REBEL AUCTION CO., INC. v. the CITIZENS BANK.
805 S.E.2d 913
| Ga. Ct. App. | 2017Background
- Citizens Bank sued Big Metal Construction and guarantor Gina Bryant on promissory notes and sought possession of equipment (forklifts) listed on a UCC financing statement filed March 16, 2011.
- Citizens amended to add Rebel Auction and Four-D, alleging Rebel Auction (as auctioneer/agent for Big Metal) sold encumbered equipment to Four-D; Rebel Auction admitted in its answer it sold the equipment as Big Metal’s agent.
- Citizens served requests for admissions; Rebel Auction failed to timely respond, so admissions were deemed admitted by operation of law; later counsel attempted late responses and sought withdrawal of admissions.
- Rebel Auction moved to withdraw admissions supported by a self-serving affidavit from its CEO contesting prior admissions; the trial court denied withdrawal, granted Citizens summary judgment on conversion, and denied Rebel Auction’s cross-motion.
- On appeal, the Court of Appeals affirmed denial of motion to withdraw admissions, reversed the grant of summary judgment to Citizens (finding a material fact issue about the financing statement’s name), and affirmed denial of summary judgment for Rebel Auction.
Issues
| Issue | Plaintiff's Argument (Citizens) | Defendant's Argument (Rebel Auction) | Held |
|---|---|---|---|
| Whether Rebel Auction could withdraw admissions | Admissions stand; defendant’s late denials lack credibility | Late affidavit shows admissions were incorrect and merits should be decided | Denial affirmed — trial court didn’t abuse discretion; affidavit lacked credible, admissible evidence |
| Whether Rebel Auction is liable for conversion as a matter of law | Auctioneer admitted selling secured collateral as Big Metal’s agent → conversion | Auctioneer contends it sold property on behalf of Four-D (not Big Metal) so no conversion | Denial of Rebel Auction’s summary judgment affirmed — admissions supported conversion claim |
| Validity of financing statement name (debtor listed as "Big Metal Construction Inc. Payroll Account") | Financing statement perfected Citizens’ security interest | Incorrect debtor name may render statement seriously misleading | Reversed grant to Citizens — triable issue whether standard search would disclose the misnamed filing (material fact exists) |
| Whether valid security agreement existed/perfection before sales | Citizens had a 2011 security agreement (signed by Bryant) and UCC-1 filed; later 2013 documents reference the UCC | Lack of dated signature and missing attachment defeats showing of enforceable security agreement at filing | Rebel Auction not entitled to summary judgment; facts viewed in Citizens’ favor support attachment/perfection — genuine issue for trial remained on other points |
Key Cases Cited
- Deere & Co. v. Miller-Godley Auction Co., 249 Ga. App. 797 (auctioneer may be liable for conversion as agent who sells another’s encumbered property)
- Elrod v. Sunflower Meadows Dev., LLC, 322 Ga. App. 666 (standard for permitting withdrawal/amendment of admissions)
- Turner v. Mize, 280 Ga. App. 256 (trial court’s discretion on withdrawal of admissions reviewed for abuse)
- Fox Run Properties, LLC v. Murray, 288 Ga. App. 568 (contradictory assertions without credible support may be construed against movant seeking withdrawal)
- Johnson v. Omondi, 294 Ga. 74 (de novo review standard for summary judgment)
- All Bus. Corp. v. Choi, 280 Ga. App. 618 (when an affidavit shows a search using the correct debtor name did not reveal the misfiled statement, it is seriously misleading)
- Receivables Purchasing Co. v. R & R Directional Drilling, LLC, 263 Ga. App. 649 (incorrect debtor name that defeats discovery via standard search renders financing statement seriously misleading)
- Garrett v. Nationsbank, N.A., 228 Ga. App. 114 (summary judgment standards re: challenging secured-party pleadings)
- Byrd v. Rachaman, 294 Ga. App. 869 (presumption that trial court acts properly in exercising duties)