Gilbert v. Farmers & Merchants Bank

• Court: Georgia Court of Appeals
• Writing for the Court: SOGNIER; BANKE, P.J., and POPE
• Citation: Gilbert v. Farmers & Merchants Bank, 385 S.E.2d 782, 192 Ga.App. 700 (Ga. App. 1989)
• Decision Date: 05 September 1989
• Docket Number: No. A89A1376,A89A1376
• Parties: GILBERT v. FARMERS & MERCHANTS BANK.

Page 782

385 S.E.2d 782

192 Ga.App. 700

GILBERT v. FARMERS & MERCHANTS BANK.

No. A89A1376.

Court of Appeals of Georgia.

Sept. 5, 1989.

Alfred D. Fears, Jr., Jackson, for appellant.

Donald W. Huskins, Eatonton, for appellee.

SOGNIER, Judge.

The Farmers & Merchants Bank brought suit against Hubert E. Gilbert seeking a deficiency judgment after repossessing and selling a piece of logging equipment pledged as collateral by Gilbert on a loan on which he defaulted. Gilbert answered and counterclaimed, alleging the bank had failed to dispose of the collateral in a commercially reasonable manner. Cross motions for summary judgment were filed, and the trial court granted the bank's motion and denied that of Gilbert. Gilbert appeals.

The record reveals that on May 7, 1985, the equipment, a 1982 Case Uni-Loader, Model 1845, was originally pledged to appellee as collateral for a loan in the amount of $7,641.19. On October 2, 1986, the balance remaining on that loan, $4,551.91, was refinanced with the Uni-Loader in question remaining as collateral for the new loan. Appellant admitted at his deposition that he defaulted on the loan, and that he parked the Uni-Loader in his yard to enable appellee to repossess it. It is uncontroverted that appellant received notice, complying with the U.C.C.'s requirements, that the equipment would be sold at a private sale. See OCGA § 11-9-504(3). After repossession, the Uni-Loader was held at a local car and truck lot in anticipation of sale and for viewing by prospective bidders, and was eventually sold to the highest bidder for $1,000.

1. Appellant contends a material issue of fact exists regarding whether appellee carried its burden of proving that the sale price obtained for the Uni-Loader was equal to its fair market value, and thus the trial court erred by granting summary judgment to appellee regarding the commercial reasonableness of the sale.

"[A] creditor who ... fails to prove that the disposition (sale), including its method, manner, time, place and terms, was commercially reasonable, is barred from obtaining a deficiency judgment, [cit.], except where the sole defect is the adequacy of the sale price, in which event the creditor is not barred from recovery but must overcome the presumption that the value of the collateral equals the debt on it. [Cits.] This presumption is overcome by proving the fair and reasonable value of the collateral, whereupon the creditor is entitled to a deficiency judgment in the amount of the debt (plus or minus any payments or charges properly applicable to the disposition) less the fair and reasonable value of the collateral proved by the creditor (if the resale price is less than the fair and reasonable value proved). [Cit.]" Farmers Bank v. Hubbard, 247 Ga. 431, 436-437, 276 S.E.2d 622 (1981).

Although this case, unlike Hubbard, was decided on summary judgment rather than by a jury after hearing evidence, "[t]he commercial reasonability of a sale of personalty under [OCGA § 11-9-504] is as appropriate a subject of summary judgment as any other issue triable by a jury. Ultimately the commercial reasonability of a sale of repossessed collateral may be a question of law; where the creditor shows prima facie that the sale was reasonable, to prevent summary judgment the debtor must support his challenge to the sale by asserting specific facts showing there is a genuine issue for trial. [Cits.]" Slaughter v. Ford Motor Credit Co., 164 Ga.App. 428-429, 296 S.E.2d 428 (1982). However, in this case, although appellee may have presented a prima facie case that the sale price was equal to the fair market value of the collateral in its affidavits in support of its motion for summary judgment, each and every one of these affidavits was rebutted by appellant in his own affidavits submitted in opposition to the motion.

Appellee proffered affidavits from Moses Greene, the buyer, who deposed that the equipment was not worth the $1,000 he paid for it; that the motor and transmission were "locked up"; and that it had no starter and the tires were all flat; A. Sidney Lane, the loan officer, who deposed that the equipment was "a piece of junk"; Jimmy Davis, the car and truck dealer on whose lot the equipment was placed, who stated that he was "familiar with the value of equipment of this type generally" and was of the opinion that $1,000 "was the best price that...