Court Opinion

ID: 5642140
Source: CourtListenerOpinion
Date Created: 2022-01-11 06:24:13.506412+00
Date Added: 2024-06-11T08:38:14.147361
License: Public Domain

Beasley, Judge,
dissenting.
I respectfully dissent. The forfeiture of the “deficiency” hinges on what has been construed as unlawful dealings by Itoh with respect to the forklift being leased to Universal. OCGA § 11-9-504 (1) applies only to those situations where the secured party after default “sell[s], lease [s] or otherwise dispose [s] of any or all of the collateral in its then condition or following any commercially reasonable preparation or processing.” But there has been no sale, lease or disposition of the collateral by the secured party here, so OCGA § 11-9-504 does not apply to the facts of this case. The testimony of the controller concerning the legal ramifications of Itoh’s actions does not control the analysis.
Although a creditor need not gain actual physical control of the collateral to arrange for its disposition, the appellant creditor never gained any control, physical or constructive, so as to be in the position to sell, lease or otherwise dispose of the forklift which Universal had leased from the debtor. The creditor simply honored Forklift’s contractual obligation with its customer, Universal, recognizing the contractual rights of Universal to lease and continue using the forklift under its arrangement with Forklift. Appellant chose not to disturb the pre-existing contract between Forklift and Universal. Far from interrupting debtor Forklift’s agreement, it exerted no control at all over the collateral and simply left its disposition to be made precisely as Forklift had provided by contract.
Appellant merely exercised a right of collection of the proceeds of the lease, as authorized by OCGA § 11-9-502 (1). It utilized the available statutory right to take control of the lease payments, to which it was entitled under § 11-9-306. Its action did not invade or ignore or interfere with the rights and liabilities of Forklift or its customer. To the contrary, it respected them. In obtaining the proceeds of this arrangement, which it had a right to do and which to a large extent were due it under its own contract with Forklift, Itoh merely mitigated the damages which Forklift had created by default and by the failure to pass payments on and honor its own contractual commitments to appellant.
Because I find OCGA § 11-9-504 inapplicable, I find no bar to the collection of the debt due and I would reverse the order of the trial court.
I am authorized to state that Presiding Judge Deen, Judge Car*128ley, and Judge Sognier join in this dissent.
Decided July 8, 1986
Rehearing denied July 31, 1986
Melody R. Hennick, W. Carey Herin, for appellant.
Kevin W. Sparger, for appellees.