S. Ct. Civ. No. 2015-0058

In an action by car purchasers - who made only two payments under a loan financing the purchase - challenging the propriety of the lending bank's repossession of the vehicle, the judgment is vacated. The defendant bank's letter to the borrowers, erroneously informing them that the loan had been repaid and that the lien on the vehicle had been released, did not invalidate the terms of the loan and security agreement. The lawfulness of the bank's repossession of the vehicle is governed by the U.C.C., and Article 9 of the U.C.C. as enacted in the Virgin Islands, 11A V.I.C. § 9-201 et seq., is devoid of any language indicating that a security agreement is only effective if perfected. Also, no language in Title 11A provides that a loan for the purchase of consumer goods is considered satisfied simply because the holder of the note erroneously sends a notice of repayment and release of lien/security interest. Thus the full balance of the loan plus financing fees were owed by the purchasers. The loan contract was breached when, after making only two payments, the borrowers failed to make any further payments. Therefore, the lender was entitled to repossess the vehicle under 11A V.I.C. § 9-609(b)(2) if this could be done without a breach of peace. Because the trial court erroneously concluded that the repossession was wrongful on the ground that the bank's security interest had been terminated, no analysis was conducted considering whether the facts of this case gave rise to a breach of peace, the criminal offense of creating a public disturbance or engaging in disorderly conduct, particularly by making unnecessary or distracting noise. This action is remanded for further consideration of whether the facts in this instance amounted to a breach of peace making the repossession unlawful. Punitive damages must be based upon conduct that shows, at a minimum, reckless indifference to the person injured - conduct that is outrageous and warrants special deterrence - but here the borrowers failed to offer any proof to establish a claim of punitive damages. Upon remand, the Superior Court is directed to make appropriate factual findings to determine what was (1) the commercially reasonable timing and method of disposing of the vehicle that collateralized the loan, and (2) the correct award of damages in light of the parties' contractual obligations and what conduct was commercially reasonable. The judgment entered on July 14, 2015 is vacated, and the case is remanded for further proceedings consistent with this opinion.