Williams v. Kloeppel, 88-585

• Decision Date: 29 December 1988
• Docket Number: No. 88-585,88-585
• Citation: 14 Fla. L. Weekly 86,537 So.2d 1033
• Parties: 14 Fla. L. Weekly 86 Andy H. WILLIAMS, Appellant/Cross Appellee, v. Robert KLOEPPEL, individually and d/b/a Inlet Marine and Inlet Marine, Inc., a/k/a Inlet Marine Sales and Services, Inc., Appellees/Cross Appellants.
• Court: Florida District Court of Appeals

Page 1033

537 So.2d 1033

14 Fla. L. Weekly 86

Andy H. WILLIAMS, Appellant/Cross Appellee, v. Robert KLOEPPEL, individually and d/b/a Inlet Marine and Inlet Marine, Inc., a/k/a Inlet Marine Sales and Services, Inc., Appellees/Cross Appellants.

No. 88-585.

District Court of Appeal of Florida First District.

Dec. 29, 1988.

Rehearing Denied Feb. 28, 1989.

Earl M. Barker, Jr., of Slott & Barker, Jacksonville, for appellant/cross appellee.

Gary B. Tullis, Jacksonville, for appellees/cross appellants.

JOANOS, Judge.

Andy H. Williams (Williams) appeals the final judgment in which the trial court determined that Williams was estopped from seeking a deficiency judgment after repossession and sale of collateral. Robert Kloeppel and Inlet Marine, Inc. (Kloeppel) cross-appeal the trial court's determination regarding the commercial reasonableness of the sale of collateral. Williams raises two issues on appeal: (1) whether an allegation of estimated value of collateral in a replevin complaint estops a secured party from proving a lesser amount of "proceeds of sale" in a later action for a deficiency judgment under section 679.504(2), Florida Statutes; and (2) whether the trial court erred in entering judgment for appellees based on the doctrine of estoppel. The issue raised on cross appeal is whether the trial court erred in finding the sale of the collateral had been conducted in a commercially reasonable manner. We reverse in part, and affirm in part.

The collateral at issue is a 1980 thirty-six foot, SS Sea Ray Boat. In March 1983, appellant sold this boat to James E. Farmer, for $95,000.00. ¹ Farmer paid $20,000.00 of the purchase price in cash, and executed and delivered a promissory note in the amount of $75,000.00, together with a security agreement and financing statement, for the balance. On November 10, 1983, Farmer transferred the boat to Kloeppel as a trade-in on another boat; in the transaction, Kloeppel expressly assumed responsibility for the $75,000.00 promissory note. For record-keeping purposes, Kloeppel placed a value of $83,466.00 on the boat.

The boat remained at Kloeppel's business, Inlet Marine, from November 10, 1983, until it was delivered to appellant on July 11, 1984. During that time, Kloeppel attempted, albeit without success, to sell the boat for $95,000.00, by placing advertisements in Jacksonville, Fort Lauderdale, Miami, and Tampa Bay newspapers. Farmer and Kloeppel defaulted on the note, and in June 1984, Williams filed a replevin action for the boat's repossession. Among other things, the replevin complaint stated that the boat had a present estimated value of $75,000.00.

Thereafter, Williams kept the boat at his marina, where he effected some repair and maintenance on it, and then offered it for sale in the normal course of his business. After advertising the boat for sale in the Florida Times Union and Boat Trader magazine, Williams received an offer of $65,000.00 from a Jacksonville physician. When Williams notified Kloeppel of the offer, Kloeppel asserted the boat was worth more than $65,000.00. Although an agreement was prepared, the sale did not go through. Kloeppel did not produce a buyer, and did not offer to buy the boat himself, although Williams suggested that he do so.

Later, Williams was contacted by a yacht broker who had seen the advertisement in Boat Trader magazine. The broker flew to Jacksonville to view the boat, but did not make an offer at that time. After conferring with his client, the broker extended an offer of $63,000.00, which Williams did not accept; instead, he attempted to negotiate a better price. Prior to his negotiations with the broker, Williams had been in contact with Pompano Air Center about a Piper Saratoga that had been offered for $67,500.00. Williams advised the broker that if his client was willing to purchase the plane, he would consider trading the boat for the plane. Ultimately, Williams was able to get the price of the plane reduced to $65,000.00. Since the agreed price for the boat was $63,000.00, Williams gave the broker a check for $2,000.00, less charges for work ordered by the buyers.

Testimony at the hearing was conflicting with respect to the condition and value of the boat at the time of repossession. According to William's testimony, the boat was dirty, the canvas top for the flying bridge was missing, the generator did not work, the cockpit deck was rotten, and the metallic trim was rusted. Williams valued the boat at $55,000.00, both at the time of repossession in July 1984, and at its sale on October 30, 1984. Kloeppel agreed there was evidence of rotting in the decking, but asserted that otherwise the boat was in very good condition. In Kloeppel's opinion, the boat was worth $83,000.00.

The trial court found that the sale of the boat had been conducted in a commercially reasonable manner, and that the expenses incurred in obtaining, holding, and preparing the boat for sale were reasonable. The trial court further found that Williams was estopped by the allegations of his replevin complaint from claiming that the collateral was worth less than $75,000.00, concluding that Williams was not entitled to recover any sums from Kloeppel individually, or in his capacity as owner of Inlet Marine, Inc. Thereafter, the trial court denied Williams's motion for rehearing and for new trial.

The Uniform Commercial Code remedies available to a secured creditor in the event of debtor default are cumulative and should be pursued seriatim. See Land v. Cessna Aircraft Co., 466 So.2d 1265, 1268 (Fla. 1st DCA 1985); Swindel v. General Finance Corp. of Florida, 265 So.2d 393, 394-395 (Fla. 1st DCA 1972). The secured creditor may take possession of the collateral, may dispose of the collateral by public or private sale in a commercially reasonable manner, and may obtain a judgment for any deficiency after the sale. §§ 679.501, 679.503, and 679.504, Fla.Stat. (1985); Land, 466 So.2d at 1268.

A secured creditor's entitlement to a deficiency judgment is not automatic. Rather, consideration must be given to the commercial reasonableness of the disposition of the collateral by the secured party. See, for example, Weiner v. American Petrofina Marketing, Inc., 482 So.2d 1362, 1364 (Fla.1986), in which the court observed that--

The code nowhere provides that the creditor loses his right to a deficiency judgment if he does not act in a commercially reasonable manner. See J. White and R. Summers, Handbook of the Law Under the Uniform Commercial Code § 26-15 at 1127 (2d ed. 1980). However, the code does supply the debtor with a remedy. ... If the collateral is disposed of in a commercially unreasonable manner, the debtor may not receive as great a credit against his debt as if the sale had been conducted in a commercially reasonable manner. The damages the debtor will suffer are equal to the difference between the price obtained in a commercially unreasonable sale and the fair market value of the collateral i.e., what it should have brought in a commercially reasonable sale. See White and Summers, supra, § 26-15 at 1133.

See also Landmark First National Bank of Fort Lauderdale v. Gepetto's Tale O' the Whale of Fort Lauderdale, Inc., 498 So.2d 920, 922 (Fla.1986). In Landmark and in Weiner, as in the instant case, the respective debtors challenged the commercial reasonableness of the sale of collateral on grounds of insufficient notice.

In Weiner, the court held that a determination that the secured party disposed of collateral in a commercially unreasonable manner, will raise a presumption

that the fair market value of the collateral at the time of repossession was equal to the amount of the total debt that it secured. The burden to prove that the fair market value of the collateral was less than the debt will be upon the secured party. If the secured party meets this burden, he will be allowed to recover a deficiency judgment in an amount equal to the total debt minus the fair market value of the collateral as ultimately determined. (emphasis supplied.)

482 So.2d at 1365. Accord Landmark First National Bank, 498 So.2d at 922; CSI Services, Ltd. v. Hawkins Concrete Construction Co., 516 So.2d 337 (Fla. 1st DCA 1987).

The estoppel issue in this case arises in the context of a seeming inconsistency between the asserted value of the collateral at the time of repossession and at the time of sale. The principle is well settled "that litigants are not permitted to take inconsistent positions in judicial proceedings." Federated Mutual Implement & Hardware Insurance Co. v. Griffin, 237 So.2d 38, 41 (Fla. 1st DCA) cert. denied, 240 So.2d 641 (Fla.1970). In application, this means when a court accepts a party's allegation in one suit, that party will be estopped to assert a contrary position in a later action involving the same parties and subject matter. 22 Fla.Jur.2d, Estoppel and Waiver § 53 (1980). See...