Summary:
Jon Anthony Seppanen purchased a vehicle from Fayetteville Dodge under a retail installment contract requiring 72 monthly payments of $988.93, secured by the vehicle and expressly permitting repossession after default. Seppanen nevertheless believed that writing "Pay to the order of JON SEPPANEN, without recourse" on the agreement discharged his obligation to pay.
After the vehicle was repossessed, Seppanen—proceeding pro se—sued Fayetteville Dodge and others, seeking return of the vehicle, a declaration that the debt had been discharged, $2 million in damages, plus $10,000 per day for loss of use.
Judge Terrence W. Boyle rejected the claims.
The court held that the retail installment contract was not a negotiable instrument governed by Article 3 of the UCC, so the "without recourse" notation did not discharge the debt. The court noted that similar debt-avoidance theories have repeatedly been rejected as frivolous.
Seppanen's other theories fared no better. His North Carolina Unfair and Deceptive Trade Practices Act claim failed because repossession after default was expressly authorized by the contract. His FDCPA claim failed because Chrysler Capital was not a "debt collector" and he alleged no prohibited collection conduct by Fayetteville Dodge. And his TILA claim failed because he identified no deficient disclosure of the credit terms.
There were procedural problems as well. Seppanen missed his deadlines for responding to the motions to dismiss and failed to satisfy the requirements for obtaining an extension. His later attempt to add claims for wrongful repossession, breach of peace, breach of contract, fraud, and unfair trade practices was also insufficient.
The court ultimately described his claims as "frivolous" and similar to claims rejected by "countless federal courts," dismissed the action, and closed the case.
The Chapter 13 Alternative
The unfortunate irony is that Seppanen may have had a legitimate way to obtain what apparently mattered most: getting his car back.
Depending on the timing and whether the vehicle had already been sold, filing Chapter 13 bankruptcy following repossession may have allowed him to invoke the automatic stay, seek return of the vehicle, and provide for the secured debt through a Chapter 13 plan.
That would not have given him a free car. But Chapter 13 can provide something considerably more useful than a homemade UCC theory: an actual statutory mechanism for keeping property while restructuring the debt.
There is, however, a practical cost to the route Seppanen chose. After forcing the lienholder to defend a federal lawsuit seeking $2 million plus $10,000 per day on theories the court found frivolous, he has probably earned considerable ire from the creditor.
And any consumer bankruptcy attorney approached afterward would also have reason for caution. Counsel would need to determine whether a Chapter 13 could still recover the vehicle, investigate whether any legitimate repossession claims existed, and—perhaps most importantly—be satisfied that the debtor would accept legal advice rather than insist on continuing theories already rejected by the federal court.
There is nothing unusual about a debtor trying unsuccessfully to solve a financial problem before seeking bankruptcy counsel. But sometimes extravagant demands and frivolous litigation can make the real solution harder.
Seppanen apparently wanted his car back. Chapter 13 might have helped him do exactly that—without first demanding several million dollars from the people holding the keys.
To read a copy of the transcript, please see:
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