Security State Bank v. Broadhead, 19652
| Decision Date | 25 February 1987 |
| Docket Number | No. 19652,19652 |
| Citation | 734 P.2d 469 |
| Parties | 3 UCC Rep.Serv.2d 869 SECURITY STATE BANK, an Idaho corporation, Plaintiff and Respondent, v. D. Wayne BROADHEAD, Defendant and Appellant. Grant CAMPBELL, Intervenor Plaintiff and Appellant, v. SECURITY STATE BANK, Intervenor Defendant. |
| Court | Utah Supreme Court |
B.H. Harris, Steven R. Fuller, Logan, for defendant and appellant.
N. George Daines, Logan, for plaintiff and respondent.
D. Wayne Broadhead (debtor) seeks reversal of a deficiency judgment against him in favor of Security State Bank (bank). Debtor seeks remand for an award of damages on a counterclaim he filed against bank. We affirm.
Debtor obtained financing from bank for his purchase of a 1977 Dodge truck by executing an installment note in favor of bank on September 20, 1977. Debtor failed to make payments as they came due under the terms of the note. In October 1978, bank repossessed the truck from the premises of a business owned by debtor's father-in-law. During the course of the repossession, an argument erupted over the ownership of a piece of welding equipment that had been installed on the truck. Debtor removed the welding equipment from the truck before the truck was transferred to bank's agent.
At trial, bank presented testimony indicating that bank repeatedly contacted debtor concerning the deficiency and after the repossession mailed debtor a notice of sale stating that the truck would be sold at a private sale on November 10, 1978, at 12:00 p.m. The truck was not sold, however, until April 20, 1979.
Debtor claims that the notice sent by bank was insufficient, that the sale was not conducted in a commercially reasonable manner, and that bank's recovery is barred by an accord and satisfaction between the parties.
Debtor's assertion that he did not receive notification of the sale rests on the position that debtor's testimony was more credible than that of bank's witnesses. The trial court was the proper forum for the resolution of this issue. In order to successfully attack a factual finding of the trial court, "an appellant must marshal all the evidence in support of the trial court's findings and then demonstrate that even [when viewed] in the light most favorable to the court below, the evidence is insufficient to support the findings." 1 Scharf v. BMG Corp., 700 P.2d 1068, 1070 (Utah 1985). Debtor's claim that he could not remember being notified, when weighed against the evidence presented by bank's witnesses, does not even approach the threshold necessary for us to disregard a finding of fact.
Debtor claims that bank's notice was technically deficient because it did not comply with U.C.A., 1953, § 70A-9-504(3), which provides:
Unless collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, reasonable notification of the time and place of any public sale or reasonable notification of the time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor, if he has not signed after default a statement renouncing or modifying his right to notification of sale.
Debtor argues that because the sale was held after the date stated in the notice, he was prejudiced because his right to redeem the property was circumvented.
We have previously considered that argument. In Scharf, we stated:
[The notice sent by creditor] stated the day on which the sale was to occur, while the actual sales occurred one day and nine days, respectively, after the date fixed in the notice.
In addition to relying on the technical deficiencies in the notice to protect him from the deficiency judgment, [debtor] claims that he was prejudiced because he could have used the several days that elapsed between the date the sale was to have occurred and the date it actually occurred to find a buyer who would pay a higher price. His notice contention is without merit. In Pioneer Dodge Center, Inc. v. Glaubensklee, Utah, 649 P.2d 28 (1982), the debtor received notice that her repossessed truck would be auctioned off at 11:00 a.m. on a specified day; instead, the truck was sold at 10:00 a.m. Because the debtor did not show up at 11:00 a.m., we held that she was not prejudiced by the error. Id. at 29. By looking beyond the technicalities of the notice requirement to its essential purpose, Pioneer Dodge made it plain that the formal elements of the notice requirement must not be followed to the frustration of its purpose. "The purpose of the notice requirement is for the protection of the debtor, by permitting him to bid at the sale, or arrange for interested parties to bid, and to otherwise assure that the sale is conducted in a commercially reasonable manner." FMA Financial Corp. v. Pro-Printers, Utah, 590 P.2d 803, 807 (1979). The notice requirement gives the debtor the opportunity to actively protect his interests.
Id. at 1071 (emphasis in the original).
In the case at bar, debtor has shown no prejudice from the delay in sale. Debtor offered some hazy, speculative evidence that before the repossession he was tentatively engaged in trying to mount a snow plow on the truck in conjunction with a possible sale for an amount sufficient to pay the loan. We do not see how the existence of a tentative prerepossession sale is relevant to any harm suffered by debtor as a result of the late sale of the truck. The record indicates that although the notice sent to debtor warned him that he would be personally responsible for any deficiency after the sale and debtor was acquainted by past experience with repossession procedures, he did nothing to contact bank or to inform it of the existence of a buyer to whom the truck could be sold for the full amount of the outstanding balance. Indeed, the evidence presented by bank indicates that debtor was advantaged by the late sale because bank was able to achieve an unusually high price, more than $1,000 over Blue Book value, for the truck by waiting to sell it.
We also reject debtor's claim that the sale of the truck through a used car lot was commercially unreasonable.
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