No. 91-040 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1992 

MACK FINANCIAL CORPORATION, 

Plaintiff and Respondent, 

-vsJOSEPH A. TEZAK and MARJEAN TEZAK, d/b/a TEZAK 

CONCRETE AND CONSTRUCTION, 

Defendants and Appellants. 

APPEAL FROM: District Court of the Fifth Judicial District, 

In and for the County of Madison, 

The Honorable Frank Davis, Judge presiding. 

es & Hoffman, Virginia Cit: 

COUNSEL OF RECORD: 

For Appellant: 

Mark David 11 

Montana 

For Respondent: 

Filed: 

of fman Jon 

Terry J. MacDonald and Paul C. Meismer; Garlington, 

Lohn & Robinson, Missoula, Montana 

Submitted on Briefs: March 12, 1992 

Decided: June 29, 1992 

f 

Clerk 
Justice R. C. McDonough delivered the Opinion of the Court. 

This is an appeal from a jury trial and judgment of the Fifth 

Judicial District, Madison County. Mack Financial Corporation 

(Mack) filed a complaint against Joseph and Marjean Tezak and their 

construction company (hereinafter Tezak) for repossession, sale and 

a deficiency judgment on cement trucks Tezak was purchasing under 

a retail installment contract. Tezak counterclaimed that Mack 

fraudulently induced surrender of the trucks and then disposed of 

the trucks contrary to an agreement of the parties and contrary to 

the Uniform Commercial Code. The District Court denied Tezak's 

motion for summary judgment, allowing the issue of whether Tezak 

received reasonable notice of sale, as required under ?j 30-9-504 

MCA, to go to the jury. The District Court further denied Tezak's 

request that the jury be instructed that Mack had violated the 

Uniform Commercial Code. The jury verdict was in favor of Mack. 

Tezak appeals and we affirm. 

The issues for our review are: 

I. Did the District Court err by denying Tezak's motion for 

summary judgment, on the issue of liability, for failure to give 

reasonable notice of sale of repossessed collateral in violation of 

5 30-9-504 (3) (a), MCA? 

11. Did the District Court err by failing to instruct the 

jury that Mack failed to give reasonable notice of the sale and 

that therefore the jury must consider damages including lost 

profits suffered by Tezak? 

Tezak purchased, under separate installment contracts, two 

2 
cement trucks from Mack. Tezak experienced financial difficulties 

and the contracts were consolidated and repayment schedules were 

renegotiated on several occasions. Tezak's inability to keep his 

payments up to date finally culminated in Mack filing this action. 

There is no dispute that Tezak was delinquent in payment of the 

agreement and that the trucks themselves were collateral for the 

agreement. 

After the action was filed, Tezak indicated to Mack that he 

was considering challenging service of process and form of the 

summons. Immediately preceding a show cause hearing, set for April 

19, 1983, the attorneys for the parties discussed the service 

problem and made an agreement. Under the agreement, Tezak was to 

deliver the trucks and voluntarily submit to jurisdiction. Mack 

agreed to provide Tezak 10 day notice of any sale of the cement 

trucks. A stipulation was drafted by Mack's attorney and forwarded 

to Tezak. The stipulation included only the terms of voluntary 

appearance in the action and delivery of the trucks but failed to 

mention the portion of the agreement relating to notice of sale. 

The stipulation was never executed or filed. 

On or about May 4, 1983, Tezak received notice from Mack, 

dated April 28, 1983, that the trucks would be sold on or after May 

12, 1983 at private sale. Tezak contacted Mack's attorney at that 

time, Gary Walton (Walton). There is a factual dispute regarding 

what ensued. Tezak contends Walton told him that he should "ignore 

and disregard" the notice. Mack contends that the instruction to 

ignore or disregard was conditioned upon execution of the 
stipulated agreement. 

On June 23, 1983, Tezak received a second 10 day notice of 

private sale, this time from Walton. However, the trucks had 

actually been sold on June 15th and 18th, 1983, respectively. 

Tezak contends that because the April 28, 1983 notice was void and 

the June 23, 1983 notice came after the trucks were actually sold, 

Mack failed to provide reasonable notice of sale as required by 

law. At trial, at the close of testimony, Tezak moved for summary 

judgment, alleging there existed no factual dispute regarding 

Mack's failure to provide notice prior to sale. Although Tezak 

referred to his motion as one for summary judgment, it was actually 

a motion for a directed verdict and we treat it as such. 

Section 25-7-302, MCA, provides: 

Where, upon the trial of an issue by a jury, the 

case presents only questions of law, the judge may direct 

the jury to render a verdict in favor of the party 

entitled thereto. 

The test commonly employed to determine if the evidence is legally 

sufficient to withdraw cases and issues from the jury is whether 

reasonable men could draw different conclusions from all the 

evidence. If only one conclusion is reasonably proper, then the 

directed verdict is proper. Cremer v. Cremer Rodeo Land and 

Livestock Co. (1979), 181 Mont. 87, 592 P.2d 485. Evidence 

introduced by the plaintiff Mack, will be considered in a light 

most favorable to plaintiff and as proving whatever it tends to 

prove. Cremer I81 Mont. at 91. 

Section 30-9-504, MCA, provides in part: 

Secured party's right to dispose of collateral after 

4 
default -- effect of disposition. 

(3) (a) . . . Unless collateral is perishable or 

threatens to decline speedily in value or is of a type 

customarily sold on a recognized market, reasonable 

notification of the time and place of any public sale or 

reasonable notification of the time after which any 

private sale or other intended disposition is to be made 

shall be sent by the secured party to the debtor if he 

has not siqned after default a statement renouncinq or 

modifvinq his riqht to notification of sale. [Emphasis 

added ] 

Section 30-9-504, MCA, clearly requires that a secured party must 

provide the debtor reasonable notification of the time after which 

repossessed collateral will be privately sold. Mack contends that 

the April 28, 1983 notice does provide adequate notice of private 

sale in conformity with the statute. 

The dispositive issue for our review is whether or not 

Walton's instruction to Tezak, to disregard the April 28, 1983 

notice, was conditioned upon execution of the stipulated agreement. 

In other words, if Walton's instructions to disregard were 

conditioned upon execution of the stipulated agreement, Tezak's 

failure to execute the stipulation precludes him from disregarding 

the April 28, 1983 notice. If, however, the instruction was 

unconditional, Tezak properly disregarded the April 28, 1983 

notice, and was entitled to re-notice. The June 23, 1983 notice 

was not provided prior to sale of the trucks and therefore would 

not fulfill the mandate of $j 30-9-504, MCA. 

Tezak testified that he was instructed by Walton to disregard 

the April 28, 1983 notice without any reference to the imposition 

of any conditions. Attorney Walton also appeared as a witness at 

the trial. We note the following excerpt from his testimony: 
Q. What did you discuss with Mr. Tezak in regard to that 

notice? 

A. I told Mr. Tezak that as far as I was concerned, he 

should-- I don't know if I used the word ignore but I 

told him that he should disregard that notice of private 

sale. And I did so with the understanding that Mr. 

Gilbert (Tezakvs attorney) was going to execute the 

stipulation that had already been sent to him. 

Q. So it was your understanding that if Mr. Gilbert 

signed the stipulation and filed it, you would be willing 

to renotice the sale? 

A. Right. 

Transcript of Proceedings, Volume IV, page 13. 

On cross examination, Walton was asked and provided: 

Q. . . . is it your position that the April 28 notice was 

invalid in light of your instruction to Joe Tezak to 

ignore it? 

A. Well, I think it depends on whether they had 

followed through with the stipulation in June, which they 

did not. 

Transcript of Proceedings, Volume IV, page 25. 

We conclude that reasonable men could draw different 

conclusions from the above evidence and inferences therefrom. 

There remains a factual issue regarding whether or not the 

instruction to disregard was conditional. A directed verdict is 

appropriate when there only remain questions of law. Section 25-7- 

302, MCA. We further conclude that the April 28, 1983 notice, 

standing alone, provides reasonable notice of sale within the 

meaning of § 30-9-504, MCA. The District Court was not in error 

for submitting the case to the jury for resolution. Furthermore, 

the District Court did not err by refusing to give an instruction 

that required the jury to find that Mack had failed to give 

reasonable notice. In light of the jury verdict in favor of Mack, 
we need not address the issue of damages raised by Tezak. The 

District Court is affirmed. 

Justice 

/ 
Justice Terry N. TrieweiLer dissenting. 

I dissent from the opinion of the majority. 

In the event that collateral is sold at a private sale, 

S 30-9-504, MCA, requires reasonable notification of the time after 

which the private sale will be conducted. 

In this case, notice was given that a private sale would be 

conducted sometime after May 12, 1983. However, the attorney for 

the party which issued the notice advised the debtor to disregard 

it. Therefore, the notice was void and no subsequent notice was 

provided prior to the sale of the collateral. 

The majority concludes that a jury could find that the 

attorney's advice to disregard the notice was conditioned upon the 

execution of a stipulation by the debtor's attorney. However, 

there was no such testimony by the creditor's attorney. He 

testified that "1 told him he should disregard that notice of 

private sale." He also testified that he gave that advice "with 

the understanding that Mr. Gilbert [Tezak's attorney] was going to 

execute the ~tipulation.'~ However, there is no indication in 

either Walton's testimony or Tezak's testimony that Waltonls 

understanding was communicated to Tezak. Tezak gave the following 

testimony: 

A. And he told me to disregard that notice. He said, 

"don't pay any attention to it. It should not have 

been sent to you. Just disregard it." He said 

that our deal was, nothing has changed. We went 

through this private sale and auctions all over 

again, went through it all over again. 
He said, "that's the way it will be. And any 

documentation you get from Mack Finance, just 

ignore it. his is between us." So I did ignore 

it. And I came home and called Mr. ~ilbert and 

told him that I guess it was sent in error. I just 

forgot about it. 

Tezakls recollection was consistent with Waltonts testimony to 

the effect that he felt that any notice should have come from him. 

During cross-examination he testified as follows: 

Q. And after Joe Tezak talked to you about that 

notice, is it true that you told him to ignore or 

disregard, or something to that effect, the notice 

itself? 

A. Thatls right. I felt that the notice should come 

from our office. 

The majority s conclusion that Walton conditioned waiver of 

the notice upon execution of a stipulation is not only unsupported 

by the direct testimony, it is inconsistent with Wafton's 

subsequent actions. On June 20, 1983, he sent a letter to Joseph 

Tezak in which he affirmatively advised Tezak that he had until 

July 1, 1983, in which to redeem his collateral. The letter 

stated: 

You have not less than ten (10) days from the date of 

this notice of private sale and until July 1, 1983, in 

which to redeem the collateral by paying the balance and 

costs in full. If full payment is not received by that 

date, you are hereby notified that Mack Financial 

Corporation will offer the collateral for sale at a 

private sale to be held on or after July 1, 1983. 

If Walton intended the previous waiver of notice to be 

conditioned on execution of a stipulation which had never been 

executed, why was it necessary to send an additional notice? And 
why did he affirmatively represent that Tezak had until July 1 by 

which to redeem his collateral? Why is Tezak being bound by a 

notice which even the creditor's attorney did not consider 

effective? 

The fact is that the creditor's attorney represented one thing 

to the debtor and unbeknownst to him, the creditor was doing 

something else. These facts, and this Court's holding, comply with 

neither the spirit nor the letter of the statutory notice 

requirements in the Uniform Commercial Code. 

Under these circumstances, the defendant was entitled to a 

directed verdict on the issue of whether he had received adequate 

notice pursuant to 5 30-9-504, MCA. 

It should be noted that the plaintiff waived its right to 

recover a substantial deficiency prior to the trial in this case. 

Whether, under 5 30-9-507, MCA, defendant was entitled to damages 

over and above the value of that deficiency has not been decided by 

the majority opinion and I, therefore, express no opinion on that 

issue. 

I would reverse the District Court's order denying defendant's 

motion for a directed verdict on the issue of liability. I express 

no opinion whether under these circumstances, plaintiff would have 

been entitled to an award of damages.