Massey-Ferguson Credit Corp. v. Black

• Decision Date: 17 January 1989
• Docket Number: No. 54067,MASSEY-FERGUSON,54067
• Citation: 764 S.W.2d 137
• Parties: 9 UCC Rep.Serv.2d 815 CREDIT CORPORATION, Respondent, v. Patricia J. BLACK and Lisa Ann Black, Appellants.
• Court: Missouri Court of Appeals

Page 137

764 S.W.2d 137

9 UCC Rep.Serv.2d 815

MASSEY-FERGUSON CREDIT CORPORATION, Respondent, v. Patricia J. BLACK and Lisa Ann Black, Appellants.

No. 54067.

Missouri Court of Appeals,

Eastern District,

Division Three.

Jan. 17, 1989.

Carla Wood Tanzey, Private Atty., Mexico, for respondent.

Carrie Diane Francke, Private Atty., Columbia, for appellants.

SIMON, Judge.

Appellants, Patricia J. Black and Lisa Ann Black, appeal a judgment entered on a jury verdict in favor of respondent, Massey-Ferguson Credit Corporation, awarding respondent $1,363.00 together with interest in the amount of $807.00 on Count I and $30,038.00 together with interest in the amount of $17,630.00 on Count II. Count I alleged that both appellants had signed a Retail Installment Contract and Security Agreement with respondent secured by a B & B cultivator. Count II alleged that appellant, Patricia J. Black, had signed a Retail Installment Contract and Security Agreement secured by a Massey-Ferguson 540 combine, a table, and a reel. Respondent alleged that appellants had made no payments on either contract.

On appeal, appellants contend that the trial court erred in: (1) overruling their motion to disqualify opposing counsel in that respondent's counsel had represented appellants in a substantially related matter; (2) denying their motion to dismiss for lack of standing to assert a claim because respondent's corporation is not registered as a foreign corporation in Missouri and is, therefore, unable to maintain a suit under § 351.635 RSMo (1978) (all references shall be to RSMo 1978 unless otherwise noted); (3) allowing respondent's counsel to question appellant, Patricia J. Black, about collateral matters, such as prior litigation, placing her character in issue, and improperly stating the import of such litigation; (4) refusing Instruction No. A, defining the term "commercially reasonable," which is not within the common understanding of the jury; and (5) denying their motion for a directed verdict at the close of all the evidence and in denying appellants' motion for a new trial because the evidence was insufficient to show that the respondent disposed of the repossessed collateral in a commercially reasonable manner. We affirm.

In October of 1982, appellants purchased a used B & B cultivator for $2,750.00. Appellant made a cash down payment of $825.00, leaving an unpaid balance of $1,925.00 which the appellants financed at 18.9%. The amount financed was to be paid in annual installments, the first of which was due November 1, 1983. Appellant, Patricia J. Black, also purchased a new Massey-Ferguson 540 Combine, a table, and a reel. The total purchase price was $59,100.00. A $10,000.00 rebate and $12,600.00 trade-in left a balance of $36,500.00 which was financed at 18.9% interest. The payments were to be paid in four annual installments, with the first being due on November 1, 1983. Both the cultivator and the combine were purchased from Brandenburger Brothers, Inc. (Brandenburger), of Bowling Green, Missouri.

Brandenburger sold Massey-Ferguson and Case Farm Equipment as well as various equipment that was received in trade. Brandenburger sold the combine and cultivator to the appellants. The financing contracts were assigned to respondent, a corporation incorporated under the laws of the state of Maryland and not registered to do business in Missouri.

Brandenburger delivered the combine to Patricia J. Black on approximately October 20, 1982. At that time, the Blacks were farming the Wallace Hollander farm in Audrain County. The Blacks obtained the farm from Wallace Hollander after arranging to pay some of Hollander's creditors. Patricia J. Black testified that she and her husband were in the bail bonding business at that time and had "bonded out" Hollander several times. When Hollander skipped bond, he and his sister called the Blacks and asked them to "bond Hollander out." The Blacks made arrangements to pay the bills on the farm and made arrangements for an attorney for Hollander. Hollander later filed for bankruptcy. The bankruptcy court set aside the transfer of the farm to the Blacks and ordered the Blacks off the farm in December of 1982. The Blacks were unable to take the cultivator and combine with them when they left.

David Avis, the area finance manager for respondent testified that the Black's first payment on the combine and the cultivator was due November 1, 1983. On December 13, he advised the office to send a demand letter to the Blacks giving them until January 9, 1984 to make the payment. On January 3, 1984, Avis called Patricia J. Black to inquire whether she had received the letter. Patricia J. Black asked Avis to call back in one week to talk with Bob Black, her husband. When Avis talked with Bob Black, he learned that the equipment was tied up in the Hollander bankruptcy case, and that the equipment could not be removed from the Hollander farm. In late April of 1984, respondent filed a motion in the bankruptcy court to have the equipment released. The equipment was released from bankruptcy on May 23, 1984. Brandenburger went to the farm, retrieved the equipment, and took it to its lot.

Avis testified that respondent followed standard procedure for selling repossessed equipment. On June 15, 1984, Avis inspected the equipment and made a wholesale and retail appraisal of the equipment. The wholesale value is the true value of a piece of machinery. The retail value is the wholesale value of the machinery plus the dealer's profit for selling the machinery. The retail price can also include the cost of fixing the machinery and providing a warranty. Avis asked for wholesale and retail appraisals from two farm equipment dealers. Clyde Wilson, a sales manager for Caldwell's Massey-Ferguson in Canton, Missouri, appraised the equipment over the telephone. Based on five years of experience in the farm equipment business, Wilson appraised the cultivator at $900.00 wholesale and $1,100.00 retail and the combine at $17,000.00 wholesale and $20,000.00 retail. Larry Brandenburger appraised the cultivator at $1,200.00 wholesale and $1,500.00 retail. He appraised the combine at $18,500.00 wholesale and $22,000.00 retail.

Next, Avis ascertained the wholesale value which is published in the National Farming Power Equipment Dealer's Association. This guide is similar to the "Blue Book" in the car industry. The guide publishes values of farm equipment. The values in the book are the average of values reported by the farm equipment dealers in the United States that belong to the association. The retail value listed was $27,130.00 and the wholesale value was listed at $22,376.00. Avis then averaged the three appraisal figures together to come up with a figure which respondent would bid at the repossession sale. Respondent set the minimum bid at $1,050.00 for the cultivator and $19,292.00 for the combine.

Avis testified that the equipment was in good shape with only 144 hours on the combine. He testified that the bid was low compared to the amount the Blacks originally paid for the equipment, because the machinery depreciated after being taken off the dealer's lot. He also testified that the economy was bad at the time and this factor probably contributed to the lower bid price.

After Avis arrived at a figure for a minimum bid, he placed an advertisement for the repossession sale in the Bowling Green Times. The advertisement ran in the newspaper on June 27, 1984, and again on July 4, 1984. Respondent sent a letter to Patricia J. Black and Lisa Ann Black advising them that the repossession sale would take place on July 9, 1984 at 10:00 a.m. The letter stated that the accelerated balance due on the equipment was $50,551.59, and that the Blacks could get the equipment back if they paid the remaining balance on the contract plus the expenses of repossession. The letter urged the Blacks to try to interest possible purchasers at the sale so that a higher resale price could be obtained. Patricia J. Black testified that she did not contact anyone to try to convince them to appear and bid at the sale.

Avis held the repossession sale as scheduled on July 9, 1984 at 10:00 a.m. on Larry Brandenburger's lot. The only people at the sale were Avis and Larry Brandenburger. No one else was present. After asking for bids, Avis announced that he was making a bid for Massey-Ferguson, Inc. When no one else placed a bid, Avis declared that the equipment was sold to Massey-Ferguson for the minimum of $1050.00 for the cultivator and $19,292.00 for the combine. Avis testified that he would not postpone the sale when no one showed up because holding a second sale would just cost appellants more money. Following the sale, notification of the deficiency was mailed to appellants.

In their first point, appellants contend that the trial court committed error in overruling their motion to disqualify opposing counsel because respondent's counsel had represented appellants in a "substantially related" matter. Appellants attached three exhibits to their brief to support their contention. These exhibits include a bill from respondent's counsel's law office which indicates that someone in the office conferred with a Cody Ice, performed research, drafted motions, and drafted an order and a dissolution bond. Also included is a letter to Cody Ice confirming that counsel is no longer representing Cody Ice, Marilyn Ice, James R. Black, Lisa Ann Black, Patricia Jane Black, C & M Bailbonds, Inc. or Missouri Enterprises, Inc. At the bottom of the bill is a typed "cc: Bob Black." The third exhibit is a handwritten receipt for $250.00. The names Patricia Jane Black and Lisa Ann Black are printed at the top of the receipt.

Appellants contend that respondent's counsel represented appellants in acquiring the Hollander farm and that her representation somehow contributed to their current inability to pay for the farm equipment. They claim respondent's counsel knew...