By Rose Oswald Poels
In a four-three opinion filed late last week, the Wisconsin Supreme Court concluded that a “dwelling used by the customer as a residence” under the Wisconsin Consumer Act (WCA) includes a garage attached to the residential building in which the customer lives for purposes of rules that need be followed when creditors proceed with nonjudicial repossession.
On behalf of the membership, WBA participated as an amicus curie in the case of Duncan v Asset Recovery Specialists, Inc. as the case involved the interpretation of statutory language used within the repossession rules of the WCA.
The facts of the case were undisputed by the parties and include that Duncan purchased a vehicle from a dealership; she financed the purchase with a loan. Duncan failed to make payments that came due and eventually was in default. The vehicle served as collateral for the loan, and the bank followed the procedure allowed under Wisconsin law for a “nonjudicial” repossession under Wis. Stat. §425.206(1)(d). The bank met all statutory requirements to proceed with nonjudicial repossession and ultimately retained Asset Recovery Specialists to repossess Duncan’s vehicle. At the time, Duncan rented an apartment unit in a multi-story apartment building. The ground floor of the building consisted entirely of a private parking garage for tenants, and Duncan sometimes kept her vehicle in it.
The central dispute between the parties is whether Asset Recovery Specialists violated Wis. Stat. §425.206(2)(b) when they entered the garage shared by residents in Duncan’s apartment building to repossess her vehicle. The court reviewed language within §425.206(2) which provides in full: In taking possession of collateral or leased goods, no merchant may do any of the following: (a) Commit a breach of the peace. (b) Enter a dwelling used by the customer as a residence except at the voluntary request of a customer. The court focused its review on the statutory language in italics.
Although “dwelling” is undefined in the WCA, the court looked to the word’s ordinary, dictionary definition, and to the use of the word in other sections of the WCA and its Administrative Code. In taking that approach, the court concluded a “dwelling” means, at minimum, a building in which at least one person lives. In proceeding in this manner, the court concluded that “dwelling used by the customer as a residence” in Wis. Stat. §425.206(2)(b) includes a garage attached to the residential building in which the customer lives. In making its conclusion, Asset Recovery Specialists was found to have violated §425.206(2)(b) when they repossessed Duncan’s car from the parking garage of her apartment building without her consent.
While I am disappointed in the court’s opinion, I do not regret WBA’s involvement in the case as an amicus on behalf of the membership as the court’s opinion does offer clarity of the term “dwelling.” This in turn helps members further fine-tune any nonjudicial repossession procedures. Fortunately, Wisconsin’s banks are not heavily engaged in nonjudicial repossession of vehicles, so the impact of the court’s decision in this context I believe is likely minimum. That said, as the effect of the court’s decision broadens the plain language of Wis. Stat. §425.206(2)(b), banks need be aware of the court’s new interpretation to ensure there is no violation of the WCA when repossessing vehicles in a similar setting.