Title: Ford Motor Credit Co. v. Welch

State: vermont

Issuer: Vermont Supreme Court

Document:

Ford Motor Credit Co. v. Welch  (2003-453); 177 Vt. 563; 861 A.2d 1126

2004 VT 94

[Filed 17-Sep-2004]

                                 ENTRY ORDER

                                 2004 VT 94
                      SUPREME COURT DOCKET NO. 2003-453

                               JUNE TERM, 2004

   Ford Motor Credit Company            }     APPEALED FROM:
                                        }
                                        }
       v.                               }     Rutland Superior Court
                                        }     
   Matthew A. Welch                     }
                                        }     DOCKET NO. 335-6-03 Rdcv

                                              Trial Judge: Richard W. Norton

       In the above-entitled cause, the Clerk will enter:

       ¶  1.     Appellant, Ford Motor Credit Company ("Ford"), commenced
  this action for a deficiency judgment following the sale of a repossessed
  automobile at private auction.  The trial court denied Ford's claim because
  it found that Ford had failed to provide the defendant debtor with notice
  of a right to redeem.  We affirm.

       ¶  2.     In 1998, Matthew Welch purchased a used pickup truck and
  entered into a repayment agreement with Ford.  The contract provided Ford
  with a security interest in the vehicle, and the right to repossess it if
  Welch failed to make timely payments.  The contract further provided that
  upon repossession, Ford must provide Welch with a notice of a right of
  redemption specifying the amount needed to redeem and that Welch could
  exercise his right of redemption any time prior to the moment of sale by
  Ford.  If Welch did not exercise his right of redemption, the contract
  authorized Ford to sell the vehicle and apply the proceeds to Welch's
  outstanding obligation.  

       ¶  3.     Welch defaulted on his payments and voluntarily surrendered
  the vehicle to Ford on June 4, 2001.  Ford sold the vehicle at private
  auction on June 22, and credited the sale price to Welch's account.  A
  deficiency of $4,466.82 remained, and on June 2, 2003, Ford filed suit in
  the Rutland Superior Court.  

       ¶  4.     At trial, Ford submitted business records into evidence
  during the testimony of the custodian of records for its New Hampshire
  office to establish that it had sent notice of a right to redeem to Welch
  prior to the sale of the repossessed vehicle.  The court admitted the
  records without objection. Welch, however, testified that he never received
  the notice, and questioned the sufficiency of Ford's evidence.  The trial
  court, after weighing the evidence, found that Ford violated the contract
  by failing to provide Welch with notice of his right to redemption.  The
  court therefore denied Ford's request for a deficiency judgment.  
        
       ¶  5.     Ford raises five claims on appeal: (1) that the court
  wrongly interpreted V.R.E. 803 (6) to require a corporate witness
  testifying to business records to have personal knowledge regarding each
  transaction contained in the records; (2) that the court applied the wrong
  legal standard by requiring proof of receipt of notice, rather than merely
  proof that the notice was sent; (3) that the court incorrectly determined
  that Ford failed to prove that it sent the notice to Welch; (4) that the
  court used an outdated remedial standard when it barred any recovery of
  deficiency; and (5) that the court should have waived the notice
  requirement because the debtor voluntarily surrendered the collateral for
  sale at private auction. 

       ¶  6.     First, Ford contends that the trial court misapplied V.R.E.
  803(6) and improperly discounted evidence that it sent Welch the required
  notice.(FN1) Ford argues that the court interpreted the Rule as requiring a
  corporate witness testifying to business records to have personal knowledge
  of the submitted evidence.  We disagree with this characterization of the
  court's action, because V.R.E.  803(6) goes to the admissibility, and not
  the weight of the evidence.  Because Ford's business records were admitted
  without objection, it's argument is unavailing. 

       ¶  7.     In its second claim, Ford argues that the court imposed the
  wrong legal standard by requiring Ford to show proof of "receipt," rather
  than proof, as required by the contract, that the notice was "sent." 
  Again, we disagree. 

       ¶  8.     "[T]he secured party has the burden of pleading and proving
  that any given disposition of collateral was commercially reasonable, and
  preceded by reasonable notice."  Chittenden Trust Company v. Maryanski, 138
  Vt. 240, 244-45,