Ford Motor Credit Co. v. Harris

• Citation: 386 S.W.3d 864
• Decision Date: 09 November 2012
• Docket Number: No. SD 31568.,SD 31568.
• Parties: FORD MOTOR CREDIT COMPANY LLC, Plaintiff–Respondent, v. David HARRIS, Defendant–Appellant.
• Court: Court of Appeal of Missouri (US)

386 S.W.3d 864

FORD MOTOR CREDIT COMPANY LLC, Plaintiff–Respondent,

v.David HARRIS, Defendant–Appellant.

No. SD 31568.

Missouri Court of Appeals,

Southern District,

Division Two.

Nov. 9, 2012.

Donald M. Brown, Bolivar, MO, for Appellant.

Bradley D. Pierce, St. Louis, MO, for Respondent.

DON E. BURRELL, J.

David Harris (“Buyer”) appeals the deficiency judgment awarded against him after a bench trial in favor of Ford Motor Credit Company, LLC (“Assignee”) on its claim that Buyer breached his automobile purchase agreement. Buyer's single, multifarious point claims the trial court erred in finding that Assignee satisfied its burden of proof because Assignee failed to properly authenticate “certain business records” and no substantial evidence proved that Buyer's repossessed vehicle “was disposed of in a commercially reasonable manner[.]” Because Buyer failed to properly preserve his error claims, we affirm.

Applicable Principles of Review & Substantive Law

The trial court's judgment is presumed correct; it is Buyer's burden to demonstrate that it is incorrect. Delaney v. Gibson, 639 S.W.2d 601, 604 (Mo. banc 1982). As a result, we must affirm the judgment unless Buyer successfully demonstrates that there is “no substantial evidence to support it, unless it is against the weight of the evidence, or unless it erroneously declares or applies the law.” Ford Motor Credit Co. v. Henson, 34 S.W.3d 448, 450 (Mo.App. S.D.2001). We view the evidence and all reasonable inferences from it in the light most favorable to the judgment, and we must disregard all contrary evidence and inferences. Id. We presume that the trial court correctly overruled objections to proffered evidence, and we will reverse only if the trial court abused its discretion. C & W Asset Acquisition, LLC v. Somogyi, 136 S.W.3d 134, 137 (Mo.App. S.D.2004). “A [trial] court abuses its discretion in ruling on the admissibility of evidence when its ruling is illogical and so unreasonable and arbitrary that it shocks our sense of justice or indicates a lack of careful, deliberate consideration.” Stokes v. National Presto Indus., Inc., 168 S.W.3d 481, 483 (Mo.App. W.D.2005).

The Admission of Business Records

Section 490.680¹ operates as a “business records exception” to the hearsay rule, see Discover Bank v. Smith, 326 S.W.3d 120, 123 (Mo.App. S.D.2010), and provides that such a record is

competent evidence if the custodian or other qualified witness testifies to its identity and the mode of its preparation, and if it was made in the regular course of business, at or near the time of the act, condition or event, and if, in the opinion of the court, the sources of information, method and time of preparation were such as to justify its admission.

Disposition of Collateral after Default

A secured party's disposition of collateral after default is governed by section 400.9–610, which states,

Every aspect of a disposition of collateral, including the method, manner, time, place, and other terms, must be commercially reasonable. If commercially reasonable, a secured party may dispose of collateral by public or private proceedings, by one or more contracts, as a unit or in parcels, and at any time and place and on any terms.

Missouri requires strict compliance with this provision, Henson, 34 S.W.3d at 450, and compliance is a matter to be proven by the secured party; there is no requirement that the debtor raise commercial unreasonableness as an affirmative defense. Citizens Nat'l Bank v. Robertson, 101 S.W.3d 302, 304 (Mo.App. E.D.2003). Whether a sale is commercially reasonable is a question of fact. Id.;Henson, 34 S.W.3d at 451. When a fact is contested, we defer to the assessment of evidence made by the trial court. See Sneil, LLC v. Tybe Learning Ctr., Inc., 370 S.W.3d 562, 567 (Mo. banc 2012).

Facts and Procedural Background

Assignee's only witness at trial was Ann Tummons, a business development manager for Assignee. Ms. Tummons testified that the records she brought to court as “Plaintiff's Group Exhibit 1” (“Exhibit 1” ²) were kept under the care, custody and control of Assignee in connection with its business dealings with Buyer. She said she had worked for Assignee for 25 years in different positions.

Ms. Tummons was familiar with Assignee's policies and procedures regarding its records, and she testified that the documents in Exhibit 1 were prepared in the regular course of Assignee's business. “To the best of [her] knowledge,” the documents contained in Exhibit 1 were prepared “at or reasonably contemporaneously with” matters stated in the records. When Assignee's counsel offered Exhibit 1 into evidence, counsel for Buyer stated, “Your Honor, I would—I would object due to the lack of the witness' qualification to authenticate a document from Blue Ridge Imports, Incorporated [“Dealer”] and/or Mazda American Credit.” The trial court overruled the objection, stating that “a sufficient foundation has been laid to show that these are the records of Ford Motor Credit, which [Ms. Tummons] purports to be a custodian of.” ³

Ms. Tummons testified that Exhibit 1 included “a Missouri Retail Installment Contract” showing that Buyer bought a 2005 Hyundai Elantra (“the vehicle”), “gap protection,” and an extended warranty from Dealer in July 2008 for $9,999. The contract interest rate was 12.49%, and the total cost for the vehicle, with financing, was $17,633.40, payable in 60 monthly installments of $268.89 each. The contract stated that if Buyer defaulted on his monthly payments, the vehicle could be repossessed, and Buyer would be liable for attorney fees. Ms. Tummons testified that the contract “specifically provide [d]” an assignment to Assignee, doing business as Mazda American Credit. Ms. Tummons also testified without objection that Exhibit 1 included a credit application that showed Assignee as having an interest in the transaction “from the beginning[.]”

Ms. Tummons testified that Buyer made a total of 15 payments, and he made no further payments after January 5, 2010. Assignee provided notice of default to Buyer, dated February 5, 2010, and gave him until February 25, 2010, to pay the past-due amount. When Buyer did not pay the arrearages by that date, Assignee repossessed the vehicle. Assignee then sent another notice on March 5, 2010, that informed Buyer that Assignee intended to sell the vehicle at a private sale. The notice gave Buyer ten days from the date of the notice to redeem the vehicle. According to Ms. Tummons, both notices were included in Exhibit 1.

In testifying about a report on the condition of the vehicle at the time Assignee repossessed it, Ms. Tummons referred to a “Manheim Auction” ⁴ document contained in Exhibit 1. At this point, Buyer's counsel stated, “Your Honor, I'm going to just—just for the record renew my objection to any documents from Manheim Auction, as there is simply nobody here to authenticate this business record.” ⁵ The trial court overruled the objection, stating that “the earlier foundation covered the entire [Assignee] batch of documents of Exhibit 1.”

Ms. Tummons went on to testify that the vehicle was “[n]ot in very good condition. Below average.” Specifically, “it had hail damage, [a] cracked windshield, dents, dings, and there were burn holes in the—on the interior of the vehicle. The battery was dead. The oil was dirty.” Assignee estimated the vehicle's value at “a little more than $3,900.” According to Ms. Tummons, “[t]he auction said it would be worth around [$]4,175.” After Buyer's redemption period had expired, Assignee had the vehicle sold by Manheim Auction at a “[d]ealers only” auction that resulted in a sale price of $4,000. Buyer did not object to any of the foregoing testimony.

Ms. Tummons also testified—without objection—that it was customary for Assignee to sell repossessed vehicles at ManheimAuction, and she was aware that other finance companies sold repossessed cars “in this fashion [.]” Based upon her experience, the sale of the vehicle was a commercially reasonable sale. She personally attended “the auctions from time to time,” but she did not think that she was at the auction in which Buyer's vehicle was sold. After subtracting all credits and then adding repossession fees and interest as of the date of the sale, Buyer owed $5,910.26 under the contract. Ms. Tummons requested that Assignee be awarded attorney fees of $886.54, plus additional interest at 12.49% from the date of the sale. Buyer's counsel cross-examined Ms. Tummons, but he presented no other evidence on behalf of Buyer.

The trial court found that the vehicle was “picked up in substandard condition [,]” and stated, “The fact that they were able to get $4,000 at a sale for dealers present, and I have—frankly, believe that's about as commercially reasonable as you can expect.” It thereafter entered judgment for $5,910.26 as principal, $614.72 in interest, and $886.54 for attorney fees for a total award of $7,411.52, plus court costs and post-judgment interest. Buyer's appeal timely followed.

Analysis

Buyer's point states:

The trial court erred in finding and concluding that [Assignee] met its burden of proving that [Assignee] was entitled to a judgment for deficiency after disposition of collateral authenticity [sic] because the trial court's final judgment, findings, and conclusions as to the existence of the foundational requirements of business records and the standard for commercial reasonableness of collateral disposition were not supported by substantial evidence, were against the weight of the evidence, and erroneously declared or applied the law in that [Assignee] failed to submit substantial evidence to support the authentication of certain business records which were introduced and accepted into evidence at trial; and in that [Assignee] failed to prove [sic] to submit substantial evidence to support a finding that the collateral in question was disposed of in a commercially reasonable manner in all respects as...