Cla-Mil East Holding Corp. v. Medallion Funding Corp.
Court of Appeals of New York
6 N.Y. 3d 375 (2006)
Medallion Funding (defendant), a secured creditor of a debtor leasing space from Cla-Mil East Holding (plaintiff), obtained a judgment and a court order directing city marshals to recover the debtor's laundry-equipment collateral; the marshals removed the equipment without notifying Cla-Mil and allegedly damaged the property. Cla-Mil sued Medallion for trespass, abuse of process, and negligence; the trial court held Medallion had a duty to notify Cla-Mil before the repossession, but the appellate court reversed.
Whether a secured creditor who repossesses collateral through government officials under a court order is liable for damage to property caused by the removal of the collateral under Uniform Commercial Code § 9-604(d).