Opinion ID: 1302880
Heading Depth: 1
Heading Rank: 5

Heading: The auction sale was commercially reasonable.

Text: Many courts agree with the approach used in In re Zsa Zsa Limited, where `it is the aggregate of circumstances in each caserather than specific details of the sale taken in isolationthat should be emphasized in a review of the sale. The facets of manner, method, time, place, and terms cited by the Code are to be viewed as necessary, and interrelated parts of the whole transaction.' Rudow, Determining the Commercial Reasonableness of the Sale of Repossessed Collateral, 19 U.C.C.L.J. 139, 140 (1986) (footnotes omitted) (quoting In re Zsa Zsa Ltd., 352 F.Supp. 665, 670 (S.D.N.Y.1972), affirmed, 475 F.2d 1393 (2d Cir.1973)). A leading Code commentator has identified distinguishing characteristics of a commercially reasonable auction sale, which are rearranged in checklist fashion. 1. [A] sale at which the public, particularly including the knowledgeable trade public, is invited, by prior advertisement, to appear and bid for the collateral to be sold. 2. If the collateral is goods, they should be available for inspection by prospective bidders before the sale. 3. The advertisement should be published in at least one newspaper of general circulation, and perhaps appropriate trade publications, reasonably in advance of the time of sale to allow potential bidders to participate, and should provide a reasonable amount of information concerning the time and place of sale and the collateral to be sold. 4. The goods must be offered and sold for cash to the highest responsible bidder; and bidders must know of other bids and be permitted to raise their bids. 5. The place of sale, moreover, must be accessible to the general public; and the sale itself, if not conducted by one of the parties or a public official, must generally be under the direction of a licensed auctioneer. W. Davenport & D. Murray, supra § 6.05(b)(2), at 273-74 (footnotes omitted). A review of the settled record indicates: 1. Over 600 sale bills were printed and distributed, 100 of which were sent by Mr. Huey to dealers in Denver, Montana, Omaha, and Lincoln who might be interested in such equipment. 2. Prospective bidders were apparently free to examine the collateral before bidding. 3. Advertisement of the auction sale appeared in the Missouri Basin Shopper, Sioux Falls Argus Leader, and Aberdeen American News. 4. The record reflects the auction was conducted in the usual manner, with bids made aloud to give opportunity to competing bidders to raise their bids. 5. Location of sale appeared easily accessible and directions thereto were included in newspaper advertisements and sale bills. The sale was conducted by an auctioneer licensed in South Dakota. As earlier noted, the circuit court found the auction was conducted in a commercially reasonable manner within the meaning of SDCL 57A-9-504(3). A trial court's finding that a sale is commercially reasonable is a finding of fact, C.I.T. Corp. v. Duncan Grading & Constr., Inc., 739 F.2d 359, 360 (8th Cir.1984) (per curiam); Lendal Leasing v. Farmer's Wayside Stores, 720 S.W.2d 376, 380 (Mo.Ct.App.1986), which will be upheld unless it is clearly erroneous. C.I.T., 739 F.2d at 360. Review of the settled record in this case convinces us that there is ample support for the circuit court's determination. Therefore, the circuit court's ruling that the auction sale was commercially reasonable is not clearly erroneous.