299 Ga. 655
Ga.2016Background
- In March 2006 Venable bought a minivan under a "Conditional Sale Contract" from a dealership; the dealership assigned its security interest to SunTrust.
- Venable stopped paying in November 2007; SunTrust repossessed and sold the vehicle at auction for less than the loan balance.
- SunTrust filed a deficiency action against Venable on October 15, 2012 to recover the unpaid balance.
- Venable asserted the claim was time-barred by the four-year statute of limitations for sales of goods (OCGA § 11-2-725(1)); SunTrust relied on the six-year limitation for simple written contracts (OCGA § 9-3-24).
- The trial court granted summary judgment for SunTrust; the Court of Appeals reversed, holding the four-year UCC statute applied and barred the claim.
- The Supreme Court of Georgia affirmed the Court of Appeals, concluding the contract’s predominant purpose was the sale of a good, so the four-year Article 2 limitation governed and SunTrust’s claim was time-barred.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which statute of limitation applies to a deficiency action on a conditional sale contract that also grants a security interest? | SunTrust: six-year limitation for simple written contracts (OCGA § 9-3-24) applies because the contract includes a security/secured-transaction component. | Venable: four-year UCC limitation for contracts for the sale of goods (OCGA § 11-2-725(1)) applies because the contract’s dominant purpose is sale of a vehicle. | The four-year UCC limitation applies; the contract’s predominant purpose was sale of a good, so the deficiency action is time-barred. |
Key Cases Cited
- Giles v. Swimmer, 290 Ga. 650 (standard of review on summary judgment)
- Ole Mexican Foods, Inc. v. Hanson Staple Co., 285 Ga. 288 (dominant-purpose test for UCC applicability)
- J. Lee Gregory v. Scandinavian House, L.P., 209 Ga. App. 285 (analysis of predominant purpose where contract has mixed elements)
- First of America Bank v. Thompson, 552 N.W.2d 516 (Mich. App.) (applying UCC four-year limit to deficiency actions in similar facts)
- Associates Discount Corp. v. Palmer, 219 A.2d 858 (N.J. 1966) (deficiency action characterized as enforcement of sales-price obligation)