O.C.G.A. § 10-1-36 (2019)

Annotations

Law reviews. For article, “Nonjudicial Foreclosures in

Georgia Revisited,” see 24 Ga. St. B. J. 43 (1987). For annual survey article on commercial law, see 50 Mercer L. Rev. 193 (1998).

JUDICIAL DECISIONS ANALYSIS GENERAL CONSIDERATION NOTICE General Consideration Section is cumulative to UCC. - Ga. L. 1967, p. 674, § 7 provided that it was cumulative of former Code 1933, Ch.

109A-9-5 and provided cumulative additional rights and remedies which must be fulfilled before any deficiency claim will lie against a buyer. Georgia

SELLING/OTHER TRADE PRACTICES

Cent. Credit Union v. Coleman, 155 Ga. App. 547, 271 S.E.2d 681, 1980 Ga. App. LEXIS 2668 (1980). Application of both federal and state statutes. - No inconsistency exists in applying both the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA), 12 U.S.C. § 1735f-7, and the Georgia Motor Vehicle Sales Finance Act (MVSFA), O.C.G.A. § 10-1-30 et seq., as DIDMCA speaks only to procedures to be followed prior to foreclosure and the notice requirements of O.C.G.A. § 10-1-36(a) only apply to procedures that take place after repossession. Chambliss v. Oakwood Acceptance Corp., 315 B.R. 166, 2004 Bankr. LEXIS 1505 (Bankr. S.D. Ga. 2004). Leases. - The commercially reasonable sale provision under O.C.G.A. § 11-9-504 and the notice provision under O.C.G.A. § 10-1-36 were not applicable to a lease which was a “true lease” rather than a disguised secured transaction. Citizens & S. Nat’l Bank v. Thomas, 188 Ga. App. 312, 372 S.E.2d 687, 1988 Ga. App. LEXIS 970 (1988). Compliance required for recovery of deficiency. - Compliance with this section is a condition precedent to recovery of any deficiency claim against a defaulting purchaser of a motor vehicle. Doughty v. Associates Com. Corp., 152 Ga. App. 575, 263 S.E.2d 493, 1979 Ga. App. LEXIS 3044 (1979). Trial court properly granted judgment to a debtor, finding that a repossessor failed to comply with O.C.G.A. § 10-1-36, and therefore was precluded from collecting a deficiency from the debtor following the sale of the debtor’s vehicle, as the repossessor waived strict compliance with O.C.G.A. § 10-1-36 by admitting that it received a facsimile notice sent by the debtor, and raised no issue as to the timeliness of the notice or whether it was received by the proper person, and failed to send the required notice thereunder to the debtor’s address shown on the contract or later designated by the debtor, opting instead to send the notice to a post office box. Consumer Portfolio Servs. v. Rouse, 282 Ga. App. 314, 638 S.E.2d 442, 2006 Ga. App. LEXIS 1377 (2006).

Noncompliance bars recovery. - A creditor’s failure to comply with the notice provisions of O.C.G.A. § 10-1-36 is an absolute bar to recovery of a deficiency judgment. Bryant Int’l, Inc. v. Crane, 188 Ga. App. 736, 374 S.E.2d 228, 1988 Ga. App. LEXIS 1192 (1988). Compliance not required when creditor was not a “seller”. - Compliance with O.C.G.A. § 10-1-36 was not required in disposing of a tractor and trailer given as collateral for a promissory note since the lender was not engaged in the business of selling motor vehicles to retail buyers in retail installment actions. The repossession at issue was governed only by O.C.G.A. § 11-9-504(3). Ervin v. Arnold, 197 Ga. App. 841, 399 S.E.2d 548, 1990 Ga. App. LEXIS 1471 (1990). Statute of limitations. - While it appeared that O.C.G.A. § 9-3-24, rather than O.C.G.A. § 11-2-725, would most likely apply to defendant collection attorney’s state court deficiency action against the plaintiff consumer, and it was not for the federal court to say what the Georgia courts would hold, the uncertainty meant there was no intentional unfair conduct and the consumer’s Fair Debt Collection Practices Act claim was dismissed; other parts of the Georgia Code, such as O.C.G.A. §§ 10-1-36 and 40-3-50, and applicable case law indicated that Georgia’s highest courts would most likely hold that the case fell within Ga. U.C.C. Art. 9 and not Ga. U.C.C. Art. 2. Almand v. Reynolds & Robin, P.C., 485 F. Supp. 2d 1361, 2007 U.S. Dist. LEXIS 31907 (M.D. Ga. 2007). Notice Notice required within ten days of repossession, not acquisition of interest. - This section makes no mention of sending a notice within ten days after an interest in the property is acquired. To give this section such a construction would be to allow a party who is a subsequent holder of the note to give notice six months, or perhaps even a year, after the repossession occurred based merely on the fact that the party then acquired a right to possession of the vehicle. This section is clear in its import to protect the debtor by giving the debtor

Notice (Cont’d) notice within ten days of the repossession so that the debtor might act to prevent the loss of any rights the debtor might have. Barnett v. Trussell Ford, Inc., 129 Ga. App. 176, 198 S.E.2d 903, 1973 Ga. App. LEXIS 928 (1973). Cure period does not stop 10 days. - Creditor had the right to repossess debtor’s truck on the date the debtor surrendered the truck, not at the end of a ten-day period extended by the creditor for the debtor to “cure” the debtor’s default, and the “cure” period did not stop the running of the ten-day notice requirement of O.C.G.A. § 10-1-36. Welch v. Ford Motor Credit Co., 227 Ga. App. 904, 490 S.E.2d 206. Triggering of ten-day period. - It is only when the debtor is in default and the right to repossess exists that no distinction should be made between repossession and voluntary surrender with regard to triggering the running of the ten-day period within which the required notice must be sent. Central & S. Bank v. Williford, 192 Ga. App. 843, 386 S.E.2d 688, 1989 Ga. App. LEXIS 1254 (1989). Because the lessor was not bound to renew a vehicle lease agreement or become the owner of the vehicle and the residual purchase option price was not nominal or unreasonably low, the lease agreement did not serve as a security interest that triggered notice requirements under O.C.G.A. § 10-1-36. Lewis v. Lease Atlanta, Inc., 234 Ga. App. 812, 508 S.E.2d 188, 1998 Ga. App. LEXIS 1362 (1998). No requirement that notice be received. - Under O.C.G.A. § 10-1-36, there is no requirement that the required notice be received, but only that it be sent within ten days of repossession by registered or certified mail to the address shown on the contract or later designated by the buyer. Brack Rowe Chevrolet Co. v. Walls, 201 Ga. App. 822, 412 S.E.2d 603, 1991 Ga. App. LEXIS 1593 (1991). Two attempts to deliver certified mail to the buyer’s correct address met the requirements of O.C.G.A. § 10-1-36. Hill v. Federal Employees Credit Union,

193 Ga. App. 44, 386 S.E.2d 874, 1989 Ga. App. LEXIS 1290 (1989). Use of language “you may redeem said collateral” is sufficient compliance with the terms of this section. Gary v. GMAC, 128 Ga. App. 10, 195 S.E.2d 458, 1973 Ga. App. LEXIS 1362 (1973). Statement of balance is not required. - Although a statement of the balance owed would be preferable in advising the buyer of the buyer’s rights of redemption, this section does not require such specification. Cook v. First Nat’l Bank, 130 Ga. App. 587, 203 S.E.2d 870, 1974 Ga. App. LEXIS 1191 (1974). Compliance with notice requirements. - After the Chapter 13 debtors objected to a secured creditor’s amended proof of claim that alleged the existence of a deficiency balance after it had repossessed and sold the collateral, the creditor complied with the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA), 12 U.S.C. § 1735f-7, by giving the debtors 30 days notice of default and right to cure before it repossessed their mobile home, and complied with the Motor Vehicle Sales Finance Act, O.C.G.A. § 10-1-30 et seq., by sending the post-repossession notice to the debtors within 10 days of repossession; therefore, its post-repossession notice was timely. Chambliss v. Oakwood Acceptance Corp., 315 B.R. 166, 2004 Bankr. LEXIS 1505 (Bankr. S.D. Ga. 2004). Creditor’s notice of an intention to seek a deficiency judgment sent to the debtors was sufficient. Although the certified mail receipt did not indicate the date the letter was sent, the creditor’s agent gave a sworn statement based on personal knowledge that the letter was sent two days after the car was repossessed, and the address used was current and correct, although it was not the address listed in the sales contract. Versey v. Citizens Trust Bank, 306 Ga. App. 479, 702 S.E.2d 479, 2010 Ga. App. LEXIS 968 (2010). Trial court erred by granting summary judgment to a finance company in the company’s suit against a debtor to collect a deficiency from the sale of the debtor’s repossessed vehicle because there was a genuine issue of material fact as to

SELLING/OTHER TRADE PRACTICES

whether the finance company complied with the requirement under O.C.G.A. § 10-1-36(a) to mail a notice to the debtor’s designated address or the address in the contract. Shell v. Tidewater Fin. Co., 318 Ga. App. 69, 733 S.E.2d 375, 2012 Ga. App. LEXIS 848 (2012). Noncompliance with notice requirements. - When a bank forwarded separate deficiency notices to a loan cosigner and the cosigner’s daughter by certified mail within 10 days after repossession of a financed vehicle but mailed both notices to the daughter’s address, even though the cosigner’s address was the one shown on the contract, the notice was not in compliance with O.C.G.A. § 10-1-36. Whatley v. Bank S., 185 Ga. App. 896, 366 S.E.2d 182, 1988 Ga. App. LEXIS 38 (1988). The repossession of defendant’s automobile occurred when the defendant notified the bank of the defendant’s intention to allow repossession, not when the bank physically removed the car from the seller’s premises; the bank therefore did not comply with the 10-day notice requirements of O.C.G.A. § 10-1-36 by sending notice on the day after the car was returned. Sikes & Swanson Pontiac-GMC Truck, Inc. v. Cantrell, 194 Ga. App. 818, 392 S.E.2d 36, 1990 Ga. App. LEXIS 352 (1990). Failure to comply with the notice provisions of O.C.G.A. § 10-1-36 is an absolute bar to recovery. Brack Rowe Chevrolet Co. v. Walls, 201 Ga. App. 822, 412 S.E.2d 603, 1991 Ga. App. LEXIS 1593 (1991). The absence of any proof that the notice was sent by certified mail coupled with evidence that it was never received, left the trial court with a disputed fact regarding whether the notice was properly sent in compliance with O.C.G.A. § 10-1-36. Pitts v. Bank S. Corp., 209 Ga. App. 124, 433 S.E.2d 96, 1993 Ga. App. LEXIS 798 (1993). Creditor, who did not comply with the notice requirements of O.C.G.A. § 10-1-36 in repossessing and selling a debtor’s vehicle, was not entitled to assert a deficiency claim over the debtor’s objection, despite the language of the bankruptcy plan and the creditor’s belief that the practice in the district was to

allow such claim. Gibson v. Citifinancial Auto Corp. (In re Gibson), No. 05-40782-MGD, 2005 Bankr. LEXIS 2672 (Bankr. N.D. Ga. Nov. 15, 2005). Creditor, who was secured by debtor’s car, was not entitled to a deficiency claim after the sale of the car failed to satisfy the full amount of the debt owed since the creditor did not give notice under state law of the creditor’s intention to seek a deficiency claim. Baxter v. Sys. & Servs. Techs., Inc., 287 B.R. 298, 2002 Bankr. LEXIS 1418 (Bankr. S.D. Ga. 2002). Notice not required in car lease. - Lessor was not required to comply with the notice provisions of O.C.G.A. §§ 10-1-36 and 11-9-504 because the motor vehicle lease agreement the lessor entered into with the lessee was intended to be a true lease and not to evince a secured transaction; the lessor retained a meaningful reversionary interest in the car because the option price was more than nominal since the purchase option price was approximately one-third of the car’s value, and the agreement contained no provision purporting to grant the lessee equity in the vehicle prior to exercise of the purchase option. Aniebue v. Jaguar Credit Corp., 308 Ga. App. 1, 708 S.E.2d 4, 2011 Ga. App. LEXIS 103 (2011). Plaintiff’s good faith held question of fact. - When it cannot be determined if notice of the sale was returned prior to or after the sale, the plaintiff’s good faith in the transaction is a question for the trier of fact. Slocum v. First Nat’l Bank, 152 Ga. App. 632, 263 S.E.2d 516, 1979 Ga. App. LEXIS 3071 (1979). Notice objection did not apply. - With respect to the creditor’s deficiency claim arising from a sale of a truck in which the creditor had perfected a first-priority lien, the debtor’s objection based on O.C.G.A. § 10-1-36, which requires additional notice to recover a deficiency against a buyer, did not apply to bar the claim because the creditor was not a sales finance company under the Georgia statute given that it had not purchased a retail installment contract from a seller and was not engaged in the business of purchasing retail installment contracts. Ambrose v. Advantage Funding Commer. Capital Corp. (In re Ambrose),

Notice (Cont’d)

568 B.R. 716, 2017 Bankr. LEXIS 665 (Bankr. N.D. Ga. 2017). RESEARCH REFERENCES

Am. Jur. 2d. 67A Am. Jur. 2d, Sales, §§ 337, 370.