CSI SERVICES, LTD., APPELLANT,
v.
HAWKINS CONCRETE CONSTRUCTION COMPANY, A FLORIDA CORPORATION, HAWKINS BRIDGE CO., INC., A FLORIDA CORPORATION, AND C. D. HAWKINS, APPELLEES
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CSI Services sought a deficiency judgment against Hawkins after repossessing and selling collateral, but the trial court denied it solely because CSI failed to provide notice of the sale. The appellate court reversed, holding that while failure to give notice creates a rebuttable presumption of commercial unreasonableness, a secured party may still recover a deficiency judgment if it proves the collateral's fair market value was obtained and was less than the debt.
Failure to give notice of collateral sale creates a rebuttable presumption that the sale was commercially unreasonable, but this presumption does not automatically bar a deficiency judgment. A secured party may obtain a deficiency judgment if it proves the collateral was sold at fair market value and the proceeds were less than the debt, unless other defenses are proven.
[1] A final summary judgment that anticipates future judicial adjustment after the disposition of collateral is not a final judgment that resolves all litigation between the…
[2] Receipt of a copy of a final summary judgment ordering the sale of collateral does not constitute reasonable notification of the time after which a private sale is to be…
Previewing 2 of 6 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“failure to give such notice generally renders a sale commercially unreasonable. See Landmark First National Bank of Fort Lauderdale v. Gepetto's, 498 So.2d 920 (Fla.1986). However, that failure does not necessarily preclude entry of a deficiency judgment following the sale.”
Establishes the core holding that lack of notice does not automatically bar a deficiency judgment despite making the sale presumptively unreasonable.
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Join FLexlaw to unlock all legal intelligenceCSI Services repossessed collateral securing a debt owed by C.D. Hawkins and Hawkins Bridge Co. and sold the collateral without providing the required…
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WIGGINTON, Judge.
Appellant appeals an amended final judgment denying it’s request for a deficiency judgment against appellees, C. D. Hawkins and Hawkins Bridge Co. We reverse and remand.
Without making determinations as to the other issues involved below, such as whether the collateral was sold by appellant for fair market value and whether a novation had occurred, the trial judge denied the deficiency judgment solely on the basis of the fact that appellant undisputedly failed to give Hawkins and Hawkins Bridge Co. notice of the sale of the collateral.
A secured party is required under section 679.504(3), Florida Statutes, to give notice of a sale of repossessed collateral and failure to give such notice generally renders a sale commercially unreasonable. See Landmark First National Bank of Fort Lauderdale v. Gepetto’s, 498 So. 2d 920 (Fla.1986). However, that failure does not necessarily preclude entry of a deficiency judgment following the sale. As established in Weiner v. American Petrofina Marketing, Inc., 482 So. 2d 1362 (Fla.1986) and followed in Gepetto’s:
When it has been determined that a secured party has disposed of collateral in a commercially unreasonable manner, there will arise a presumption that the fair market value of the collateral at the time of repossession was equal to the amount of the total debt that it secured. The burden to prove that the fair market value of the collateral was less than the debt will be upon the secured party. If the secured party meets this burden, he will be allowed to recover a deficiency judgment in an amount equal to the total debt minus the fair market value of the collateral as ultimately determined.
In Gepetto’s, decided immediately prior to the date of the amended final judgment on appeal, the court specifically found that a sale conducted without prior notice cannot be considered commercially reasonable and it therefore falls within the “rebuttable presumption” rule of Weiner. In that case, the bank argued that the evidence presented to the trial court adequately rebutted the Weiner presumption. The court declined to make a determination on that issue but remanded to the trial court for further proceedings.
Thus, according to Weiner and Gepet-to’s, failure to give the requisite notice merely raises the rebuttable presumption that since the sale was commercially unreasonable, the secured party is not entitled to a deficiency judgment. However, if the secured party can overcome that presumption by showing that fair market value was obtained for the collateral and the value received was less than the debt, and if no other defenses are asserted and proven, the secured party is entitled to a deficiency judgment.
Therefore, we conclude that the trial judge erred in denying the deficiency judgment in this case solely on the basis of lack of notice without addressing appellant’s rebuttal evidence. Following the Supreme Court in Weiner and Gepetto’s, we reverse and remand to the trial judge for a reconsideration of appellant’s entitlement to a deficiency judgment consistent with this opinion, including resolution of the fair market value issue and the novation defense.
REVERSED and REMANDED.
BOOTH and THOMPSON, JJ., concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
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Thunderbird, Ltd. v. Great Am. Ins. Co., 566 So. 2d 1296 (Fla. 1st DCA 1990)…e assets it received through foreclosure was less than the total indebtedness which appellants partially guaranteed. Norwest Bank Owatonna, N.A. v. Millard, 522 So. 2d 546 (Fla. 4th DCA 1988); CSI Services, Ltd. v. Hawkins Concrete Construction Co., 516 So. 2d 337 (Fla. 1st DCA 1987). While the foregoing is a correct statement of the law, we disagree with appellants that Great American’s action in placing before the trial court the certificate of sale would entitle appellants to judgment as a matter of law.…
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Norwest Bank Owatonna, N.A. v. Millard, 522 So. 2d 546 (Fla. 4th DCA 1988)…ust be supported by established equitable principles and the record must disclose sufficient facts and circumstances to justify the judgment. The most recent exposition of the rule appears in CSI Services, Ltd. v. Hawkins Concrete Construction Co., 516 So. 2d 337, 338 (Fla. 1st DCA 1987), wherein the court said: The burden to prove that the fair market value of the collateral was less than the debt will be upon the secured party. If the secured party meets this burden, he will be allowed to recover a defici…
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Dane D. Morgan v. Kelly, 642 So. 2d 1117 (Fla. 3d DCA 1994)…cured by the final judgment of foreclosure, minus the fair market value of the property, as determined by the court. Norwest Bank Owatonna, N.A. v. Millard, 522 So. 2d 546 (Fla. 4th DCA 1988) (citing CSI Servs., Ltd. v. Hawkins Concrete Constr. Co., 516 So. 2d 337, 338 (Fla. 1st DCA 1987)). See R.K. Cooper Constr. Co. v. Fulton, 216 So. 2d 11 (Fla.1968); Liberty Business Credit Corp. v. Schaffer/Dunadry, 589 So. 2d 451 (Fla. 2d DCA 1991); Flagship State Bank of Jacksonville v. Drew Equip. Co., 392 So. 2d 609…
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Weiner v. Am. Petrofina Mktg., Inc., 482 So. 2d 1362 (Fla. 1986)
- Landmark First Nat'l Bank of Fort Lauderdale v. Gepetto's Tale O' THE Whale OF Fort Lauderdale, Inc., 498 So. 2d 920 (Fla. 1986)