Ruling in favor of Show-Me Credit Union over car repossession reversed

By Sam Knef | Mar 7, 2018

An appeals court has found in favor of a man who claimed that a lender that provided him financing of two vehicles failed to give proper notice as required by the Uniform Commercial Code when it repossessed them and sought a deficiency judgment.

ST. LOUIS — The Missouri Court of Appeals Eastern District has found in favor of a man who claimed that a lender that provided him financing of two vehicles failed to give proper notice as required by the Uniform Commercial Code when it repossessed them and sought a deficiency judgment.

According to the Feb. 27 ruling, Show-Me Credit Union had taken action against Dustin Mosely when he stopped making payments for the cars it financed for him. Show-Me argued that it sent Mosely a right to cure letter containing statutory notices and that he voluntarily surrendered the cars. It also claimed that it later sent Mosely a statutory notice of intent to sell the two cars and that after selling them and applying payments and credits due to Mosely, $12,535.96 remained due on his account.

Show-Me’s legal action sought the amount due, as well as attorneys' fees, costs and expenses.

In a counter action filed at Audrain County Circuit Court, Mosely sought to pursue a class action alleging Show-Me did not obtain his written consent to repossess, failed to send notices that complied with UCC requirements and wrongfully charged interest.


Show-Me's motion to dismiss argued that Mosely failed to state a claim upon which relief could be granted and that it did comply with UCC requirements in the underlying action.

Audrain County Circuit Judge Linda Hamlett granted Show-Me's motion to dismiss.

The appeals court panel -- Judges Gary Gaertner, Robert Clayton III and Angela Quigless -- noted that a failure to specify the type of sale in a presale notice to a debtor, public or private, leaves the debtor without an adequate ability to protect his or her interests.

"Thus, a failure to specify the type of sale, either public or private, at which the creditor would dispose of collateral violates the notice requirements" in statute, wrote Gaertner for the panel. "Mosely properly pleaded such a failure by SMCU, thus the trial court erred in determining that SMCU's notice was sufficient.

"Because Mosely properly pled SMCU's presale notice violated the UCC, the trial court erred in dismissing his counterclaim and granting judgment in favor of SMCU."

The panel remanded the case to Audrain County for further proceedings.

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