Piper Acceptance Corp. v. Yarbrough, 82-1899

• Decision Date: 28 March 1983
• Docket Number: No. 82-1899,82-1899
• Citation: 702 F.2d 733
• Parties: 35 UCC Rep.Serv. 1704 PIPER ACCEPTANCE CORPORATION, Appellee, v. Wilburn Y. YARBROUGH and Sarah Yarbrough, his wife, Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 733

702 F.2d 733

35 UCC Rep.Serv. 1704

PIPER ACCEPTANCE CORPORATION, Appellee, v. Wilburn Y. YARBROUGH and Sarah Yarbrough, his wife, Appellants.

No. 82-1899.

United States Court of Appeals,

Eighth Circuit.

Submitted March 22, 1983.

Decided March 28, 1983.

Michael Everett, Lepanto, Ark., for appellants.

Smith & Nixon by Griffin Smith, Little Rock, Ark., for appellee.

Before LAY, Chief Judge, HENLEY, Senior Circuit Judge, and FAGG, Circuit Judge.

PER CURIAM.

Appellants Wilburn Y. Yarbrough and his wife, Sarah, appeal from the district court's ¹ order holding that appellee Piper Acceptance Corporation disposed of their repossessed airplane in a commercially reasonable manner pursuant to article 9 of the Arkansas Uniform Commercial Code (U.C.C.). See Ark.Stat.Ann. Secs. 85-9-501 et seq. (Supp.1981). In particular, appellants allege that (1) they were not given reasonable notification of the time after which a private sale of the airplane was to be made; ² (2) appellee failed to advertise the sale of the airplane adequately; and (3) appellee offered the airplane for sale entirely on a wholesale basis without seeking interested retail buyers. For the reasons discussed below, we affirm the district court's order.

On November 28, 1980 appellants purchased a used aircraft from Atlanta Aircraft Sales for $165,447.46. Appellants made a down payment and executed a conditional sale and security agreement to pay the balance of $136,536.96 in eighty-four installments of $1,625.44 each. That same day the contract was assigned to appellee for value given. Shortly thereafter appellants began complaining to the airplane's manufacturer, Piper Aircraft Corporation (Piper), about alleged defects in the airplane. Because appellants were dissatisfied with Piper's response, they refused to continue paying their monthly installments. Consequently, appellee accelerated all payments due under the contract and declared the agreement in default.

On September 23, 1981 appellee brought an action to replevin the aircraft, claiming that appellants owed $91,018.46, of which $84,835.34 was principal. Appellants voluntarily surrendered possession of the aircraft without prejudice to their rights to pursue any claims based on defects in the manufacture of the aircraft ³ and to require that any disposition of the aircraft be done in a commercially reasonable manner.

On October 20, 1981 appellee notified appellants by certified mail that the aircraft would be sold at a private sale on or after November 8, 1981. ⁴ On November 15, 1981 appellee advertised the aircraft to the Piper dealer network of about 550 dealers through a monthly bid letter publication. The ad stated that the airplane's logbooks were not available, which would tend to depress the value of the plane. The logbooks were unavailable because appellants refused to relinquish them to appellee. The highest offer appellee received for the aircraft was $68,000.00, provided that the logbooks could be obtained by the time of the closing. (Notably, the Aircraft Price Digest, which listed the resale prices of used aircraft, valued the airplane at only $63,018.00.) Counsel for appellants, in a letter dated February 15, 1982, advised appellee to "go ahead and sell the airplane without our having checked it further. Please give us notice of the time and date of the sale."

After several attempts by appellee to get the logbooks, appellants finally surrendered them on April 8, 1982, and the sale was consummated on April 26, 1982. Appellee did not notify appellants of the time and date of this sale as they requested. Applying the net proceeds of the sale to the outstanding balance resulted in a deficiency of $33,313.49. The district court awarded appellee this amount after a hearing to determine whether the sale was commercially reasonable under the relevant provisions of the Arkansas U.C.C. This appeal followed.

Appellants' contention that they were not given reasonable notification of the time after which a private sale of the airplane was to be made turns on the fact that over five months had elapsed between the time they received notice of the sale in October and the consummation of the sale in April. This claim is without merit. The purpose of the reasonable notification requirement is to afford debtors "sufficient time to take appropriate steps to protect their interests by taking part in the sale or other disposition if they so desire." U.C.C. Sec. 9-504 comment 5, reprinted in Ark.Stat.Ann. Sec. 85-9-504 (Repl.1961). Appellee provided appellants sufficient notice to protect their interests and was under no statutory obligation to notify appellants of the exact time and date of sale. See B. Clark, The Law of Secured Transactions Under the Uniform Commercial Code p 4.8[e] (1980) (sale handled on a private negotiated basis may have no exact time or place).

Appellants further attack the commercial reasonableness of the...