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Plaintiffs’ Lawyers, Deep Pockets and Legal Theories

When a repossession goes bad, a plaintiff’s lawyer will try to use every available legal theory against every available deep pocket.  Take a look at this example from a recent case.

Tramelle Thompson sued Gateway Financial Services, Inc. and a repossession agency and its employees for violating the Fair Debt Collection Practices Act and Illinois’s repossession statute, for negligence, and for “willful and wanton behavior” in connection with the repossession of Thompson’s vehicle.

The claims against Gateway were based on the theory that Gateway was responsible for the actions of the repossession company.  Gateway, which had a security interest in the vehicle, moved to dismiss the repossession, negligence, and willful and wanton behavior claims.

The U.S. District Court for the Northern District of Illinois first found that Thompson stated a claim against Gateway under Illinois’s repossession statute for liability for the actions of the repossession agency.  The court found that, according to a comment to the statute, a secured party may be liable for the actions of another, even if no agency relationship exists.

So, the court concluded that the bad acts of the repossessor could be asserted in claims against the creditor.  That’s bad enough, but how about claims against the creditor based on the creditor’s own bad acts?

What bad acts would those be, you ask?  Well, one possibility is that the creditor wasn’t careful in selecting the repossession agent.

That’s what happened here – the court also found that Thompson stated a claim for negligence and willful and wanton conduct in the hiring, retaining, and supervision of the repossession agency.  Under Illinois law, such a cause of action requires the plaintiff to plead, among other things, that the employer knew or should have known that the employee had a particular unfitness for the position so as to create a danger of harm to third persons.

In his complaint, Thompson alleged that Gateway knew or should have known that the repossession agency had a particular unfitness and that Gateway knew or should have known that the repossession agency was likely to breach the peace when attempting to repossess the vehicle.  That was evidently good enough to avoid a dismissal of the plaintiff’s claim.

It’s early in the case, when the motions are flying, and Gateway and the repossession agent most likely will have other opportunities to escape liability, but at least for now, the plaintiff’s claim is still alive.

Thompson v. Gateway Financial Services, Inc., 2011 U.S. Dist. LEXIS 40766 (N.D. Ill. April 14, 2011)


Tom Hudson (, 410-865-5411) has written several books, available at   He also publishes Spot Delivery®, a legal newsletter for auto dealers, and is Editor in Chief of CARLAW®, a monthly report of legal developments in all states for the auto finance and leasing industry.  He is a partner in the Maryland office of Hudson Cook, LLP.  Copyright 2011, all rights reserved.  Based on an article from Spot Delivery.  Single publication rights only, to American Repossessor. HC# 4837-8765-6969.

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