Jones v. Bank of Nevada

• Decision Date: 30 May 1975
• Docket Number: No. 7686,7686
• Citation: 91 Nev. 368,535 P.2d 1279
• Parties: , 17 UCC Rep.Serv. 333 Clifford A. JONES and Lloyd E. Percell, Individually, and as copartners dba Percell-Jones Leasing Company, Appellants, v. BANK OF NEVADA, a Nevada Banking Corporation, Respondent.
• Court: Nevada Supreme Court

Page 1279

535 P.2d 1279

91 Nev. 368, 17 UCC Rep.Serv. 333

Clifford A. JONES and Lloyd E. Percell, Individually, and as copartners dba Percell-Jones Leasing Company, Appellants, v. BANK OF NEVADA, a Nevada Banking Corporation, Respondent.

No. 7686.

Supreme Court of Nevada.

May 30, 1975.

Paul V. Carelli, III, Las Vegas, and William M. Spence, Phoenix, Ariz., for appellants.

Smith & O'Brien, Las Vegas, for respondent.

OPINION

MOWBRAY, Justice:

On May 29, 1969, appellants-defendants, Clifford A. Jones and Lloyd E. Percell, executed a promissory note and a security agreement covering a certain Beechcraft Westwind aircraft in favor of the respondent-plaintiff, Bank of Nevada. Jones and Percell defaulted in the payment of the note, and as a result thereof the Bank took possession of the aircraft in April 1970. Bank sold the aircraft for $71,000 and thereafter instituted this action for a deficiency judgment of $75,330.56 against Jones and Percell, individually, and against the copartnership of Percell-Jones Leasing Company.

1. Bank filed its complaint in the court below on August 27, 1971. Defendants answered on October 7, 1971, asserting as their principal defense that the aircraft was not sold in a commercially reasonable manner.

The case was eventually set for trial on March 14, 1973. Two days prior thereto, however, Jones, acting as counsel for all defendants, filed a motion for continuance, on the ground that he would be out of the country and that Percell would be absent from the State on the date of trial. The motion was granted, and the trial rescheduled for May 14, 1973.

On May 9, 1973, the defendants filed a substitution of attorneys, wherein their present counsel, Paul V. Carelli, III, was substituted in the place of Jones. At the same time, defendants' new counsel filed a motion '. . . for an order vacating that certain trial date of the above matter presently set for May 14, 1973 . . .' The district judge granted the motion to continue the trial and permitted the association of out-of-State counsel; but the judge entered an order denying further discovery.

2. Jones and Percell argue, first, that the trial court erred in denying them the right to engage in pretrial discovery. We turn to consider this contention. Nineteen months elapsed between the time Jones and Percell answered the complaint and the date of their second motion to continue the trial. During this period there was no request for admissions nor any attempt to take depositions nor were interrogatories submitted. There was simply no attempt on their part to move for any pretrial discovery; nor was their initial request for continuance of a trial date predicated upon the ground that more discovery time was needed. The second motion for a continuance was based on the fact that new counsel had been retained. The supporting affidavit of counsel failed to list the names and addresses of any persons sought to be deposed, the substance of the testimony to be elicited, and the materiality of the same.

The transcript reflects that Percell testified extensively at trial, although Jones was never present nor the reason for his absence indicated. Numerous exhibits were introduced by appellants. Jack Green, appellants' expert witness, voluntarily appeared and testified. A search of the record fails to disclose the prejudice complained of, or if any such existed, the record has not been preserved for our consideration on appeal. ¹ Quite to the contrary, appellants' counsel announced at the time of trial that they were ready to proceed. See Heffron v. Los Angeles Transit Lines, Inc., 170 Cal.App.2d 709, 339 P.2d 567 (1959, hearing denied, 1959).

A trial judge must be afforded reasonable discretion in controlling the conduct of pretrial discovery. As the court said in Heffron, supra, 339 P.2d at 570:

'. . . Without reasonable judicial control, the instruments of discovery are susceptible to abuse and may be utilized for purposes of delay, annoyance and harassment. . . .'

And, again, the rule was appropriately stated in Price v. H. B. Green Transportation Line, Inc., 287 F.2d 363, 366 (7th Cir. 1961):

'The record shows that the defendant made no effort to employ discovery procedures until the cause had been set for trial. Under these circumstances we find that there was no error by the District Judge in refusing to allow the defendant to take the depositions of the plaintiff's 'examining physicians.' . . .'

And so, in the instant case, we hold that the district judge's ruling was a reasonable exercise of the court's discretion in the proper and necessary control of discovery proceedings.

3. We move to the second and fundamental issue presented by this appeal--whether Bank's disposition of the aircraft satisfied the requirements of the Uniform Commercial Code as adopted by the State of Nevada.

Specifically, the Code sections involved are NRS 104.9504(3) ² and NRS 104.9507(2), ³ wherein 'commercial reasonableness' is the controlling factor. The answer is predicated upon the particular circumstances of the disposition of the aircraft

Following its repossession on April 9, 1970, and notification to appellants that the plane would be sold on or after April 24, 1970, Bank caused advertisements to be placed in General Aviation News, Trade-A-Plane, the Wall Street Journal, the National Observer, and the major newspapers in Los Angeles, Denver, Salt Lake City, Chicago, and New York. Bank caused about 2,000 brochures to be prepared and distributed to approximately 240 sales organizations in the United States, to fixed-based operators who were qualified to operate this type of airplane, and to major sales organizations of used aircraft. Bank further hired a sales representative to assist in marketing the aircraft. Those offers received were either contingent upon further financing or the offers were too low for consideration.

On June 22, 1971, the plane was sold to Omni Aircraft, an aircraft broker in Arizona, at a price of $71,000, the highest cash offer submitted. This aircraft broker, in turn, resold the plane for $123,000, exclusive of broker's commission, but not before it was required to expend about $33,000 in necessary modifications to effect the resale of the aircraft. The plane was an unpressurized converted military unit built in the 1950s.

Although various estimates of the plane's worth appear in the record, the price obtained upon sale is not the sole...