Gray-Taylor, Inc. v. Tennessee, GRAY-TAYLO

• Decision Date: 19 October 1978
• Docket Number: INC,GRAY-TAYLO,No. 17193,17193
• Citation: 573 S.W.2d 859
• Parties: 25 UCC Rep.Serv. 957 , d/b/a Jimmie Green Chevrolet, Appellant, v. Johnny TENNESSEE, Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 859

573 S.W.2d 859

25 UCC Rep.Serv. 957

GRAY-TAYLOR, INC., d/b/a Jimmie Green Chevrolet, Appellant, v. Johnny TENNESSEE, Appellee.

No. 17193.

Court of Civil Appeals of Texas, Houston (1st Dist.).

Oct. 19, 1978.

Rehearing Denied Nov. 16, 1978.

Bracewell & Patterson, William Fred Hagans, Andrew F. Spalding, Houston, for appellant.

Stephen J. Cavanaugh, Bellaire, for appellee.

PEDEN, Justice.

Gray-Taylor, Inc., d/b/a Jimmie Green Chevrolet, appeals from a judgment in a suit filed by Johnny Tennessee based primarily on the Texas Deceptive Trade Practices Act (Tex.Bus. & Comm. Code Ann. § 17.41 Et seq.). The jury found that Jimmie Green Chevrolet advertised a certain automobile for sale with the intent not to sell it as advertised a violation of Art. 17.45(9) of the Act, and that Jimmie Green's notice to the plaintiff of default on his vehicle was commercially unreasonable under Section 9.504(c), Texas Bus. & Comm. Code. The jury also determined reasonable attorney's fees and assessed damages. The trial court held as a matter of law that Jimmie Green violated the Federal Truth In Lending Act, 15 U.S.C. § 1601, Et seq., and Regulation Z, 12 C.F.R. § 226.1 Et seq., by failing to provide a signature line following the full context of the retail installment contract. Appellant asserts no evidence and insufficient evidence points of error, contends that the award of $426.77 as compensation to the appellee was excessive and says the awards of $197.67 as a penalty for violation of Section 9.507 of the Uniform Commercial Code and $172.60 as penalty for violation for the Truth In Lending Act and Regulation Z were erroneous.

In August, 1976, Johnny Tennessee read the newspaper ads for used cars. On the day in question two significant ones were run. The first, placed by a Mr. Ben Nolan, stated:

Grand Prix '75, take up payments, air, power, new radial tires, AM-FM radio, tilt steering wheel. Like new. Must sell. Owner getting company car. Installed CB, antenna and radar snooper optional. 358-6322

It is uncontroverted that the 358-6322 telephone number was at Mr. Nolan's residence and that he had no association with Jimmie Green Chevrolet.

The second ad, by Jimmie Green Chevrolet, was located on the same page, was much larger than the first, and advertised several cars for sale, including this one:

'75 Pontiac Grand Prix, black on black, bucket seats, center console, power steering, power brakes, power seats, mag wheels, new steel belted radial tires, one owner . . .

Three telephone numbers were listed: 529-0710, 529-0803 and 529-4911.

Tennessee was interested in taking over the notes on a 1975 Pontiac Grand Prix. He testified that when he "called the number in the paper", a man named Jones from Jimmie Green Chevrolet answered and said "the car that he had was a 1975 Grand Prix." Tennessee testified that it was not one on which payments could be taken over from the owner. In later testimony, the appellee admitted that the ad he saw "wasn't a Jimmie Green ad at all. It was a small print regular ad."

When the appellee arrived at Jimmie Green Chevrolet, he was informed that the car they said they had in stock had been sold but that they had other cars he might find of interest. He bought a 1969 Plymouth Fury for $200 down and agreed to make an additional payment of $150 on September 15, and the first installment of $94.80 on September 30. The contract price was $1093.75, with an additional $86.30 finance charge and a $23.60 insurance premium.

After accepting delivery of the car, the appellee had several problems with it. Its inspection sticker was expiring, so he returned it to Jimmie Green Chevrolet that same day. He finally got an inspection sticker, but two days later the brakes went out. The cost of repair was $104.29, and since the appellee was without funds, the mechanic held the car until he received a pay check. Meanwhile, he paid a coworker $20.00 every two weeks for transportation to and from work.

On September 16, Mr. Salter of Jimmie Green Chevrolet telephoned appellee concerning his default on the $150.00 payment due on September 15. Appellee complained that the repair bill for the car's brakes would keep him from making the entire payment. The parties disagree about whether an agreement was worked out.

The car was repossessed and notice of repossession was sent to the appellee, stating that the car would be sold at public sale on October 1, 1976, at 2:00 a. m. Mr. Salter admitted that the 2:00 a. m. time was an error and that the sale was scheduled for 2:00 p. m. On September 24, 1976, appellee's counsel asked that the automobile not be sold, and at the time of trial, the car was still being held on the company's premises.

Appellant first contends that the trial court erred in entering judgment for the plaintiff and in refusing to grant the defendant's motion for directed verdict because the judgment is founded on Special Issue Number 2, and there is no evidence to support the jury's affirmative answer to it. That issue asked:

Do you find from the preponderance of the evidence that Defendant Jimmie Green Chevrolet advertised the 'Grand Prix, '75, take up payments, air, power, new radial tires, AM-FM radio, tilt steering wheel. Like new. Must sell. Owner getting company car. Installed CB antenna and radar snooper optional, 358-6322?'

Special Issue Number 3 inquired:

Do you find from a preponderance of the evidence that the advertisement referred to in Special Issue No. 2 was made with intent not to sell the automobile as advertised?

It was also answered "We do."

Appellee does not contend that Jimmie Green placed the ad in question in the newspaper, only that its salesman "adopted" it by representing that such Grand Prix was available for sale when the appellee called to inquire. We have examined the entire record and can find no evidence that the appellant's salesman, Jones, represented that there was available, as the special issue inquired, a "Grand Prix, '75, take up payments, air, power, new radial tires, AM-FM radio, tilt steering wheel. Like new. . . . Installed CB antenna and radar snooper optional. 358-6322." Nor can we find any evidence that Jones represented to the appellee that Jimmie Green had an automobile that could reasonably be identified as the one described in the special issue. We agree that there is no evidence to support the jury's answer to Special Issue Number 2.

The submission of Special Issue Number 4 was predicated on an affirmative answer to No. 3, and inquired:

Do you find from a preponderance of the evidence that there was an adverse effect on the Plaintiff? 'Adverse Effect' means any damage or injury suffered as the proximate result of advertising the automobile referred to in Special Issues Number 2 and 3 with intent not to sell said automobile as advertised.

Special Issue Number 5, predicated on an affirmative answer to Number 4, asked whether the advertisement and intent referred to in Issues 2 and 3 were a producing cause of adverse effect on the plaintiff. In response to predicated issue No. 6, the jury found that $426.77 would reasonably compensate the plaintiff for the adverse effect caused by the advertisement and intent referred to in Special Issues 2 and 3.

We sustain the appellant's first point of error to the extent that the trial court's judgment is founded on the jury's affirmative answer to Special Issue No. 2; this includes the answers to Issues 3-6.

The trial judge awarded the plaintiff $197.67 as a penalty for violation of Section 9.507 of the Texas Business and Commerce Code after the jury found in response to Special Issue No. 1 that the "notice of default" sent to the plaintiff by the defendant was not commercially reasonable. That section of the Code provides:

Section 9.507 Secured Party's Liability for Failure to Comply with This Subchapter

(a) If it is established that the secured party is not proceeding in accordance with the provisions of this subchapter, disposition may be ordered or restrained on appropriate terms and conditions. If the deposition has occurred the debtor or any person entitled to notification or whose security interest has been made known to the secured party prior to the disposition has a right to recover from the secured party any loss caused by failure to comply with the provisions of this subchapter. If the collateral is consumer goods, the debtor has a right to recover in any event an amount not less than the credit service charge plus ten percent of the principal amount of the debt or the time price differential plus ten percent of the cash price. (emphasis added)

(b) The fact that a better price could have been obtained by sale at a different time or in a different method from that selected by the secured party is not of itself sufficient to establish that the sale was not made in a commercially reasonable manner. If the secured party either sells the collateral in the usual manner in any recognized market therefor or if he sells at the price current in such market at the time of his sale or if he has otherwise sold in conformity with reasonable commercial practices among dealers in the type of property sold he has sold in a commercially reasonable manner. . . .

" Consumer goods" are items bought or used primarily for personal, family or household use. Tex.Bus. & Comm. Code Ann. § 9.109.

In the appellant's eighth point of error it says the trial court erred in awarding a recovery to the plaintiff for the commercially unreasonable notice of sale because the...