Sec. 36a-785. (Formerly Sec. 42-98). Foreclosure.
Sec. 36a-785. (Formerly Sec. 42-98). Foreclosure. (a) Repossession. When the
retail buyer is in default in the payment of any sum due under the retail installment
contract or installment loan contract, or in the performance of any other condition which
such contract requires him to perform, or in the performance of any promise, the breach
of which is by such contract expressly made a ground for the retaking of the goods, the
holder of the contract may retake possession thereof. Unless the goods can be retaken
without breach of the peace, it shall be retaken by legal process, but nothing herein
contained shall be construed to authorize a violation of the criminal law. In the case of
repossession of any motor vehicle without the knowledge of the retail buyer, the local
police department shall be notified of such repossession immediately thereafter. In the
absence of a local police department or if the local police department cannot be reached
for notification, the state police shall be promptly notified of such repossession.
(b) Notice of intention to repossess. Not less than ten days prior to the retaking,
the holder of such contract, if he so desires, may serve upon the retail buyer, personally
or by registered or certified mail, a notice of intention to retake the goods on account
of the buyer's default. The notice shall state the default and the period at the end of
which such goods will be retaken, and shall briefly and clearly state what the retail
buyer's rights under this subsection will be in case such goods are retaken. If the notice
is so served and the buyer does not perform the conditions and provisions as to which
he is in default before the day set for retaking, the holder of the contract may retake said
goods and hold such subject to the provisions of subsections (d), (e), (f), (g) and (h) of
this section regarding resale, but without any right of redemption.
(c) Redemption. If the holder of such contract does not give the notice of intention
to retake, described in subsection (b), he shall retain such goods for fifteen days after
the retaking within the state in which they were located when retaken. During such
period the retail buyer, upon payment or tender of the unaccelerated amount due under
such contract at the time of retaking and interest, or upon performance or tender of
performance of such other condition as may be named in such contract as precedent to
the retail buyer's continued possession of such goods, or upon performance or tender
of performance of any other promise for the breach of which such goods were retaken,
and upon payment of the actual and reasonable expenses of any retaking and storing,
may redeem such goods and become entitled to take possession of the same and to
continue in the performance of such contract as if no default had occurred. The holder
of such contract shall within three days of the retaking furnish or mail, by registered or
certified mail, to the last known address of the buyer a written statement of the unaccelerated sum due under such contract and the actual and reasonable expense of any retaking
and storing. For failure to furnish or mail such statement as required by this section, the
holder of the contract shall forfeit the right to claim payment for the actual and reasonable
expenses of retaking and storage, and also shall be liable for the actual damages suffered
because of such failure. If such goods are perishable so that retention for fifteen days
as herein prescribed would result in their destruction or substantial injury, the provisions
of this subsection shall not apply and the holder of the contract may resell the goods
immediately upon such retaking.
(d) Compulsory resale. If the retail buyer does not redeem such goods within fifteen days after the holder of the contract has retaken possession, the holder of the contract
shall sell such goods at public or private sale which sale may be held not less than fifteen
days and shall be held not more than one hundred eighty days after the retaking. When
the holder of the contract retakes possession by legal process, and an answer is interposed, the holder of the contract may, at his election, hold such retaken goods for a
period not to exceed thirty days after the entry of final judgment by a court of competent
jurisdiction entitling the holder of the contract to possession of such goods before holding
such resale. The holder of the contract shall give the retail buyer not less than ten days'
written notice of the time and place of any public sale, or the time after which any private
sale or other intended disposition is to be made, either personally or by registered mail
or by certified mail receipted for on mailing directed to the retail buyer at his last-known
place of business or residence. The holder of the contract may bid for such goods at any
public sale. The proceeds of the resale shall be considered to be either the amount paid
for such goods at such sale or the fair cash retail market value of such goods at the time
of repossession, whichever is the greater, except as otherwise provided in subsection
(g) of this section.
(e) Proceeds of resale. Proceeds of the resale shall be applied (1) to the payment
of the actual and reasonable expenses thereof, (2) to the payment of the actual and
reasonable expenses of any retaking and storing of said goods, (3) to the satisfaction of
the balance due under the contract. Within thirty days of the resale, the holder of the
contract shall give the retail buyer a written statement itemizing the disposition of the
proceeds. Any sum remaining after the satisfaction of such claims shall be paid to the
retail buyer.
(f) Deficiency on resale. Notwithstanding that the proceeds of the resale are not
sufficient to defray the actual and reasonable expenses thereof, and also such actual and
reasonable expenses of any retaking and storing of such goods and the balance due under
the contract, the holder of the contract may not recover the deficiency from the retail
buyer or any surety or guarantor for him, or from any one who has succeeded to the
obligations of such retail buyer, except as provided in subsection (g) of this section.
(g) Fair market value. If the goods retaken consist of a motor vehicle the aggregate
cash price of which was more than two thousand dollars, the prima facie fair market
value of such motor vehicle shall be calculated by adding together the average trade-in
value for that motor vehicle and the average retail value for that motor vehicle and
dividing that sum by two. Such average trade-in value and average retail value shall be
determined by the values as stated in the National Automobile Dealers Association Used
Car Guide, Eastern Edition, as of the date of repossession. If the goods retaken consist
of a boat the aggregate cash price of which was more than two thousand dollars, the
prima facie fair market value of such boat shall be calculated by adding together the
average trade-in value for that boat and the average retail value for that boat and dividing
that sum by two. Such average trade-in value and average retail value shall be determined
by the values as stated in the National Automobile Dealers Association Appraisal Guide
for Boats, Eastern Edition, as of the date of repossession. In the event that the value of
such motor vehicle or boat is not stated in such publication, then the fair market value
at retail minus the reasonable costs of resale shall be determined by the court. The prima
facie evidence of fair market value of such motor vehicle or boat so determined may be
rebutted only by direct in-court testimony. If such value of the motor vehicle or boat is
less than the balance due under the contract, plus the actual and reasonable expenses of
the retaking of possession, the holder of the contract may recover from the retail buyer,
or from anyone who has succeeded to his obligations, as a deficiency, the amount by
which such liability exceeds such fair market value, as defined in this subsection. If the
actual resale price received by the holder exceeds such fair market value, as defined in
this subsection, the actual resale price shall govern.
(h) Election of remedies. After the holder retakes possession as provided in subsection (a), or if the holder obtains a prejudgment remedy against the goods under chapter
903a, the retail buyer or anyone who has succeeded to his obligations shall not be liable
for any balance due, except to the extent permitted by subsection (g) of this section.
The holder may seek a monetary judgment on the contract against the buyer unless the
goods have been repossessed, with or without judicial process. Goods purchased under
the contract shall not be executed upon to satisfy such judgment. When such judgment
becomes final, the holder's security interest in the goods shall be extinguished. If the
contract covers a retail sale of a motor vehicle required to be registered, the holder shall
comply with section 14-188.
(i) Recovery of part payments. If the holder of the contract fails to comply with
the provisions of subsections (c), (d), (e), (f), (g) and (h), after retaking the goods, the
retail buyer may recover from the holder of the contract his actual damages, if any, and
in no event less than one-fourth of the sum of all payments which have been made under
the contract.
(j) Waiver of statutory protection. No act or agreement of the retail buyer before
or at the time of the making of a retail installment contract or installment loan contract
nor any agreement or statement by the retail buyer in such contract shall constitute a
valid waiver of the provisions of subsections (c), (d), (e), (f), (g), (h) and (i).
(k) Loss. After the delivery of the goods to the retail buyer and prior to any retaking
thereof by the holder of the contract, the risk of injury and loss shall rest upon the retail
buyer.
(1949 Rev., S. 6700; 1957, P.A. 357, S. 2, 3; 1959, P.A. 301; 1961, P.A. 116, S. 22, 23; P.A. 76-258, S. 1, 2; P.A. 77-506; 77-614, S. 486, 587, 610; P.A. 78-303, S. 85, 136; P.A. 94-134, S. 2, 3; May 25 Sp. Sess. P.A. 94-1, S. 61, 130.)
History: 1959 act added provisions re notification of police where vehicle is repossessed without its buyer's knowledge
in Subsec. (a); 1961 act amended Subsecs. (d) and (e) for conformity with Uniform Commercial Code; P.A. 76-258 amended
Subsec. (d) to require that sale be held within 180, rather than 90 days, to require that buyer be notified of "the time after
which any private sale or other intended disposition is to be made", deleted Subsec. (e) re procedure where contract holder
not required to resell repossessed goods, relettering as necessary, required that contract holder notify buyer of disposition
of proceeds in new Subsec. (e), formerly (f), changed force of Subsec. (f), formerly (g), so that deficiency is not recoverable
from buyer ("except as provided in subsection (g)") where previously deficiency was recoverable, added new Subsecs.
(g) and (h), deleted former Subsecs. (h) and (i), and relettered former Subsecs. (j) to (l) as (i) to (k); P.A. 77-506 substituted
"retail" buyer for "installment" buyer in Subsec. (a), referred to "unaccelerated" amounts due, required that buyer be
notified of amount due within 3 days of retaking rather than "immediately" upon buyer's written demand and stated that
failure to meet notice requirement resulted in forfeiture of right to claim payment for retaking and storage expenses rather
than in forfeiture of $10 to the buyer, specified that Subsec. (h) is applicable where holder obtains a prejudgment remedy
and made minor language changes in Subsecs. (e) and (g); P.A. 77-614 and P.A. 78-303 placed state police within the
department of public safety, effective January 1, 1979; P.A. 94-134 amended Subsec. (g) to include a boat the aggregate
price of which was more than $2,000 and reworded for clarity the formula for calculating a motor vehicle's fair market
value, effective October 1, 1994, and applicable to retail installment contracts and installment loan contracts executed on
or after that date; May 25 Sp. Sess. P.A. 94-1 amended Subsec. (g) by making a technical change, effective July 1, 1994;
Sec. 42-98 transferred to Sec. 36a-785 in 1995.
Annotations to former section 42-98:
Actual receipt of notice to resell repossessed automobile not necessary. 150 C. 631. Cited. 198 C. 34. Notification
requirements mandatory. 209 C. 163. Cited. 216 C. 458. Cited. 231 C. 707.
Cited. 7 CA 613.
Compliance with section mandatory under act. 30 CS 604. Cited. 31 CS 152.
Cited. 2 Conn. Cir. Ct. 495, 499, 681. Sale by holder of retail installment contract who repossessed automobile need
not be given notice by publication nor be conducted by licensed auctioneer. 4 Conn. Cir. Ct. 351. Applicable only to retail
buyers. 6 Conn. Cir. Ct. 709.
Subsec. (c):
Cited. 24 CA 455.
Subsec. (d):
A bid is merely an offer to purchase. Where plaintiff did nothing to consummate sale other than to place in its own file
a bid to purchase, held no resale having taken place, the plaintiff was not entitled to recover any deficiency. 23 CS 362.
Court held day of retaking was to be excluded and last day included in computing the fifteen days for redemption. 2
Conn. Cir. Ct. 708. Sale by repossessor before statutory time limit defeated his right to deficiency judgment. Id.
Subsec. (e):
Cited. 24 CA 455.
Subsec. (g):
Cited. 23 CS 365.
Subsec. (h):
Cited. 23 CS 365.