Opinion ID: 1676987
Heading Depth: 2
Heading Rank: 2

Heading: The Conversion and Wrongful Repossession Claims

Text: Ala.Code 1975, § 7-9-503, provides in relevant part: Unless otherwise agreed a secured party has on default the right to take possession of the collateral. In taking possession a secured party may proceed without judicial process if this can be done without breach of the peace or may proceed by action. With regard to collateral such as automobiles, § 7-9-504(3) provides that 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. We have held that selling collateral without satisfying the notice requirements of § 7-9-504(3) constitutes conversion. Simmons Machine Co. v. M & M Brokerage, Inc., 409 So.2d 743, 751 (Ala.1981). The Rhodeses argue that the notice Chrysler Credit sent to them failed to fulfil the purpose of § 7-9-504(3) and that the repossession of their car was wrongful and constituted conversion. Specifically, they point out that the notice stated that the car had been voluntarily surrendered, whereas it was actually repossessed from the premises of David Jones Chevrolet. We conclude that the notice at issue in this case clearly met the formal requirements of § 7-9-504(3) and fulfilled the purpose of that provision. We note, in the first place, that the Rhodeses concede in their brief that Chrysler Credit met the formal requirements of § 7-9-504(3). The notice must inform the debtor whether the sale of the collateral is to be private or is to be public. Lavender v. AmSouth Bank, N.A., 539 So.2d 193, 195 (Ala.1988). In the case of a private sale, § 7-9-504(3) requires only reasonable notification of the time after which any private sale is to be made. Id. See also, White and Summers, Uniform Commercial Code: Practitioner's Edition, § 27-12 at 600-01. The notice in this case met these requirements. The Rhodeses principally argue that the notice failed to fulfil the purpose of § 7-9-504(3). We disagree. In considering the sufficiency of notice in another case, the Court of Civil Appeals stated: The purpose of the notice is to enable the debtor to protect his interest in the property by paying the debt, finding a buyer, being present at the sale to bid on the property or have others do so, in order to keep from sacrificing the collateral at a secret sale at less than its true value. Wells v. Central Bank of Alabama, N.A., 347 So.2d 114, 120 (Ala.Civ.App.1977). See, Lavender, 539 So.2d at 195; Simmons, 409 So.2d at 749. As stated above, Chrysler mailed the notice on October 6, 1989; the Rhodeses' attorney on October 16, 1989, mailed a letter demanding the return of the car; and the car was privately sold on November 22, 1989. It is undisputed that between October 16 and November 22 the Rhodeses made no attempt to bring their account with Chrysler Credit current. In fact, other than the October 16 letter, neither the Rhodeses nor their attorney had any further communication with Chrysler Credit until after the car was sold. Considering the contents of the notice sent by Chrysler Credit, we reject the Rhodeses' contention that they were not informed that the car had been repossessed and that it would be privately sold. Even if the phrase voluntarily surrendered misstates the means by which Chrysler Credit took possession of the car, it is undisputed that the Rhodeses knew that Chrysler Credit had, in fact, taken possession of it and that Chrysler Credit intended to sell it. The Rhodeses make no other arguments in support of their claim for damages for conversion and wrongful possession. In light of our holding that the notice in this case complied with both the letter and the spirit of § 7-9-504(3), we conclude that as to the conversion and wrongful repossession claims the trial court properly granted Chrysler Credit's motion for summary judgment.