Spellman v. Independent Bankers' Bank of Florida
161 So. 3d 505
| Fla. Dist. Ct. App. | 2014Background
- IBBF made five loans (2004–2007) secured by 365,151 shares of Beach Community Bancshares, Inc. (BCB) pledged and delivered by the Shuaney Irrevocable Trust (SIT).
- SIT defaulted on the loans and on a subsequent forbearance agreement; IBBF demanded payment and took enforcement steps.
- At IBBF’s direction, BCB cancelled the original share certificates and reissued new certificates in the name of a wholly-owned IBBF subsidiary; IBBF attempted to offer the shares for sale but received no purchasers.
- IBBF sued SIT for the loan balances; SIT countered that IBBF’s transfer of the shares to its subsidiary constituted an "other disposition" under UCC § 9-610 (Fla. § 679.610), limiting IBBF to a deficiency claim or, alternatively, amounted to an unreasonable retention/acceptance under § 679.620(6).
- The trial court granted summary judgment for IBBF for the full indebtedness; SIT’s rehearing motion was denied, and SIT appealed.
Issues
| Issue | Plaintiff's Argument (SIT) | Defendant's Argument (IBBF) | Held |
|---|---|---|---|
| Whether transferring shareholder certificates to IBBF’s wholly-owned subsidiary was an "other disposition" under UCC § 9-610 that precludes pursuing a money judgment | Reissuing certificates to IBBF’s subsidiary was an "other disposition," so IBBF must treat the transaction as a disposition and can only recover a deficiency after crediting the collateral’s value | Transfer of record/legal title to a secured party or its subsidiary is not a disposition under the UCC; § 679.619(3) confirms transfer of title alone does not constitute disposition | The transfer to the subsidiary was not an "other disposition"; IBBF did not forfeit its right to a money judgment |
| Whether IBBF’s possession/retention of the shares required election of remedies or caused acceptance in full satisfaction under § 679.620(6) | Retaining/accepting the collateral without commercially reasonable disposition constituted an improper retention/acceptance, limiting recovery | UCC allows a secured party to take/retain possession and to simultaneously pursue other remedies; remedies are cumulative and no election is required | IBBF could repossess the shares and simultaneously sue for the debt; no election or forced acceptance occurred |
Key Cases Cited
- Fletcher v. Cobuzzi, 499 F. Supp. 694 (W.D. Pa. 1980) (transfer of collateral stock to creditor itself is not an "other disposition" under UCC)
- Sports Courts of Omaha, Ltd. v. Brower, 534 N.W.2d 317 (Neb. 1995) (creditor’s transfer of stock to itself does not constitute UCC "disposition")
- IFG Leasing Co. v. Gordon, 776 P.2d 607 (Utah 1989) (same—reissuance to creditor is not an "other disposition")
- Williams v. Regency Fin. Corp., 309 F.3d 1045 (8th Cir. 2002) (analysis of "disposition" includes transfers short of sales; scope of term varies by context)
- Ctr. Capital Corp. v. JR Lear 60-099, LLC, 674 F. Supp. 2d 569 (D. Del. 2009) (secured creditor may obtain full money judgment while in possession of collateral)
- Weiner v. Am. Petrofina Mktg., Inc., 482 So. 2d 1362 (Fla. 1986) (improper sale of collateral affects deficiency computation but is distinguishable here)