Wippert v. Blackfeet Tribe of Blackfeet Indian Reservation, 84-281

• Decision Date: 14 February 1985
• Docket Number: No. 84-281,84-281
• Citation: 42 St.Rep. 200,695 P.2d 461,215 Mont. 85
• Parties: , 40 UCC Rep.Serv. 1589 Verlin F. WIPPERT and Loretta L. Wippert, Plaintiffs and Appellants, v. The BLACKFEET TRIBE OF the BLACKFEET INDIAN RESERVATION, et al., Defendants and Respondents.
• Court: Montana Supreme Court

Page 461

695 P.2d 461

215 Mont. 85, 40 UCC Rep.Serv. 1589

Verlin F. WIPPERT and Loretta L. Wippert, Plaintiffs and Appellants, v. The BLACKFEET TRIBE OF the BLACKFEET INDIAN RESERVATION, et al., Defendants and Respondents.

No. 84-281.

Supreme Court of Montana.

Submitted on Briefs Sept. 6, 1984.

Decided Feb. 14, 1985.

Frisbee, Moore & Stufft, Cut Bank, for plaintiffs and appellants.

Cannon & Sheehy, Ross W. Cannon, Helena, for defendants and respondents.

GULBRANDSON, Justice.

Verlin R. Wippert and Loretta Wippert Rex, plaintiffs below, appeal from a decision of the Ninth Judicial District, Glacier County, ordering the Wipperts to pay the Blackfeet Tribe a deficiency judgment of $14,330.59. We reverse.

This case was originally filed as a quiet title action, and was first considered by this Court in Wippert v. Blackfeet Tribe (Mont.1982), 654 P.2d 512, 39 St.Rep. 2117. At that time we affirmed the trial court's determination that a Blackfeet Tribal Court judgment against the Wipperts must be enforced as a matter of comity. However, the case was remanded to the District Court for an independent determination of the correct amount remaining unsatisfied on the Tribal Court judgment.

The facts as gleaned from the record appear to be as follows: In 1974, the Wipperts operated a cattle ranch east of Browning, Montana on the Blackfeet Indian Reservation. In March of 1974 the Wipperts began borrowing money from the Blackfeet Tribal Credit Program. Funds totalling $44,729.97 were eventually advanced to the Wipperts by the Tribe. As part of the transaction, the parties entered into a security agreement on March 1, 1974. According to the agreement, the collateral for the loan was to be "all cattle ... now owned or hereafter acquired by the debtors." The security agreement contained a default clause, and provided that in case of default the rights and duties of the parties would be governed by the Montana Uniform Commercial Code (UCC). The agreement specifically provided that any notice of sale of the collateral required by the UCC would be satisfied "by giving the Debtor at least five days prior written notice of the time and place of any public sale ..."

The Wipperts defaulted on their loan in November of 1975. They were notified of the Tribe's intention to foreclose on the loan to enforce the security agreement in a March 8, 1976 letter from the Blackfeet Tribal Credit Committee. While that letter mentioned the Committee's intent to sell the collateral and apply the proceeds to the amount unpaid on the loan, it said nothing about the time or place of the proposed sale. The record indicates that the Wipperts received no notice at all from the Tribe informing them of the date and location of the foreclosure sale.

On April 15, 1976, the Blackfeet Tribal Court issued its order finding the Wipperts in default on the loan and permitting the tribe to sell the Wipperts' cattle in order to satisfy the outstanding balance due.

The cattle were sold at public auction in Shelby, Montana on April 19, 1976. After deducting the costs of caring for the cattle prior to sale, the Tribe applied $27,031 to the amount due on the Wipperts' loan, leaving a deficiency of $17,698.

The trial upon remand was heard on March 23, 1983, before the Honorable R.D. McPhillips, sitting without a jury. On March 28, 1984, the court filed its findings and conclusions and an order requiring the Wipperts to pay to the Tribe the $14,330 that remained unpaid after other funds had been applied to the deficiency. The court also ordered the Wipperts to pay the Tribe's costs and attorney fees. The Wipperts appeal from this judgment.

The following issues are presented for review:

1. Did the District Court err in ruling that the Tribe complied with the notice requirements of the UCC thereby entitling it to a deficiency judgment?

2. Did the District Court err in awarding the Tribe attorney fees?

3. Did the District Court err in allowing the Tribe to recover interest on its judgment?

4. Did the District Court err in determining the unpaid balance on the loan from the Tribe to the Wipperts?

Upon consideration of the first issue, we conclude that the judgment against appellants must be reversed. We therefore need not address the remaining issues.

The Wipperts maintain the District Court's deficiency judgment cannot stand in light of the fact that the Tribe failed to give the Wipperts adequate notice of the sale of their collateral as required by both section 30-9-504(3), MCA, and the terms of the security agreement between the parties.

Title 30, Chapter 9, MCA is that portion of the UCC which regulates secured transactions. Section 30-9-504(3), MCA prescribes the manner in which a secured party may dispose of collateral following default. In pertinent part, that statute provides:

"(3) ... Sale or other disposition may be as a unit or in parcels and at any time and place and on any terms, but every aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable. 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 ... shall be sent by the secured party to the debtor ..."

The respondent Tribe argues that since the collateral in this case was of a type customarily sold on a recognized market, i.e. cattle sold at public auction, notice of sale was not required under section 30-9-504(3), MCA. We do not agree that cattle constitute a type of collateral "customarily sold on a recognized market." It has been found that a "recognized market" under UCC section 9-504(3) would be akin to a stock market, or commodity market. O'Neil v. Mack Trucks, Inc. (Tex.Civ.App.1976), 533 S.W.2d 832, 836; Norton v. National Bank of Commerce of Pine Bluff (1966), 240 Ark. 143, 398 S.W.2d 538, 540. These markets deal with essentially tangible goods whose price is determined by external factors normally beyond the control of specific interested buyers, and where "haggling and competitive bidding are not primary factors in each sale." Norton, 398 S.W.2d at 540. See also White and Summers, Uniform Commercial Code Sec. 26-10 (1980). The "recognized market" exception was included in the statute...