedies on default by
the debtor under secured transaction under Chapter 9 of
the Louisiana Commercial Laws, R.S. 10:9-101 et. seq.,
R.S. 9:5351 et. seq., and R.S. 32:701 et seq., as applicable,
entitling the secured party to obtain possession and
dispose of the collateral as provided herein. These
remedies shall be in addition to all other remedies

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applicable to nonpossessory security interest affecting
collateral in which security interest or chattel mortgage, as
applicable, has been granted, which shall remain available
and in full force and effect in their entirety. (Emphasis
added).

La. R.S. 6:695 makes clear that the ADRA is an additional, non-

exclusive remedy. Thus, the wife’s valid consent to the repossession

supersedes any noncompliance with the ADRA. This argument is without

merit.

LUTPA: Loss of tools, earnings; Attorney fees

“Unfair methods of competition and unfair or deceptive acts or

practices in the conduct of any trade or commerce are hereby declared

unlawful.” La. R.S. 51:1405. LUTPA creates a private cause of action as

follows:

Any person who suffers any ascertainable loss of money
or movable property, corporeal or incorporeal, as a result
of the use or employment by another person of an unfair or
deceptive method, act, or practice declared unlawful by
R.S. 51:1405, may bring an action individually… In the
event that damages are awarded under this Section, the
court shall award to the person bringing such action
reasonable attorney fees and costs.

La. R.S. 51:1409. The plaintiff has not proven any facts which would

establish a LUTPA violation. This claim is without merit.

DECREE

Based on the foregoing, the judgment of the trial court is

AFFIRMED. The plaintiff is taxed with all costs of this appeal.

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