This class action raises the issue of the steps that must be taken in Minnesota before a vehicle can be repossessed. The defendants include Ally Financial, Inc., Resolvion, LLC, and 11th Hour Recovery, Inc. The complaint alleges violations of the Fair Debt Collection Practices Act (FDCPA), the Minnesota Uniform Commercial Code (UCC), and Minnesota Common Law.
The complaint defines something called the Cobb Notice: “Under Minnesota law, when a secured party has repeatedly accepted late and/or partial payments from the debtor over the course of a loan, the secured party must notify the debtor that strict compliance with the contract terms will be required before the secured party can lawfully repossess the collateral.”
In a Cobb Notice, the lender must tell the customer that “strict compliance with the time for payment” will be required “in the future.” It must also tell the borrower that late payments will no longer be accepted. In addition to these things, the Cobb Notice must set out the amount past due, the deadline to pay the balance due, and the consequences if the borrower does not comply with these terms.
The complaint quotes the Minnesota Supreme Court as saying that the Cobb Notice is necessary because the lender’s “conduct has induced the justified reliance of the debtor in believing that late payments are acceptable.”
If a lender has not sent a Cobb Notice, but has accepted late or partial payments in the past, the complaint says, “repossession is wrongful as a matter of law.”
In June 2015, plaintiff Patricia Freeman bought a 2013 Hyundai Elantra with a loan from Ally Financial. During the course of the loan, Freeman made many late or partial payments. Ally accepted all of them. While it did send out late notices, none of these met the requirements of a Cobb Notice.
On or around June 5, 2019 Ally hired Resolvion, which in turn asked for assistance from 11th Hour, to perform a repossession. The police were informed that a repossession was going to take place. The companies gained unauthorized entry to Freeman’s locked garage, entered, and removed the vehicle.
Freeman found that the vehicle was gone the next day. When she told the companies that the repossession was illegal, they still refused to release the vehicle.
Ally later sold the vehicle and kept the proceeds.
Three classes have been defined for this action.
The Repossession Class, the Conversion Class, and the FDCPA Class all have the same definition: All Minnesota consumers whose vehicle were repossessed by or on behalf of Ally, between May 22, 2016 and May 22, 2020, and who made two or more late or partial payments on the vehicles that were accepted by Ally, and who thereafter were not sent a strict compliance Cobb Notice before the repossession of the vehicle.Article Type: Lawsuit