Dungan v. Dick Moore, Inc., 54557

• Decision Date: 13 February 1985
• Docket Number: No. 54557,54557
• Citation: 463 So.2d 1094
• Parties: Gary P. DUNGAN and Judy Dungan v. DICK MOORE, INC.
• Court: Mississippi Supreme Court

Page 1094

463 So.2d 1094

Gary P. DUNGAN and Judy Dungan v. DICK MOORE, INC.

No. 54557.

Supreme Court of Mississippi.

Feb. 13, 1985.

Ben Barrett Smith, D. Ronald Musgrove, Batesville, for appellants.

R.M.P. Short, Sardis, for appellee.

Before WALKER, P.J., and HAWKINS and ROBERTSON, JJ.

ROBERTSON, Justice, for the Court:

I.

This brouhaha arises out of a secured transaction under which the seller has repossessed and sold a mobile home said, ineffectually, by the buyer to have 52 identifiable defects. The proceedings move from the unusual to the bizarre as at practically every step--service of replevin process, the purported redemption of the mobile home, the proceeding under what was formerly known as a writ of inquiry--errors were committed (although in fairness to the trial judge it readily appears that in these somewhat intricate areas of the law he received little or no help from counsel). In the end, having regard only for the points properly preserved for appeal and the assignments of error presented, the judgment below which is to the effect that the buyers are entitled to no damages as a result of the alleged wrongful repossession of their mobile home must be affirmed.

II.

On August 7, 1981, Gary P. Dungan and Judy Dungan, husband and wife, (sometimes hereinafter "Dungans"), purchased from Dick Moore, Inc., a corporation having its principal place of business in Memphis, Tennessee, (sometimes hereinafter "Moore"), one Del Rio mobile home. The Dungans were Defendants below and are Appellants here. Dick Moore, Inc. was the original Plaintiff below and is the Appellee here.

The Dungans made a downpayment of $5,860.00. The balance of the purchase price was financed via a mobile home retail installment contract executed between Moore and the Dungans and providing for the payment of the unpaid balance of $14,089.76 in 95 monthly installments of $288.72 each. The contract provided that Moore held a security interest in the mobile home to secure performance by the Dungans of their obligations under the retail installment contract.

Shortly thereafter, the Dungans took delivery of the mobile home and occupied it as their place of residence near Enid in rural Yalobusha County, Mississippi. After the Dungans had made only one of the installment payments called for by the contract, a dispute arose between the parties regarding the condition of the mobile home. The Dungans stopped making their monthly payments and claimed that there were at least 52 identifiable defects in the mobile home for the repair of which Moore was responsible. Moore denied this but nevertheless attempted to make repairs. As a result neither party has been satisfied, and, indeed, they have gravitated to the point where a barely civil state of warfare exists.

By February of 1982, the Dungans were six months in arrears in their payments. Invoking rights secured to it by law and by its agreement with the Dungans, Moore took steps to enforce its security interest. ¹ On February 17, 1982, Moore commenced this civil action by filing its complaint for replevin in the Circuit Court of Yalobusha County, Mississippi. The record reflects that prior to this time the Dungans had moved out of the trailer and were living in rental housing in Memphis.

On March 1, 1982, the Circuit Court entered a default judgment in favor of Moore and against the Dungans in the replevin action. Shortly thereafter, Moore physically obtained possession of the mobile home and moved it to Memphis. On March 30, 1982, Moore sent a registered letter to the Dungans advising them of the amount owed and indicating that liquidation was imminent. Immediately thereafter, the Dungans filed a motion to set aside the default judgment. They did not, however, seek to enjoin or restrain the sale. Despite actual knowledge that the default judgment in replevin was being contested, Moore sold the mobile home on April 9, 1982, for the sum of $11,200.00.

Some two months later the motion to set aside the default judgment was heard. At the hearing it developed that the process upon which the judgment had been predicated was defective. On May 31, 1982, the Circuit Court entered its order vacating the default judgment the effect of which was to reinstate Moore's original complaint for replevin. That matter was then set for hearing on its merits on June 3, 1982.

Prior to the June 3 hearing, the Dungans, purporting to act under the authority of Miss.Code Ann. Sec. 89-1-59 (Supp.1984), tendered to Moore all amounts due and owing as of that date under the retail installment contract. The Circuit Court regarded this tender as having redeemed the mobile home and, on June 14, 1982, entered an order dismissing Moore's complaint for replevin and further provided, in pertinent part:

10. That the Plaintiff [Dick Moore, Inc.] shall return, within five (5) days of this date, unto Defendants the 1981 Del Rio 80" OVA 76" FLR x 14, 3T2 Twimscs 11354 Mobile Home which was taken from Defendants by Plaintiff on or about 8 March 1982.

11. That in the alternative, if Plaintiff fails to return Defendant's [the Dungans] 981 Del Rio 80' OVA 76" FLR x 14 3T2 Twimscs 11354 Mobile Home, the Court order Plaintiff to pay unto Defendants the reasonable value of said Mobile Home.

The June 14, 1982 order further provided that a hearing would be held via a writ of inquiry to determine what damages may have accrued to the Dungans.

The mobile home which was the subject of the contract was, as indicated above, a 1981 Del Rio mobile home. The testimony was undisputed that when repossessed it was in a damaged condition although who was responsible for the damage was hotly disputed. In any event, within five (5) days of the June 14, 1982 order, Moore tendered to the Dungans a new 1982 Del Rio mobile home of the same size, shape, design and floor plan, and comparably furnished and equipped. It is undisputed that the 1982 mobile home tendered was in better condition and was of greater value than the 1981 home. This tender was refused by the Dungans.

The hearing ² on the matter of the Dungans' damages was held in the Circuit Court of Yalobusha County, Mississippi, on August 18, 1982. At that hearing the Dungans established that between February and June of 1982 they had been living in Memphis and had been paying a monthly rental of $270.00. They had also incurred a charge for the storage of furniture in the amount of $26.00 a month. The Dungans offered no testimony that they had moved out of the home because it was uninhabitable or because of Moore's alleged failure to make requested repairs.

Following the hearing the Circuit Court entered its order finding as follows:

The Defendants had moved out of the trailer prior to the replevin action and were living in Memphis, Tennessee.

Plaintiff, Dick Moore, Inc., offered to replace the mobile home that was replevined and sold with a new 1982 model mobile home, within the time frame of the Court's order dated June 14, 1982.

Defendants refused to accept such offer of Plaintiff.

The Court then found and held that the Dungans had "totally failed to prove any damages" and dismissed the writ of inquiry. From that order the Dungans have perfected the instant appeal.

III.

The events leading up to the hearing, which is the subject of this appeal, reflect a more than modest misunderstanding of the law on the part of everyone involved. A reference to a few basics is necessary.

A.

The Dungans granted to Dick Moore, Inc. a security interest in the original mobile home. In relevant part, this transaction is governed by Article 9 of the Uniform Commercial Code. While we recognize that an argument could be made that Tennessee's version of the UCC could be made applicable, the parties throughout seem to have conceded that Mississippi law should govern and, accordingly, we will proceed by reference to Article 9 of the Mississippi UCC. Miss.Code Ann. Secs. 75-9-101 et seq. (1972).

The Dungans made one payment on their obligations to Moore and stopped payment on the check for the second. By February of 1982, the Dungans were six months in arrears. Under such circumstances, Moore had a right to the possession of the mobile home. Miss.Code Ann. Sec. 75-9-503 (1972).

Moore's entitlement to possession is a matter of substantive right emanating from the application of the provisions of Section 75-9-503 to the fact of the failure of the Dungans to make the payments required in the note. The UCC provides that one procedure whereby the secured party such as Moore might obtain possession is "by action", in this instance by an action in replevin. Miss.Code Ann. Sec. 75-9-503 (1972); see General Electric Credit Corp. v. Fred Pistone, Jr., Inc., 68 Misc.2d 475, 326 N.Y.S.2d 898 (1971). The statute also provides that a secured party may proceed without judicial process if this can be done without breach of the peace.

On March 8, 1982, Moore obtained possession of the mobile home. A secured party after default may sell the collateral by public or private proceedings. Miss.Code Ann. Sec. 75-9-504(1) and (3). Moore immediately gave notice to the Dungans of its intention to sell the mobile home. The Dungans acknowledged that they received this notice. The mobile home was subsequently sold by Moore for $11,200.00. The Dungans have in no way suggested any deficiency in the sale proceedings or any other violation of their rights accorded by Sec. 75-9-504 or any other provision of Article 9 of the UCC. The sale was held on April 9, 1982.

An aspect of the point bears emphasis. The Dungans sought to vacate the default order for a replevin because of a defect in process. That defect called into question Moore's procedural right to possession of the mobile home under the replevin statutes only. Moore's substantive right to possession of the collateral existed by virtue of Part 5 of Article 9 of the Mississippi Uniform Commercial Code, and, more particularly, Section 75-9-503. If the Dungans had substantial...