Court Opinion

ID: 9750455
Source: CourtListenerOpinion
Date Created: 2023-08-28 14:59:23.349956+00
Date Added: 2024-06-11T07:26:10.561198
License: Public Domain

Allen, C.J.,
dissenting. I must respectfully dissent. The majority opinion states that “neither § 9-504(3), nor the definitions of the terms within it, indicate that the creditor complies when the debtor has actual notice of the public sale.” This statement overlooks the last sentence of § 1-201(38) which provides that: “The receipt of any writing or notice within the time at which it would have arrived if properly sent has the effect of a proper sending.” 9A V.S.A. § 1-201(38) (emphasis added).
*485It is undisputed that the defendants here had actual knowledge of the time and place of the sale from the newspaper advertisement, and the subsequent confirmation with the bank. Under the Code, a person has “notice” of a fact when “he has actual knowledge of it,” 9A V.S.A. § l-201(25)(a), and receives a “notice” when “it comes to his attention.” 9A V.S.A. § l-201(26)(a). The receipt of actual notice constituted a proper “sending” under the facts before us. Leasing Service Corp. v. Diamond Timber, Inc., 559 F. Supp. 972, 978 (S.D.N.Y. 1983); Crest Inv. Trust, Inc. v. Alatzas, 264 Md. 571, 576-77, 287 A.2d 261, 264 (1972); Chase Manhattan Bank, N.A. v. Natarelli, 93 Misc. 2d 78, 90-91, 401 N.Y.S.2d 404, 412 (Sup. Ct. 1977).
This construction is in keeping with the primary purpose of the notice requirement in 9A V.S.A. § 9-504(3), which is “to allow persons having any interest in the collateral or possible liability for a deficiency claim to do whatever is necessary to redeem the property or see that the disposition brings a fair price to minimize the deficiency.” Adams v. B & D Builders & Developers, Inc., 144 Vt. 353, 356, 477 A.2d 628, 631 (1984); see also 9A V.S.A. § 9-504(3) comment 5.
There is no reason under the Code or the decided cases to make a “reasonable steps” analysis where the debtor has actual knowledge of the information which the secured party is required to send under 9A V.S.A. § 9-504(3). The majority’s reasoning that § 9-504(3) imposes a procedural requirement upon the creditor to “send” notice of the collateral sale to the debtor, irrespective of the debtor’s actual knowledge, has potentially broad implications. Under this approach a creditor who failed to “send” written notice of the sale of collateral to the debtor would be denied a deficiency judgment even if the debtor had obtained actual knowledge through helping to arrange the actual sale.
The Supreme Court of Ohio directly confronted this situation in Umbaugh Pole Building Co. v. Scott, 58 Ohio St. 2d 282, 390 N.E.2d 320 (1979). That court ruled that “[u]nder the circumstances, written notice would be surplusage and would call for an adherence to a ritual.” Id. at 291, 390 N.E.2d at 325.
Rejecting actual knowledge as satisfying the notice requirement of § 9-504(3) in this case moves the Court towards a position where, if confronted with a case factually similar to Umbaugh, a principled distinction might be impossible. See also Comfort Trane Air Conditioning Co. v. Trane Co., 592 F.2d 1373, 1389 *486n.13 (5th Cir. 1979) (recognizing that the question of whether participation by the debtor in the liquidation process satisfies the notice requirement of § 9-504(3) is undecided in Georgia); DeVita Fruit Co. v. FCA Leasing Corp., 473 F.2d 585, 588 (6th Cir. 1973) (implicitly accepting debtor instigation of the collateral sale as satisfying the notice requirement of § 9-504(3)).
Accordingly, because I feel that the requirement that notice be “sent” has been satisfied, this Court should consider whether or not it was timely under the circumstances.
I am authorized to say that Justice Mahady joins in this dissent.