Opinion
No. 1 CA-CV 17-0118
12-05-2017
PHOENIX CORVETTE SALES, LTD., Plaintiff/Appellee, v. CARL BROOKS, Defendant/Appellant.
COUNSEL Germaine Law Office, PLC, Phoenix By Sanford J. Germaine Counsel for Plaintiff/Appellee Carl Brooks, Tempe Defendant/Appellant
NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. Appeal from the Superior Court in Maricopa County
No. CV2016-003559
The Honorable James T. Blomo, Judge AFFIRMED IN PART, VACATED IN PART, REMANDED COUNSEL Germaine Law Office, PLC, Phoenix
By Sanford J. Germaine
Counsel for Plaintiff/Appellee Carl Brooks, Tempe
Defendant/Appellant
MEMORANDUM DECISION
Judge Diane M. Johnsen delivered the decision of the Court, in which Presiding Judge Lawrence F. Winthrop and Judge Maria Elena Cruz joined. JOHNSEN, Judge:
¶1 Carl Brooks appeals the superior court's grant of summary judgment in favor of a car dealer in a deficiency action. For the following reasons, we affirm the judgment in part, vacate the judgment in part and remand.
FACTS AND PROCEDURAL BACKGROUND
¶2 In April 2013, Carl Brooks purchased a 12-year-old BMW 7-Series from Phoenix Corvette Sales, Ltd. ("Corvette") for $15,650. Brooks paid $2,000 down and financed the remainder through a purchase money security agreement at 29.9% annual interest. The agreement provided that in case of default, Corvette and Brooks would have the rights and duties of secured party and debtor, respectively, under Arizona's version of the Uniform Commercial Code ("UCC"). At some point, Brooks stopped making payments and Corvette regained possession of the BMW. In September or October 2015, Corvette sold the car for $2,500. Corvette then sent Brooks a letter asserting he owed $12,762 in remaining principal, $672 for costs associated with retaking and disposing of the BMW, and $2,861 in interest, offset by $2,500 Corvette received when it sold the car.
¶3 Corvette sued Brooks for the deficiency and eventually moved for summary judgment, arguing Brooks had failed to produce any evidence to show a genuine issue of material fact. Brooks did not respond even after the court granted an extension, and the court granted Corvette's motion, entering judgment against Brooks for $13,796.05 in principal and accrued interest and attorney's fees and costs of $4,967.75.
¶4 We have jurisdiction over this timely appeal pursuant to Article 6, Section 9 of the Arizona Constitution and Arizona Revised Statutes ("A.R.S.") sections 12-120.21(A)(1) (2017) and -2101(A)(1) (2017).
Absent material revision after the relevant date, we cite a statute's current version.
DISCUSSION
¶5 Summary judgment is appropriate when "the moving party shows that there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law." Ariz. R. Civ. P. 56(a) (2017); Kadlec v. Dorsey, 224 Ariz. 551, 553, ¶ 12 (2010). "We review de novo a grant of summary judgment, viewing the evidence and reasonable inferences in the light most favorable to the party opposing the motion." Ochser v. Funk, 228 Ariz. 365, 369, ¶ 11 (2011). Although the superior court may summarily grant a summary judgment motion if the non-moving party does not file a response, Ariz. R. Civ. P. 7.1(b)(2), "the mere absence of a genuine dispute of material fact does not automatically entitle [the moving party] to judgment—the [moving party] must also demonstrate that the evidence entitles it to judgment as a matter of law." Wells Fargo Bank, N.A. v. Allen, 231 Ariz. 209, 213, ¶ 16 (App. 2012).
¶6 Brooks argues he should not be liable for the balance owed on the BMW because the car did not work properly. As noted, however, Brooks did not respond to Corvette's motion for summary judgment, and on appeal, our review is limited to the record before the superior court. Vig v. Nix Project II Partnership, 221 Ariz. 393, 396, ¶ 10 (App. 2009). Corvette submitted an affidavit from its president, David Kaufman, stating that Brooks defaulted; that affidavit, which was undisputed, was sufficient to establish that Brooks failed to pay.
¶7 As for the amount owed, Arizona law generally provides that, when a debtor defaults on a security agreement, the creditor may sell or dispose of the collateral and sue the debtor for the remaining deficiency. See A.R.S. §§ 47-9607 to -9616 (2017). But in such a situation, the law requires that "[e]very aspect of a disposition of collateral, including the method, manner, time, place and other terms, must be commercially reasonable." A.R.S. § 47-9610(A-B). In a deficiency action involving a consumer good, the secured party must prove that its disposition of the collateral was commercially reasonable. Gulf Homes, Inc. v. Goubeaux, 124 Ariz. 142, 145 (1979); see also A.R.S. § 47-9626(B) (2017) (allowing application of common-law principles in deficiency actions involving consumer goods). Whether the secured party acted reasonably in disposing of the collateral is a question of fact. Int'l Harvester Co. v. Fuoss, 157 Ariz. 378, 380 (App. 1988).
"Consumer goods" and "Consumer transaction," as defined by the UCC, contemplate sales in which a person finances goods for "personal, family or household purposes." A.R.S. § 47-9102(A)(23), (26). The purchase money security agreement here stated that Brooks intended to use the BMW primarily for "personal, family, or household purposes." --------
¶8 The summary judgment record here contains no assertion by Corvette that it disposed of the BMW in a commercially reasonable manner and, more significantly, no evidence that it did so. The Kaufman affidavit merely stated, without elaboration, that the BMW "was repossessed and disposed of." Although Corvette sent a letter to Brooks that itemized its calculation of the purported deficiency, Corvette offered the superior court no evidence of the method, manner, time, place or other terms of its disposition of the BMW. In the absence of evidence showing Corvette acted reasonably in disposing of the car, it did not meet its burden of proof to establish the amount of the deficiency. See Gulf Homes, 124 Ariz. at 146; Wells Fargo Bank, 231 Ariz. at 213, ¶ 16.
CONCLUSION
¶9 For the foregoing reasons, we affirm the judgment insofar as it establishes that Brooks is liable for breach of the loan agreement, but vacate the stated amount of the deficiency for which he is liable, and remand for further proceedings. We award Brooks his taxable costs, contingent upon compliance with Arizona Rule of Civil Appellate Procedure 21.