209 Conn. 163 | Conn. | 1988
The sole issue in this case is whether the principles governing the liquidation of commercial security interests are superseded by a provision in a security agreement that expressly incorporates, by statutory reference, the procedures governing the foreclosure of consumer installment sales. The plaintiff, Mack Financial Corporation, brought this action, as the assignee of a purchase money security interest in a used trailer truck, to recover a deficiency judgment from the
The facts relevant to this appeal are as follows. On July 27,1982, the defendants bought a used Mack tractor trailer truck from Bridgeport Mack Trucks, Inc., for $18,525.36. The defendants intended to use, and did use, the truck to haul goods for hire. The contract of sale, denominated a “retail installment contract,” created a security interest on behalf of the seller or its assignee to secure payment of the defendants’ outstanding indebtedness. The seller immediately assigned all of its rights in the contract to the plaintiff, and the defendants, duly notified, agreed to make the required payments directly to the plaintiff. After the truck broke down in Oregon on January 14, 1983, the defendants ceased making further payments. The plaintiff repossessed the truck peacefully and resold it, in Oregon, for $1700, without giving the defendants the required notification of its resale plans.
Whether these events permit the plaintiff to recover a deficiency judgment from the defendants is a question that turns, as the parties acknowledge, on the proper interpretation of one of the conditions of the installment contract, a contract drafted by the plaintiff. The contract provides: “In the event that the cash price of the property is $25,000.00 or less and buyer shall default in any of the terms and conditions of this contract, seller shall proceed in accordance with Section 42-98 of the Connecticut General Statutes to the extent that the procedure set forth in the preceding paragraph of this contract is inconsistent with the pro
To place this question into context, it is important to clarify three subsidiary matters not seriously at issue: (1) the fact of the plaintiffs noncompliance with statutory requirements for written notification of sale; (2) the legal consequence of such noncompliance in a commercial secured transaction; and (3) the legal consequence of such noncompliance in a transaction involving the purchase of consumer goods for consumer purposes. Each of these matters warrants only brief discussion.
During the presentation of its case-in-chief, the plaintiff introduced no evidence that it had given the defendants any written notice expressly informing the defendants of the plaintiffs intent to resell the repossessed truck either at a public or at a private sale. For consumer transactions, such written notification is a procedural requirement of § 42-98 (d).
For entirely commercial transactions, this court in Connecticut Bank & Trust Co. v. Incendy, supra, 27-28, recently discussed the consequence of noncompliance with the statutory notification requirements of § 42a-9-504 (3). We there held that the failure to provide the required notification serves to limit but not to preclude a creditor’s action for a deficiency judgment. Id. The defendants do not contest the proposition that, if Incendy applies, their motion for a directed verdict was correctly denied because of the plaintiff’s effort, at trial, to make a factual showing of “the amount that should reasonably have been obtained through a sale conducted in accordance with the ‘commercially reasonable’ requirements of the code.” Id., 27.
For entirely consumer transactions, by contrast, Connecticut case law has assigned a more serious consequence to a failure to give the notification of sale that § 42-98 (d) makes a procedural requirement. We must bear in mind that we are dealing with consumer legislation, whose interpretation is to be guided by its remedial purpose of protection for retail buyers. Barco Auto Leasing Corporation v. House, 202 Conn. 106, 116, 520 A.2d 162 (1987); Rhodes v. Hartford, 201 Conn. 89, 95, 513 A.2d 124 (1986). In construing a similar provision in a related section, General Statutes § 42-84, which
We can therefore restate the question that we must resolve as follows. If a secured creditor, having reason to know of a secured buyer’s intention to use contract goods for commercial purposes,
The trial court resolved this question in favor of the plaintiff. In its memorandum of decision setting aside the verdict, the court concluded that the evidence unquestionably established that: (1) the plaintiff did not satisfy the notice requirements of § 42-98; and (2) the defendants bought their truck, for $18,500, in order to haul goods for hire. In these circumstances, the court concluded that “literal compliance” with the statute was not mandatory because the transaction in this case
Commercial contracting parties have considerable freedom to determine the remedial rights that will ensue upon breach. Such authority is expressly conferred upon buyers and sellers of goods in article 2 of the Uniform Commercial Code, General Statutes § 42a-2-719.
In this case, the parties’ bargain imposes upon the seller or its assignee the burden of complying fully with consumer procedures that would otherwise not be mandatory in this commercial context. Particularly when it is the commercial seller whose drafting has imposed this burden upon itself, we are of the view that the contract should be enforced according to its terms. See Greenwich Contracting Co. v. Bonwit Construction Co., 156 Conn. 123, 130, 239 A.2d 519 (1968). The plaintiff’s construction of the contract would attribute no operative meaning whatsoever to the contract’s express incorporation of § 42-98. “Parties generally do not insert meaningless provisions in their agreements and
There is error, the judgment is set aside and the case is remanded with direction to render judgment for the defendants.
In this opinion the other justices concurred.
General Statutes § 42-98 (d) provides in relevant part: “If the retail buyer does not redeem such goods within fifteen days after the holder of the contract has retaken possession, the holder of the contract shall sell such goods at public or private sale which sale may be held not less than fifteen days and shall be held not more than one hundred eighty days after the retaking. . . . The holder of the contract shall give the retail buyer not less than ten days’ written notice of the time and place of any public sale, or the time after which any private sale or other intended disposition is to be made, either personally or by registered mail or by certified mail receipted for on mailing directed to the retail buyer at his last-known place of business or residence.”
General Statutes § 42a-9-504 (3) provides in relevant part: “Disposition of the collateral may be by public or private proceedings .... Unless collateral is perishable or threatens to decline speedily in value or is of a
In completing the written statements in which they applied for financing for their truck purchase, the defendants disclosed their intent to use the truck for a proprietorship that was engaged in the business of trucking.
General Statutes § 42a-9-109 provides in relevant part: “Goods are (1) ‘consumer goods’ if they are used or bought for use primarily for personal, family or household purposes; (2) ‘equipment’ if they are used or bought for use primarily in business, including farming or a profession . . . .”
General Statutes § 42a-2-719 provides in relevant part: “(1) Subject to the provisions of subsections (2) and (3) of this section and of the preceding section on liquidation and limitation of damages, (a) the agreement may provide for remedies in addition to or in substitution for those provided in this article and may limit or alter the measure of damages recoverable under this article . . . .”