DAVID J. GANGELHOFF, D/B/A GULF MARINE OF CLEARWATER, AND DAVID J. GANGELHOFF, INDIVIDUALLY, APPELLANTS,
v.
TRANSAMERICA COMMERCIAL FINANCE CORPORATION, APPELLEE
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Gangelhoff appealed a summary judgment awarding Transamerica a deficiency judgment of over $100,000 following the repossession and sale of collateral from his business. The court reversed, finding that genuine issues of material fact existed regarding the commercial reasonableness of the sale, which precluded summary judgment.
Summary judgment was improper because Gangelhoff's affidavit raised genuine issues of material fact concerning commercial reasonableness. Transamerica's failure to provide notice of the sale created a presumption of unreasonableness, and the 39% valuation allegation raised factual disputes that must be resolved at trial.
[1] A creditor's failure to provide notice of a collateral sale raises a presumption that the sale was commercially unreasonable.
[2] A presumption of commercial unreasonableness of a collateral sale creates a presumption that the fair market value of the collateral equals the total secured debt.
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Join FLexlaw to unlock all legal intelligence“Because there exists an issue of fact concerning the commercial reasonableness of the sale, we reverse.”
States the court's primary reason for reversing the summary judgment and the controlling legal standard.
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Join FLexlaw to unlock all legal intelligenceGangelhoff, owner of Gulf Marine, executed a security agreement and personal guaranty with Borg Warner Acceptance Corporation (later Transamerica) for…
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FRANK, Judge.
David Gangelhoff, the owner of Gulf Marine of Florida, has appealed from a final summary judgment in favor of Trans-america Commercial Finance Corporation. The court awarded Transamerica a deficiency judgment of over $100,000, together with interest, costs, and attorney’s fees, for a total judgment of $133,817.87. This judgment was entered after Transamerica sold the collateral it had repossessed from Gulf Marine. Because there exists an issue of fact concerning the commercial reasonableness of the sale, we reverse.
Gulf Marine sold boats and engines. Gangelhoff, as owner of Gulf Marine, had executed an inventory security agreement and personal guaranty with Borg Warner Acceptance Corporation, the predecessor of Transamerica Commercial Finance Corporation. When Gangelhoff defaulted under the agreement, Transamerica sought to re-plevy the property. The court entered an order authorizing a writ of replevin and granted a break order. The collateral was repossessed and eventually sold. When Transamerica sought a deficiency judgment, Gangelhoff filed two affidavits in opposition, alleging that Transamerica had not notified him of the sale and that the price received by Transamerica represented only 39% of the wholesale value of the goods.
In the summary final judgment the court states that there is no genuine issue as to any material fact. Under the circumstances before us, however, Gangel-hoff s affidavit was sufficient to raise the question of whether the sale was commercially reasonable under section 679.504, Florida Statutes (1989). Transameriea’s failure to give Gangelhoff notice raises a presumption that the sale was commercially unreasonable. CSI Service, Ltd. v. Hawkins Concrete Construction Co., 516 So. 2d 337 (Fla. 1st DCA 1987). Moreover, a further presumption is that the fair market value of the collateral at the time of repossession was equal to the total secured debt. Weiner v. American Petrofina Marketing, Inc., 482 So. 2d 1362 (Fla.1986). According to Weiner, the creditor would be entitled to a deficiency judgment if it could overcome that presumption by showing that the amount actually received was equal to fair market value and that the proceeds of the sale were less than the debt. See Ford Motor Credit Co. v. Jones, 584 So. 2d 205 (Fla. 2d DCA 1991).
Thus, our review of the record indicates that genuine issues of material fact surround the commercial reasonableness of the sale and summary judgment was improper. We reverse and remand for further proceedings consistent with this opinion.
DANAHY, A.C.J., and CAMPBELL, J., concur.
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Citator
Cited By
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Burley v. Gelco Corp., 976 So. 2d 97 (Fla. 5th DCA 2008)…79.627(1) and (2), Florida Statutes. Once a debtor shows that the creditor gave insufficient notice, a presumption arises that the subsequent sale of the collateral was commercially unreasonable, see Gangelhoff v. Transamerica Commercial Fin. Corp., 611 So. 2d 1333, 1334 (Fla. 2d DCA 1993); CSI Servs., Ltd. v. Hawkins Concrete Constr. Co., 516 So. 2d 337 (Fla. 1st DCA 1987), thus rendering the question of commercial reasonableness a fact issue. Here, the sole evidence of commercial reasonableness before the t…
Authorities Cited
- Weiner v. Am. Petrofina Mktg., Inc., 482 So. 2d 1362 (Fla. 1986)
- CSI Servs., Ltd. v. Hawkins Concrete Constr. Co., 516 So. 2d 337 (Fla. 1st DCA 1987)
- Ford Motor Credit Co. v. Jones, 584 So. 2d 205 (Fla. 2d DCA 1991)