I understand the rules of taking action against time barred debt. My question is a twist on that. I didn't take "Action" but I, a lender, gave a loan to a borrower for a vehicle. Security agreement in place, perfected title, and all of that stuff. Borrower stopped paying in 2008. Repossession orderred. This was before my time. Fast forward to 2005. I'm reviewing the "Charged off loan" report and looking over old files and I see a few loans where we charged them off but still have the liens (Pink Slips). Read the notes on one loan and openned a repo. A week later, repo guy finds and hooks the car. I send the notice of intent and state, "You will NOT be responsible for the deficiency should there be one". The guy sues me for violation of Cal Civ Code 337. It states I am barred from taking action after 4 years. Action is defined as a law suit. I'm thinking, "No problem, i'm not taking action, I'm simply repossessing, which i'm entitled to do". The lien has not been satisfied and although I can't sue, my lien is still valid.
Or is it!? Section 2911 of the California Code says the lien is extinguished when the SOL runs out according to my general counsel. I read it again (Read it before) and interpret that to related to real property, not personal property but in any event, it if DOES apply, then so must Cal Code 2914 which states, "Disregard this chapter if the loan is subject to UCC". This loan is subject to UCC.
So I read everything I can find in Article 9. I call a bunch of attorneys and call a bunch of collectors. NO ONE can tell me if there is any case law or rules as it relates to being able to repo a car more than four years after the default.
Any opinions? Case law? References?
Thanks in advance
Last edited by Scribby; 07/22/15 09:44 PM.