5D06-1995 Burley v. Gelco

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State: Florida

Court: Florida Fifth District Court

Docket No: 5D06-1995

Case Date: 02/25/2008

Preview:IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FIFTH DISTRICT JANUARY TERM 2008

JOHN BURLEY, Appellant, v. GELCO CORPORATION, D/B/A G.E. CAPITAL, ETC., Appellee. ________________________________/ Opinion filed February 29, 2008 Appeal from the Circuit Court for Orange County, Renee Roche, Judge. James N. Charles, Celebration, for Appellant. Leo Benitez of Benitez & Associates, Coral Gables, for Appellee. Case No. 5D06-1995

SAWAYA, J. The issue we must resolve is whether summary final judgment rendered in an action for replevin and breach of vehicle lease agreement is appropriate when material issues of fact exist as to whether the sale of the repossessed vehicles was commercially reasonable as required by Article 9 of the Uniform Commercial Code (U.C.C.). Based on the facts and circumstances of the instant case, we reverse the summary final judgment and remand for further proceedings.

Gelco Corporation filed the above referenced action after Mr. Rooter of Central Florida, Inc. and its president, John Burley, defaulted on a vehicle lease agreement under which Mr. Rooter agreed to lease three vehicles owned by Gelco. Mr. Burley also signed a personal guaranty of the payments. The court ordered that Mr. Rooter and Mr. Burley surrender the vehicles upon the posting of a bond by Gelco. An Agreed Order Granting Partial Summary Judgment as to Count I (Replevin) was entered. The

vehicles were turned over to Gelco, which subsequently moved for final summary judgment as to damages. In its motion, Gelco alleged that after it recovered the three vehicles, Gelco disposed of them "in a commercially reasonable manner," obtaining $44,180 from the auction sale and leaving a balance of $55,928.80 due under the lease.1 Mr. Burley filed an affidavit in opposition to Gelco's motion, stating, inter alia, that he was entitled to receive notice of the disposition of the vehicles prior to their sale pursuant to section 679.611, Florida Statutes, but had not been provided with that notice. Had he received the required notice, Mr. Burley would have either objected to the proposed sale or gone to the sale and purchased the vehicles himself because their sale price was less than one-third of the market price. He stated that a commercially reasonable sale would have resulted in a sale of the vehicles for over $40,000 each. Mr. Burley argued below that his affidavit raised a question of fact whether the sale of the vehicles was commercially reasonable, thus preventing entry of summary final judgment. If the sale was commercially unreasonable, an evidentiary hearing was

The lease agreement called for payments of $555.67 per month per vehicle for a period of 60 months; Mr. Rooter and Mr. Burley stopped making payments less than a year after entering into the agreement. 2

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required in order for Gelco to establish that the fair market value of the vehicles was less than the debt. Nevertheless, the court entered final summary judgment in favor of Gelco, finding that there were no genuine issues of material fact as follows: f. [Gelco]'s notice of the proposed sale of the Three Vehicles to JOHN BURLEY was insufficient as it did not indicate the specific date, time and place of the sale. g. Nevertheless, [Gelco] met its burden of proof and established that it disposed of the Three Vehicles in a commercially reasonable manner. The court awarded Gelco $2,000 in attorney's fees and $357.75 in costs in addition to the deficit of $55,928.80. Mr. Burley's argument is simple: he asserts that Gelco's failure to provide him with the notice required by section 679.611, Florida Statutes, raised a presumption that the sale of the vehicles was conducted in a commercially unreasonable manner. 2 Therefore, Mr. Burley contends, the trial court erred in proceeding further and finding that Gelco had met its burden of rebutting the presumption because such a determination requires an evidentiary hearing and could not be determined by summary judgment. We believe Mr. Burley is correct. Article 9 of the U.C.C., codified in chapter 679, Florida Statutes, provides that when the debtor defaults, the secured party can take possession of the secured collateral and can "sell, lease, license, or otherwise dispose of any or all of the collateral . . . ."

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