Court Opinion

ID: 9538477
Source: CourtListenerOpinion
Date Created: 2023-08-07 07:36:54.467875+00
Date Added: 2024-06-11T14:57:55.231798
License: Public Domain

HALL, Justice
(dissenting):
I do not agree that the subject lease was intended to create a security interest within the contemplation of the Uniform Commercial Code.1
Whether a lease is intended as security is to be determined from the facts of each case and I am of the opinion that the facts here do not warrant such a conclusion.2
Generally, a security interest is provided for the protection of a seller. In this instance, FMA is not a seller but was in fact the purchaser of the equipment in question from Galanis as seller. FMA then leased the equipment to Galanis who in turn assigned the lease to Pro-Printers, Inc., but remained jointly and severably liable with the assignee, and signed a personal, absolute and unconditional guaranty. They also waived all notice, and agreed that the equipment could be sold without impairing their liability.
What is also critical here is that, at the time of default, FMA was advised by the assignee and the guarantors to pick up the equipment and sell it. FMA gave letter notice to the guarantors of its intention to pick up the equipment and extended to them an opportunity to sell the equipment and thus mitigate damages. Guarantors did nothing and 11 months later FMA made the sale which is the subject of this proceeding.
The facts of this case dictate the following conclusions: (1) that no one intended a security interest to be reserved; (2) that guarantors were not entitled to notice of sale; and (3) in any event, they had actual notice of a pending sale by their own action in requesting that the equipment be picked up and sold.
Guarantors clearly had adequate opportunity to purchase the equipment themselves or to otherwise protect their interests in the same at the time of sale to others, had they made any effort to do so.
I would reverse and remand for the purpose of permitting judgment to be entered by way of damages as stipulated by the parties.

. U.C.A., 1953, 70A-1-101, et seq.

. U.C.A., 1953, 70A-1-201(37).