Michael Scott has just purchased a 65” flat-screen TV for his lovely girlfriend Jan. Michael obtained a loan from Scranton Bank to buy this impressively sized television; a TV that Michael knows will tangibly prove his love for his lady. To get the loan, Michael had to sign a standard security agreement in which Scranton Bank took a security interest in Michael’s personal vehicle (which he owned free and clear), a 2007 Chrysler Sebring Convertible. The security agreement includes an after-acquired property clause covering the car and any other vehicle-related peripherals. Michael purchased a top-of-the-line navigation system and four new hubcaps a month after he signed his loan documents. Unfortunately, Michael was fired from his job after he violently attacked an HR representative. He has not been able to find another job and has just defaulted on his loan. Scranton Bank wants to seize the car as well as the new navigation system and hubcaps. Which statement is correct?
1. Scranton Bank can repossess the car, and can also repossess the navigation system and hubcaps because they are covered by the after-acquired property clause regardless of whether or not they are considered accessions.
2. Scranton Bank may repossess the car, but cannot repossess the navigation system or the hubcaps unless they are considered accessions.
3. Scranton Bank cannot repossess the car or the navigation system and hubcaps; Article 9 prohibits after-acquired property clauses for consumer goods and thus the security agreement was invalid.
4. Scranton Bank cannot repossess the vehicle without first getting a judicial order of replevin.