Opinion ID: 779743
Heading Depth: 2
Heading Rank: 1

Heading: u.c.c.

Text: 11 Williams brought an action against Regency pursuant to section 400.9-507 of the Missouri Code, asserting that Regency's 1995 post-repossession sale of the 1987 Oldsmobile to FPI was commercially unreasonable and thus violated section 400.9-504. Mo. Rev. Stat. §§ 400.9-504, 507 (1996). Section 400.9-504 requires that the sale or other disposition of collateral by a secured party after default must be commercially reasonable and enumerates the manner in which the proceeds of the sale or disposition are to be applied. Mo. Rev. Stat. § 400.9-504(1), (3). The district court held that Williams could not obtain a surplus judgment nor Regency a default judgment because a valid sale of the vehicle had not occurred: Regency's transfer of the 1987 Oldsmobile to FPI without first having obtained a repossession title violated Missouri's motor vehicle titling statute, section 301.210 of the Missouri Code, and thus was void. Id.; Mo. Rev. Stat. § 301.210. 12 Williams contends that because Regency's transfer to FPI constituted a disposition, the question of whether Regency's disposition of the 1987 Oldsmobile was commercially reasonable is for a jury to decide. We agree. 13 Section 400.9-504 provides, 14 (1) A secured party after default may sell, lease or otherwise dispose of any or all of the collateral in its then condition.... (3) Disposition of the collateral may be by public or private proceedings and may be made by way of one or more contracts.... [E]very aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable. 15 Mo. Rev. Stat. § 400.9-504. Under Missouri law, [t]he provisions of the [Uniform Commercial] Code are to be liberally construed. Computer Network Ltd. v. Purcell Tire & Rubber Co., 747 S.W.2d 669, 674 (Mo.Ct.App. 1988). When interpreting a statute, we take as our point of departure the statute's language. United States v. S.A., 129 F.3d 995, 998 (8th Cir.1997). A fundamental canon of statutory construction is that, unless otherwise defined, words will be interpreted as taking their ordinary, contemporary, common meaning. Perrin v. United States, 444 U.S. 37, 42, 100 S.Ct. 311, 62 L.Ed.2d 199 (1979) (citation omitted); United States v. Parker, 267 F.3d 839, 847 (8th Cir.2001). When the meaning of a statute is questionable, it should be given a sensible construction and construed to effectuate the underlying purposes of the law. S.A., 129 F.3d at 998. 16 The secured transaction provisions at issue here were intended to ensure that upon default, a secured party sell, lease or otherwise dispose of collateral in good faith and in a commercially reasonable manner, and that debtors and creditors be provided a remedy for a party's failure to comply with statutory duties. Mo.Rev.Stat. §§ 400.9-504, 400.9-507 cmt. The inclusion of the term disposition in section 400.9-504 indicates both that the terms sale and disposition are not intended to be synonymous, and that a disposition of collateral need not necessarily be in the form of a sale. Mo.Rev.Stat. 400.9-504. The comment to section 400.9-504 provides, Subsection (1) does not restrict disposition to sale: the collateral may be sold, leased, or otherwise disposed of — subject of course to the general requirements of subsection (2) that all aspects of the disposition be `commercially reasonable.' Id. cmt. Although Missouri case law has neither defined nor interpreted disposition, where there is a paucity of Missouri case law interpreting a provision of the U.C.C., [Missouri] courts... look for guidance to decisions of other jurisdictions.... Robinson v. Citicorp Nat'l Servs., 921 S.W.2d 52, 54 (Mo.Ct. App.1996) (citation omitted). Courts in other jurisdictions have similarly interpreted the term disposition in their respective enactments of this and related U.C.C. provisions as not being limited to valid sales. 17 The word sale implies the passage of absolute title.... A sale consists in the passing of title from the seller to the buyer for a price. 18 The phrase other disposition implies the parting with, alienation or giving up [of] property and [was] intended to include conveyances other than sales such as gift, assignment, abandonment, barter, exchange, or destruction ... [and] transfer for permanent possession.... 19 In re the Estate of Rothko, 84 Misc.2d 830, 379 N.Y.S.2d 923, 958 (1975), aff'd sub nom, Rothko v. Reis, 43 N.Y.2d 305, 401 N.Y.S.2d 449, 372 N.E.2d 291 (1997) (finding that shipment to alleged purchasers for their permanent possession or permanent control is within the meaning of otherwise dispose under the U.C.C.) (citations omitted); Mechanics Nat'l Bank of Worcester v. Gaucher, 7 Mass.App.Ct. 143, 386 N.E.2d 1052, 1055 (1979) (Disposition implies a permanent transfer of possession.); Cordova v. Lee Galles Oldsmobile Inc., 100 N.M. 204, 668 P.2d 320, 323 (1983) (holding a temporary loan does not constitute a disposition under U.C.C. Article 9 because disposition means a permanent transfer of possession); see also Midwest Bank & Trust Co. v. Roderick, 132 Ill.App.3d 463, 87 Ill.Dec. 334, 476 N.E.2d 1326, 1331 (1985) ([T]he only reasonable interpretation of the [U.C.C.] is that `other disposition' is intended to encompass all types of financial arrangements...). Thus, disposition for the purposes of the U.C.C. Article 9 provisions is not limited to valid sales, but includes the transaction by which Regency permanently transferred possession of the 1987 Oldsmobile to FPI. Without having first obtained a repossession title, Regency relinquished its lien on the vehicle, effectively selling the Oldsmobile to FPI for $3,550.00. 20 Because disposition encompasses the transaction by which Regency permanently transferred the 1987 Oldsmobile to FPI, whether Regency disposed of the 1987 Oldsmobile in a commercially reasonable manner presents a genuine issue of material fact for a jury to determine. To hold that a transaction that is not a legally valid sale under section 301.210 cannot give rise to a cause of action under the U.C.C. would leave without legal recourse those individuals who have been adversely affected by transactions such as that perpetuated by Regency and FPI, in which cars routinely are sold without title in violation of section 301.210. Such an outcome would defeat the purpose of the Missouri U.C.C. and section 301.210, which is to protect the innocent and guileless from the machinations and wiles of the wicked. Antle v. Reynolds, 15 S.W.3d 762, 767 (Mo.Ct.App.2000) (citation omitted). Furthermore, to hold that Regency's violation of section 301.210 barred Williams' claim under the U.C.C. provisions would require us to conclude that there can be no purchase [or sale] under [section] 301.210.4 without a title transfer, which would mean that the statute has no effect and would simply state a redundancy. In order for the statute to make sense, we have to say that it applies to purchases [and sales] of vehicles without contemporaneous transfers of title. Id. at 766. Accordingly, we reverse the district court and remand for a new trial on this issue.