The Law Office of Kurt H King

December 1, 2020

Repossession and Commercially Reasonable Sale

It is not enough in Missouri to simply say in your petition to the Court that the sale of repossessed property was “commercially reasonable.” To survive a motion to dismiss, the petition must include facts that show the sale was in fact conducted through a commercially reasonable process. Language stating the method, manner, time, place, and terms must be in the petition. For example, a solid petition describes how the repossessed property was advertised and placed for sale–Craigslist, Facebook Marketplace, consigned to a business that sells those items, etc.–whether and how bids were solicited and accepted, the time and place of sale.

Without these facts stated in the petition, the Court could–and should–dismiss the repossessing creditor’s petition for failure to state a cause of action upon which relief may be granted. That was the ruling of Western District of the Missouri Court of Appeals in Ford Motor Credit Company v. UpDegraff, 218 S.W.3d 617, 623 ( Mo. Ct. App. 2007, an appellate decision followed recently in a case handled by this writer.

In the UpDegraff case, filed in the Circuit Court of Clay County, Missouri, the Court of Appeals dismissed Ford Motor Credit Company’s (“Ford”) case for lack of jurisdiction because Ford failed to sufficiently plead facts regarding commercial reasonableness of its sale of the vehicle repossessed from Ms. UpDegraff. 

Ford’s attempt to remedy its deficient petition by putting a dealer account manager on the stand who testified as to the details of the sale of the Ford Focus was rejected by the higher court on appeal as beyond the scope of the pleadings (an objection made during trial in Clay C:ounty) which failed to adequately state facts as to how the vehicle was sold by Ford Motor Credit. 

In essence, by failing to plead the “method, manner, time, place, and other terms” of the its sale of collateral, Ford failed to state a claim upon which relief could be granted.  As no claim was stated, Ford made no case and the Western District dismissed the appeal, remanding with instructions that the Clay County trial judge dismiss the case in full.

So, be thorough and plead the necessary facts if you are the creditor, as the debtor in default may well defeat the case for a deficiency judgment by filing a motion to dismiss for failure to state a claim.

Kurt H. King, Law Office of Kurt H. King

816.781.6000, 20 E. Franklin, Liberty, Missouri 64068;

Debtor/Creditor representation, Personal Injury, Workers Compensation, Business Litigation, Employment Discrimination/Retaliation representation, General Matters

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