Ford Motor Credit v. Brenneman

FORD MOTOR CREDIT d/b/a PRIMUS FINANCIAL SERVICES, Respondent, v. RAYMOND BRENNEMAN and VALERIE BRENNEMAN, husband and wife, and their marital community composed thereof, Appellant.

No. 44773-8-II

Court of Appeals of Washington, Division 2

July 1, 2014

UNPUBLISHED OPINION

Lee J.

Raymond and Valerie Brenneman appeal the trial court's order granting summary judgment to Ford Motor Credit and awarding Ford a deficiency judgment for the balance due under its motor vehicle retail installment contract with the Brenneman The Brenneman contend that there are material issues of fact concerning whether Ford's sale of their repossessed vehicle was commercially reasonable and whether Ford provided proper notice of that sale. Because no genuine issues of material fact exist, we affirm.

FACTS

The Brenneman bought a 2004 Volvo automobile from Barrier Volvo on December 6, 2007. In connection with this purchase, the Brenneman signed a retail installment contract that set forth the terms of the purchase and the installment payments they agreed to make. Ford is the creditor with respect to the Brenneman' loan.

The Brenneman assert that they took the car back to Barrier for warranty repair of its transmission in the fall of 2008. The Brenneman also claim that after a month-long delay, Barrier informed them that a replacement transmission was on back order. The Brenneman grew tired of waiting and surrendered possession of the car to Barrier. They believed that by surrendering possession and foregoing a lemon law claim, they satisfied their obligations under the retail installment contract. Ford repossessed the car on November 3, 2008, and sent the Brenneman a notice of its plan to sell the vehicle on November 5, 2008.

Ford arranged for the car to be sold at auction by Manheim Seattle, which conducts weekly vehicle auctions in Washington and other states. The car sold for $13, 000, leaving a balance of more than $10, 000 due on the Brennemans' retail installment contract. Ford mailed a statement of sale to the Brennemans that set forth those figures and the deficiency they owed.

When the Brennemans did not pay the deficiency, Ford sued to recover the monies due under the retail installment contract. The Brennemans responded by raising several defenses including claims that Ford's action was barred by its failure to give proper notice of the sale and that the sale was not commercially reasonable under the Uniform Commercial Code.

Ford moved for summary judgment and provided documents showing that it mailed the notice of its plan to sell the car, as well as the statement of sale, to the address on the Brennemans' vehicle registration. Ford added that the car was sold "as is" to the highest bidder, and that the sale "was through an experienced dealer in a recognized market in a commercially reasonable manner." Clerk's Papers (CP) at 33. Ford also provided a certification from its business records custodian stating that it had demanded payment on the contract and that the Brennemans had refused or been unable to pay.

The Brennemans responded that they did not receive notice of the sale because it was sent to an address where they had resided "in the past" rather than their current mailing address, which is the address included in their contract with Ford. CP at 49. They also asserted that their • surrender of the car to the dealer satisfied their contract obligations with Ford.

During the hearing on Ford's motion, the Brennemans acknowledged that nothing in the contract or the law stated that surrender of the car would take care of any outstanding contractual obligations. Nor could they cite any law stating that a car's defect allows an owner to void a related sales contract. The trial court granted Ford summary judgment on the issue of the Brennemans' liability, but it requested additional briefing concerning the car's value and the appropriate judgment amount.

The Brennemans then moved for reconsideration and asserted that issues of fact remained as to whether they had actually defaulted on the contract, whether Ford's sale of the car was commercially reasonable, and whether they had adequate notice of the sale. They argued that their car payments were timely until they surrendered possession, and that they never received a notice of default. They also maintained that the car's inoperative transmission had to be fixed to make Ford's sale of the car commercially reasonable, and that the vehicle registration form that Ford submitted was not authentic.

In a separate memorandum addressing the car's value, the Brennemans contended that the value at the time of sale based on the current "Blue Book"^[1] figure, was approximately $23, 000. CP at 76, 77. They asserted in the alternative that the car was defective and had no retail commercial value.

Ford's response concerning the car's value attached the auctioneer's condition report stating that the vehicle was drivable and that its overall condition was average at the time of sale. The report also showed that the car was valued at $10, 650 before the auction. Ford argued that the car was not defective and not without value.

In response to the Brennemans' motion for reconsideration Ford again asserted that it had shown the car was operable at the time of default and that the Brennemans had provided no competent evidence to support their claim to the contrary. Ford also argued that it had shown, with the certification from its business records custodian, that the Brennemans were in default. Ford added that the vehicle registration it had submitted was valid but argued that even if its notice of the sale was insufficient, the Brennemans had not disclosed any resulting loss.

The trial court denied the Brennemans' motion for reconsideration and concluded that the value of the car was established by the commercially reasonable sale. The court ultimately entered a judgment of $14, 389.07 in Ford's favor.

On appeal, the Brennemans argue that material issues of fact remain on the issues of commercial reasonableness and notice that preclude summary judgment and the entry of a deficiency judgment against them.

ANALYSIS

1. Standard of Review

When reviewing a summary judgment order, we engage in the same inquiry as the trial court, on the same record. Marshall v. Bally's Pacwest, Inc., 94 Wn.App. 372, 377, 972 P.2d 475 (1999). A summary judgment order can be granted only if the pleadings, affidavits, depositions, and admissions on file show the absence of any genuine issues of material fact, and that the moving party is entitled to judgment as a matter of law. Marshall, 94 Wn.App. at 377. The motion should be granted only if, from all the evidence, reasonable persons could reach but one conclusion. Wojcik v. Chrysler Corp., 50 Wn.App. 849, 854, 751 P.2d 854 (1988). The court must consider all facts submitted and all reasonable inferences from the facts in the light most favorable to the nonmoving party. Nivens v. 7-11 Hoagy's Corner, 133 Wn.2d 192, 198, 943 P.2d 286 (1997).

After the moving party has submitted adequate affidavits, the nonmoving party must set forth specific facts rebutting the moving party's contentions and disclosing the existence of issues of material fact. Marshall, 94 Wn.App. at 377. A nonmoving party may not rely on speculation or on argumentative assertions that unresolved factual issues remain. White v. State, 131 Wn.2d 1, 9, 929 P.2d 396 (1997). Although CR 56(e) requires an affidavit submitted in a summary judgment proceeding to be based on personal knowledge, to set forth admissible evidentiary facts, and to show that the affiant is competent to testify as to his averments, courts generally will indulge in some leniency with respect to affidavits presented by the nonmovant. Pub. Util. Dist. No. 1 of Lewis County, v. Wash. Pub. Power Supply Sys. (WPPSS), 104 Wn.2d 353, 360-61, 705 P.2d 1195, 713 P.2d 1109 (1985). Such leniency does not extend, however, to affidavits containing inadmissible evidence or conclusory statements. WPPSS, 104 Wn.2d at 361.

In responding to Ford's motion for summary judgment, the Brennemans submitted an unsworn affidavit that was not signed under penalty of perjury. See GR 13 (unsworn affidavit is permitted if signed under penalty of perjury). The Brennemans attached an identical declaration that was signed under penalty of perjury to their reply to Ford's response to their motion for reconsideration. We will consider these filings in determining whether issues of fact remain concerning the commercial reasonableness of the sale or Ford's notice thereof.

2. Commercial Reasonableness

The Uniform Commercial Code requires a creditor to dispose of a defaulting debtor's collateral in a "commercially reasonable" manner. RCW 62A.9A-610(b); Sec. State Bank v. Burk, 100 Wn.App. 94, 95, 995 P.2d 1272 (2000). The fact that a greater amount could have been obtained by a disposition at a different time or in a different method from that selected is not alone sufficient to preclude the creditor from establishing that the disposition was made in a commercially reasonable manner. RCW 62A.9A-627(a). A disposition of collateral is commercially reasonable if it is made in the usual manner in any recognized market, at the price current in any recognized market at the time of the disposition, or is otherwise in conformity with reasonable commercial practices among dealers in the type of property that was the subject of the disposition. RCW 62A.9A-627(b). In sum, the commercial reasonableness of a sale depends on the procedures employed and not on the proceeds generated. Leasing Serv. Corp. v. Diamond Timber, Inc., 559 F.Supp. 972, 979 (S.D.N.Y. 1983) (citing Foster v. Knutson, 84 Wn.2d 538, 527 P.2d 1108 (1974)), aff'd, 729 F.2d 1442 (2d Cir. 1983).

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