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Motors Acceptance Corp. v. Rozier

Ownership of repossessed collateral remains with the debtor until the creditor disposes of the collateral or elects to retain it in accordance with the Uniform Commercial Code.

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The question certified by the Eleventh Circuit in this case is whether, under Georgia law, ownership of collateral passes from a debtor to a creditor upon repossession. For the reasons that follow, we hold that ownership remains with the debtor until the creditor disposes of or elects to retain the collateral in accordance with the procedures of the Georgia Uniform Commercial Code. On August 8, 2002, creditor Motors Acceptance Corp. MAC repossessed an automobile from debtor Derryl Rozier for nonpayment under the terms of their installment loan sales contract.1 On August 12, 2002, Rozier filed for Chapter 13 bankruptcy and sought to regain possession of the vehicle. MAC agreed to return the vehicle to Rozier, but argued that it was not legally required to do so. The United States Bankruptcy Court for the Middle District of Georgia held that the vehicle was part of Rozier’s bankruptcy estate under Georgia law and that return of the vehicle to Rozier was proper.2 MAC appealed, and the United States District Court for the Middle District of Georgia affirmed.3 MAC appealed to the Eleventh Circuit, which certified the question before us now.4

1. Consistent with prior decisions from the Georgia Court of Appeals5 and the Georgia bankruptcy courts,6 we hold that ownership of such collateral does not pass to a creditor upon repossession for nonpayment under an installment loan sales contract. Revised Article 9 of the Georgia Uniform Commercial Code OCGA § § 11-9-101 et seq . governs our analysis.7

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