Brockbank v. Best Capital Corp.
Decision Date | 29 June 2000 |
Docket Number | No. 25162.,25162. |
Parties | Edward P. BROCKBANK, Respondent, v. BEST CAPITAL CORP., Petitioner. |
Court | South Carolina Supreme Court |
James R. Allen and Andrea C. Pope of Barnes, Alford, Stork & Johnson, LLP, of Columbia, for petitioner.
Thomas W. Bunch, II of Robinson, McFadden & Moore, of Columbia, for respondent.
Edward P. Brockbank (Debtor) sued Best Capital Corp. (Creditor) after the repossession and sale of his mobile home, alleging, among other things, violation of the notice provision contained in Article 9 of the Uniform Commercial Code (UCC).1 The trial judge granted Creditor's motion for summary judgment. The Court of Appeals reversed and remanded. Brockbank v. Best Capital Corp., Op. No. 99-UP-098 (S.C.Ct.App. filed February 18, 1999). We granted Creditor's petition for a writ of certiorari following the denial by the Court of Appeals of Creditor's petition for rehearing. We affirm the Court of Appeals' opinion as modified.
Brockbank and his wife, Sharon K. Brockbank, purchased a double-wide mobile home from Kahn Development Company in February 1995. Kahn assigned the contract to Creditor.2 The Agreement for Sale of Manufactured Home (Agreement) states that Debtor "may take possession of the property, live in it, and continue in possession while this Agreement remains in effect." Debtor agreed to pay taxes and maintain fire insurance coverage, with Creditor named as the loss payee on the insurance policy. Debtor agreed not to transfer or assign his rights under the Agreement without Creditor's prior written permission. Debtor agreed not to move the mobile home from the location specified in the Agreement until the loan was paid in full. Debtor agreed to maintain the home in good repair, and Creditor retained the right to inspect it at any reasonable time upon reasonable notice to Debtor.
Under a section titled "Seller's remedies," the Agreement states:
Except as provided by law, if you default in making any payment or in performing any other obligation hereunder, we may either bring an action against you for specific performance, or enforce a forfeiture of your interest in the manufactured home. If a forfeiture is enforced, you will forfeit all rights and interests in and to the property and appurtenances, and shall immediately surrender to us peaceable possession of the property and forfeit to us, as liquidated damages, all payments made hereunder together with all improvements placed on or in the property. In no event shall the provisions of this paragraph affect our other lawful rights or remedies against you.
Finally, the Agreement states that "[u]pon your performance of all requirements under this Agreement, including payment of all sums due, we will convey to you good and marketable title free of all liens to this manufactured home."
Creditor had resold the home for $19,500.
Debtor alleged that Creditor was required, pursuant to Article 9 of the UCC, to provide him with notice of the sale of the mobile home. See S.C.Code Ann. § 36-9-504(3) (Supp. 1999). Debtor moved for partial summary judgment on the issue of liability, asserting a hearing was necessary only to determine damages under the formula established in S.C.Code Ann. § 36-9-507(1) (Supp.1999).
Creditor counterclaimed, requesting a deficiency judgment and sanctions under the South Carolina Frivolous Civil Proceedings Sanctions Act. Creditor admitted it had not sent Debtor or his estranged wife notice of the sale, but argued that Article 9 applies only to secured transactions and there was no security interest created by the Agreement. Creditor also contended that Debtor was not entitled to notice because he had abandoned the home and his estranged wife voluntarily had surrendered it to Creditor.
The trial judge granted summary judgment to Creditor. The judge ruled the Agreement constituted an unsecured loan and so the default and penalty provisions of Article 9 did not apply to the transaction. The Court of Appeals reversed, finding that the transaction between Debtor and Creditor falls squarely within the statutory definition of a secured transaction. Based on that determination, the Court of Appeals remanded the case for the trial judge to determine whether Brockbank's alleged abandonment of the home divested him of his rights under Article 9, including the right to notice of the sale.
A trial court may properly grant a motion for summary judgment when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c), SCRCP. Summary judgment is not appropriate when further inquiry into the facts of the case is desirable to clarify the application of the law. Tupper v. Dorchester County, 326 S.C. 318, 487 S.E.2d 187 (1997). Summary judgment should not be granted even when there is no dispute as to evidentiary facts if there is dispute as to the conclusion to be drawn from those facts. Id. In determining whether any triable issues of fact exist, the court must view the evidence and all reasonable inferences that may be drawn from the evidence in the light most favorable to the non-moving party. Manning v. Quinn, 294 S.C. 383, 365 S.E.2d 24 (1988). An appellate court reviews the granting of summary judgment under the same standard applied by the trial court pursuant to Rule 56, SCRCP. Williams v. Chesterfield Lumber Co., 267 S.C. 607, 230 S.E.2d 447 (1976); Wells v. City of Lynchburg, 331 S.C. 296, 501 S.E.2d 746 (Ct.App.1998).
A mobile home usually is classified as personal property. See City of North Charleston v. Claxton, 315 S.C. 56, 431 S.E.2d 610 (Ct.App.1993)
(. ) A security interest in a mobile home is perfected by listing the interest on the certificate of title. See S.C.Code Ann. § 36-9-302(3)(b) (Supp.1999) and Note 1 of South Carolina Reporter's Notes; S.C.Code Ann. §§ 56-19-210, 56-19-290(3), and 56-19-340 (1991 & Supp.1999). However, the Note 1 of South Carolina Reporter's Notes to S.C.Code Ann. § 36-9-302 (Supp.1999).
Article 9 of the UCC applies to "any transaction (regardless of its form) which is intended to create a security interest in personal property or fixtures including goods, documents, instruments, general intangibles, chattel paper, or accounts." S.C.Code Ann. § 36-9-102(1)(a) (Supp.1999). The In re Berry, 189 B.R. 82, 86 (Bankr.D.S.C. 1995) (quoting S.C.Code Ann. Title 36, Commercial Code, Background and Introduction, p. 14) (internal quotes omitted).
No magic words or precise form are necessary to create a security interest so long as the minimum formal requirements regarding perfection, attachment and enforceability are met. In re CFLC, Inc., 166 F.3d 1012, 1016 (9th Cir.1999) (citing In re Amex-Protein Dev. Corp., 504 F.2d 1056, 1058-59 (9th Cir.1974)); accord United Virginia Bank/Seaboard Natl. v. B.F. Saul Real Estate Inv. Trust, 641 F.2d 185, 189 (4th Cir.1981)
; Mitchell v. Shepherd Mall State Bank, 458 F.2d 700, 703 (10th Cir.1972). "The court must find both language in a written agreement that objectively indicates the parties' intent to create a security interest...
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