UCC 6yr SOL takes precedence in Auto repo?

[Anonymous]

Anyone...Calawyer-

This is a response to my theory that the 6 year SOL under the UCC (aka the buisness consumer code)Article 3 does not apply to a defiency lawsuit in regards to a retail sales installment agreement. I forwarded this Case Law in New Jersey to a friend of mine that works for a contract and litigation Law firm out of Houston where I am being sued. The lawyers deal with this on a regular basis. A judgement has already been passed down against my x-wife for the defiency amount...now they are coming after me. I responded to the Law firm saying that this is time-barred, but they still issued me citations. I then contacted my friend out of the Houston Law Firm and the lawyers there gave this response. Any takers on this?????????

The Ford Motor Credit case would be excellent if we were in New Jersey. New Jersey law does not have any precedent in a Texas case. The case would be thrown out of court.

Unfortunately, Frost Bank is right under the Texas Business and Commerce Code Sec. 3.118(a) which states:

(a)Except as provided in Subsection (e), an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six years after the due date or dates stated in the note, or, if a due date is accelerated, within six years after the accelerated due date.

I double checked to ensure that your Retail Sales Installment Contract was negotiable and it is under Texas Business and Commerce Code Sec. 3.104 which provides the following:

(a) Except as provided in Subsections © and (d), "negotiable instrument" means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it:

(1) is payable to bearer or to order at the time it is issued or first comes into possession of a holder;

(2) is payable on demand or at a definite time; and

(3) does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, but the promise or order may contain;

(A)an undertaking or power to give, maintain, or protect collateral to secure payment;

(B)an authorization or power to the holder to confess judgment or realize on or dispose of collateral

©a waiver of the benefit of any law intended for the advantage or protection of an obligator.

You should try to call Frost Bank to determine the date of acceleration of the debt. This means the date they repossessed the car, not the date that the car was sold. This date is when the statute of limitations begins hopefully it will be beyond 6 years. You may get lucky there. If they will not provide that information to you over the phone, then we will send them Request for Production and request it there.

[Anonymous]

http://www.meislik.com/recentnj/blcases/blc00872.htm

http://lawlibrary.rutgers.edu/courts/appellate/a3166-00.opn.html

[LadynRed]

Per some discussion on another forum on this issue, the SOL that applies for repos in the UCC is found between Articles 2 and 9.

[Anonymous]

Yes...that was my initial argument....I will let you know how it goes. I have responded with 4 year SOL per Article 2.....it being time barred....they just keep coming. Also each state adopts its own statute under the UCC. In the case of the New Jersey suit, the UCC is 4 year, but here in Texas it is 6 year, in respects to Article 3.

[Anonymous]

Yes...that was my initial argument....I will let you know how it goes. I have responded with 4 year SOL per Article 2.....it being time barred....they just keep coming. Also each state adopts its own statute under the UCC. In the case of the New Jersey suit, the UCC is 4 year, but here in Texas it is 6 year, in respects to Article 3.

[Anonymous]

I have been curious about this myself, and I have gotten conflicting answers in past. I found email address on contact page of website for Secretary of State of Texas on page dealing with UCC. They responded that they cannot give legal advice, please contact lawyer.

I also emailed Richard Alderman, "The Peoples Lawyer" at University of Houston. Here is the message and answer.

Question: Can you tell me what section of the UCC in Texas, covers a deficiency caused by a repo of an automobile? I am doing research to find out what would be statute of limitations for the deficiency, and have come up with conflicting answers. I would like to know what section would cover this, Article 2 with 4 year limitation, or Article 3 with 6 year limitation. Also, if you know of any cases that have been tried in Texas that support this information? Thank you in advance for any information.

Answer: Article 9, should be 4 year SOL

Article 9 being the governing statute is also mentioned at this site by lawdog:

http://www.lawdog.com/states/tx/st1i.htm

Here is link to Texas statute

http://www.capitol.state.tx.us/statutes/bc/bc0000900toc.html

hope this info helps.

[Edit by kenrb01 on Wednesday, May 28, 2003 @ 03:51 PM]