(Code 1981, §11-9-627, enacted by Ga. L. 2001, p. 362, § 1.)
Law reviews.- For article, "The Revisions to Article IX of the Uniform Commercial Code," see 15 Ga. St. B.J. 120 (1977). For article surveying developments in Georgia commercial law from mid-1980 through mid-1981, see 33 Mercer L. Rev. 33 (1981). For article, "Nonjudicial Foreclosures in Georgia: Fresh Doubts, Issues and Strategies," see 23 Ga. St. B.J. 123 (1987). For annual survey of commercial law, see 43 Mercer L. Rev. 119 (1991). For note discussing repossession and foreclosure as creditor's remedies under the Uniform Commercial Code, see 3 Ga. L. Rev. 198 (1968). For comment on a secured party's burden of proof in seeking a deficiency judgment after resale of collateral, see 33 Mercer L. Rev. 397 (1981).
JUDICIAL DECISIONSANALYSIS
Right to Deficiency Judgment
Editor's notes.
- In the light of the similarity of the provisions, decisions under former Article 9 are included in the annotations for this Code section. For a table of comparable provisions, see the table at the beginning of the Article.
Commercially reasonable disposition as prerequisite for deficiency judgment.
- If the secured party does not dispose of the collateral in a commercially reasonable manner, there can be no recovery of any deficiency between the sale price and the unpaid balance. Granite Equip. Leasing Corp. v. Marine Dev. Corp., 139 Ga. App. 778, 230 S.E.2d 43 (1976) (decided under former Code Section11-9-504).
Fact that every aspect of foreclosure sale (method, manner, time, place and terms) must be commercially reasonable is a condition precedent to recovery of any deficiency between sale price and balance remaining due on contract price, and if sale is not commercially reasonable plaintiff can recover nothing, because it is then presumed that price on foreclosure sale in fact does represent full value of article at time of repossession. Brown v. C.I.T. Corp., 150 Ga. App. 361, 258 S.E.2d 44 (1979) (decided under former Code Section11-9-504).
In Georgia, a secured party is absolutely prohibited from recovering deficiency judgment where notice is not given or sale is commercially unreasonable. Comfort Trane Air Conditioning Co. v. Trane Co., 592 F.2d 1373 (5th Cir. 1979) (decided under former Code Section 11-9-504).
Even though defendant debtor failed to introduce any testimony while denying claim in its entirety, burden of proof was upon secured party to prove sale was done in a commercially reasonable manner in order to recover on deficiency. Georgia Cent. Credit Union v. Coleman, 155 Ga. App. 547, 271 S.E.2d 681 (1980) (decided under former Code Section11-9-504).
In the case of a loan secured by both real and personal property, the provision for liquidation of the guarantor's personal property "in a commercially reasonable manner" did not apply where the lender chose to exercise its "rights and remedies in respect of the real property" as permitted under former § 11-9-501(4). Senske v. Harris Trust & Sav. Bank, 233 Ga. App. 407, 504 S.E.2d 272 (1998).
Sale must allow debtor to exercise redemption right.
- Act of secured party, in selling collateral without strict compliance with notice of sale provisions precludes purchaser or owner from exercising right of redemption under former § 11-9-506, and for that reason secured party cannot recover for deficiency owed by purchaser. Braswell v. American Nat'l Bank, 117 Ga. App. 699, 161 S.E.2d 420 (1968) (decided under former Code Section11-9-504).
Sole defect in sale was adequacy of price.
- Creditor who fails to prove that notice of sale was given debtor (where required) or fails to prove that disposition, including its method, manner, time, place and terms, was commercially reasonable, is barred from obtaining a deficiency judgment, except where sole defect is adequacy of sale price, in which event creditor is not barred from recovery but must overcome presumption that value of collateral equals debt. Richard v. Fulton Nat'l Bank, 158 Ga. App. 595, 281 S.E.2d 338 (1981); First Nat'l Bank v. Rivercliff Hdwe., Inc., 161 Ga. App. 259, 287 S.E.2d 701 (1982) (decided under former Code Section11-9-504).
Where sole defect in sale of collateral is adequacy of sale price, creditor is not barred from obtaining deficiency judgment; however, creditor must overcome presumption that value of collateral equals debt on it, proving its fair and reasonable value. Zohbe v. First Nat'l Bank, 162 Ga. App. 604, 292 S.E.2d 444 (1982) (decided under former Code Section11-9-504).
Overcoming presumption concerning collateral.
- The presumption that the value of collateral equals the debt on it is overcome by proving the fair and reasonable value of the collateral. First Nat'l Bank v. Rivercliff Hdwe., Inc., 161 Ga. App. 259, 287 S.E.2d 701 (1982) (decided under former Code Section11-9-504).
When collateral valued.
- Proof of the value of the collateral is required to be the value at the time of repossession. First Nat'l Bank v. Rivercliff Hdwe., Inc., 161 Ga. App. 259, 287 S.E.2d 701 (1982) (decided under former Code Section11-9-504).
Cost alone is never proof of market value. Zohbe v. First Nat'l Bank, 162 Ga. App. 604, 292 S.E.2d 444 (1982) (decided under former Code Section11-9-504).
Proof of price brought at public sale is not sufficient to overcome presumption against creditor that value of collateral equals debt on it. Zohbe v. First Nat'l Bank, 162 Ga. App. 604, 292 S.E.2d 444 (1982) (decided under former Code Section11-9-504).
Commercial Reasonableness of Disposition
Good faith required.
- A creditor must perform in good faith its obligations in disposing of collateral. Lacy v. General Fin. Corp., 651 F.2d 1026 (5th Cir. 1981) (decided under former Code Section 11-9-504).
Commercially reasonable disposition required.
- Although Uniform Commercial Code has no requirement that secured party sell collateral after repossession, secured party who does not elect to retain collateral in satisfaction of indebtedness must act in commercially reasonable manner in disposing of it, and disposition must be made in commercially reasonable time. Henderson Few & Co. v. Rollins Communications, Inc., 148 Ga. App. 139, 250 S.E.2d 830 (1978) (decided under former Code Section11-9-504).
Once creditor has possession the creditor must act in a commercially reasonable manner toward sale, lease, proposed retention where permissible, or other disposition. If such disposition is not feasible, the asset must be returned, still subject, of course, to creditor's security interest. To the extent that creditor's inaction results in injury to debtor, debtor has right of recovery. Henderson Few & Co. v. Rollins Communications, Inc., 148 Ga. App. 139, 250 S.E.2d 830 (1978) (decided under former Code Section11-9-504).
Secured party has right to dispose of collateral repossessed from debtor so long as every aspect of disposition - method, manner, time, place, and terms - are commercially reasonable. Comfort Trane Air Conditioning Co. v. Trane Co., 592 F.2d 1373 (5th Cir. 1979) (decided under former Code Section 11-9-504).
Because a bank utilized professionals in the industry to assist in the sale of the debtor's equipment, and it did not rush to dispose of the equipment, but ultimately sold it to the person whom the debtor and its guarantor contended would most likely tender the highest bid for the equipment, said sale was conducted in a commercially reasonable manner under O.C.G.A. §§ 11-9-627(b) and11-9-610. AKA Mgmt. v. Branch Banking & Trust Co., 275 Ga. App. 615, 621 S.E.2d 576 (2005).
Effect of conducting unreasonable sale.
- A secured creditor who conducts a commercially unreasonable sale is barred from proceeding against other collateral pledged for the debt and/or from seeking a deficiency judgment against the debtor or the guarantor. Contestabile v. Business Dev. Corp., 259 Ga. 783, 387 S.E.2d 137 (1990) (decided under former Code Section11-9-504).
Burden of proving reasonableness.
- Where reasonableness of sale of repossessed collateral is challenged, burden of showing that disposition of collateral was commercially reasonable rests with secured party. Wagner v. Ford Motor Credit Co., 155 Ga. App. 729, 272 S.E.2d 500 (1980) (decided under former Code Section11-9-504).
Burden of proof of commercial reasonableness of sale of collateral rests with secured party, and includes burden to show that terms of sale are commercially reasonable, and one term which must be so proved is that resale price was fair and reasonable value of collateral. Hubbard v. Farmers Bank, 155 Ga. App. 720, 272 S.E.2d 510 (1980), aff'd, 247 Ga. 431, 276 S.E.2d 622 (1981) (decided under former Code Section11-9-504).
When the reasonableness of the sale is challenged, the seller of the collateral has the burden of proving that the sale was reasonable. A secured creditor who fails to meet this burden is barred from recovering any deficiency between the sale price and the debt. Walker v. Modnar Corp., 194 Ga. App. 68, 389 S.E.2d 558 (1989) (decided under former Code Section11-9-504).
Proof required to show reasonableness.
- Where reasonableness of sale of repossessed collateral is challenged, secured party must establish affirmatively that "terms" of sale were commercially reasonable, and that resale price was fair and reasonable value of collateral. Wagner v. Ford Motor Credit Co., 155 Ga. App. 729, 272 S.E.2d 500 (1980); Massey-Ferguson Credit Corp. v. Bond, 176 Ga. App. 217, 335 S.E.2d 454 (1985) (decided under former Code Section11-9-504).
For secured party to meet burden of proving every aspect of sale is commercially reasonable, it must establish affirmatively that terms of sale were commercially reasonable, which includes burden of showing that resale price was fair and reasonable value of collateral. Granite Equip. Leasing Corp. v. Marine Dev. Corp., 139 Ga. App. 778, 230 S.E.2d 43 (1976); BVA Credit Corp. v. May, 152 Ga. App. 733, 264 S.E.2d 32 (1979); Comfort Trane Air Conditioning Co. v. Trane Co., 592 F.2d 1373 (5th Cir. 1979) (decided under former Code Section11-9-504).
Presumption as to value of collateral serves as gauge of commercial reasonableness.- Effect of presumption that value of collateral at time of repossession equals debt owed is to provide value against which price obtained upon secured party's disposition of repossessed collateral can be measured for purpose of deciding whether price term was commercially reasonable. The presumption does not operate, however, to deny a secured party a deficiency judgment. Comfort Trane Air Conditioning Co. v. Trane Co., 592 F.2d 1373 (5th Cir. 1979) (decided under former Code Section 11-9-504).
Overcoming presumption as to collateral value.
- Presumption that value of collateral equals debt on it is overcome by proving fair and reasonable value of collateral, whereupon creditor is entitled to deficiency judgment in amount of debt (plus or minus any payments or charges properly applicable to disposition) less fair and reasonable value of collateral proved by creditor (if resale price is less than fair and reasonable value proved). Farmers Bank v. Hubbard, 247 Ga. 431, 276 S.E.2d 622 (1981) (decided under former Code Section11-9-504).
Effect of price obtained on resale in establishing value.
- Where, in case challenging reasonableness of sale of repossessed collateral, secured party presents no evidence other than price obtained on resale; this was not sufficient to establish fair and reasonable value of collateral. Wagner v. Ford Motor Credit Co., 155 Ga. App. 729, 272 S.E.2d 500 (1980) (decided under former Code Section11-9-504).
Proof of price brought at public sale of collateral is insufficient to establish market value for purposes of proving commercial reasonableness of sale, since foreclosure sales are forced sales and notoriously fail to bring true market price of article. Hubbard v. Farmers Bank, 155 Ga. App. 720, 272 S.E.2d 510 (1980) (decided under former Code Section11-9-504).
Debtor's contention that debtor could have obtained a higher price for aircraft sold at private sale had debtor sold them personally was insufficient to infer that creditor who sold planes acted in commercially unreasonable manner. Cessna Fin. Corp. v. Wall, 876 F. Supp. 273 (M.D. Ga. 1994).
Failure to obtain price equal to presumed value.- Failure of secured party to obtain price equal to presumed value does not make sale commercially unreasonable per se, but this circumstance would be one fact taken into account by trier of fact in determining whether sale was commercially reasonable. Comfort Trane Air Conditioning Co. v. Trane Co., 592 F.2d 1373 (5th Cir. 1979) (decided under former Code Section 11-9-504).
Wide discrepancy between sale price and value of collateral signals need for close scrutiny, even though a seemingly low return is usually not dispositive on question of commercial reasonableness. Granite Equip. Leasing Corp. v. Marine Dev. Corp., 139 Ga. App. 778, 230 S.E.2d 43 (1976) (decided under former Code Section11-9-504).
Sale of repossessed collateral is not commercially reasonable when there is wide discrepancy between sale price and value of such collateral (presumed to equal amount of debt in absence of proof otherwise) coupled with secured party's failure to prove value at time of repossession, and that such value does not equal debt. Granite Equip. Leasing Corp. v. Marine Dev. Corp., 139 Ga. App. 778, 230 S.E.2d 43 (1976) (decided under former Code Section11-9-504).
Where the secured party sold collateral at a private sale and within hours the buyer sold the collateral to a third party for more than 13 times what the buyer paid, and there was no evidence that the seller solicited more than one buyer, the debtor carried the burden in opposing summary judgment of identifying evidence that the sale of the collateral was not commercially reasonable. Hansford v. Burns, 241 Ga. App. 407, 526 S.E.2d 884 (1999).
Commercial reasonableness of time of sale.
- Commercial reasonableness of time of sale must be judged from time of repossession rather than time creditor finally chooses to dispose of goods. Henderson Few & Co. v. Rollins Communications, Inc., 148 Ga. App. 139, 250 S.E.2d 830 (1978) (decided under former Code Section11-9-504).
Sale not commercially reasonable where only one dealer contacted.
- Where time is not of the essence and secured party only contacts one dealer in attempting to sell, sale is not commercially reasonable. Luxurest Furn. Mfg. Co. v. Furniture Whse. Sales, Inc., 132 Ga. App. 661, 209 S.E.2d 63 (1974), aff'd sub nom., 233 Ga. 934, 214 S.E.2d 373 (1975).
Commercially unreasonableness sale of goods is not conversion.
- Private sale of vehicle repossessed by agents of secured party is not conversion even though terms are not commercially reasonable. Thurmond v. Elliott Fin. Co., 141 Ga. App. 574, 234 S.E.2d 153 (1977) (decided under former Code Section11-9-504).
Detailed accounting required.- The provision as to the disposition of collateral being "commercially reasonable" does not abrogate the doctrine that a creditor asserting control over a debtor's assets, then seeking to recover a deficiency judgment, must make a detailed accounting of its disposition of the assets. Walton Motor Sales, Inc. v. Ross, 736 F.2d 1449 (11th Cir. 1984) (decided under former Code Section 11-9-504).
Effect of unreasonable sale of one security item on recovery of other items.
- Distributor, who was the secured creditor of the dealer (via the execution of one security interest agreement) conducted a commercially unreasonable sale of one of the forklifts which secured the debt and thereby adversely affected the distributor's action to recover the amount due on the remaining inventory which secured the debt. C. Itoh Indus. Mach., Inc. v. Forklift Serv. Co., 180 Ga. App. 125, 348 S.E.2d 551 (1986), aff'd, 256 Ga. 757, 354 S.E.2d 159 (1987) (decided under former Code Section11-9-504).
Sale of collateral done in commercially reasonable manner.
- See White v. First Ga. Bank, 167 Ga. App. 825, 307 S.E.2d 720 (1983) (decided under former Code Section11-9-504).
Private auction sale of automobile.
- The method and manner of sale of a repossessed automobile were commercially reasonable, where the collateral was disposed of at a private auction by a recognized automobile auction company according to standard practice and procedure for sales of this kind. McMillian v. Bank S., 188 Ga. App. 355, 373 S.E.2d 61 (1988) (decided under former Code Section11-9-504).
Evidence of car's fair and reasonable value insufficient.
- Documents in evidence showing only the sale price of the car were insufficient to establish the car's fair and reasonable value. No witness testified as to the basis for the opinion or opined that the appraised value of the car was the car's fair and reasonable value in that market at the time of the repossession or the sale. Versey v. Citizens Trust Bank, 306 Ga. App. 479, 702 S.E.2d 479 (2010).
Failure to prove fair and reasonable value of minibuses.
- Secured creditor failed to prove the fair and reasonable value of minibuses at the time of sale, where the only evidence of value of the vehicles was the offers received after the default by the creditor's corporate president, upon solicitation of some 15 individuals nationwide, and the actual price paid at the sale of the vehicles. Walker v. Modnar Corp., 194 Ga. App. 68, 389 S.E.2d 558 (1989) (decided under former Code Section11-9-504).
Sale of convenience store equipment and food inventory.- Small Business Administration failed to act in a commercially reasonable manner in the sale of collateral consisting of inventory and equipment from a convenience store, where the value of food inventory substantially diminished by the time of auction and the equipment brought less than it would have if it had been sold at the store site in a timely manner. Johnson v. United States Small Bus. Admin., 116 Bankr. 863 (Bankr. M.D. Ga. 1990) (decided under former Code Section 11-9-504).
Sale occurred in a commercially reasonable manner.
- Assuming that the sale of collateral was a public sale within the meaning of O.C.G.A. § 11-1-201(31.1), the sale occurred in a commercially reasonable manner, under O.C.G.A. § 11-9-627, because the sale was consistent with the reasonable commercial practices of dealers in similar equipment. Moreover, the sale qualified as a valid private sale under O.C.G.A. § 11-9-613 and the creditor did not have to comply with the statute's public-sale provisions regarding time and advertising. Colonial Pac. Leasing Corp. v. N & N Partners, LLC, 981 F. Supp. 2d 1345 (N.D. Ga. Nov. 4, 2013).
Waiver
Commercial reasonableness cannot be waived.
- Commercial reasonability of method and notice of sale cannot be contractually waived under former § 11-9-501(3). The commercial reasonability of method and notice of sale required cannot be contractually waived or varied. Ennis v. Atlas Fin. Co., 120 Ga. App. 849, 172 S.E.2d 482 (1969) (decided under former Code Section11-9-504).
Status of "guarantor" is determinative as to legally non-binding effect of pre-default waiver of the requirements of former § 11-9-501(3). Branan v. Equico Lessors, Inc., 255 Ga. 718, 342 S.E.2d 671 (1986) (decided under former Code Section11-9-504).
Guarantor may waive notice.
- A guarantor or surety, under the terms of a separate contract, may waive such protection as notice or the right to contest the commercial reasonableness of the disposition of collateral. Pollard v. Trust Co. Bank, 175 Ga. App. 510, 333 S.E.2d 642 (1985), overruled on other grounds, 255 Ga. 721, 342 S.E.2d 674 (1986) (decided under former Code Section11-9-504).
Surety's advance consent to otherwise dischargeable conduct.
- Surety or guarantor may consent in advance to conduct which would otherwise result in discharge. Vickers v. Chrysler Credit Corp., 158 Ga. App. 434, 280 S.E.2d 842 (1981) (decided under former Code Section11-9-504).
Summary Judgment
Summary judgment denied.
- Trial court erred by granting summary judgment to creditor regarding the commercial reasonableness of the sale, where a material issue of fact existed regarding whether creditor carried its burden of proving that the sale price obtained for a piece of logging equipment was equal to its fair market value. Gilbert v. F & M Bank, 192 Ga. App. 700, 385 S.E.2d 782 (1989) (decided under former Code Section11-9-504).
Where it is unclear whether certified letter sent as "notice," which was returned marked "unclaimed" was returned prior to or after private sale, and where length of time between mailing and sale is almost four months, it is error to grant a summary judgment for deficiency balance in favor of plaintiff creditor. Geohagan v. Commercial Credit Corp., 130 Ga. App. 828, 204 S.E.2d 784 (1974) (decided under former Code Section11-9-504).
Burden of Proof
Burden on secured party.
- Burden of proving reasonableness of disposition of collateral is upon the secured party. Henderson Few & Co. v. Rollins Communications, Inc., 148 Ga. App. 139, 250 S.E.2d 830 (1978) (decided under former Code Section11-9-504).
The burden is on the secured party to prove that the sale of the collateral was commercially reasonable. Johnson v. United States Small Bus. Admin., 116 Bankr. 863 (Bankr. M.D. Ga. 1990) (decided under former Code Section 11-9-504).
After commercial reasonableness of secured party's disposition has been challenged, burden is placed upon the secured party to prove disposition was commercially reasonable. Comfort Trane Air Conditioning Co. v. Trane Co., 592 F.2d 1373 (5th Cir. 1979) (decided under former Code Section 11-9-504).
In challenge to reasonableness of a sale of repossessed collateral, secured party bears burden of proof that sale was commercially reasonable. BVA Credit Corp. v. May, 152 Ga. App. 733, 264 S.E.2d 32 (1979) (decided under former Code Section11-9-504).
Where reasonableness of disposition challenged, secured party must show resale price was fair, reasonable value.
- Whenever reasonableness to sale of repossessed collateral is challenged, burden of showing that disposition of collateral was commercially reasonable rests with the secured party. This includes burden of showing that resale price is fair and reasonable value of collateral. Vines v. Citizens Trust Bank, 146 Ga. App. 845, 247 S.E.2d 528 (1979); Central & S. Bank v. Craft, 190 Ga. App. 576, 379 S.E.2d 432 (1989) (decided under former Code Section11-9-504).
Where commercial reasonableness of sale is challenged by debtor, party holding security interest has burden of proving that terms of sale were commercially reasonable and that resale price was fair and reasonable value of collateral. Richard v. Fulton Nat'l Bank, 158 Ga. App. 595, 281 S.E.2d 338 (1981); Harrison v. Massey-Ferguson Credit Corp., 175 Ga. App. 752, 334 S.E.2d 352 (1985); Carlton Mfg., Inc. v. Bauer, 207 Ga. App. 850, 429 S.E.2d 329 (1993) (decided under former Code Section11-9-504).
Value presumed equal to debt owed.
- Absent evidence of the value of collateral at the time of repossession, the value of the goods is presumed to be equal to the debt owed. Borden v. Pope Jeep-Eagle, Inc., 200 Ga. App. 176, 407 S.E.2d 128 (1991) (decided under former Code Section11-9-504).
Rebuttable presumption rule.
- The rebuttable presumption rule, by placing the burden on the creditor to show the propriety of the sale and making the creditor liable for any injury to the debtor, provides an adequate deterrent to an improper sale on the part of a creditor and adequately protects the debtor's interest, without arbitrarily penalizing the creditor. Emmons v. Burkett, 256 Ga. 855, 353 S.E.2d 908 (1987) (decided under former Code Section11-9-504).
Under the rebuttable presumption rule, if a creditor fails to give notice or conducts an unreasonable sale, the presumption is raised that the value of the collateral is equal to the indebtedness. To overcome this presumption, the creditor must present evidence of the fair and reasonable value of the collateral, and the evidence must show that such value was less than the debt. If the creditor rebuts the presumption, the creditor may maintain an action against the debtor or guarantor for any deficiency. Any loss suffered by the debtor as a consequence of the failure to give notice or to conduct a commercially reasonable sale is recoverable and may be set off against the deficiency. Emmons v. Burkett, 256 Ga. 855, 353 S.E.2d 908 (1987) (decided under former Code Section11-9-504).
A more complete statement of the rule set forth in Emmons v. Burkette, 256 Ga. 855, 353 S.E.2d 908 (1987), is: If the creditor conducts a commercially unreasonable sale and does not rebut the presumption that the value of the collateral is equal to the indebtedness, the creditor loses the right to recover the deficiency against the debtor and the guarantor. If the presumption is rebutted, the first to recover the deficiency remains as held in Emmons. Business Dev. Corp. v. Contestabile, 261 Ga. 886, 413 S.E.2d 447 (1992) (decided under former Code Section11-9-504).
Creditor showing of reasonableness as prerequisite to deficiency judgment.
- If condition precedent of commercial reasonableness is not met in foreclosure sale, no recovery is possible, and burden is on creditor to prove such. Brown v. C.I.T. Corp., 150 Ga. App. 361, 258 S.E.2d 44 (1979) (decided under former Code Section11-9-504).
Showing required to recover deficiency.
- Burden is on secured party to prove value of collateral at time of repossession and that such value does not equal debt; failure to do so results in presumption that value was at least amount of debt. BVA Credit Corp. v. May, 152 Ga. App. 733, 264 S.E.2d 32 (1979); Comfort Trane Air Conditioning Co. v. Trane Co., 592 F.2d 1373 (5th Cir. 1979); Georgia Cent. Credit Union v. Coleman, 155 Ga. App. 547, 271 S.E.2d 681 (1980) (decided under former Code Section11-9-504).
Appellee secured creditor had burden of overcoming presumption that value of trucks equalled the debts on them by evidence of their fair and reasonable values, and evidence of resale prices was not sufficient to do this, nor were appellee's affiant's conclusory statements that they were sold in a commercially reasonable manner, thus, grant of summary judgment for appellee on claim for deficiency was error. Davis v. Ford Motor Credit Co., 164 Ga. App. 137, 296 S.E.2d 431 (1982) (decided under former Code Section11-9-504).
Debtor's burden after creditor proves commercial reasonableness.
- Where creditor shows prima facie that sale of collateral was reasonable, to prevent summary judgment for deficiency, debtor must support debtor's challenge to the sale by asserting specific facts showing there is a genuine issue for trial. Slaughter v. Ford Motor Credit Co., 164 Ga. App. 428, 296 S.E.2d 428 (1982) (decided under former Code Section11-9-504).
Debtor's burden after creditor files a deficiency claim.- A proof of claim constitutes prima facie evidence of the validity and amount of the claim, shifting the burden of proof to the debtor to show that the deficiency claim should not be allowed; the mere recitation of National Automobile Dealers Association mobile home values is insufficient for this purpose without some evidentiary connection to the actual home at issue. In re Brown, 221 Bankr. 46 (Bankr. M.D. Ga. 1998).
Evidence from an owner of an equipment purchaser, who had 22 years of experience in the industry and who claimed that a finance company's sale of equipment upon repossession did not bring the equipment's full value, raised a genuine issue of fact as to commercial reasonableness; accordingly, a grant of summary judgment to the finance company on the company's claim for a deficiency judgment was error. Mason Logging Co. v. GE Capital Corp., 322 Ga. App. 708, 746 S.E.2d 180 (2013).
Jury/Court Determinations
Commercial reasonableness of disposition is jury question.
- Question of commercial reasonableness is generally for jury, but trial judge may withdraw question of commercial reasonableness from jury and direct a verdict. Comfort Trane Air Conditioning Co. v. Trane Co., 592 F.2d 1373 (5th Cir. 1979) (decided under former Code Section 11-9-504).
Commercial reasonableness of disposition of collateral, considering method, time, place and terms, is question of fact for jury. Neither trial court nor appellate court should take upon itself such a determination. Ennis v. Atlas Fin. Co., 120 Ga. App. 849, 172 S.E.2d 482 (1969) (decided under former Code Section11-9-504).
It is for jury to determine the commercial reasonableness of a private sale of collateral. Gordon v. Weldon, 154 Ga. App. 531, 268 S.E.2d 796 (1980) (decided under former Code Section11-9-504).
Ultimate question of commercial reasonableness is one of law.
- When reasonableness of a sale of repossessed collateral is challenged, secured party has burden of proving that it was reasonable; and ultimate question of commercial reasonableness is one of law. Granite Equip. Leasing Corp. v. Marine Dev. Corp., 139 Ga. App. 778, 230 S.E.2d 43 (1976) (decided under former Code Section11-9-504).
RESEARCH REFERENCES
Am. Jur. 2d.
- 68A Am. Jur. 2d, Secured Transactions, §§ 556-572, 606, 624 et seq., 642-680, 685-703.
C.J.S.- 72 C.J.S., Pledges, §§ 49, 50.
U.L.A.- Uniform Commercial Code (U.L.A.) § 9-627.
ALR.
- Seller's rights in respect of the property, or its proceeds, upon dishonor of draft or check for purchase price, on a cash sale, 31 A.L.R. 578; 54 A.L.R. 526.
Rights and remedies as between parties to conditional sale after seller has repossessed himself of the property, 99 A.L.R. 1288.
Right of creditor or mortgagee to redeem from his own sale, 108 A.L.R. 993.
Purchase by pledgee of subject of pledge, 37 A.L.R.2d 1381.
Rights and duties of parties to conditional sales contract as to resale of repossessed property, 49 A.L.R.2d 15.
Uniform Commercial Code: Burden of proof as to commercially reasonable disposition of collateral, 59 A.L.R.3d 369.
Uniform Commercial Code: failure of secured creditor to give required notice of disposition of collateral as bar to deficiency judgment, 59 A.L.R.3d 401.
Construction of term "debtor" as used in UCC § 9-504(3), requiring secured party to give notice to debtor of sale of collateral securing obligation, 5 A.L.R.4th 1291.
What is "commercially reasonable" disposition of collateral required by UCC § 9-504(3), 7 A.L.R.4th 308.
Loss or modification of right to notification of sale of repossessed collateral under Uniform Commercial Code § 9-504, 9 A.L.R.4th 552.
Failure of secured party to make "commercially reasonable" disposition of collateral under UCC § 9-504(3) as bar to deficiency judgment, 10 A.L.R.4th 413.
Sufficiency of secured party's notification of sale or other intended disposition of collateral under UCC § 9-504(3), 11 A.L.R.4th 241.
Nature of collateral which secured party may sell or otherwise dispose of without giving notice to defaulting debtor under UCC § 9-504(3), 11 A.L.R.4th 1060.
Secured transactions: what is "public" or "private" sale under UCC § 9-504(3), 60 A.L.R.4th 1012.
UCC: value of trade-in taken on sale of collateral for purposes of computing surplus or deficiency, 72 A.L.R.4th 1128.
Causes of action governed by limitations period in UCC § 2-725, 49 A.L.R.5th 1.