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Giles v. First Va. Credit Servs. - 149 N.C. App. 89, 560 S.E.2d 557 (2002)


North Carolina courts have long recognized the right of secured parties to repossess collateral from a defaulting debtor without resort to judicial process, so long as the repossession is effected peaceably. The general assembly codified procedures for self-help repossessions, including this common law restriction, in the North Carolina Uniform Commercial Code, N.C. Gen. Stat. ch. 25.


On or about January 18, 1997, Joan Giles entered into an installment sale contract for the purchase of an automobile. The contract was assigned to First Virginia Credit Services, Inc.'s (First Virginia), which obtained a senior perfected purchase money security interest in the automobile. The terms of the contract required Joann Giles to make sixty regular monthly payments to First Virginia. The contract stated that Joann Giles' failure to make any payment due under the contract within ten days after its due date would be a default. During the early morning hours of 27 June 1999, Professional Auto Recovery, Inc. (Professional Auto Recovery) at the request of First Virginia, repossessed the locked automobile from plaintiffs' front driveway. According to First Virginia, the account of Joann Giles was in arrears for payments due on 2 May 1999 and 2 June 1999, and pursuant to the terms of the contract, repossession was permitted. Plaintiffs Richard Giles and Joann Giles then filed the present complaint against defendants First Virginia and Professional Auto Recovery for wrongful repossession of the subject vehicle. According to the Gileses, defendants wrongfully converted and/or repossessed the automobile and plaintiffs’ personal property located within the automobile, as they made a payment on the account that First Virginia had accepted immediately prior to First Virginia’s repossession of the automobile. Moreover, the plaintiffs alleged that the removal of the automobile constituted breach of the peace in violation of N.C. Gen. Stat. § 25-9-503. The trial court granted First Virginia’s motion for summary judgment.


  1. Was the repossession invalid?
  2. Did the removal of the automobile constitute breach of the peace in violation of N.C. Gen. Stat. § 25-9-503?


1) No. 2) No.


The Court affirmed the trial court’s decision, holding that the fact that the plaintiffs mailed a check to try to cure default before the repossession took place, which was not received until after the repossession, did not render the repossession invalid. Anent the second issue, the Court held that the repossession, occurring without confrontation, did not breach the peace (i) because it happened in the early morning hours from Joan’s non-enclosed driveway; (ii) Joan expressly consented to it by the virtue of her contract with First Virginia; (iii) Joan’s neighbor, awakened by the repossession, did not confront the repossessor; (iv) neither Joan’s house nor any other enclosure was entered; and (v) there was no allegation or evidence of any form of deception by First Virginia.

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