Williams v. Regency Financial Corp., 02-1181.

• Decision Date: 01 November 2002
• Docket Number: No. 02-1181.,02-1181.
• Citation: 309 F.3d 1045
• Parties: Byther Mae WILLIAMS; Richard V. Fink, Appellants, v. REGENCY FINANCIAL CORP., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

309 F.3d 1045

Byther Mae WILLIAMS; Richard V. Fink, Appellants, v. REGENCY FINANCIAL CORP., Appellee.

No. 02-1181.

United States Court of Appeals, Eighth Circuit.

Submitted: September 12, 2002.

Filed: November 1, 2002.

Rehearing and Rehearing En Banc Denied: December 18, 2002.^*

Dale K. Irwin, argued, Kansas City, MO. for appellant.

Charles E. Weedman, argued, Harrisonville, MO (Michael P. Bandre, on the brief), for appellee.

Before WOLLMAN and MORRIS SHEPPARD ARNOLD, Circuit Judges, and BOGUE,¹ District Judge.

WOLLMAN, Circuit Judge.

Regency Financial Corporation (Regency) filed a deficiency claim against Byther Mae Williams (Williams) in her Chapter 13 bankruptcy proceedings. Williams responded with a five-count adversary complaint against Regency, alleging violations of sections 400.9-504 and 400.9-507 of the Missouri Uniform Commercial Code (U.C.C.) and of the Missouri Merchandising Practices Act (MPA). Following jury selection, the district court granted judgment as a matter of law in favor of Regency on Counts I, II, and III of Williams' complaint. The district court transferred Counts IV and V to the bankruptcy court pursuant to 28 U.S.C. § 157(b)(1). Williams appeals the district court's adverse judgment concerning Counts I through III. We affirm in part and reverse and remand in part.

I. BACKGROUND

Regency and FPI are closely connected corporations started in 1994 by Tom Moore and Neil Erisman respectively, having interlocking management and ownership. They are located in the same building and share employees. Regency and FPI operate a "buy here, pay here" establishment, colloquially referred to by Williams as a repossession churning mill. FPI sells used cars at retail for at least twice their cost. Regency finances the purchases. The majority of buyers finance their car purchases by Purchase Money Security Agreements (PMSAs) bearing 18% interest. FPI sells or assigns the PMSAs to Regency at a 35% discount. When a debtor defaults, FPI repossesses the car on Regency's behalf. Regency then sells the repossessed car back to FPI at a price determined by FPI personnel, which is lower than the amount owed by the debtor at the time of repossession, thereby creating a deficiency. FPI then sells the car to another buyer, beginning the cycle again. Frequently, the cars are sold without Regency's having procured a repossession title.

Regency employs an attorney on its premises to file lawsuits to recover deficiencies resulting from the difference between the balance owed on the PMSA and the amount paid by FPI to Regency for the car. As of October 2002, Regency had filed more than 1,800 such actions against individuals within Jackson County, Missouri, alone. Missouri Case.Net, available at http://casenet.osca.state.mo.us/casenet/CasenetV4.3/Name Results.asp?LastName=RegencyFinancialCorp.

In June 1994, Williams and her late husband purchased a 1987 Oldsmobile from FPI for $7,995.00. Williams paid FPI a down payment of $800.00; the balance of the purchase price was financed by a Motor Vehicle Sales Contract (MVSC) and a PMSA bearing 18% interest, which FPI then sold to Regency. At the time of the purchase, Williams signed a power of attorney to FPI.

In 1995, Williams returned the 1987 Oldsmobile to Regency after having paid Regency $4,750.00. Regency sent Williams a Notice of Private Sale pertaining to the Oldsmobile that stated a "Pay Off Balance" due of $3,851.63, plus a "Repossession Cost" of $150.00, totaling $4,021.63. (The parties do not explain the basis of the extra $20.00.) Regency claims to have sold the Oldsmobile to FPI for $3,550.00, leaving Williams a deficiency of $471.63.

Regency did not obtain a repossession title for the Oldsmobile from the Missouri Department of Revenue. Instead, Regency released its lien on the Oldsmobile. In December 1995, a representative of FPI assigned the Oldsmobile's title to FPI pursuant to the Williams' June 1994 grant of power of attorney. In January 1996, FPI assigned the Oldsmobile's title to James Thurman and James King. Thurman and King purchased the 1987 Oldsmobile for $7,935.00, financed by a PMSA. They paid $4,385.00 more for the car than FPI had paid to Regency for the same vehicle one month earlier.

Williams later purchased a 1986 Cadillac from FPI. After having paid $720.00, Williams voluntarily returned the car to Regency. Regency sent Williams a Notice of Private Sale that stated the balance due. Regency sold the repossessed Cadillac to FPI, and FPI auctioned the vehicle.

In 1999, Regency filed a deficiency claim for $614.37 on the Oldsmobile in Williams' Chapter 13 proceedings. Williams filed an adversary complaint against Regency. Regency denied Counts I and II of the complaint, which addressed Regency's transactions with respect to the 1987 Oldsmobile and are at issue here, and dismissed its deficiency claim.

II. JURISDICTION

Regency contends that Williams' appeal, notice of which was filed on December 27, 2001, is untimely because the district court order issued on November 5, 2001, began the thirty days in which Williams could timely file an appeal. We disagree. The November 5 order reversed the bankruptcy court's judgment denying Williams the relief sought in Counts IV and V of her complaint. Those counts are not at issue in this appeal; they have been transferred to the bankruptcy court. The district court judgment in favor of Regency, which Williams appeals here, was entered on November 27, 2001. The date on which the district court's final judgment is entered is the date from which a party has thirty days in which to timely file an appeal. Fed.R.Civ.P. 58; see United States v. Interlink Sys., Inc., 984 F.2d 79, 81-82 (2d Cir.1993) (holding appeal of judgment entered two years after district court's order was timely made). Because Williams filed the notice of appeal within thirty days from November 27, 2001, her appeal is timely. Fed. R.App. P. 4(1)(a). Accordingly, we have jurisdiction to hear this appeal. 28 U.S.C. § 1291.

III. DISCUSSION

A. U.C.C.

Williams brought an action against Regency pursuant to section 400.9-507 of the Missouri Code, asserting that Regency's 1995 post-repossession sale of the 1987 Oldsmobile to FPI was commercially unreasonable and thus violated section 400.9-504. Mo. Rev. Stat. §§ 400.9-504, 507 (1996). Section 400.9-504 requires that the "sale or other disposition" of collateral by a secured party after default must be "commercially reasonable" and enumerates the manner in which the proceeds of the sale or disposition are to be applied. Mo. Rev. Stat. § 400.9-504(1), (3). The district court held that Williams could not obtain a surplus judgment nor Regency a default judgment because a valid sale of the vehicle had not occurred: Regency's transfer of the 1987 Oldsmobile to FPI without first having obtained a repossession title violated Missouri's motor vehicle titling statute, section 301.210 of the Missouri Code, and thus was void. Id.; Mo. Rev. Stat. § 301.210.

Williams contends that because Regency's transfer to FPI constituted a disposition, the question of whether Regency's disposition of the 1987 Oldsmobile was commercially reasonable is for a jury to decide. We agree.

Section 400.9-504 provides,

(1) A secured party after default may sell, lease or otherwise dispose of any or all of the collateral in its then condition.... (3) Disposition of the collateral may be by public or private proceedings and may be made by way of one or more contracts.... [E]very aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable.

Mo. Rev. Stat. § 400.9-504. Under Missouri law, "[t]he provisions of the [Uniform Commercial] Code are to be liberally construed." Computer Network Ltd. v. Purcell Tire & Rubber Co., 747 S.W.2d 669, 674 (Mo.Ct.App. 1988). When interpreting a statute, we take as our point of departure the statute's language. United States v. S.A., 129 F.3d 995, 998 (8th Cir.1997). "A fundamental canon of statutory construction is that, unless otherwise defined, words will be interpreted as taking their ordinary, contemporary, common meaning." Perrin v. United States, 444 U.S. 37, 42, 100 S.Ct. 311, 62 L.Ed.2d 199 (1979) (citation omitted); United States v. Parker, 267 F.3d 839, 847 (8th Cir.2001). "When the meaning of a statute is questionable, it should be given a sensible construction and construed to effectuate the underlying purposes of the law." S.A., 129 F.3d at 998.

The secured transaction provisions at issue here were intended to ensure that upon default, a secured party "sell, lease or otherwise dispose" of collateral in good faith and in a commercially reasonable manner, and that debtors and creditors be provided a remedy for a party's failure to comply with statutory duties. Mo.Rev.Stat. §§ 400.9-504, 400.9-507 cmt. The inclusion of the term "disposition" in section 400.9-504 indicates both that the terms "sale" and "disposition" are not intended to be synonymous, and that a disposition of collateral need not necessarily be in the form of a sale. Mo.Rev.Stat. 400.9-504. The comment to section 400.9-504 provides, "Subsection (1) does not restrict disposition to sale: the collateral may be sold, leased, or otherwise disposed of — subject of course to the general requirements of subsection (2) that all aspects of the disposition be `commercially reasonable.'" Id. cmt. Although Missouri case law has neither defined nor interpreted "disposition," "where there is a paucity of Missouri case law interpreting a provision of the U.C.C., [Missouri] courts... look for guidance to decisions of other jurisdictions...." Robinson v. Citicorp Nat'l Servs., 921 S.W.2d 52, 54 (Mo.Ct. App.1996) (citation omitted). Courts in other jurisdictions have similarly interpreted the term "disposition" in their respective enactments of this and related U.C.C. provisions as not being limited to valid sales.

The word "sale" implies the passage of absolute title.... "A...