Attorney fees reversed in repossessed car dispute

The Indiana Court of Appeals upheld the damages awarded to a Tippecanoe County man who had his ride repossessed one summer night but remanded for attorney fees to be recalculated to a lower amount.

Fabian Huizar answered his front door after 10 p.m. in July 2018 to find two employees from K.I.G. Recovery Service preparing to repossess the 2015 Ford Explorer he had purchased for his fiancee. One of the workers talked to Huizar while the other entered the vehicle and then kept the doors locked until Huizar’s fiancee handed over the keys so the SUV could be driven away.

Horizon Bank, which financed the purchase of the Explorer, told Huizar he would have to pay the loan in full in order to get the vehicle back. Subsequently, the SUV was sold at auction for less than the loan’s total, so the bank demanded Huizar pay the deficiency balance of $7,679.08.

Instead, Huizar filed a complaint against Horizon. He alleged the bank had violated the Deceptive Consumer Sales Act, the Indiana Uniform Commercial Code and the Crime Victims Relief Act. In an amended complaint, he tacked on another claim under the Fair Debt Collection Practices Act.

The Tippecanoe Circuit Court initially gave the checkered flag to all of Huizar’s claims, awarding damages for each and determining he was entitled to attorney fees. However, upon further review, after Horizon filed a motion to correct error, the trial court found the bank was not a debt collector and could not be held liable under the FDCPA.

Horizon appealed, arguing, in part, the trial court abused its discretion by finding the bank had breached the peace and by awarding Huizar attorney fees under the IUCC and CVRA. Huizar cross-appealed on multiple issues including that the trial court abused its discretion in assessing attorney fees.

Although the Court of Appeals concluded the trial court did not err in many of its rulings, the appellate panel agreed with the bank and reversed the award of attorney fees under the IUCC and CVRA.

Huizar’s lawyer, Duran Keller, had requested an award of $400 an hour for about 185 hours of work on the case.

The trial court lowered the rate to $300 per hour for 154.35 hours of work for a total of $46,305. Along with finding the trial court did not abuse its discretion in reducing Keller’s hourly rate, the appellate court determined that Huizar could not recover attorney fees under the IUCC and CVRA.

However, the Court of Appeals noted attorney fees were available under the DCSA. It reversed and remanded with instructions that the trial court award Huizar attorney fees only for hours attributable to his DCSA claim, specifically that Horizon breached the peace.

The Court of Appeals also affirmed the trial court’s award to Huizar of $1,500 in nominal damages under the CVRA. Moreover, it upheld the award of reduced IUCC damages of $3,080.03.

Huizar had argued the trial court should not have slashed the IUCC damages award. The trial court had calculated the damages to be $10,759.11 but then subtracted the deficiency balance and awarded the remainder to Huizar.

“If the collateral is sold in the usual manner in a recognized market for those goods, then the sale is presumed to be proper,” Judge Margret Robb wrote for the court, citing Hall v. Owen County, State Bank, 175, Ind. App., 150, 163, 370 N.E.2d 918, 929 (1977). “… Here, the record establishes that the vehicle was sold at auction and there is no evidence that Horizon executed the sale in bad faith.”

The case is Horizon Bank v. Fabian Huizar, 20A-CT-1937.