Opinion ID: 2380575
Heading Depth: 1
Heading Rank: 4

Heading: Good Faith and Commercial Reasonableness

Text: The principal limitation on the secured party's right to dispose of collateral is the requirement that he proceed in good faith and in a commercially reasonable manner. (Citations omitted.) 11 M.R.S.A. § 9-507, Comment 1, see 11 M.R.S.A. §§ 1-203; 9-504. On appeal, Odell argues that the activities of Ocean were violative of these basic tenets of commercial practice. The two points available to the defendant under the circumstances of this appeal are: (1) the failure to give notice of the sale of the collateral when such action was requested by Woodman; and (2) the sale of the securities in two installments. We find these circumstances do not require the reversal of the Superior Court's findings that Ocean acted in good faith and in a commercially reasonable manner. As noted by Odell, section 9-504(3) requires that every aspect of the disposition [of collateral] including the method, manner, time, place and terms must be commercially reasonable. However, section 9-507(2) provides that sales in any recognized market are commercially reasonable. In the instant case, the Superior Court found that the sale of the collateral was made in a recognized market, through an established broker and in a commercially reasonable manner. We find nothing in the two factors noted above that undermines either the findings of the Superior Court or the statutory recognition of commercial reasonableness accorded to sales on a recognized market. We also find unpersuasive Odell's claim that Ocean did not act in good faith. The plaintiff by the terms of section 9-504(3) was not required to give notice of the sale and was permitted to sell the collateral in installments. We find no lack of good faith in Ocean acting as authorized by the Code. Odell's request that he be notified prior to the sale did not in this case supplant the plaintiff's rights under the Code. Inasmuch as the Superior Court's findings are not clearly erroneous, we uphold them on appeal.