Court Opinion

ID: 9586387
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:10:02.542083+00
Date Added: 2024-06-11T17:30:00.511098
License: Public Domain

Beasley, Chief Judge,
concurring specially.
1. Kim sought to redeem the collateral, but the collateral was nearly non-existent. The security agreement signed by restaurant buyer Kim at closing purports to grant to seller McCullom “security title to and a security interest in all fixtures, equipment, inventory, merchandise and goods of the restaurant business . . ., including but not limited to the fixtures and equipment listed on Exhibit ‘A’ attached hereto and made a part hereof, and all additions, accessions and substitutions for such . . ., together with the products and proceeds thereof (all such property being hereinafter collectively called ‘Collateral’) to secure the payment of the principal of, interest on and satisfaction of all obligations arising from the . . . note. . . .” No Exhibit A is attached to the document which was entered into evidence.
In her post-trial motion for modification of the judgment or alter*442natively for entry of its satisfaction, Kim attached “Exhibit B” which she contended was a partial listing of the equipment pledged as collateral. There is no indication, even in her accompanying affidavit in the record, that this represents the collateral which was the subject matter of the security agreement. The closing agreement, which Kim introduced into evidence at trial, does not assign a value to any of the items listed as the assets which were the subject of the sale: inventory and supplies, equipment and fixtures, lease and leasehold improvement, covenant not to compete, goodwill and trade name.
The restaurant business which was sold operated under the trade name “The Barbecue Place.” Kim abandoned the business and the premises after several months of operation, and when McCullom reopened it, he renamed it “Scott’s Barbecue and Deli.” The original trade name had lost its worth because it had no customers, and the business was worth only its good will. There was no inventory when he regained possession, and he also testified that “aside from a couple pieces of equipment, all of the equipment is owned by the [landlord].” The equipment Kim added became fixtures and thus also became owned by the landlord under the lease and not collateral. The lease itself was never transferred to Kim because she did not sign the assignment, and McCullom remained obligated under the lease.
The condition of the premises was “pretty derelict,” McCullom testified. “There was food just left to rot. Nothing had been cleaned. There were bugs. ... It took a good couple of weeks everyday going down there and cleaning.”
Thus the evidence supports the trial court’s judgment and the denial of the post-judgment motion, in that the assets of the business which Kim bought were dissipated so that McCullom did not regain a valuable business plus payment therefor (in the form of a judgment on the promissory note). There was no double recovery and no collateral to redeem.
2. I agree that it was not an abuse of discretion to allow McCullom to amend his complaint mid-trial, in order to accommodate the additional damages which arose or came to light after the complaint was filed. Defendant Kim should not have been surprised at trial because, in addition to her knowledge that utility bills and rent for which she was obligated were not paid, the note itself provides, “To secure the payment of this note, Holder shall have the rights and remedies provided in a certain security agreement of even date executed by the undersigned in favor of Holder which security agreement is incorporated expressly by reference into this note and made a part thereof.” Under the security agreement, Kim promised not only the payment of the note but also “the satisfaction of all other obligations of the undersigned hereunder to the Secured Party, . . . however created, arising or evidenced, whether direct or indirect, *443absolute or contingent, or now or hereafter existing, or due or to become due.”
Decided August 7, 1996.
Smith, White, Sharma & Halpern, Furman Smith, Jr., for appellant.
David A. Kleber, for appellee.