Title: Central Trust Bank v. Branch

State: missouri

Issuer: Missouri Supreme Court

Document:

SUPREME COURT OF MISSOURI
en banc 
THE CENTRAL TRUST BANK, 
) 
) 
Appellant, 
) 
) 
v. 
) 
No. SC99297 
) 
BARBARA BRANCH and 
) 
ALEXIS BRANCH, 
) 
) 
Respondents. 
) 
APPEAL FROM THE CIRCUIT COURT OF ST. LOUIS COUNTY 
The Honorable Matthew H. Hearne, Judge 
The Central Trust Bank appeals a judgment in favor of Barbara and Alexis Branch 
on its petition for a deficiency judgment in relation to a promissory note and security 
agreement financing the Branches’ 2010 Chevrolet Impala (the “vehicle”).  The Bank 
claims the circuit court erred in finding it failed to provide the Branches with “reasonable 
notification” after the sale of the vehicle.  The Bank also asserts the circuit court erred in 
determining it did not strictly comply with the requirement that it send a pre-sale notice of 
disposition stating the method of intended disposition.  The Bank’s pre-sale notice of 
disposition stated the vehicle would be sold at a private sale, but the circuit court held the 
dealers-only auction at which the vehicle was sold was a public sale.  Because the Bank 
Opinion issued September 13, 2022
2 
 
properly sent a post-sale explanation of deficiency and the dealers-only auction was not a 
public sale, the circuit court’s judgment is reversed, and the cause is remanded. 
Factual and Procedural Background 
 
The Branches entered into a retail installment contract and security agreement for 
the purchase of the vehicle from a dealership in 2014.  The security agreement identified 
the address of the Branches’ principal residence in St. Louis and provided all 
correspondence would be sent to that address.  The security agreement was eventually sold 
and assigned to the Bank.   
The Branches defaulted on the loan, and, in January 2015, the Bank sent the 
Branches a notice of their default and right to cure.  Following the notice of right to cure, 
the Branches made a payment but again defaulted.  So, in May 2015, the Bank sent the 
Branches a second notice of their default and right to cure.  The Branches made a payment 
but again defaulted and missed multiple monthly payments.   
In January 2018, the Bank repossessed the vehicle and sent the Branches, via 
certified mail, a notice with the heading “confirmation of repossession notices of intent to 
apply for repossessed title and to sell collateral” (the “pre-sale notice”).  In the pre-sale 
notice, the Bank advised the Branches, among other things, that it:  (1) had repossessed the 
vehicle, (2) intended to apply for a repossession title 10 or more days after January 11, and 
(3) intended to sell the vehicle “by private sale” 15 or more days after January 11.  The 
pre-sale notice further advised the Branches of the amount owed, the manner in which 
proceeds of the sale would be distributed, the possibility of a deficiency, and their rights to 
regain possession of the vehicle by paying the amounts owed in full prior to the sale.  
3 
 
Finally, the pre-sale notice informed the Branches of their right to have the Bank explain 
in writing how it calculated the amount owed.  The notice included all the information 
required by section 400.9-6141 and substantially tracked the form set forth therein and the 
pre-disposition form published by the Missouri division of finance.  The Branches admit 
they received the pre-sale notice. 
 
In February 2018,  the Bank sold the vehicle at an auction conducted by a third party 
and open only to automobile dealers licensed in Missouri.  The vehicle sold for less than 
the balance owed, and, in March 2018, the Bank sent the Branches a written explanation 
of the deficiency (the “post-sale explanation”).  The post-sale explanation advised the 
vehicle had been sold, stated the Branches owed a deficiency of approximately $8,600, 
explained how the Bank calculated the deficiency, and stated the Bank “reserved the right 
to pursue legal action” if the deficiency was not paid.  The post-sale explanation included 
all the information required under sections 400-9.616(a)(1) and 400.9-616(c) and followed 
the form published by the Missouri division of finance.   
The Bank sent the post-sale explanation via certified mail to the Branches at their 
last known address.  Postal records showed delivery of the post-sale explanation was 
unsuccessful and a notice of attempted delivery was left at the address.  The Branches never 
claimed the post-sale explanation, and, after several weeks, it was returned to the Bank.  
The Bank took no further action to mail or deliver the post-sale explanation. 
                                              
1 All statutory citations are to RSMo 2016, unless otherwise noted. 
4 
 
 
In May 2019, the Bank filed a petition in the associate division of the circuit court, 
under chapter 517, seeking to recover the deficiency with interest.  The circuit court held a 
bench trial in February 2020, after which it entered a judgment denying the Bank’s petition 
with written findings of fact and conclusions of law.  The circuit court found the Bank was 
not entitled to recover a deficiency for two independent reasons:  (1) the Bank failed to 
provide “reasonable notification” of the sale of collateral and (2) the pre-sale notice failed 
to comply with sections 400.9-614(1)(A) and 400.9-613(1)(C), (E) in that it stated the 
vehicle would be sold at a private sale when the circuit court found the dealers-only auction 
constituted a public sale.  The Bank appealed, and this Court granted transfer after an 
opinion by the court of appeals.  Mo. Const. art. V, sec. 10.  
Standard of Review 
 
The circuit court’s judgment will be affirmed unless it is not supported by 
substantial evidence, it is against the weight of the evidence, or it erroneously declares or 
applies the law.  Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976).  Additionally, 
matters of statutory interpretation are reviewed de novo.  Holmes v. Steelman, 624 S.W.3d 
144, 149 (Mo. banc 2021).  A lender’s right to a deficiency judgment accrues only if there 
is strict compliance with statutory requirements.  State ex rel. Gen. Credit Acceptance Co., 
LLC v. Vincent, 570 S.W.3d 42, 48 n.4 (Mo. banc 2019).  Doubts regarding statutory 
compliance are resolved in the debtor’s favor.  Mancuso v. Long Beach Acceptance Corp., 
254 S.W.3d 88, 92 (Mo. App. 2008). 
 
 
5 
 
Bank Sent Post-Sale Explanation 
 
The Bank asserts the circuit court erred in determining it failed to send “reasonable 
notification” of the sale of collateral because the Bank sent, and the Branches admit they 
received, a pre-sale notice of its intent to sell the vehicle and the Bank complied with 
section 400.9-616(b) when it sent the Branches the post-sale explanation by certified mail 
to an address reasonable under the circumstances. 
The Bank’s claim of error requires an examination of the circuit court’s judgment.  
The circuit court ruled the Bank was not entitled to a deficiency judgment because it found 
(1) the Bank mailed “notices to [the Branches] by certified mail to their last known address 
and those letters were unclaimed”; (2) “there was no evidence that [the Branches] received 
any notice of sale”; and (3) the Bank’s failure, thereafter, to make “additional efforts to 
locate or notify the [Branches]” was a failure to “give reasonable notification of the sale of 
collateral as mandated by § 400.9-504(3),” RSMo 2000.  The circuit court’s judgment 
included a bolded finding that “where the creditor learns prior to the sale that the debtor 
did not receive the notice, it is no longer reasonable to assume that the debtor has 
been given the opportunity to protect her interests at the sale.” (Italics added).  The 
circuit court found the Bank’s failure to give, prior to the sale, notice of its intent to sell the 
vehicle precluded it from obtaining a deficiency judgment.   
Review of the circuit court’s findings of fact and conclusions of law show these 
conclusions were based on mistakes of fact and law.  There is no evidence in the record 
that either the first or second notices of the Branches’ defaults and rights to cure were 
undelivered or unclaimed.  The record also shows the Bank sent via certified mail, and the 
6 
 
Branches admit they received, the pre-sale notice of the Bank’s intent to sell the vehicle.  
The only evidence of unclaimed correspondence between the Bank and the Branches 
related to the post-sale explanation, which all parties agree was not delivered and was 
eventually returned to the Bank.  The circuit court’s finding that the Branches did not 
receive the Bank’s pre-sale notice of its intent to sell the vehicle is rejected because it is 
not supported by any evidence in the record.  See Belleville v. Dir. of Revenue, 825 S.W.2d 
623, 624 (Mo. banc 1992). 
Upon erroneously finding the Branches did not receive any pre-sale notice, the 
circuit court misstated the law when it determined the effect of the Bank’s failure to send 
pre-sale notice.  The circuit court found the Bank failed to provide “reasonable notification 
of the sale of collateral as mandated by § 400.9-504(3),” RSMo 2000, and “defined in 
section 400.1-201(26).”   As noted, the Branches admit they received the Bank’s pre-sale 
notice.  And even if they had not, the statute the circuit court found mandated “reasonable 
notification” of the sale of collateral, section 400.9-504(3), RSMo 2000, was repealed in 
2001.2  The circuit court’s factual findings and conclusions of law that the Bank was 
precluded from receiving a deficiency judgment because it failed to give pre-sale notice 
were erroneous.  
This Court, however, will affirm if the circuit court reached the correct result for the 
wrong reason.  In other words, the Court will affirm on any ground supporting the circuit 
                                              
2 The statute the circuit court stated defined “reasonable notification,” section 
400.1-201(26), was amended in 2017 to move the provisions governing when a person 
“notifies” or “gives” notice to section 400.1-202(d), RSMo Supp. 2017. 
7 
 
court’s judgment, “regardless of the grounds on which the circuit court relied.”  Stanley v. 
State, 420 S.W.3d 532, 543 n.9 (Mo. banc 2014).  In support of the judgment, the Branches 
claim the Bank failed to comply with the statutory requirements governing the post-sale 
explanation of deficiency.  The Branches do not claim the form or substance of the post-sale 
explanation was deficient.  They contend, instead, the Bank did not “send” the post-sale 
explanation as required by section 400.9-616(b)(1) because the explanation was sent by 
certified mail.  
In a consumer-goods transaction, such as here, after the secured party disposes of 
collateral, section 400.9-616(b)(1) requires it to “[s]end an explanation to the debtor or 
consumer obligor, as applicable, after the disposition[.]”  (Emphasis added).  Section 
400.9-102(a)(74) defines “‘send,’ in connection with a record or notification” as:   
(A) To deposit in the mail, deliver for transmission, or transmit by any other 
usual means of communication, with postage or cost of transmission 
provided for, addressed to any address reasonable under the circumstances; 
or 
 
(B) To cause the record or notification to be received within the time that it 
would have been received if properly sent under subparagraph (A)[.] 
 
The Branches rely on the definition of send in subparagraph (A), arguing the 
language “to deposit in the mail” does not expressly authorize “certified mail,” so the Bank 
had to comply strictly with subparagraph (B) of the statute, which required it present proof 
that it “cause[d] the record or notification to be received.”  In support of the proposition 
that subparagraph (A) does not include certified mail, the Branches cite Leasing Associates, 
Inc. v. Slaughter & Son, Inc., 450 F.2d 174, 179 n.5 (8th Cir. 1972).  In that case, the Eighth 
Circuit noted the “elements required by the [UCC] to prove ‘sending’ a notice are virtually 
8 
 
identical to those required . . . to support a presumption of receipt.”  Id.  From that 
statement, the Branches conclude subparagraph (A) is a codification of the “mailbox rule”  
that provides a presumption of receipt when a letter is sent by regular mail but that does 
not apply to certified mail because certified mail creates a record of receipt.  The Branches 
fail to include, however, that the Eighth Circuit noted the definition of “send” in 
subparagraph (A) differs because it does not require proof of receipt.  “[I]t is sufficient to 
prove ‘sending’ the notice without proof of its receipt.”  Id.  As a result, Leasing Associates 
does not support the Branches’ argument that subparagraph (A) does not include certified 
mail. 
Importantly, the Branches cite no other authority for the proposition that certified 
mail fails to comply with the requirements of subparagraph (A).  Neither has this Court 
found any such authority.  To the contrary, the court of appeals and other jurisdictions have 
found, or assumed without analysis, certified mail complies with the requirements of 
subparagraph (A).  See, e.g., Springfield Chrysler-Plymouth, Inc. v. Harmon, 858 S.W.2d 
240, 244 (Mo. App. 1993) (characterizing notices sent via certified mail as “properly 
sent”); Auto Credit of Nashville v. Wimmer, 231 S.W.3d 896, 903 (Tenn. 2007) (“Auto 
Credit complied with the provisions of Article 9 when it sent the notification to [debtor] 
via certified mail, despite the fact [debtor] never received the notification.”); Coy v. Ford 
Motor Credit Co., 618 A.2d 1024, 1027 (Pa. Super. Ct. 1993) (holding notice sent via 
certified mail complied with the UCC); see also White, Summers, & Hillman, Uniform 
Commercial Code § 34:33  (6th ed. 2022) (“Of course, creditors can use certified mail so 
that proof of receipt exists.”).   When the Bank sent the post-sale explanation via certified 
9 
 
mail, it complied with subparagraph (A)’s requirement “to deposit in the mail,” so there is 
no merit to the Branches’ claim the Bank was required to prove the Branches actually 
received the post-sale explanation under subparagraph (B). 
In further support of the judgment, the Branches claim the Bank did not strictly 
comply with section 400.9-616 because, after the certified mail was returned as unclaimed, 
it was required to make further efforts to provide them with the post-sale explanation.  The 
legal basis of this claim is based on their characterization of the post-sale explanation as a 
“post-sale notice of explanation.”  That characterization likely stems from their use of the 
definition of “send” in 400.9-102(a)(74), which applies “in connection with a record or 
notification.”  Use of the terms “notice” and “notification” implicates section 400.1-202(d), 
RSMo Supp. 2017, which provides: “A person ‘notifies’ or ‘gives’ a notice or notification 
to another person by taking such steps as may be reasonably required to inform the other 
person in ordinary course, whether or not the other person actually comes to know of it.” 
The Branches, therefore, assert the Bank not only had to “send” the explanation but also 
take “such steps as may be reasonably required to inform” them of it. 
That would be correct under section 400.9-611 for the pre-sale notice.  Comment 6 
to section 400.9-611 states the UCC “leaves to judicial resolution” the question whether 
the requirement of “reasonable notification,” stemming from section 400.9-611(b),3 
                                              
3 For pre-sale notices of dispositions, section 400.9-611(b) requires a secured party to send 
a debtor a “reasonable authenticated notification of disposition,” that is reasonable “as to 
the manner in which it is sent, its timeliness . . . , and its content.” Section 400.9-611 cmt. 2.   
10 
 
requires a “second try” when a secured party learns the debtor did not receive the pre-sale 
notice.   
In contrast, the UCC did not require a post-sale explanation until section 400.9-616 
was enacted in 2001, and that section never uses the terms “notify,” “notice,” 
“notification,” or any other variation of the word to describe the post-sale explanation.  
Neither does section 400.9-616 require a secured party to send a “reasonable notification” 
of deficiency or to attempt a “second try” at providing reasonable notification in some 
circumstances in any way similar to the provision for pre-sale notice in section 400.9-611.  
The Branches cite no authority, and this Court has found none, applying the “reasonable 
notification” and “second-try” requirements related to pre-sale notices under section 
400.9-611 to post-sale explanations under section 400.9-616.   
Rather, section 400.9-616(a)(1) provides the post-sale explanation is a “writing.”  
The definition of “send” set out in the general provisions of the UCC applies “in connection 
with a writing, record, or notice,” indicating writings should not be construed 
synonymously with notices.  Section 400.1-201(36), RSMo Supp. 2017 (emphasis added).4  
Because it is erroneous to call the post-sale explanation a “notice,” section 400.1-202(d)’s 
provisions – stating a party “‘notifies’ or ‘gives’ a notice or notification by taking such 
                                              
4 The general definition differs slightly from section 400.9-102(a)(74)(A) in that it requires 
a writing to be “properly addressed and, in the case of an instrument, to an address specified 
thereon or otherwise agreed, or if there be none to any address reasonable under the 
circumstances[.]”  Section 400.1-201(36).  By contrast, section 400.9-102(a)(74)(A)  
requires only that it be “addressed to any address reasonable under the circumstances.”  
The Bank complied with both definitions when it mailed the post-sale explanation to the 
Branches’ last known address, which was listed in the parties’ agreement. 
11 
 
steps as may be reasonably required” – do not apply.  (Emphasis added).  The Bank 
properly sent the writing constituting the post-sale explanation. 
Finally, the Branches claim prior decisions compel this Court to hold the Bank was 
required to take additional steps to provide them with notice after the post-sale explanation 
was returned unclaimed.  The cases on which the Branches rely, however, were decided in 
the context of pre-sale notices or notices sent to advise the debtor of a right to redeem.  See 
Schlereth v. Hardy, 280 S.W.3d 47, 48 (Mo. banc 2009) (requiring additional steps when 
notice of right to redeem real property after a tax sale was returned unclaimed); Com. Bank 
of St. Louis, N.A. v. Dooling, 875 S.W.2d 943, 947 (Mo. App. 1994) (requiring further 
attempts to provide pre-sale notice when the secured party knew the debtor had not received 
pre-sale notice).  Here, the post-sale explanation is not meant to notify the Branches of 
rights that could expire if not exercised, such as the right to redeem after a tax sale.  The 
Court does not find similar interests are at stake after the sale of collateral in a consumer-
goods transaction.  
The Branches also cite Missouri Credit Union v. Diaz, 545 S.W.3d 856, 862-63 
(Mo. App. 2018), for the proposition that “the strict requirements necessary to obtain a 
deficiency judgment apply equally to post-sale notices.”  Granting that proposition, 
Missouri Credit Union says nothing about whether a secured party who sends a post-sale 
explanation must make further attempts to send its post-sale explanation when the 
explanation is returned unclaimed.  The court of appeals did not hold in Missouri Credit 
Union that a secured party fails to comply with the requirements of a post-sale explanation 
when it properly sends an explanation but the explanation is later returned unclaimed.  The 
12 
 
Court agrees secured parties must strictly comply with section 400.9-616’s requirements, 
and it finds the Bank met those requirements.   
Section 400.9-616(b)(1) required only that the Bank “send” its post-sale explanation 
to the Branches.  As previously established, the Bank did so, whichever definition of “send” 
applies, when it mailed the explanation to the Branches at their last known address listed 
in the parties’ agreement.  The circuit court’s findings that the Branches did not receive the 
pre-sale notice were not supported by substantial evidence, and the circuit court 
erroneously declared and applied the law when it applied section 400.9-504(3), RSMo 
2000.  Reversal on this point, however, does not dispose of the appeal because the circuit 
court articulated a second and independent basis for its judgment that the Bank challenges 
in its second claim of error. 
Private Sale 
 
The Bank asserts the circuit court erred in ruling the Bank did not strictly comply 
with sections 400.9-614(1)(A) and 400.9-613(1)(C), (E) in that the pre-sale notice stated 
the vehicle would be sold at a private sale but the dealers-only auction at which it was sold 
was a public sale.  
In consumer-goods transactions, section 400.9-614(1)(A) requires a notification of 
disposition to provide the “information specified in section 400.9-613(1)[.]”  As relevant 
here, subdivision (C) of section 400.9-613(1) required the pre-sale notification of 
disposition to state “the method of intended disposition,” and subdivision (E) of the same 
section required it to state “the time and place of a public disposition or the time after which 
any other disposition is to be made[.]”  The Bank’s pre-sale notice stated the vehicle would 
13 
 
be “sold by private sale at some fifteen (15) or more days following the date of this letter.”  
Consequently, if the auction at which the vehicle was sold was not a public sale, the Bank 
complied with the statute because its pre-sale notice stated the method of intended 
disposition and “the time after which” the disposition would be made.  Id.  If, however, the 
auction was a public sale, the Bank failed to comply with the statute because its pre-sale 
notice failed to state the vehicle would be sold at a public sale and failed to state the “time 
and place” of the public sale.  Id. 
 
The circuit court found the vehicle was sold “at an auction in which only certain 
dealers who qualified could participate.”  There is no challenge to the circuit court’s factual 
findings in this regard.  The only question is whether the circuit court correctly declared or 
applied the law in concluding that such an auction is a public sale.   
The UCC does not define “public sale” or “public disposition,” but comment 7 to 
section 400.9-610 provides guidance.  Comment 7 states a public sale “is one at which the 
price is determined after the public has had a meaningful opportunity for competitive 
bidding.”  The same comment states:  “Meaningful opportunity is meant to imply that some 
form of advertisement or public notice must precede the sale (or other disposition) and that 
the public must have access to the sale (disposition).”  Id. (internal quotation omitted).  
Because “only certain dealers who qualified” could participate in the auction, neither the 
public nor the Branches had a “meaningful opportunity” for competitive bidding.  Id.; see 
also section 400.9-614 (including in the safe-harbor form for notification of disposition at 
a public sale the statement that the debtor “may attend the sale and bring bidders”).  As a 
result, the auction was not a public sale, and the Bank’s pre-sale notice stating the vehicle 
14 
 
would be “sold by private sale” and stating “the time after which” the vehicle would be 
sold complied with sections 400.9-613(1)(C), (E) and consequently, section 
400.9-614(1)(A). 
Nonetheless, the Branches claim the auction was a public sale because it is 
conceivable a person who is not a dealer licensed in Missouri could have participated in 
the auction using a qualified dealer as an agent or intermediary.  Even if that were true, the 
only members of the general public permitted to enter the auction and bid were dealers 
licensed in Missouri.  The circuit court erroneously applied the law when it held the dealers-
only auction at which the vehicle was sold was a public sale.5 
Conclusion 
 
The circuit court’s finding that the Branches did not receive any pre-sale notice of 
the disposition is not supported by substantial evidence.  Further, the circuit court misstated 
the law when it required the Bank to comply with section 400.9-504(3), RSMo 2000, and 
provide the Branches with “reasonable notification” of the sale of collateral.  The Branches 
admit they received the pre-sale notice of the sale of collateral required by section 
400.9-611(b).  The Bank complied with the statutory requirements governing its post-sale 
explanation of deficiency.  The circuit court also misstated the law when it found the 
Bank’s pre-sale notice stating the vehicle would be sold by private sale failed to comply 
with sections 400.9-613(1)(C), (E) in that the circuit court erroneously determined the 
                                              
5 The Bank asserted a third claim of error, but it is unnecessary for the Court to reach the 
third claim because the Court has granted the Bank all the relief it requested.  See Brown 
v. State Farm Mut. Auto. Ins. Co., 776 S.W.2d 384, 389 (Mo. banc 1989).  
15 
 
dealers-only auction at which the vehicle was sold was a public sale.  The circuit court’s 
judgment is reversed, and the cause is remanded.  
 
___________________________________ 
 
PATRICIA BRECKENRIDGE, JUDGE 
 
 
Wilson, C.J., Powell, Fischer, 
Ransom, and Draper, JJ., and 
Goodman, Sp.J., concur. 
Russell, J., not participating.