1 We also use t he t er m “RV” ( re cr eat ional vehicle) t o r efer t o a mot or home in t his op inion.
2 The Gri ff

in s di vorced in 1991. 

### TEXA S COU RT O F AP PEAL S, THIR D DISTRIC T, AT AU STIN

NO. 03-01-00131-CV Morgan Stanl

ey Dean Wi

tter Cr edit Cor poratio n, Appellant
v. Vernon Gr

iffin, Appellee

FROM THE DISTRICT CO URT OF COMAL COUNTY, 274TH JUDICIAL DISTRICT NO. C98-566C, HO NORABLE ROB ERT PFEUFF ER, JUDGE PRESIDING Appe llantMo rg an St anley Dea n Witt er Cre dit Co rp or at ion ( “Mo rg an S t an ley” ) ap pe als fr o m t he dis t r ict co ur t ’s t ak e- no t hing jud gme nt in it s s uit to co l l ec t a de f i ci en cy ari si ng f rom t he foreclosure and sal

e of coll ateral that secured an i

nstallm ent sales con

tract un de r wh i ch Ve rnon Gr iffin (“ Gr iffi n” ) d efault ed. Mo rg an St anley challenge s t he lega l and fact ual su ffi ciency o f the
ev i den ce to s uppor

t th e c our t’s j udgm en t. We wi l l

af f i rm th e j udgm

en t of th e d i str i ct c our t.
FACTUAL AND P

ROCEDURAL BACKGROUND In 1989, Grif

fi n an d hi s f ormer wif e p urchase d a

motorho me 1 by ex ec ut ing a r et ail insta llm ent con tr act (“t he no t e” ) ple dg ing t he mo t o rho me a s c o llat er al. 2 The moto r home cost $155,413.20, o f w hic h t he Gr iffins fina nc ed $6 1, 82 0 o ve rfift ee n ye ars. The p ar ti es di spute
o wn er ship of the note. Morga nStanley contends the note was origi nal ly hel d by Sears Consum

er3 T he ge ne r al ma nager of Adesa-San Antonio (“Adesa”) testified that Adesa i s part o f A desa Co rp or at ion, a

nationa l c hai n of wh olesal e m ot or vehicl e auction h

ouses that operates in f

if ty-seven U.S. cities. He tes tif

ie d that eigh

ty percen t o f the v ehi cl es sold a

t Adesa auctions

are passen

ger vehi cles, wi th the remain

der bein g large trucks, boats, moto rcycl es and RVs. 2 Fi nan ci al Co rp or at ion o f Delawa re , su bseq uent ly NOVUS Financial Co rp or at ion, an d u lt imat ely he ld by Morgan Stanl ey

Dea n Witt er Cre dit Co rp or at ion. Grif fi n counters that no evidence establi shes that Morgan Stanley

ulti ma tely hel d the note. In Septembe

r 1997, paym

en t s on the m

ot or home stopped. Mor gan Stanl ey was
un ab le t o lo ca t e t he fo r mer Mr s. Gr iffin bu t did co nt ac t Gr iffin

as c o- maker of t he no t e. Acco rd ing to Morgan

St an ley, du r ing Oc t o be rt hr o ug h D ec emb er 19 97 , Gr iffin and Morgan Stanl

ey dis cussed op t ions for discha rg ing t he no t e. Mo rg an S tan l ey agree d to Gr

i f f i n’ s a ttem pti ng to se l l the motor home but als o madepl

ans to repossess the m

ot or home on Jan

uary 16, 1998, if i

t had not received payment by then. Grif

fi n m ai ntain s that he m

ade a verb al

off er t o M or gan S t anley to pur chas e t he
mo t o rho me for $25,000, and al so faxed an off er of $28,000 on J anua ry 7, 199 8. Gr iff in maintains he based h

is off ers on an RV dealer’s st at eme nt t ha t it migh t be ab le t o giv e G r iffin a co mpa r ab le
am oun t, dep ending o n t he mot or home’ s co ndit ion. Morgan Stanl ey deni es recei vi ng Gri ff in ’s f axed offer . Mo rg an St anley rep os sess ed t he mot or home o n Janu ar y 28 and h ad i t towe d to Adesa-San Ant o nio (“A

des a”), a w

hol es al e, m otor v eh i cl e a uc ti on h ous e l oca ted i n S an A nton i o. 3 On Feb ruary 2, Morgan Stanley

sent Gri ff

in and h is form er wif e a not ice o f acce lerat ion o f the ou t st anding d ebt of $46 ,0 39. 95 a nd no t ice o f intent t o se ll t he mo t o rho me a t a “ pr iva t e s ale ” t o be he ld “on or after Feb ruary 16, 199 8.” Adesa so ld t he Gr iffin

moto r home at what it claim s was a pri va te d eal er- onl

y au cti on on February

26, 1998, for $18,250. Griff in contends thatthe auction was a publ ic sale. Fo llowing4 The rel eva nt portions

of se ction

9.504(c) provi

de: Di sp osi ti on of th e c oll ate

ra l may b e b y pu b l i c or pri v ate proceedin

gs and m ay be m ade by wa y of one or m ore c ontr ac ts. S al e or ot he r dis po sit io n ma y be a s a un it o rin pa r ce ls an d a t an y ti me a nd pl ac e a nd on a ny term s b ut e ve ry aspe ct of the di sp osi ti on including the m

ethod, m an ne r, t im e, place and terms

mus t be commer

cially reas onable
. Unl

ess colla teral i s peri shab le

or t hreatens to decli

ne speedi ly in val ue ori s of a ty pe cu sto mari l

y sol d on a r ec ogn ize d m ar ke t, r ea so na ble not ifi

cat ion o f the t ime an d pl ac e of an y publ i c s al e or rea son

ab l e n oti f i ca ti on of t he t ime after which any pri v ate sa le o ro t he rint en de d d isp o sit io n is t o be ma de shal l b e sent by

the secured p arty to the debtor , i f

he has n ot si gned af ter d ef aul t a s tate men

t ren oun ci ng or mod ify inghis right t o no t ifi

cat ion o f sale. In the case of consum er goo ds no other noti f i cation need b e se

nt. Tex . Bus . & C om. C ode A nn . § 9.504 (c) (W

est 199 1) (em

phasi s ad ded). Af ter sui t was f i l ed, th e Le gi slature am

ended the code
. SeeAct of May 17 1999, 76th R.S., ch. 414, § 1. 01, 199 9 T ex. Gen. Laws 2639, 2639-750. We ci

te to the versi

on of the law that was in

eff ect at the time

this action accrued. 3 t he auction, Morgan Stanley sent a f orm al de man d to Gr i f f i n a nd hi s f orm er w i f e f or$27 ,8 80. 88, t he al le ged de ficie nc y bala nc e r ema ining o n t he no t e. Gr iffin c ha lle ng ed hi s ob ligat ion t o p ay the de fic ien cy. In Jul

y 1998, Morgan Stanl

ey brought suit to co ll

ect that am

ount f rom G ri f f i n. Morgan St anley non- suit ed t he fo rmer Mrs . G riffin.

I n a be nc h t r ial, the district cou rt r endered a tak e-not hi ng j udgment against Morgan S t an ley. At Morgan

Stanley ’s request, the dis

trict court fi

le d fi ndi ngs of fact an d concl usi ons of l aw. In four i ssues raised on appe al, Mo rgan Stanley chal le nges the court’s f

in din gs of f act and rel ated
co nclusio ns of lawth at: ( 1) Mo r ga n S t an ley fa iled t o es t ab lish t ha t it wa s t he ho lde ro f t he Gr iffin note; (2 ) t he A de sa

au cti on wasa p ub l i c, n

ot priv ate, sale f or which Morgan Stanl ey

did n ot provide t he Grif fi ns wi th adequate notice as requi red by section 9.504 of the Tex

as Bus iness and Comm

erce Code; 4 ( 3) t he mo t o rho me was not so ld in a co mmercially reaso nable manner as r equ ired by se cti on 9.504; and (4) the sal

es pri ce obtain

ed for the m

ot or home was n

ot comm ercia ll y reas onabl

e.4 Mor ga n Sta n l ey re qu ests a reversal

of the di strict

cou rt’ s j udgm

en t, j udgm en t i n i ts f av or, and a r ema nd fo r t ria l o n t he a mo unt o f att orney’ s f ees. In the al

ternative, Morgan Stanl

ey
re que st s a r emand o f the en t ire ca se . We co nc lud e t ha t t he r e is so me evi dence to support the trial
cou rt ’s fi ndi ngs that t he sale of the moto r home was n ot co mmercially reaso nable and t hat t he fi ndi ngs are not so agains

t t he gr eat weight and p re po nder ance of t he evide nce a s t o be clear ly and
man ifes t ly

un jus t . Be ca us e t he iss ue r eg ar din g t he co mmer cia l re as o na ble ne ss o f t he sa le is dispo sitive of Morgan Stanley ’s cl ai m, we do not reach the i ssues of own er ship of t he no t e o r t he adequacy of notice.
STANDARD OF REVIEW We at t ac h t o find ing s o f fac t t he sa me wei ght that we att ach to a jury ’s verdict on j ury questions. Law

yers Sur. Corp. v. Larson , 869 S.W.2d 649, 653 (Tex. App
. —A us t in19 94 , wr it den i ed). F i ndi ngs of f act are re viewed for legal and fac t ua l su fficie nc y o f t he ev ide nc e b y t he sa me standards use d to revi

ew j ury f i ndi ngs . Stabl

e Ener gy v. New

ber ry , 9 99 S .W. 2d 5 38, 546 (T ex. App. —Aus t in 199 9, pet . d enied) . T he re view fo r leg al and f ac tua l su f f i ci en cy va ri esdepe nd

i ng on whether t he party appe al i ng th e f i ndi ng h ad th e burden

of proof on

the issue at tri al
. SeeW. We nd ell Ha ll, Standards of Review in Texas , 29 St. Mary ’sL. J. 3 51, 476 -502 (1 998). When t he pa rt y having t he burden

o f pr o o f ap pe als an ad ve r se fac t find ing in the trial court , the point of error should b e that t he positi on taken by

the appella

nt was establ

is hed as a m att er of l aw or t hat the fi ndi ngs
co nt ra dict ingthat position were agai nst the great we i gh

t a nd preponderanc e of the ev ide nce. Croucher v. Croucher , 660 S.W.2d 55, 58 ( Te x. 1 983 ). Her e Mo rg an St anley had t he burden at trial5

to pr ove t hat dispo sitio n of t he co llat er al w as co mmer cia lly reas onab l e. Greathou

se v . Char ter N at’l Bank-S outhwest , 851 S.W .2d 173 , 176-7 7(Tex . 1992)
.

A party cha

ll engi ng an adverse f ac t f in din g as a m atter of law – a l egal

suf fi ci ency po int– m ust ove rcom e two hu rdles. Sterner v. Marathon Oil Co. , 767 S.W.2d 686, 690 ( T ex. 1989)
. Fi rs t, the record must be ex am in ed for evi dence that

su pp o r t s t he t r ial c o ur t ’s find ing , wh ile igno ring al

l evi den ce to the c ontrary . Id . If th er e is n

o ev i den ce to s uppor

t th e f i n di n g, t h en th e
en tire re co rd must be exa mined t o d et er mine whet he r the c ontra ry pr op os itio n asse rt ed by t he app ellant i s establ

i shed as a m atter of l aw. Id . Thus, for Mo rgan Stanl ey to prevai l on i ts legal suf fi ci ency po int , we m

ust fi nd that there is

no evi dence i n the record to support t he ch al le nged fi ndi ngsan d th at th e c ontr ary

pos i tion i s establ i shed as a m atter of l aw. Westech Eng’g, Inc. v. Clearw ater Constructor

s, Inc. , 83 5 S .W .2d

19 0, 1 96 (Tex . A

pp .—A us ti n 19 92 , no wr

i t)

. I n r ev iew ing wh et he ra fin din g is aga inst t he gr eat weight and pr epo nder ance of t he evi dence – a f actual suf f i ci ency poi nt – we m ust ex am i ne al l the evi den ce. Stabl e, 999 S.W.2d at 546. Even t hou gh a finding may app ear t o be aga inst t he pr epo nder ance of t he ev ide nc e, it will be up he ld unl ess t he evide nce is t oo wea k t o s upp or t t he finding o r t he we ight of th e ev i den ce

to the c ontrary is so ove rw helming as t o r ende r t he judg ment manifest ly wro ng and unjust. See id. (citi ng Cain v. Bain , 709 S. W.2d 175 , 17 6 (T ex. 1 986 )) ; Valencia v. G arza , 765 S.W.2d 893, 896 (Tex. App.—San Ant o nio 1989, n

o wri t). Moreove

r, the tri al courtas t he t r ier o f fac t in a benc h t rial is t he exc lusive judge of the f ac ts p rov ed , th e c red

i bi l i ty of t he wit ne ss es , an d t he we igh t t o be giv en t he ir t es t imo ny. Stable , 999 S. W.2d at 556 -57 ; Valenc ia , 76 5 S. W .2d at 8 95. Th e a

ppe l l atecou

rt sh oul d n ot6

su b sti tute it s ju dg ment fo r t hat o f t he t rie r o f f act merel y b eca use i

t reaches a diff

erent fact
conc l usi on. Westech , 835 S.W.2d at 196. An appe l l ate court i s n

ot bound by a tri al court’s l egal conc l usi ons. Stable , 999 S.W.2d at 547. The appell

ate court reviews the concl usi ons i ndepe nd en t ly t o de t er mine t he ir
corr ectness. As hc ra

ft v. Lookadoo , 952 S.W.2 d 907, 9 10 (Tex . App.—Da l l as 1 997), pet. denied , 977 S. W.2 d 56 2 ( Te x. 199 8) (p er cur iam). I f the co nt ro lli ng fi ndi ngs of fact wi ll support a co rrect le gal theory, then i

ncorrect conclusi

ons of l awdo not requ

i re rev ersa l
. Stable , 999 S.W.2d at 547; Valenc ia , 765 S.W .2d

at 8 97- 98. Con

cl us i ons of la w ma y n ot be reve rsed unless they

are erroneous
as a matter of l

aw. Stable , 999 S.W.2d at 547. In short, Mor gan Stanl

ey h as a significant bu rd en o n app eal. We must upho ld t he judgment of the t rial court unless we conclude t hat t here is no evidence to suppo rt the t rial court ’s fi ndings and that t he appellant’s positi on is establ is hed as a m

atter of law or t hat the fi

ndi ngsare so
con tra ry to th e g re at w ei gh t an d p repon dera n ce of th e ev i den ce

as to b e m an i f estl y un j us t,
DISCUSSI ON Morgan St an ley a ss er t s inis sues threean d fo ur t ha t it dis po se d o f t he mo t o rho me in
a c o mmer cia lly

reas onab l e m

an ner and at a com

merci al l y reas onab l e pri

ce. Be ca us e p ricei s on

e of several f ac tors c ourts

con si de r i n d eterm i ni ng whether d

i sp osi ti on was comm

ercia ll y reas onabl

e, we will addre ss th

ese i ssues together. See Havins v. F irst N at’ l Ban k, 9 19 S .W. 2d 1 77, 181 (T ex. App.—A mari l l o 1996, n

o wri t). Sec ti on 9.504(a) of the Texas Busi ness and Com me rce Code (“the Code”) provides that “ [a] se cu

red pa rty af ter d ef aul t may se l l , l ea se oro t he rwis e d isp o se o f an y o rall of the coll ateral5 The rel eva nt portions

of se ction

9.507(b) prov

i de: The f act t ha t a b et t er pr ice co ul d h av e b ee n o bt ain ed by a sa le a t diffe r en t t ime o rin a dif feren t method from

that selected

by th e s ecur ed

pa rty i s n ot of i tse l f suf f i ci en t to establi sh that t he sal

e was not made

in a comm ercia ll y reas onabl e m ann er . I f the secured party ei ther sells the coll ateralin t he us ua l mann er in any recogniz ed m

arket the ref oror if he sells at t he pr ice cu rr ent in such mar ket at t he t ime of his sa le or if he haso t he rwis e s o ld

i n c onf ormi ty w i th rea sona bl e com merci al practi ces am ong de alers i n the ty pe of property sold he ha s sol d i n a com merci al l y reas onab l e m

an ner. Tex . Bus . & C om. C ode A nn . § 9.507 (b) (W

est 199 1). 7 in it s t he n c o nd it io n o rfo llo win g a ny co mmer cia lly r ea so na ble preparat ion or pro cessin g.” Tex. Bus. & C om. C ode A

nn . § 9.504 (a) (W

est 199 1). W

h en a cre di tor c h oos es

to sel l the c oll ateral, “e very aspectof t he disp os itio n including the me thod, man ne r , t ime, pla ce an d t er ms mu st be co mmer cia lly
reas onab l e.” Id. § 9.504 (c). Th e c red i tor h asthe

bu rde n of showing the comm

ercial reasonablenes s of the sa l e. Greathouse , 851 S. W.2 d at 176 -7 7. Whet her t he cr ed it o rha s d isp o se d o f co llat er al in
a co mmercially reaso nabl e m ann er i s a q ues tion of f act. Havins , 91 9 S. W.2d at 181 ; Gordon & Asso cs., Inc. v. C

ullenBank/

City w est, N .A. , 8 80 S .W. 2d 9 3, 96 ( Te x. App.—Corpus Chri sti 1994,
no wri t). The C ode does

not def i ne “c omm erci al l y reas onab l e”; i

t does, h owev er, specify

that as lo ng
as t he se cu r ed pa r t y has so ld “ in co nfo r mit y wit h r ea so na ble co mmer cia l pr ac t ice s a mo ng de ale r s in th e ty peof prop erty sol d he h assol d i n a com merc i al l y rea son ab l e m an ne r.”Tex . Bu s. &

Com m . Code An n. § 9 .507(b) (We st 1991 ). 5 In addi tion, the fa

il ure to obtain the

b es t pri cedoe s n ot
au t o mat ica lly

r en de rt he sa le co mmer cia lly unreasonab le ; i

t is si mpl y one of several f

actors t hat ma

y be cons i dered
. See id .; Havins , 919 S.W.2d at 181 n.3.

Texasco ur t s e xamining co mmer cia l re as o nab lene ss hav e c o nsid er ed many fa ct ors, including wh et he rt he se cu r ed pa r t y pu r su ed t he be st po ss ible price, wh ether the coll

ateral was so ld6 Morga n S tan l ey also cha l l en ge s f i nd i ng s of fact nos. 38 an

d 39, whi ch address the type

of notice required by st at ut e. Be ca us e w e fin d t he iss ue o f co mmer cia l re as o na ble ne ss is dis positi ve, we do not reach the i ssue of n

ot ic e. 8 in bul k or piecem

eal , whether

i t wa s s ol d i

n a publ i c or pri

va te s al e, w he the r i t wa s a va i l ab l e f or i ns pe cti on bef ore and durin

g the sale, whether i

t was sold i

n a d epr esse d o r t hriving mark et , a nd whether the ex pe ns esof the s ale wer

e reas onab l e. Havins , 91 9 S. W.2d at 181 ; Pruske v. Nat’l Bank of Commerce , 533 S.W.2d 931, 937 n.1 (T ex. Civ. Ap p. —S an Ant onio 197 6, no w rit ). In Havins , t he cou rt f urth er rec om men de d e xa m i ni ng the ad ve rti si ng un de rtak en , th e s tateof

t he coll ateral at t he tim e of sal e, ef f ortsto enhan

ce that condition, the method o f soli citin g bi ds, t he num

ber of bi ds, recei ved, th e p l ac e of

sa l e, an d th e cre di to r’ s g oo d f

ai th i n c onduc tin g the sal e. See Havins , 919 S.W.2d at 181 . T he co ur t may also e xamineevi dence regardi

ng usual co mmercial pr act ices amo ng deal ers f or the col l ateral sold. SeeTex . Bus . & C om. C ode A nn . § 9.507 (b); Gordon , 880 S.W.2d at 97. If t he disp os itio n of t he coll ateral i s not comm

ercia ll y reas onabl

e, the secured party m

ay not
recover a def i ci ency pay men t from the deb tor. See Greathouse , 851 S.W.2d at 176 -77 ; Rabinow itz
v. The C adle Co. II , 993 S.W.2d 796, 800 (Tex. App.—Dalla s 199 9, p et . de nied); ITT Commercial Fin. Corp. v. Riehn , 796 S.W .2d 248 , 252 (Tex. A pp.—D al l as 1 990, n

o wri t). Morgan Sta n l ey ob j ec ts to twe

n ty-e i gh t f i n di n gsof f ac t re l ate d to th

e comm ercia l reasonablenes s of the sal

e of the Gri ff

in motor home. 6 In

addi ti on, MorganSt anley objec t s t o t he dis trictcourt ’s related conclusi on of law that it did n

ot sel l the m ot or home i

n a com me rci all y
r ea so na ble ma

nne r and thus i s barred

fro m collect ing a de ficiency judgment . We have g ro upe d t he
cou rt ’s fi ndi ngsgeneral

ly as to subje ct matter and reviewthem b el ow. In revie win g the evi dence, we7 Findingof f ac t no. 16: “The A

DESA auction i s an

au cti onthat sells passen

ger vehi cl es alm ost excl us i ve l y .” F i nd i ng of fact no. 18: “Th

e f act that 700-900 de al ers are i nterested i

n A DESA auc t ions in g en er al d o es no t es t ab lish a nyt hing wit h r eg ar d t o t he co mmer cia l r eas ona bl en es s of selling a recreati onal veh i cl e at an A

DESA au ction abs ent proof tha

t ADESA is known as [a] sel le r of recreational

veh ic le s.” Fi ndi ng of f act no. 19: “ADESA is not known as a sel le r of recreational veh ic le s an d i s th usn ot a rec ogn

ize d m ar ke t f or th es e v eh i cl es .” Fi n di n g of f ac t no. 37: “Pla int iff f ail ed to establ i sh

wh ethe r the c oll ateral wassold at a propi

tious tim e.”
8 D’ Amat o wa s t en de r ed as an ex pe r t wit ne ss at t r ial. 9 ar e mi ndful of the signi

fi cant bur den Mor gan St anley must o verco me to o vert urn t he cou rt ’s judgm ent giv en the appl

ic abl e standard of rev

ie w. Recognized Market f

or RVs Morgan Stan l ey ch al l en ge s th e di stri ct c ourt’ s f

i nd i ng s of f ac t tha t the A de sa au cti on is not a r ecognized m

arket for resell

in g RVs. 7 A de sa ’s

gen eral man ag er Sa m D’ A mato testifi

ed that Adesa of f ers ab out 15 00 m

ot or ve hic les an d s ells ap pr o ximat ely 7 00 t o 80 0 v eh icle s a t it s w ee kly auctions. 8 Eigh

ty pe rce nt of the veh ic le s sold are pas senger v

ehi cl es. D’Am

ato t estif ie d that Adesa is known as the pl

ace t o go if y

ou ar e a c ar dea ler lo ok ing for car s. I n co mpar ison, less t han o ne per cent of the veh

ic le s so ld a t Ad es a a r e R Vs ; D ’Ama t o co uld r ec all t he na me o f o nly one or two RV deal ers fr o m Ad es a’ s ba se o f ap pr o xima tely 1500 v ehicle de alers ; and D ’Amat o t est ifi ed t hat t he Gr iffin mot or home may have been t he o nly RV o ffer ed fo rsa le on February 26. D’Am

ato t estif ie d to his b el i ef that ca r deal ers a re also i ntere sted i

n R Vs, b ase d on h

i s obs ervati on tha

t mos t car de alers “h ave one or two RVs on the i r l ot at any

gi ven ti me.” Signi

fi cantly, D’Amato test if

ied that Adesa
ru ns a speci

al auction f or RVs calle d “The Tex

as Round-Up” but adm

itted that Morgan S t an ley did not at t empt t o p lace t he mo t o rho me in t his s ale o ran y o t he rRV
- sp ec ific sa le. We find t ha t t he r e is
som e ev i den ce to sup port the dis

trict court ’s f

in din gs thatAdesa s el ls

prim aril y passen ger vehi cl es9 SeeITT Commercial Fin. Corp
. v. Riehn , 796 S.W.2d 248, 251 (T ex. App. —Da llas 199 0, no wri t) (st at ingthat expert unfam il ia r with spe ci fi

c m obil e hom es sold a nd procedures used to sell them co uld provide testi

mony only on whether reasonab le price was obtaine d , not co mm ercia l reas onab l eness

of d i sposi tion ). 10 and does not represent a recogn ize d ma rk et fo r resale RVs. In addition, the fi ndi ngs are not so ag ai n st th e g re at w ei gh t an d p repon dera n ce of th e ev i den ce

as to b e m an i f estl y un j us t. Selling Effor

ts Morgan Stanley al so objects to fi

ndi ng of f act no. 20: “Sam D’ Amato knew not hing
o f t he pa r t icu lar au ct io n in question as

he h ad no personal

knowle dge thereof.” D’A ma to testifi ed
ex t en sive ly

regardin g Adesa’ s usual

busi ness pract ic es. He admit t ed, how ever , t hat he had no perso nal knowle dge of the detai ls of the processi

ng an d sale of the Gri ff

in motor home. 9 Morgan Stan l ey rel i ed on D’Amat o’ s t est imony of Ade sa’s usu al pr act ices t o p ro ve that prospecti ve buy ers
were ab le t o insp ec t Gr iffin’s mo t o rho me duri ng th e thre e day

s b ef ore the a uction. Also, wh

i l e the re
was ev ide nc e t ha t Mo r ga n S t an ley r eq ue st ed t he mo t o rho me be detail ed for the auction, there was some question whether the det ail in g was actually

done because the expense records did no t cle ar ly refl ect a charge f or det ai li ng. D’A ma to testifi ed that detailin

g can b rin g between $500 to $15 00 m

ore f ora v ehi cle. In

ad di ti on, D’Amat o w as u nable t o c learly explain t he exp ense re co rd s for t he
re po sses sion, t ra nspo rt at ion, and p re par at ion o f the mot or home, making i t di f f i cul t to support t he reasonablenes s of the expe nses cl ai me d in connecti on with the s al e. We concl ude the evi

dence was leg ally and f actuall y s uff ic ie nt to support t he f

in din g that D’Am

ato had no personal

kn o wle dg e o f t his
auc t ion.10 Th e c ourt’ s f i nd i ng of f ac t no. 21 overlaps

with c hal le nged f i nd i ng of fac t no . 22 : “ Pla int iff did not adverti se the sa

l e of the re crea

tion al vehi cle col l ateral i n qu esti on.”Because we f

in d evi dence to support f

i ndi ng of f act no. 21, we c oncl

ude that f i ndi ng n o. 22 i s si m i l arl y supp orted. 11 Adver tising Ad di t io na lly, Morgan Stanl ey chal le ngesthe co urt ’s fi

ndi ng of f act no. 21: “[Morgan S t an ley] did n

ot establ is h that ADESA adv

ertised th e s ale o f t he pa r t icu lar r ec r ea t io na l ve hic le in question .” D’Amat o t est ifi ed t hat Ades a’s mar ket ing dep ar t ment us ua lly f axed the l i st of ve hi cl esf or sale, sent fl

ye rs, mai le d notices, an

d telem arketed to deal ers. However, Morgan Stanley was un ab le to sh owt hat t he Gr iff

in mot or home w as t he su bject of a ny of t hese effor t s. D ’Amat o s t at ed he co uld be “ al m ost 9 9 pe rce nt a ss ure d”the se

thi ng s w ere done f orthe Gri f f i n m otor h ome, b

ut n o cop i esof t he f ax ed i nv en tory, f l yers, or m ail ed n otice s we re produced at trial . We concl ude the evi

dence was le gal ly and f actuall y s uff ic ie nt on this fi ndi ng. 10
Reasonable Com mercialPractices of RV Dealers The dist rict co ur t also made finding of fact no. 35, which Morgan St anley ch all enges, that “[M organ

Stanl ey ] fail ed to es tab l i sh

the com merc i al l y rea son ab l e p racti ce s a

mong de al ers of recreational

ve hic les t o se ll

those vehi

cl es.” Morgan

Stan l ey ’s wi tne ss esat tri

al i nc l ude d D ’A mato, Deb ra Schul ze, a coll ections m anager at Morgan Stanl ey , and Pam Wi lke s, a clie

nt servi ce off ic er at Morgan St an ley. D’ Amat o ’s o nly t es t imo ny ab ou t RV d ealer s’ se lli

ng effo rt s wa s t hat one of t he biggest RV dealers he works with was hav in g dif fi cul ty sel li ng RVs. He di

d not discuss

what sales
me thods the deal er was usi

ng. Schul ze was tendered as a

n ex pert reg ardi

ng r eas onab l e an

d ne ces sary sales pra cti ce s i n th e f orec l osu re i nd us try . By he r own ad m i ss i on, sh e doesnot in terac t with dealers. Wi lke s wa s a r eg io na l co llec t io ns s pe cia list o n RV a cc o un t s a t t he t ime o f t he ev en t s le ad ing t o t his11 Findingof f act no. 23: “Pl ai

ntif f di d not att em

pt t o obt ai

n an y bids f rom de al er s or oth er s wi th re sp ec t to t he c o llat er al in q ue st io n. ” Fin ding o f fac t no . 2 4: “Pla int iff did no t o t he rwis e e ng ag e in sol i ci tation or nego t iatio ns co nduc t ed e ither dire ct ly or t hro ugh a bro ker wit h re spe ct t o a t t empt ing to sell the c oll ateral .” 12 l aw su i t. She w asthe

pri nc i pal pe rs on assi gned to coll ect the Grif

fi n account and s

poke oftenwi

th Gr iff in, buther job as she d esc ribed it d id no t include w or king wi th RV deal ers. W e concl ude there
was leg ally

and f actuall y s uff ic ie nt evi dence to support the court ’s f in din gs that Morgan Stanley

fai le d to establi sh reasonable sales practices of RV deal ers. Ot he r E ffo rt s t o S el l M ot or Ho me Morgan Stanley also chal len ges the cou rt’s fin

din gs that it made no efforts t o dispose of Gr iff in’s mot or home in a manner o t her t han t he Ade sa a uct ion. 11 Schul ze testif ie d that Morgan Sta n l ey doe s n ot co n si gn i ts col l ate ra l v eh i cl es , nor does

i t i n v i te dea lers t o view t he co llater al and
ma ke offers. She al so t estifi ed that Morgan St anley i

nstructed t he r epo sses sion a gent t o t ow t he coll ateraldirectl

y to Adesa f

or liquida tion by auction. In addi

tion, Grif fi n testif ie d that he had

spoken wi th an RV deal

er by teleph one who had

quote d h i m $25 ,00 0 de

pe nd i ng on th e veh i cl e’ s c ond i ti on and t hat he ha d f

axed a l etter contain

in g a $28,000 purchase off er to Morgan Stanl ey . Morgan St anley ’s witne sses den

ie d recei vi ng the f ax. Gri ff in pr o duced a copy of

the le tt er at t rial

but was
un ab l e to co nfirm that t he fax wa s sent . Wit h re gar d t o t he RV dealer, Wilke s acknowledged that she had spoken wi

th Grif fi n ab out hi s conversa

tion wi th the deal er, but disti

ngui shed the pri

ce quot ed Gr iffin as simp ly abal

lpark fi gure t he dealer m

igh t pay if the RV was i

n the condi

tion descri

bed as
o pp o se d t o an ac t ua l o ffer
. Wilke s’ s no t es o n t he Gr iffin acco unt indicated t hat Mo rgan St anley ’s manage ment was agreeab le to Grif fi n sel li ng the RV to reduce t he repossession loss; however, Wi lke s12 Findingof f act no. 7: “The wh

olesal e val ue of the coll

ateral was $24,210.00 at t he t ime of t he sa le o f t he co ll at er al. ” F ind ing o f fac t no . 8: “T he fair mar ke t r et ail va lue o f t he co llat er al wa s $33,110.00 at t he t ime o f t he sa le of c ollat er al.” Findingof f act no. 11: “Defen

dant put a ‘fl

oor ’ pri ce of $ 17, 500 .0 0 o n t he co llater al at t he auc t ion, said p rice is fo und t o be unr eas ona bly l ow given t he ad mi tt ed fair mar ke t va lue o f t he co llat er al. ” F ind ing o f fac t no . 30 : “ Pla int iff did no t se ll t h e coll ateralin a comm ercia ll y reas onabl

e lin e, in that t he co llater al was so ld in the f i rs t an d on l y au cti on it was entered i

n wi th an unrea sonab l

y l ow fl oor price.” F i

ndi ng of fa ct no. 32: “T he sa les pr ice is co mmer cia lly

unr eas ona ble in li

ght o f t he mar ke t va lue , t he wh o les ale val ue, and the am

ount o ff ered by Defe ndan t.” Fin din g of f act no. 33: “The coll

ateral was n

ot sold at a price current in the ma rket at t he t ime of t he sa le.” Finding o f fact no. 36: “Plaint iff failed t o e st abl i sh ho w it can be co mmer cia lly

r ea so na ble t o se ll a r ec r ea t io na l ve hic le in a pa r t icu lar au ct io n t ha t it kn ows , b as ed

on past experi ence, wil

l y ie ld a sales pri ce si

gnifi cantl y l ower than even N.A.D.A . wholes al e val ues.”
13 “N. A.D .A. ” is no t defined in t he br iefs or in the r eco rd . We assu me the par t ies ar e r efer ring to the National

Automobi

le Deal er’s As sociation’s Of fi ci al Used Car Gui

de. 13 co uld not say wh

ether man agem ent was i nf ormed of the $25,000 f

igure that was quotedGri f f i n. We
con cl ud e th at a de qu ate ev ide nc e s up po r t s t he co ur t ’s find ing t ha t Mo r ga n S t an ley d id not att em

pt t o s ell the c ollat er al ot her t han t hro ugh t he au ct ion.
Sa le s P ri ce of Mo to r H ome Fin ally, Morgan St anley ch all enges the cour t’s fi

ndi ngs that t he sales p rice of t he
m otorhome

was unreas onabl

e. 12 Mo rg an St anley’s o wn do cument at ion int ro duc ed a t t rial listed t he N. A.D .A. 13 reta

i l va l ueof the motor h ome a

t $33 ,11 0; wh

ol e sale val

ue was l is ted at $24, 210. Howev er, Morgan

Stanley required a m

in im um a uction bi d (“f loor price”) of onl

y $17,500, wh

ic h is twenty-ei

ght percent under

t he N. A.D .A. who lesale value and fifty-t hre e pe rc ent un de rr et ail. While Schul ze tes ti f i ed tha t the f l oorprice was bas ed on the RV’s condi tion, age, and the f

irm ’s previ

ous experience

selli ng RVs, Morgan Stanl

ey does not dispute the dis

trictcou rt ’s f

i nd i ng s th at the m otor14 The m otor home had 15,324 m

il es on the odometer, whi ch b ot h si des agr eed i s l ow. Th e impou nd ch ec klis t ind ica t ed t ha t t we nt y-s ix com ponen ts of the motor h om

e w ere i n g ood co ndit ion, wh ile ni ne were i n ne ed of ref

ur bish in g. T he Ad es a c o nd it io n su mmar y list s s ev en co mpo ne nt s in good condi tion, twenty-si

x com ponents i n f ai r condition, and f

iv e i n poor co ndi

tion. Grif fi n testif ie d that hi s f ormer wi fe was a m

eticul ous housewi fe, wh

o put cove

rs ov er the

motor home ’sf

urni ture an d p l asti c ov

er th e c ar pe t.
15 We no t e t hat co mmentone to se cti on 9. 50 4 s t at es : “ Alt ho ug h p ub lic s ale is r ec o gn ize d, it is hoped that private sal

e wi ll be en cour aged where, as i s f

requently the case, pri

vate sale through comm ercia l ch an ne ls w ill re su lt in

hi gher real iza

ti on of col l ateral f or th e b en ef i t of all par t ies.” Te x. Bus. & Co m. Co de Ann. § 9. 504 cmt. 1. Arr ang in g for a pr iv

ate sale m

ay take more tim

e than arrangi ng f or liquida tion by auction, but m

ay resul t in a b etter price.
16 Findingo f fac t no . 26 : “ Pla in tif f’ s own em

pl oye e, Deb

ra Schu ltze [sic] , a dmitt ed t hat she wo uld not sell

her personal

recreational

veh ic le in an aucti on such

asthe ADES A au cti on ut ili zed by Pla int iff in t his c as e, be ca us e it wo uld no t br ing en o ug h mo ne y. D eb r a S ch ult ze [ sic ] w ould tr y me thods ot her t han b y

au cti on to get a better pr ic e i f s he was s el li

ng he r personal rec

reation [sic] vehi cle.” 14 ho me was i

n good condition a

nd ha d low m il eage. 14 In a ddit ion, the motor home was n ever apprai sed f orvalue. It was so ld at t he firs t an d o nly au ct io n in w hic h it was entered. There is no additi onal cost to off er the veh ic le in a subs equent auction. D’A ma to testifi ed t ha t au ct io n s a

re“ a g ood way

to l i quif y ass ets i m medi atel y .” 15 So me of the evi

dence on price fav

ored Morgan St anl

ey . D’Am

ato t estif ie d that
so metimes t he price obtai ne d f or a ve hi cle wi l l decl i ne the m ore auc t ions in which it is offer ed a nd that t he re po sses sion lane at auc t ion is o ne o f the most po pular lanes. Schu lze t est ifi ed t hat selling repossessed

coll ateral at retail

val ue i s not economically

feas ible for a co rp or at ion li

ke Morgan Stanley in most cases because of the time an d expenseinvolved. She al so testif i ed th at i f she wer e selling her o wn RV she wo uld have o pt ions, beside s sale by au ct ion, not available t o a co rp or at ion. W i th regards to t hi s portion of Schul ze’s testim

ony, we agree with Mor gan St anley that the co urt ’s finding of f act no. 2 6 is in

accurate, 16 but concl

ude that the erro r was not harmf ul b ecause other17 Finding of f act n o. 27 : “ Pla in

tif f’ s own em

pl oy ee , D eb raSc hul

tze [s i c] , a dm

i tte d recreat ional

vehi cles sold at an auct ion such as the A DESA auct ion util

ized by Plai ntif f i n this cas e se ll f or signi f i can tly l ess than ev en ‘N.A .D.A .’ wh

ol es al e val ue .” F i nd i ng of f ac t no. 28: “ In

sp i te of her t es t imo ny as se t fo r t h in

Fi ndi ngs of Fact #26 and #27, Pla int iff did no t ev en at t emp t t o o bt ain whole s ale va

l ue, l et alone f ai r m arket v al ue, f or the col l ateral i n qu esti on by an y other m eans.” Findingof

fact no. 34: “Pl ain

tiff did not endeavor t o o btain the best pr ice po ss ible. In fac t , P laint iff mere l y pl ac ed the col l ateral i n a n a uc ti on which it a ffi

rmat ively knew wo uld br ingsubstantially less than even whole sal e v al ue b ase d on past ex

peri ence.”
18 We agr ee w ith Mo rg an St anley tha t t he evi de nc e i s s li gh t f orf in din g of f act no. 40 : “Pla int iff reasonabl

y s hould h ave obtai ned cl ose to $33,110.00 for the coll ateral.” Howe ver, we concl ude t hat any err or t hat re sult ed w as ha rmless in light o f t he ev ide nc e o n w ho les ale value a nd t he overall evi dence on the other f

actors co nsti

tut in g whether the sal

e was comm

ercia ll y reas onabl

e. 15 t est imony by Schul ze supp or ts t he cou rt ’s o ve r all find ing s t ha t t he sa les pr ice o f t he mo t o rho me was
un r ea so na ble in li

ght of t he fact t hat Mo rg an St anley oft en d o esnot ob tai n w hol es al e val uef or veh ic le s so ld at auc t ion. 17 The i mportant testimony

was not the man

ner in wh ich Sc hu lze wo uld se ll her own RV, buther statemen ts: “I’m say in g my experience h

as been that my veh ic le s, run through
an auction, do not get whole sale”; “ . . . not every veh ic le of that year, m

ake an d m ode l i s g oi n g to
se ll f ort he wh o les ale va lue t ha t ’s in t he bo ok . Y ou will have so me tha t will, many that wo n’t ”; and “We se l l v eh i cl es acros s th

e c oun try an d y ou do n ot ev

en re ce i v e w h ol es al e v al ue at a n au to aucti on.” 18 We concl

ude that there is som

e evi dence to support the court ’s f in din gs that the sal es price of the m otor home

wasunr e as onabl y l ow and that the evidence was not so against t he great
we i gh t an d p repon dera n ce of th e ev i den ce

as to b e m an i f estl y un j us t. Based on our review

of t he r eco rd , w e co nclude t hat legally and fact ually sufficient evi dence sup po rt s t he d i stri ct court’s f i ndi ngs i n l i ght of the a ppl i cab l e stan

dards of re vi ew. In add itio n, we find t hat t he cou rt’ s c onc l us i on of la w that Morgan Stanley

is barred f rom coll ectin g a19 Con cl us i onof law no. 6 stat es: “P laint iff did no t se ll t he co llat er al in a co mmer cia lly r ea so na ble manner a nd t hus p laintiff is no t en t it led to sue for a d efi cien cy. Morgan Sta nley al

so ob j ec ts to fi

ndi ng of fact no. 29: “Plai ntif f f ail ed to est ab lish that an ADESA auction is a comm ercia ll y reas onabl

e m ethod, man

ner or pl ace

to sell a recreational

vehi cle. T he Co ur t find s in each in stance thatt he AD E SA Au ct io n w as no t a c o mmer cia lly reasonabl e m ethod, mann

er or place t o se ll a r ec r ea t io na l ve hic le. ” T his fi ndi ng of f act overlaps

with c oncl

usi on of law no. 6 which we have uphel

d; theref ore, we reject the chal

le nge to this f

in din g. 16 deficienc y

j udgm en t bas ed on

the c omm

erci al unr eas onab l eness

of the sa

l e was not cl earl y
erro neous. 19
CONCLU SION

Because we determi

ne there was s

uff ic ie nt evi dence to suppo rt the dist rict co urt ’s f i nd i ng s th at the s al e of the Grif fi n m ot or home was n

ot comm ercia ll y reas onabl

e, the j udg men t of the dis trict court is

aff irm ed.

Davi

d Puryear, Justice Be fore C hie f Justi ce Ab ou ssie , Just ice s B. A. S mi th an d Pu ryear Af fi rmed Fil ed: Mar ch 28, 2002 Do No t Publis

h