Case Law

Kentucky Repossession Case Law

Case Name: First & Farmers Bank v. Henderson
Case Location: 763 SW 2d 2376 KY App. (1988)

The substance of this case concerns the manner in which the bank repossessed Henderson’s speed boat, in which it held a valid security interest.  Prior to going to Henderson’s residence, the bank informally requested that the Pulaski County Sheriff’s Department have one of its deputy on standby at the scene.  Deputy Sheriff Pat Kelly, in full uniform, carrying his weapon and in a marked police car, met the bank’s employees at the scene before any attempt to repossess the boat.  After the employees hitched the boat on its trailer to their vehicle but before they could depart, Henderson arrived and made a vehement verbal objection to the repossession. Kelly then approached the antagonists. Henderson maintained he asked the deputy if the bank could legally repossess his boat, to which the deputy nodded in the affirmative.  The court concluded that a creditor runs the risk of potential liability if the creditor proceeds with a self-help repossession when there is a serious protest or objection by the debtor.  The court also said that “if the strong arm” of the law is needed, the creditor must secure judicial intervention when a police officer is carrying out or sanctioning the repossession.  The court awarded $1,988.24 in actual damages and $75,000 for punitive damages.

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Case Law

In the case of Northside Motors of Florida, Inc. v. Brinkley, 282 So. 2nd (FL 1973), the court’s ruling states, in part, “The Supreme Court of the United States has since emphasized and re-emphasized that state action will not be found in the purely private conduct of an individual voluntary engaged in without some form of active assistance or cooperation on the part of the state.” This means that law enforcement shall not be involved in the self-help (non-judicial) repossession process unless some violation of law occurs.

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