### IN THE COURT OF APP EALS OF TENNESS EE AT NAS HVILLE N ove m be r 18, 200 5 S es sio n AU TO C RED IT OF NA SHV ILLE v. MEL ISSA WIMM ER

Appeal f romthe Circ uit Court for Su m ner County No. 23298-C C . L. Rogers, Judge

No. M2005- 00978-COA-R 3-CV - F iled on Au gust 31, 2006

A w oman b ou g ht a

us e d auto mob ile , f

inanc ing thepu rcha se wi th a loan f ro m th e plaintif

f c re dit company . The loan w as sec ured throug h a UCC Article 9 security interest in the vehic le. When the buy er f ell behind in her pay ments, the cre ditor repossesse d the car and sent her notice by certified mail that it int ended to se ll the car and that she w ould fac e a de ficienc y judgme n t i f the sale price was less than the amount she still owed. She did not rece ive the notice, and the certified letter wa s returne d unclaimed to the c reditor the day afte r the sale . The creditor sued f or a de ficienc y

of over $3,400, and the c ircuit court g rante d it judgment for the amount claimed. T he buy er soug ht statutory damag es under

Tenn. Code Ann. § 47- 9-625 arg uing that the attempted notice was inade quate, and the trial court dismissed her c ounterc laim. The buy er a ppeals this dismiss al. We reve rse the trial court be causewe f

ind Auto Credit did not act rea sonably in proce eding to sell t h e car without aff irming that the notice had in f act be en deliver ed. Tenn. R. App . P . 3 Appeal as of Right; Judgme nt of th e Circ uit Court Modif ied in Part

and Reverse d in P art

P ATR I C I A J. C O T T RE LL , J ., delivere d the opinion of the court, in which W I L L I AM B. C A IN J ., joined. F RAN K G. C L EME NT , J R ., J

. d i s s en t i n g.
J ames B . Hawkins, Steven J. Christ opher, G allatin, Tenne ssee, for the appe llant, Melissa Wi mmer.
J ames D. R. Robert s , J an et L

. L ayman, Nashville, Te nnessee , for the a ppellee, A uto Credit of Nashville.
OP IN ION
I. P URCHA S E AND R E P OS S E S S I ON On April 28, 2000, Melissa Wimmer purcha sed a 1996 Pl y mouth Neon from Dow ntown Mo tor s inGa llatin , Tenn ess ee. Fin a nc ing fo r the pu rc ha se wa s f urnis he d b y

theplaintif

f, Au toA ut o C r edi t cont ended t hat i t s r epre s ent at i ve t ol d M s
. W i mm er t hat sh e woul d r ece i ve not i ce “ wi t hi n a f ew 1 d ays
. ” M s. W i m m er t est i f i ed t hat s he was t o l d t he l et t er would arri ve 1 0 t o f i f t een d ays f

rom t he d at e o f

repo ss ess i o n.
T h e lan g u a g e o f t h e no tice m a tc h e s tha t se t o u t i n T e n n . C o d e A n n . § 4 7 -9 -6 1 4

. 2

T he onl y ev i dence about t hes e a t t emp t s ca me f r om Aut o C r edi t ’ s empl o y ee who i nt er pret ed un expl ai ned 3 h a n d w ritten no te s o f t h e thr e e d a te s a p p e a rin g o n th e r e tur n e d e n v e lo p e a s ind ic a ting a ttem p ts to d e live r. In he r b rie f, M s
. W i mm er ac t ual l y ag r ees t hat t he not at i ons o n t he en vel op e i ndi cat ed at t emp t s t o del i ver
. H owever , t her e i s no ot her
ev i d en ce ab o ut t ho se a t t em p t s. -2- Cr e dit of Na sh vil le (“ Au to Cre dit ” ). Th e a mou nt b or ro we d w a s $ 7, 19 9. 99 . T he a nn ua l in te re st r a te was 29%, w ith the balanceto be paid off in 156 wee kly installments of $69.22, resulting in a total financ e cha

rg e of $3,598.44. Theloan was s ec u re d throug h a prope rly perf ecte d UCC Article 9 security interest in the ca

r. Ms. Wi mmer intermittently fell behind in her

payments, only

to c atch up and then fall behind ag ain. In J anuary of 2002, she wa s told that if she did not bring he rself c urre nt by paying f our we eks of past due pay ments, Auto Credit would repossess the c ar. She r eporte dly told Auto Cre dit to take the ca r, bec ause “ she had nothing but tr ouble out of it since she g ot it.” During the same te lephone conver sation, Auto Credit’s repres en t at i ve informe d Ms. Wi mmer that she would r ece ive written notice sometime af

ter the r epossession of he r rig ht to redee m the car, i ncluding the amount required to p a y thede bt i n f

ull

. 1
The c ar w as re possessed fr om Ms. W immer’s home on J anuary 17, 2002. On J anuary

18, 2002, Auto Credit sent, by certified mail, a letter to Ms. Wim mer’s home addre ss. The hea ding of thelet ter read “NO TI CE O FOU R PLANTO SEL L PRO PER TY ,” a ndits bo dy state d th a t A uto Credit intended to sell the reposse ssed car “sometime afte r” J anuary 28, 2002, unless Ms. Wi mmer paid t he remaining debt i n full. It also explained that if the s ale pr oduced le ss money than she owe d, Au to C re dit

wo uldho ld h e r l ia

blefo r the dif

fe re nc e a ndc ou ld s e e k a

de fi c ie nc y jud g me nt a g a ins t her. The letter

also explained how she could g et the ca r bac k and how to g et more information on 2 the sale or

the amount owed.
Th e c ar w a s so ld at a

pu bli c auc tio n o n F e br

ua ry 7, 20 02 , f

or $1 ,8 00 . T he no tic e to M s. Wim mer ha d been sent by certified mail, return r ece ipt requested, but Auto Cre dit had not rec eived any confirmation of delivery prior to the sale. On Fe bruary 12, Auto Credit’s notice wa s returne d by thePos t O ff

ic e , ma rk e d “ un c la ime d. ” No tatio ns on the re turne d e nv e lop e ind ic a te that atte mpt s wer e made to deliver the le tter to Ms. Wi mmer on January 24, Fe bruary 7, and F ebrua ry 9, 2002. 3 Ms. Wi mmer testified that she did not re ceive these notice s. The proc eeds f

rom the sale w erenot sufficie n t t o m ee t t he amount owe d on the ca r. Consequently , on Fe bruary 28, 2 0 0 2 Au t o Credit broug ht an ac tion in S umner County Gene ral Sessions Court t o rec over the defic iency balanc e. Af

ter a hearin g, t h e Ge n era l Sessions C ourt dismiss ed Auto Credit’s action, finding that Ms. Wimmer had not be en prope rly notified, pursuant to statutory

require ments, of the sale or of he r rig ht to redee m the collater al.S h e a lso tes tif ie d tha t sh e ha d sp o k e n to he r u n c le a n d he r fa the r a n d tha t t h e y ha d to ld he r th e y w o u ld try to 4

com e u p wi t h t he mo ney t o re deem t he car
. Co ns equen t l y , s he ar gu ed t hat s he mi gh t hav e been abl e t o re deem t he car i f s he had r ece i ved t he promi s ed not i ce. Aut o C r edi t vi gor ous l y di s put es t hi s conc l us i on. W e a r e of t he op i ni on t hat he r ab i l i t y t o red ee m i s no t rea l l y rel ev an t to the issue b efo re us si nc e st atuto ry d am ag es are n o t b ase d o n a ctua l d am ag es.

T he debt or may r ecove r her act ual dam age s , or “

. . . i n any eve nt an amo un t not l es s t han t he cred i t serv i ce 5 charge p l us t en p erce n t ( 1 0 % ) of t he p ri nci p al am o unt of t he o b l i gat i o n or t he t i m e- p ri ce d i f ferent i al plus t en p ercent ( 10 % ) of t he cas h pr i ce. ” M s
. W i mm er t hu s as ks t hi s cour t t o a war d h er t he cr edi t s er vi ce cha r ge of $3 , 59 8. 44 on he r ag ree m en t an d 1 0 % o f

t he p rincip al am o un t o n he r o b l i ga t i o n, o r $ 7 1 9 .98 , fo r a to t al o f $ 4 ,31 8 .42 , p l us li t i ga t i o n fees,
c o u rt c o sts, a n d a p p lica b le inte re st.

-3- Auto Credit filed an a

ppeal in the Circuit Court of Sumner County

. Ms. Wimmer filed an answe r and c ounter-c laim in which she asked f or statutory

damag es under

Tenn. Code Ann. § 47- 9- 62 5( c )( 2) on thethe ory

that Auto Cr e dit faile d to com ply wi th the ma nd a tory no tic e re qu ir e me nts under the statute.
The Circuit Court trial was c onducted on De cembe r 16, 2004. Aside from Ms. Wi mmer, the only witness to testify

was Ka ren Clark, Auto Credit’s Supervisor for Collections. Ms. C lark te sti fi e d th a t A uto Cr e dit

ha d M s. Wimme r’ s c ur

re nt p ho ne nu mbe r in its fil e s, that a n a g e nt o f A uto Cr e dit liv e d in Ms. Wimme r’ s nei g hb or ho od , an d that Auto Cr e dit wo uld no t hav e be e n f inanc ia lly bu rd e ne d if

thesa le ha d b e e n p os tpo ne d s e ve ral w e e ks

. For her pa rt, Ms. Wi mmer denie d that she had r ece ived any certified mail n o t i ces and claimed that Auto Cre dit was awa re that shehad experienc ed proble ms with her mail. She admitted that she made no eff

ort to contac t Auto Credit to check on the status of her c ar. 4
At the conc lusion of the trial , t h e co u rt ruled in fa vor of Auto Cre dit, finding that it had fulfilled its notice requir ements under the Uniform Commerc ial Code (“U CC”). T h ec o u r t dis mi s s ed Ms. Wimmer’s counter claim for statutory damag es and a war ded Auto Credit a de ficienc y judgme nt in the a mo u n t o f

$ 3 , 0 4 7

. 6 7 a s w e ll a s a tt o r n e y ’ s f e e s a n dd is c r e ti o n ary

c o s ts

. M s
. Wi mm e r

th en filed a moti on for a

new tria l as to the dismissal of her counte rclaim, which was de nied. This appea l followed.
II. S T AT UT ORY R EQU I R EM ENTS
Secure d transac tions are g overne d by the Article 9 of the Uniform Commerc ial Code. Tenn. Code Ann. §§ 47-9- 101 throug h 47-9-709. Te nnessee Code Annotat ed § 47-9-625 pr ovides for r e me d ie s a g a in s t a

s e c u r e dp arty

w h o f a il s to c o mp ly

w ith th e p r o v is io n s o f

th e U CC g overning default. W herethe collater al is consumer g oods, a debtor may rec over damag es ag ainst a cr editor who “f ailed to comply ” with the provisions on reposse ssion and disposition of collatera l, acc ording to a spec ified formula. Tenn. Code Ann. § 47- 9-625(c )(2)

. I n essenc e, Ms. Wimm er a rg ues that 5 Au to C re dit

faile d to c omp ly

wi th c e rt a in r e qu ir e me nts

.T he U C C def i nes t he t er m “ s end, ” a s us ed i n t he cont ext of not i f i cat i on, as “ ( A ) t o deposi t i n t he mai l , del i ver 6 fo r t rans m i ss i o n, t rans m i t by any other m eans of co m m uni cat i o n, wi t h po st a g e o r co st of t rans m i ss i o n pro vi d ed fo r, addres s ed t o any addres s r eas onabl e u nder t he ci r cums t anc es ; or ( B ) t o cau s e t he r ecor d or n ot i f i cat i on t o be re cei ved wi t h i n t h e t i me t h at i t w ou l d h av e bee n recei ved i f pr oper l y s en t u n der s u bpar ag r aph ( A)

. ” T en n
. Code An n
. § 47- 9- 1 0 2 (7 4 ).

W h ile t h is te n -d a y n o tice p e rio d is inte n d e d to o p e ra te a s a “sa fe h a rb o r,” T e n n . C o d e A n n . § 4 7 -9 -6 1 2 c m t.

7

n. 3, i t ne ces s ar i l y ha s t hat ef fect onl y as t o t he i s s ue of t i mel i nes s of

t he not i ce. -4- After a debtor defaults, a sec ured pa rty may obtain possession of collater al and may sell or otherwise dispose of the collateral. Tenn. Code Ann. § 47-9-610( a). Theg ener al re quirement for the sale is that “[e]very

aspec t of a disposition . . . mustbe commer cially rea sonable.” Tenn. Code An n. § 4 7- 9- 61 0( b) . A s th e Com me nts to O ff ic ia l Text of

theUC C po int

ou t, this se c tio n, lik e a ll others that cre ate liability , is subjec t to limit ations found elsew here , e.g ., Tenn. Code Ann. § 47- 9- 6 2 8 ( l i m i t a t i o n o n l i ab i l i t y o f s e c u r e dp art y)

. A d d i t i o n a l l y:
Th e princ ipal li mit a tio ns un de r this pa rt on a secu red party ’s ri g ht t o e nf or c e its se c urity int e re st a g a ins t c oll a te ral arethere qu ir e me nts that it pr oc e e d in g oo d f a ith [Tenn. Code Ann § 47-1-203], in a commer cially rea sonable manne r [Tenn. C o de Ann §§ 47-9-607 and -610], and, in most case s, with reasona ble notification [Tenn. Co d e A n n § § 4 7

- 9

- 6 1 1 th r o u g h - 6 1 4 ]. Tenn. Code Ann. § 47- 9-625 cmt. n. 2.
Th e re qu ir e me nt that is a t issu e in the c a se be fo reus is r e a so na bleno tif ic a tio n. Th e pu rp os e of the re quired notice is “to enablethe debtor to protect his interest in the prope rty by paying the debt, finding a buy er or being prese nt at the sale to bid on the property or haveothers do so, to the end that it be not sa crific ed by a sale at less than its true value.” Mallicoat v. Volunt eer Financ e & Loa n Co rp ., 415 S.W .2d 347, 350 (Tenn. Ct. App. 1966).
A s e c ur e d p arty

wh o in te nd s to dis po se of c oll a te ral mus t “ se nd ” to the de bto r “ a re a so na ble 6
auth e nti c a te d n oti fi c a tio n o f d isp os iti on .” Te nn . Co de An n. § 4 7- 9- 61 1( b) a nd(c ). Re a so nab le notice has se vera l aspec ts. Tenn. Code Ann. § 47-9- 611 cmt. n. 2. One a spect of r easona ble notice is c on te nt, i.e ., whether

the lang uag e cle arly

g ives the debtor all t h e nec essary information. The re qu ir e d c on te nt o f the no tic e is se t out in Te nn . Code An n. § 47- 9- 61 4. Th e re is n o is su e in this caseabout the suff

iciency of the c ontent of the notice sent by Auto Credit.
Simi larly , the notice must be sent within a r easona ble t ime. Tenn. Code Ann. § 47-9-612. Reasonable ness of the timing of the notice relates to the time period betwe en the notice and the dispositi on of the collater al, so that the notice a ctually provides an opportunityfor the de btor to take eff ective a ction in response to the notice . Tenn. Code An n
. § 47-9-612 c mt n. 2. By statute, a notification of dispo s i t i o n sent afte r def ault and at lea st ten (10) day s befor e the e arliest time of dispositi on set forth in the notification is reasonable . Tenn. Code Ann. § 47- 9-612(b)

. 7A cco rdingl y , a no t i ce sent t o an i nco rr ect ad d res s when t he sender has kno wl ed ge o f t he co rr ect ad d res s and 8

a n ot i ce s ent wi t hout s uf f i ci ent post age ar e n ot r eas onabl e n ot i ce.
She al so f

i l ed a “ M o t i o n f

o r Jud gm ent N o t wi t hst and i ng t he V erdict ” (presuma b l y , a m o t i o n t o al t er or am end 9
t he j udgment ) or for a new t r i al cont es t i ng onl y t he di s mi s s al of he r coun t er cl ai m. I n h er bri ef , M s
. W i mm er s t at es t hat sh e fi le d a n a p p e a l “o f t h e d ism issa l o f he r c o u n te r-c la im .” -5- An other a sp e c t of

re a so na bleno tic e is the mann e r i n w hic h th e no tic e is s e nt. Th us , 8
re g ard le ss o f the re a so na

ble ne ss o r su ff

ic ie nc y of the tim ing a ndc on te nt, theno tic e mus t bese nt i n a c omm e rc ia lly

re a so na blema nn e r. Te nn . Code A nn . § 47 -9 -6 12 c mt. n. 3. A p e rf e c tly c omp le te a nd c le ar no tic e se nt mor e than te n d a y s b e fo rethepr op os e d s a le do e s n ot a c c omp lis h th e pu rp os e of the notice require ments if it is not rece ived. Consequently , a cr editor must use rea sonable means to ensure de livery

or re ceipt. It is thi s aspec t of notice that is the basis of Ms. Wimmer’s claim that Auto Credit failed to c omply with the notice re quirements.
III. P R OC EDU R A L S T AT US
The c ase be fore us involved both a suit for a de ficienc y judge ment broug ht by the sec ured pa rty a nda c ou nte rc la im f

or statut ory dama g e s b ro ug ht b y the de bto r. Ms. Wimme r a pp e a ls o nly thetria l c ou rt ’s dis mis sal of he r c ou nte rc la im andno t th e tria l c ou rt ’s jud g me nt a wa rd ing Au to Cr e dit a de fi c ie nc y

jud g me nt. 9
I n Tenne ssee a

secur ed party

may , in some circumstanc es, rec over a defic iency

judgme nt even where all the UCC’s require ments for disposition of collatera l have not bee n met . D av e np or t v . Ch ry sle r Cre dit

Cor p ., 818 S.W .2d 2 3 , 32 (Tenn. Ct. App. 1999). T he aw ard to a cre ditor of a defic iency

judgme nt does not nece ssarily prec lude awa

rd of statutory

damag es to the debtor. Id. ; Bl an k e ns hip -M

e lto n R e al E

sta te , 166 S.W .3d 195, 205 (Tenn. Ct. App. 2004). Thus, the awa rds arenot mutuallyexclusive an d , wher e both awa rds ar e justified, offse t is proper. Da v e np or t , 818 S.W .2d at 32. B eca

use Ms. Wim mer ha s expli citly declined to a ppeal the def

iciency judgme nt, we need not discuss further the la w re g arding those cir cums tance s in which both types of a war ds are appropriate in the same case
. I n th e c a se be fo reus , th e iss ue is w he ther A uto Cr e dit took th e st eps that w e rere a so na bly re qu ir e d to inf

orm Ms . Wim me r o f i ts i nte nt an d he r option s b e fo reit s oldthec ar. Re a so na ble ne ss is a fa c t- sp e c if

ic inq uiry tha t mu st b e de te rm ine d inthec on te xt o f a ll the su rr ou nd ing c ir c ums ta nc e s. Whil e ther e is room to arg ue who ha d the burden of proof on this issue, that determination will not a ff e c t th e ou tc omein this c a se
. Th a t is be c aus e the e vid e nc e is n ot r e a lly dis pu te d. Th e c ou rt ’s ta sk here in is to d et er m i n e whether, unde r all the c ircumstance s as prove d, Auto Credit provided re a so na bleno tic e a s th a t te rm

ha s b e e n d e fi ne d b y

statuea nd

prior c ou rt ru lin g s.
IV. R EASON A BLE N OT I CE
As set out earlier, the cre d i tor is require d to send rea sonable notification of collatera l dis po sit ion , ande ve ry

a sp e c t of no tic e mus t be re a so na

ble , inc lud ing the ma nn e r in wh ic h it i s se nt.B e c a u se re c e ip t b y the d e b to r is n o t a r e q u ire d e le m e n t o f re a so n a b le no tif ic a tio n o f d isp o sitio n o f co llate ra l, 10

w e ne e d no t an al y ze i n d et ai l t he U C C d ef i ni t i o n o f recei p t

. Suff i ce i t t o say t hat und er t hat d ef i ni t i o n, as well as in act ual i t y , M s
. W i mm er di d not r ece i ve not i ce. T en n. C o d e A nn
. § 4 7

- 1

- 2 0 1 (2 6 ) p ro vid es: A pe rs o n ‘ recei ves’ a noti ce o r not i f i cat i o n when: ( A) I t c omes t o h i s a t t en t i on ; or ( B ) I t i s dul y del i ver ed at t he pl ace of bus i nes s t hr ough wh i ch t he cont r act was made or a t an y ot her pl ace held o ut b y hi m as the p l ac e fo r rec eip t o f such co m m un i ca t i o ns.

-6- An ana ly sis of the rea sonablene ss of the cr editor’s a ctions must includec o n s id e r ation of the purposes of the notice re quirement. The notice is intended to provide the debtor with the opportunity to either re de e m th e c oll a te ral and the re by a vo id a sa le or , if that is no t po ssi ble , to make su rethesa le re su lts in a fair price for the collater al. International Harvester Credit Corp. v. Ingram , 619 S.W .2d 134, 137 (Tenn. Ct. App. 1981).
The statutes foc us on the cre ditor’s duty to provide notification and a cts taken in pe rformance of that duty . “A pe rson ‘notifies’ or ‘g ives’ a notice or notification to another by taking such steps as may be re asonably

require d to inform the other in ordina ry course whether o r n o t s u ch other a c tually com es to kn ow of it. ” Te nn . Co de An n. § 4 7- 1- 20 1( 26 ). As thela ng ua g e of thestatut e makes clear, proof of actua l notice to or receipt by the debtor is not require d. R & J of Tennessee , Inc. v . Blankenship-M

elton Real Estate, Inc ., 166 S.W .3d 195, 205; 4 J A M ES J. W HI TE & R O BERT S. S U M M ERS , U NI F OR M C O M M ER CI A L C ODE , § 34 -1 2( d) (5 th e d. 20 02 ) (“We kno w o f n o c a se holding that the de btor must rece ive the notice.” ) 10
I f the only test were whether the cre ditor initially used methods that “in the ordinary course ” would result in delivery

of the notice , our ana ly si s wo u ld stop here. Auto Cre dit’s initi al ac tions in sending the notice, i.e. , by certified mail to the corr ect a ddress, certainly meet the standa

rd of “steps . . . re asonably re q u i re d . . . in the ordinary course ” to ac tually

achie ve notification. Additionally , they

meet the de finition of “send” , Tenn. Code Ann. § 47-9-102(74) , and the c reditor’ s duty is to “send” r easona

ble notice.
F urthe r, ou r c ou rt s h a ve he ld that, wh e re the c re dit or pr op e rl y se nd s a no tic e , th e c re dit or

is not “forc ed to take r esponsibilityfor lost mail or the debtor ’s re fusa l to acc ept prope rly delivere d mail.” R & J of Tennessee, I nc. , 1 6 6 S

. W

. 3 dat2 0 4 , q u o t i n g NationsBank v. Clegg , No. 01-A- 01- 9510-CH-00469, 1 996 WL 165513, at *5 (Te nn. Ct. App. Apr. 10, 1996)(no T enn. R. App. P. 11 application filed)

. Ho we ve r, theinq uiry

do e s n ot e ndwi th ana ly sis of th e se c ur e d p arty ’s a c tio ns in i nit ia lly se nd ing theno ti ce. Neithe r d oe s th e se c ur e d p arty ’s re sp on sib ili ty to m ake re a so na

blee ff orts t o no tif y thede bto r o f the int e nd e d d isp os iti on e nd wi th the se nd ing of no tic e . T he c ou rt s o f this state requiremore than a

mere “sending ” that meets the UCC’s de finition of “send” in or der to f ind that a sec ured pa

rty has provided r easona

ble notice. R & J of Tennessee , Inc. , 166 S.W .3d at 204;T hu s , T enn es s ee i s one of t he s t at es t hat has ad op t ed a “ s econd t r y ” r equi r ement wh er e t he cr edi t or k nows 11 b e fo re the sa le tha t no tice ha s n o t b e e n d e live re d

. See 1 B A R K L E Y C L ARK , T H E L A W O F S E C UR E D T RAN SACTI O N S U N D ER THE U N I F O R M C O M M E R C I A L C O D E ¶ 4 .0 8 [7 ][ a ] (r e v . e d . S u p p . M a y 2 0 0 1 ). W h e the r the s e c u re d p a rty’s a ttem p ts a t a “se c o n d try” , i.e ., e f

fo rts m ad e aft er l ea rning no t i ce h as no t b ee n d eli ve red , are rea so na b l e d ep en d s o n the c i rcu m st an ce s.

-7- Fede ral Express Credit Union v. Lanier, No. W2005-00194-COA-R3-CV, 2005 W L 2806638 (Tenn. Ct. App. Oc t. 27, 2005) (no Te nn. R. App. 11 application filed) (re ly ing on Ma lli c oa t as compelling that conclusion).
Tenne ssee c ourts have applied the rea sonablene ss standard to c onduct by the cr editor af

ter theno tic e wa s se nt. Th e y ha ve fr e qu e ntl y

loo ke d at whe the r the c re dit or ’s de c isi on to p ro c e e d w ith the sale w as re asonable under the circ umsta n ce s exi sting at that time, including the status of the n o ti c e to th e d e b to r
. I n o th e r w o r d s , th e r e a s o n ab le n o ti c e r e q u ir e me n t, a s ap p li e d byTenne ssee courts, has e ncompassed c onsideration of the rea sonablene ss of a broa der r ang e of c onduct than simplyhow the cr editor chose to send the orig inal notice.
I n examining the re asonable ness of a cre ditor ’s ac t i o n s in giving notice, the test ha s been stated as whe ther the c reditor e mploy ed means “such a s one desirous of actua lly informing the abse nt party might re aso n ab l y ad o p t.” Mallicoat , 415 S.W .2d at 351. In Mallicoat, the sec ured c reditor sent notice by reg istered mail of the impending sale of the debtors’ automobile ten day s befor e it was to t ake pla c e . The le tte r c a me ba c k u nc la ime d, bu t th e c re dit or pr oc e e de d w iththesa le a ny way . T his court found that because the c reditor kne w that the debtor s did not rece ive the noti ce but pr ocee ded with the sale a ny way , the cr ed i tor had not complied with the UCC and ha d shown “a conscious disreg ard of

the debtor’ s rig ht to notice.” Id. , 415 S.W .2d at 350.
It has b ec o m e well-settled in Te nnessee that it is notrea sonable for a sec ured pa

rty who knows that the debtor has not rec eived the notice to proce ed with the sale w ithout making anothe r attempt at notice. See , e.g. , First T ennesse e Bank

v. He lton , 03A01-9501-CV- 00026, 1995 11 WL 515658 (Tenn. Ct. App. Aug

. 31, 1995)(no Tenn. R. A pp. P. 11 application filed)( holding that wh e re a c e rtif ie d n oti c e of

dis po sit ionwa s r e turne d u nc la ime d, bu t th e se c ur e d p arty we nt a he a d w ith the sale, without making any further eff ort to inform the debtors that their automobile would be sold, even though the cre ditor knew where the debtor was employ ed and had no difficulty contac ting the debtors af ter the sa l e to let them know the amount of the defic iency , the notice pr ovided by the cre ditor was def

ective)

. Th us , if a se c ur e d party kn ow s that th e de bto r h a s n ot r e c e ive d th e no tic e , it is n ot r e a so na

ble to g o ahe a d w iththesa le of the re po sse sse d p ro pe rty wi tho ut f ir st m akin g a n a dd iti on a l atte mpt to notify the debtor. Conver sely , if the cr editor knows the de btor has timel y re ce i v ed a notice that c omp lie s w iththere qu ir e me nts of Artic le 9, a ndthede bto r h a s n ot availe d h e rs e lf of theop po rtun ity to p ro te c t he r rig hts , th e n th e c re dit or c a n s e ll the c oll a te ral w ith ou t fe ar of a dv e rs e c on se qu e nc e s.T he debt or i n t hat ca s e had mo ved and had not not i f i ed t he bank of hi s cha ng e of addres s
. W hi l e n ot i ng t hat 12
t he d eb t o r bo re s o m e o f t he res p o nsi b i l i t y fo r hi s f ai l ure t o recei ve no t i ce o f dis p o si t i o n of co l l at eral , t he co urt nonet hel es s he l d t hat t he s ecu r ed part y ’ s not i ce was un r eas onabl e. 166 S. W

. 3d at 20 5. I n t he cas e before us , t he t r i al
co urt assi gn ed resp o nsib i l i t y t o M s. W i m m er fo r t he f ail ure o f ac t ua l no t i ce , f

i nd i ng t ha t t he ev i d en ce sho w ed t ha t M s. W i mm er “ f ai l ed t o cl ai m t he cer t i f i ed mai l not i ce. ” H owever , i n our r evi ew of t he r ecor d, we ar e u nabl e t o f i nd an y s uch evi dence

. Aut o C r edi t ’ s empl oy ee t es t i f i ed t hat t he en vel op e t hat was ret ur ned t o A ut o C r edi t mar ked u ndel i ver ed ha d t hr ee han dwri t t en dat es on i t

. She i nt er pret ed t hos e not es as i ndi cat i ng dat es of at t emp t ed del i ver y , and M s
. W i mm er do es not ch al l eng e t hat i nt er pret at i on. H owever , t her e i s abs ol ut el y no ev i dence as t o what ha pp ene d when an y del i ver i es w e re a ttem p te d . S p e c ifi c a lly, the re is no e v id e n c e tha t p o sta l e m p lo ye e s le ft a n y k ind o f no tice o f atte m p te d d e live ry, as t he t ri al c o urt ’ s f

i nd i ng i m p l i ed

. C o nsequentl y , t here i s no evi d ence t o co nt radict M s. W i m m er’ s t est i m o ny t hat s he d id no t re c e ive a n y no tice o f atte m p ts to d e live r c e rtifi e d m a il.

Aut o Cr edi t h as s ei ze d on a por t i on of t h e abov e- qu ot ed l an g u ag e an d a r g u es t h at i t s n ot i ce mu s t be 13

cons i dere d re as onabl e beca us e i t sch edul ed t he s al e o f t he car for t wen t y day s af t er i t s ent out t he cer t i f

i ed mai l not i ce, in e x c e ss o f b o th th e ten d a y m inim u m se t o u t i n the sta tute , an d the tw o w e e k s t h a t w e r e fo u n d to b e ina d e q u a te in Cl egg . W e d o no t co n sid e r th e ti m e b e tw e e n the o rig ina l se n d ing o f t h e no tice a n d the sa le to b e sign ific a n t t o ap p l i cat i o n of t he p ri m ary pri nci p l e o f bo t h Cl egg an d R & J of Te nnes s ee , Inc . -8- The more difficult question arise s when the se cure d party does not know, bef

ore the sale, whether or not the notice has been delivere d. Does the se cure d party act r easona

bly in that situation if it procee ds with the sale without taking any action to at lea st confirm that the notice was de liv e re d? I n terms of the c a se be fo re us , the de te rm inativ e qu e sti on is wh e the r Au to Cre dit sh ou ld have ta ken steps to determine whether the notice had in f

act been delivere d to Ms. W immer befor e it procee ded with the sale

. We conclude that the answe r to that question lies in two prior opinions by this court. I n R & J of Tennessee , Inc. v. Blankenship-M elton Real Estate, Inc ., we he ld that the se c ur e d p arty did not provide re asonable notice under the statute whe n it sent notice to the debtor by certified mail and so ld the c oll a te ral te n d a y s late r “w ith ou t re c e ivi ng a ny ind ic a tio n as to whe the r the no tic e a c tua lly rea ched [the debtor].” 166 S.W .3d at 205. 12
Simi larly , in NationsBank v. Clegg , No. 01-A-01-9510-CH-00469, 1996 WL 165513, at*6 (T e nn . Ct . A pp . A pr . 1 0, 19 96 )( no Te nn . R. Ap p. P. 1 1 a pp lic a tio n f

ile d) , w e state d:
Whil e absolute pr oof of r ece ipt of noti ce may not be re quired in eve ry

instance, a cre ditor who makes only

one attempt to contac t the debtor, and is left uncertain of rec eipt of the notice, h as n o t fu lfilled its obli g ation to the debtor whe n it procee ds with a disposition l ess than two we eks fr om mailing its first notice. 13
I n such situations, the cre ditor cannot simply assume delivery of notice. A uto Credit did not rec eive any

confirmation, but itwent ahead with the s ale any way without taking r easona ble steps to insure that the sale was be ing ma de only afte r re asonable notice to the debtor

. The pr o o f showed that Auto Credit knew Ms. Wimm er’ s curr ent phone number and had contac ted her

befor e re possessing the car . An ag ent of Auto Cre dit who lived in Ms. W immer’s neig hborhood had on oc casion pe rsonally collecte d the wee kly

paym en t fr o m her. Simple means-9-

to v e ri fy de liv e ry or a sc e rt a in the status of

c e rtif ie d mai l exist. Au to Cre dit did no t atte mpt to c a ll or conta ct Ms. Wim mer a fter it sent the noticeand did not attempt to determine w hether the notice had in fa ct bee n delivere d, even thoug h it had not rec eived the “ return r ece ipt” it requested. Auto Credit attempts to shift the burden to Ms. Wim mer by noting that she had alr eady been inf orme d o ve r the ph on e that sh e wo uldbe se nt a no tic e of its plans fo r the c oll a te ral a ndsu g g e sts that if she had truly intended to rede em it, she could havecalled A uto Credit to ge t information. The statute, howeve r, plac es the burde n of furnishing re asonable notice on the c reditor.
I n li g ht of Au to Cre dit ’s failu re to ve ri fy de liv e ry of theno tic e of

dis po sit ionof

c oll a te ra l, wec on c lud e that th e e vid e nc e prepo nd e rate s a g a ins t th e tria l c ou rt ’s fi nd ing that A uto Cr e dit fu rn ish e d r e a so na

bleno tic e to M s. Wimme r. We h oldthat A uto Cr e dit sh ou ld h a ve take n r e a so na ble ste ps to d e te rm inewh e the r the no tic e ha d be e n de liv e re d to Ms. Wim me r b e fo reit p ro c e e de d w ith thesa le . It to ok

no ste ps a t a ll. Con se qu e ntl y , w e re ve rs e thedis mis sa l of he r c ou nte r- c la im.
V. D I S CRE T I ONARY C OSTS
Auto Credit filed a motion to be awa rded its discr etionary costs. Such an awa rd may be made to the prevailing party

under Rule 54.04( 2) of the Rules of Civil Procedur e. The trial court g rante d the m otion and aw arde d $587.50 to Auto Credit to reimburse it for c osts incurred in obtaining the s er v i ce s o f aco u rtre p o rt eran dfo r tra n s cr i p t fe es fo r Ms

. W i m m er ’s d ep o s i t i o n an dt h e f i n al h ea ri n g. The c ourt also awa

rded A uto Credit $285.50 in court costs under T enn. R. Civ. P. 54.01(1).
Auto Credit remains the prevailing party on its deficienc y

cla i m ag ainst Ms. W immer. Howeve r, since w e havereve rsed the t ri al court’s dismiss al of he r counte rclaim for statutory damag es, she is the pre vailing party on that claim. We ag reewith Ms. W immer that discre tionary costs should be apportioned among the two claims. Howeve r, i nstead of r emanding the ca se to the tria l c ou rt fo r that a pp ortio nme nt, wec a n make that app ortio nme nt ba se d o n th e re c or d b e fo reus
. I n the intere sts of economy of time and money for the pa rties and the trial court, wefind that the discretionary

costs wer e incur

red f or ea ch claim in roughly

equ al p ro p o rt ions. Accor dingly , we reduc e the tria l court’s a war d of discre tionary costs to A uto Cre dit by one-ha lf. Court costs in the trial court sha ll be divided equally betwee n the parties.

VI . Th e tria l c ou rt ’s dis mis sa l of Me lis sa Wimme r’ s c ou nte rc la im f or statut ory dama g e s is reve rsed, and Ms. Wi mmer is awa rded statutory

damag es of $4,318.42, whic h should be offse t by the def iciency judgme nt ag ainst her a war ded to A uto Credit. The trial court’s awa rd of discr etionary-10-

costs to Auto Credit is reduce d to $293.75. We remand this ca s e to the Circuit Court of Sumner Cou nty fo r any fu rthe r p ro c e e din g s ne c e ssa ry
. Tax th e c os ts on app e a l to theapp e lle e , A uto Cr e dit of Na shville.

___________________________________ PATRI CI A J . COTTRELL , J UDGE