Landmark First Nat. Bank of Fort Lauderdale v. Gepetto's Tale O' The Whale of Fort Lauderdale, Inc.

• Decision Date: 04 December 1986
• Docket Number: No. 68348,68348
• Citation: 11 Fla. L. Weekly 626,498 So.2d 920
• Parties: 11 Fla. L. Weekly 626, 2 UCC Rep.Serv.2d 1136 LANDMARK FIRST NATIONAL BANK OF FORT LAUDERDALE, Petitioner, v. GEPETTO'S TALE O' THE WHALE OF FORT LAUDERDALE, INC., et al., Respondents.
• Court: Florida Supreme Court

Page 920

498 So.2d 920

11 Fla. L. Weekly 626, 2 UCC Rep.Serv.2d 1136

LANDMARK FIRST NATIONAL BANK OF FORT LAUDERDALE, Petitioner, v. GEPETTO'S TALE O' THE WHALE OF FORT LAUDERDALE, INC., et al., Respondents.

No. 68348.

Supreme Court of Florida.

Dec. 4, 1986.

Constance G. Grayson of English, McCaughan & O'Bryan, Ft. Lauderdale, for petitioner.

John J. Murphy of Pallotto, Hayson and Murphy, Hollywood, for respondents.

SHAW, Justice.

We have for review Gepetto's Tale O' the Whale v. Landmark First National Bank, 481 So.2d 1282 (Fla. 4th DCA 1986), which expressly and directly conflicts with Ayares-Eisenberg Perrine Datsun, Inc. v. Sun Bank, 455 So.2d 525 (Fla. 3d DCA 1984), and Bank of Oklahoma v. Little Judy Industries, Inc., 387 So.2d 1002 (Fla. 3d DCA 1980). We have jurisdiction. Art. V, § 3(b)(3), Fla. Const.

Gepetto's Tale O' the Whale of Fort Lauderdale, Inc. (Gepetto's) borrowed $100,000 from Landmark First National Bank of Fort Lauderdale (Landmark) as evidenced by a promissory note secured by collateral and a guarantee agreement. Gepetto's defaulted on the loan and Landmark filed suit against Gepetto's and the guarantors (hereinafter respondents). Pursuant to a prejudgment writ of replevin, Landmark obtained possession of the collateral. A "final summary judgment" was entered against the respondents, establishing the amount of the indebtedness at $69,950.99, and ordering disposal of the collateral in a commercially reasonable manner, any sums received therefrom to be credited against the indebtedness. The court reserved jurisdiction for "enforcement and award of attorney fees." Landmark conducted a private sale, receiving $1,350 for the collateral which had secured the $100,000 loan three years prior to the sale.

The respondents filed a petition for accounting and setoff and later an amended petition for declaratory relief and setoff, praying that the judgment be declared satisfied. As grounds therefor, the respondents asserted that Landmark failed to give notice of the sale as required by section 679.504(3), Florida Statutes (1983), ^* and that Landmark sold the collateral in a commercially unreasonable manner. The trial court denied the petition, finding that the respondents had been provided a copy of the "final summary judgment" ordering the sale and that "no further specific notice was required." The Fourth District Court of Appeal reversed and remanded with instructions to declare the indebtedness satisfied, finding that "the bank's failure to comply with the statutory notice requirement precludes entry of a deficiency judgment." 481 So.2d at 1284.

Landmark now argues that it is not seeking a deficiency judgment, but rather, is exercising rights represented by the "final summary judgment." Landmark thus contends that it is exempt from the notice requirements of section 679.504(3), pursuant to section 679.104(8), which provides that chapter 679 does not apply to "a right represented by a judgment (other than a judgment taken on a right to payment which was collateral)."

The district court, however, noted that

neither party has argued that the "[final summary] judgment," entered on February 17, 1982, resolved the litigation between the parties. Indeed, the language of the judgment indicates that it was an interim measure which anticipated future judicial adjustment after the bank disposed of the collateral. Thus, the second stage of litigation, initiated by the guarantors' [and Gepetto's] petition for an accounting and set off, is, in reality, an effort to establish a final deficiency judgment. That is how the parties tried it below and briefed the case on appeal.

481 So.2d at 1283. We find that the record supports the district court's opinion in this regard. Further, at oral argument before this Court, Landmark admitted that the finality of the "final summary judgment" had not been raised below. This argument has, therefore, been waived, and we proceed with the merits as they were presented to the district court.

Landmark next argues that respondent's receipt of a copy of the "final summary judgment" was itself "reasonable notification of the time after which ... [the] private sale ... [was] to be made," as required by section 679.504(3). We cannot agree. The final summary judgment did not specify whether the sale was to be public or private. Without further notification as to the nature of the sale, respondents could not know what steps would be appropriate to protect their interests.

The district court found that the failure to give notice precluded Landmark from seeking a deficiency judgment. We rejected this approach in Weiner v. American Petrofina Marketing, Inc., 482 So.2d 1362 (Fla.1986). Section 679.504(2), Florida Statutes (1983), provides that "[i]f the security interest secures an indebtedness, the secured party must account to the debtor for any surplus, and, unless otherwise agreed, the debtor is liable for any deficiency." We noted in...