981 F. Supp. 2d 1345
N.D. Ga.2013Background
- Between July 2007 and July 2008 N & N Partners purchased commercial equipment under three finance agreements; Fletcher and Crymes each executed continuing guaranties.
- GE Capital ultimately repossessed the collateral after N & N defaulted in September 2009; the collateral was sold in Dec. 2009 and March 2010, proceeds credited but deficiencies remained.
- GE Capital assigned the agreements to its subsidiary Colonial effective Dec. 31, 2009; Colonial sued in 2012 for deficiencies totaling $101,094.14 and attorneys’ fees.
- Defendants admitted default but argued the sales were not commercially reasonable, challenging procedural notice (some notices were sent by Colonial while GE was the secured party) and the lack of appraisals proving fair market value.
- Colonial submitted an affidavit from a GE remarketing manager (McCleveland) asserting the sale prices were fair; Colonial moved for summary judgment and defendants moved for partial summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Were the sales commercially reasonable under Georgia UCC Article 9? | Sales complied with notice and followed industry practice; proceeds matched or exceeded fair market value. | Sales violated Article 9 procedures (timing, advertising, and notices sent by Colonial not GE) and lacked appraisal evidence of FMV. | Court: Sales were commercially reasonable as to manner and price; procedural defects were minor or curable and did not preclude recovery. |
| Was notice defective because Colonial (not GE) sent notices for agreements 2 & 3? | Notices reasonably informed parties; assignment to Colonial was effective and misidentification was a minor, non‑misleading error. | Notices were a nullity and eviscerated defendants’ redemption rights, warranting partial summary judgment. | Court: Misidentification was a minor error not seriously misleading; denial of partial summary judgment. |
| Did Colonial present admissible evidence of collateral fair market value without formal appraisals? | McCleveland’s affidavit, based on personal knowledge and business records, suffices to prove FMV. | Absence of formal appraisals leaves a jury question on FMV. | Court: Affidavit and business records satisfy Rule 56 personal‑knowledge/admissibility; appraisal not required. |
| Is the amount of the deficiency established? | Colonial’s calculations reflect post‑sale accounting and added charges; seeks full deficiency. | Discrepancy between amounts Colonial previously pleaded in state court and current claim creates a factual dispute. | Court: Material factual dispute exists over the exact deficiency amount; summary judgment denied on that issue only. |
Key Cases Cited
- Emmons v. Burkett, 353 S.E.2d 908 (Ga. 1987) (secured creditor may still recover a deficiency if it rebuts presumption by proving fair and reasonable value even where sale procedures were defective)
- Mason Logging Co. v. Gen. Elec. Capital Corp., 746 S.E.2d 180 (Ga. Ct. App.) (commercial reasonableness requires proof of compliance and evidence of collateral value at repossession)
- Bradford v. Gen. Elec. Credit Corp. of Ga., 359 S.E.2d 757 (Ga. Ct. App.) (statutory notice violations do not automatically render sale commercially unreasonable; creditor may rebut presumption with FMV evidence)
- Traditional Props., Inc. v. Performance Food Group of Ga., 662 S.E.2d 250 (Ga. Ct. App.) (a party cannot rely on its own unverified pleadings to create a factual dispute in response to prima facie evidence)
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard: materiality and genuine dispute requirements)