O.C.G.A. § 11-9-611 (2019)

Annotations

JUDICIAL DECISIONS ANALYSIS REASONABLE NOTIFICATION OF SALE Reasonable Notification of Sale Editor’s notes. - In light of the similarity of the statutory provisions, decisions under former Article 9 are included in the annotations for this Code section. For a table of comparable provisions, see the table at the beginning of the Article. No federal presumption. - Section’s requirement of notice of sale is not preempted by federal regulations not providing specific notice requirements and which are intended to accommodate state procedures. United States ex rel. Farmers Home Admin. v. Kennedy, 785 F.2d 1553, 1986 U.S. App. LEXIS 23767 (11th Cir. 1986) (decided under former Code Section 11-9-504). Relation to O.C.G.A. § 10-1-36. - O.C.G.A. § 10-1-36 complements the former provisions and provides some guidance as to what constitutes reasonable notice. Lacy v. General Fin. Corp., 651 F.2d 1026, 1981 U.S. App. LEXIS 11051 (5th Cir. 1981) (decided under former Code Section 11-9-504). Effort secured party must exert in locating and notifying debtor. - See Henson v. Foremost Ins. Co., 158 Ga. App. 441, 280 S.E.2d 848, 1981 Ga. App. LEXIS 2244 (1981) (decided under former Code Section 11-9-504). Section requires giving, not receipt, of reasonable notice. - The former provisions required that seller give buyer reasonable notification of intended sale. However, requirement involved is one of creditor giving debtor reasonable notification as distinguished from debtor receiving such notification. Friddell v. Rawlins, 160 Ga. App. 44, 285 S.E.2d 779, 1981 Ga. App. LEXIS 2867 (1981); Brewer v. Trust Co. Bank, 205 Ga. App. 891, 424 S.E.2d 74, 1992 Ga. App. LEXIS 1513

(1992) (decided under former Code Section 11-9-504). Non-misleading notice, complying with this section, is sufficient. - Notice which was in accord with requirements of former Code 1933, § 109A-9504(3), and which was not such as misled or prevented debtor from exercising the right of redemption under former Code 1933, § 109A-9-506, was sufficient to reasonably notify debtor of rights. Motor Contract Co. v. Sawyer, 123 Ga. App. 207, 180 S.E.2d 282, 1971 Ga. App. LEXIS 1164 (1971) (decided under former Code 1933, § 109A-9-504). Notices sent to debtors by certified mail are sufficient. Brinson v. Commercial Bank, 138 Ga. App. 177, 225 S.E.2d 701, 1976 Ga. App. LEXIS 2097 (1976) (decided under former Code Section 11-9504). When notification is “sent” within meaning of section. - These provisions relied on presumption of actual notice arising by proof that letter was written, properly stamped, properly addressed and properly mailed. Notification is not “sent” where these procedures are not observed. Edmondson v. Air Serv. Co., 123 Ga. App. 263, 180 S.E.2d 589, 1971 Ga. App. LEXIS 1186 (1971) (decided under former Code Section 11-9-504). Letter returned to creditor stamped “unclaimed” and “postage due”. - Where it appears that only attempt made by secured party to notify debtor of time of private sale of repossessed collateral was by letter addressed to debtor and mailed by certified mail and that letter was returned to sender marked unclaimed and stamped “Postage Due 9 Cents, ” there was no duty of debtor to show that the debtor did not willfully

Reasonable Notification of Sale (Cont’d) refuse the letter because postage was inadequate, and debtor did not receive notification required under these provisions. Edmondson v. Air Serv. Co., 123 Ga. App. 263, 180 S.E.2d 589, 1971 Ga. App. LEXIS 1186 (1971) (decided under former Code 1933, § 109A-9-504). Notice of time not specified. - Notice only of intention to sell without any notification of time is not in compliance with Uniform Commercial Code as it precludes purchaser or owner from exercising right of redemption and therefore prevents the recovery of the deficiency. Motor Contract Co. v. Sawyer, 123 Ga. App. 207, 180 S.E.2d 282, 1971 Ga. App. LEXIS 1164 (1971) (decided under former Code 1933, § 109A-9-504). Former provisions did not demand that notice specify exactly when the sales would occur. It was sufficient for the creditor to notify debtor that the sales would occur only after certain dates, and so notice requirement was satisfied. Cessna Fin. Corp. v. Wall, 876 F. Supp. 273, 1994 U.S. Dist. LEXIS 19734 (M.D. Ga. 1994) (decided under former Code Section 11-9504). Notice to debtor merely that creditor intends to pursue deficiency claim. - In suit based on defaults in payment of two notes, while defendant was notified by certified mail that in event of sale plaintiff would pursue deficiency claim, this notice did not advise defendant of any contemplated sale, either public or private, thus creditor failed to comply with the former provisions, as notice is a condition precedent to recovery of any deficiency. GEMC Fed. Credit Union v. Shoemake, 151 Ga. App. 705, 261 S.E.2d 443, 1979 Ga. App. LEXIS 2758 (1979) (decided under former Code 1933, § 109A9-504). Notice to secured party holding interest senior to that of selling secured party. - Secured party who holds interest senior to one held by secured party selling property at public sale and who meets other requirements of Uniform Commercial Code must be sent notification of sale, and failure to do so gave rise

to cause of action under former subsection (1). Bank of Camilla v. Stephens, 234 Ga. 293, 216 S.E.2d 71, 1975 Ga. LEXIS 1109 (1975) (decided under former Code 1933, § 109A-9-504). Effect of failure to notify debtor. - In action for conversion of mortgaged property, instruction that secured party had no right to sell property if no notice was given was erroneous, as the U.C.C. does not prohibit sale without notice, but rather provides that a debtor is entitled to recover any loss caused by such a sale, that is, a loss caused by a sale at a less than adequate price, and is also protected from any action by secured party to recover any deficiency between sale price and balance owing. Trust Co. v. Kite, 164 Ga. App. 119, 294 S.E.2d 606, 1982 Ga. App. LEXIS 2728, 1982 Ga. App. LEXIS 2966 (1982) (decided under former Code Section 11-9-504). Where bank failed to provide notice of sale to debtor hardware store, bank was precluded from obtaining deficiency against the store. First Nat’l Bank v. Rivercliff Hdwe., Inc., 161 Ga. App. 259, 287 S.E.2d 701, 1982 Ga. App. LEXIS 1842 (1982) (decided under former Code Section 11-9-504). A creditor who fails to comply with the provisions of the UCC as to repossessed collateral is met with two results for noncompliance: (1) It will be presumed that the value of the repossessed collateral equals the amount of the debt, and (2) even if the secured party overcomes such presumption, any recovery is subject to an offset of damages proved by the debtor resulting from the violation. Barney v. Morris, 168 Ga. App. 426, 309 S.E.2d 420, 1983 Ga. App. LEXIS 2799 (1983); Emmons v. Burkett, 179 Ga. App. 838, 348 S.E.2d 323, 1986 Ga. App. LEXIS 2037 (1986), rev’d, 256 Ga. 855, 353 S.E.2d 908, 1987 Ga. LEXIS 1011 (1987) (decided under former Code Section 11-9-504). Creditor’s failure to give notice in accordance with former subsection (3) did not as a matter of law preclude the creditor’s right of recovery. Emmons v. Burkett, 179 Ga. App. 838, 348 S.E.2d 323, 1986 Ga. App. LEXIS 2037 (1986), rev’d, 256 Ga. 855, 353 S.E.2d 908, 1987 Ga. LEXIS 1011 (1987) (decided under former Code Section 11-9-504).

The Farmers Home Administration’s failure to give notice of the sale of debtors’ collateral, in violation of former subsection (3), barred the administration from recovering any deficiency against the debtors based upon their second security deed. United States ex rel. Farmers Home Admin. v. Kennedy, 806 F.2d 1014, 1986 U.S. App. LEXIS 35187 (11th Cir. 1986). But see Emmons v. Burkett, 256 Ga. 855, 353 S.E.2d 908, 1987 Ga. LEXIS 1011 (1987) (decided under former Code Section 11-9-504). Misstatement of balance due. - Debtor did not receive reasonable notification of the sale of repossessed property where the notice of sale understated the balance due at the time of the notice, thereby preventing the debtor from taking steps to protect its interest. Cessna Fin. Corp. v. Design Eng’g & Constr. Int’l, Inc., 176 Ga. App. 206, 335 S.E.2d 625, 1985 Ga. App. LEXIS 2267 (1985) (decided under former Code Section 11-9-504). Endorser entitled to notice. - An endorser’s obligation under a promissory note, including the potential liability of any deficiency, makes obvious the endorser’s interest in a fair and optimal disposition of repossessed collateral, and renders the purpose of requiring notice to the actual debtor equally applicable to the endorser. Davis v. Adel Banking Co., 175 Ga. App. 828, 334 S.E.2d 874, 1985 Ga. App. LEXIS 2396 (1985) (decided under former Code Section 11-9-504). Accommodation endorsers were entitled to notice of sale of promissory note maker’s collateral, even if the maker had waived own rights to notice. United States ex rel. Farmers Home Admin. v. Kennedy, 785 F.2d 1553, 1986 U.S. App. LEXIS 23767 (11th Cir. 1986) (decided under former Code Section 11-9-504). Former subsection (3) held inapplicable. - In a suit against the defendant as endorser of a note brought by a bank after it had exercised its power of sale on the residence of the insurer of the note, former subsection (3), relating to reasonable notification of sale, was inapplicable under the facts of the case. Breitzman v. Heritage Bank, 180 Ga. App. 171, 348 S.E.2d 713, 1986 Ga. App. LEXIS 2097 (1986) (decided under former Code Section 11-9-504).

Bank’s compliance with O.C.G.A. § 10-1-36 notice requirements. Evidence of a bank’s compliance with the notice requirements of O.C.G.A. § 10-1-36 was a sufficient showing of the bank’s compliance with the cumulative and additional “reasonable notification” provision of former subsection (3). Calcote v. Citizens & S. Nat’l Bank, 179 Ga. App. 132, 345 S.E.2d 616, 1986 Ga. App. LEXIS 1838 (1986) (decided under former Code Section 11-9-504). 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) (decided under former Code Section 11-9-504). Notice to guarantor not required. - Nothing in the Uniform Commercial Code required that notice under former subsection (3) be given to guarantor. Brinson v. Commercial Bank, 138 Ga. App. 177, 225 S.E.2d 701, 1976 Ga. App. LEXIS 2097 (1976) (decided under former Code Section 11-9-504). A guarantor is not entitled to notice under the former provisions of this section. McNulty v. Codd, 157 Ga. App. 8, 276 S.E.2d 73, 1981 Ga. App. LEXIS 1698 (1981); First Nat’l Bank v. Rivercliff Hdwe., Inc., 161 Ga. App. 259, 287 S.E.2d 701, 1982 Ga. App. LEXIS 1842 (1982) (decided under former Code Section 11-9504). A guarantor is not a “debtor” and therefore, not required under the Uniform Commercial Code to be notified by secured party of impending sale. Vickers v. Chrysler Credit Corp., 158 Ga. App. 434, 280 S.E.2d 842, 1981 Ga. App. LEXIS 2243 (1981) (but see Reeves v. Habersham Bank, 254 Ga. 615, 331 S.E.2d 589 (1985), holding that a guarantor is a debtor within the meaning of former subsection (3)) (decided under former Code Section 11-9-504). Dealer grantor of manufacturer financing. - One who is a seller of chattel paper, whether or not that person is the owner of the underlying collateral, with full recourse against him in the event of a deficiency is a debtor entitled to notice of the post-default proceedings disposing of

Reasonable Notification of Sale (Cont’d) the collateral. Barbree v. Allis-Chalmers Corp., 250 Ga. 409, 297 S.E.2d 465, 1982 Ga. LEXIS 1057 (1982) (decided under former Code Section 11-9-504). Seller of farm equipment who had assigned retail installment contracts was a “debtor” entitled to notice of sale under former subsection (3). Barbree v. Allis-Chalmers Corp., 250 Ga. 409, 297 S.E.2d 465, 1982 Ga. LEXIS 1057 (1982) (decided under former Code Section 11-9504). Claiming loss of profits due to failure to give notice. - In an action by a debtor for damages caused by repossession of collateral after an alleged breach of an agreement between the debtor and the secured party, where the debtor is in default the debtor cannot allege that the failure of the secured party to give notice as to the retention and sale of collateral caused the debtor to be damaged by loss of profits. Such violations only raise the presumption that the value of the collateral equals the amount due on the debt. Barney v. Morris, 168 Ga. App. 426, 309 S.E.2d 420, 1983 Ga. App. LEXIS 2799 (1983) (decided under former Code Section 11-9-504). Notice not required for transfer pursuant to standing full recourse assignment agreement. - The last sentence in former subsection (5) made clear that a reassignment of collateral by a secured party pursuant to a standing full recourse assignment agreement was not a “sale or disposition of the collateral” that would activate the notice provisions of former subsection (3). Turner v. Trust Co. Bank, 210 Ga. App. 535, 436 S.E.2d 577, 1993 Ga. App. LEXIS 1247 (1993) (decided under former Code Section 11-9-504). Notice requirement may not be waived or varied. See GEMC Fed. Credit Union v. Shoemake, 151 Ga. App. 705, 261 S.E.2d 443, 1979 Ga. App. LEXIS 2758 (1979) (decided under former Code 1933, § 109A-9-504). Guaranty subject to waiver of notice of sale. - Where the note hypothecating the property empowered the note’s

holder to “sell, assign, and deliver the whole or any part of the collateral at public or private sale, without demand, advertisement or notice of the time or place of sale or of any adjournment thereof, which are expressly waived,” and the guaranty signed by defendant made itself subject to all terms and conditions in the notes evidencing the obligations which it guaranteed, defendant waived notice of the sale. United States v. Jones, 707 F.2d 1334, 1983 U.S. App. LEXIS 26423 (11th Cir. 1983). Showing required by debtor. - Where debtor moves for summary judgment in deficiency proceeding where propriety of notice is in issue, debtor must show that debtor has not renounced or modified right to notification of sale under these provisions. GEMC Fed. Credit Union v. Shoemake, 151 Ga. App. 705, 261 S.E.2d 443, 1979 Ga. App. LEXIS 2758 (1979) (decided under former Code 1933, § 109A-9-504). Receipt of notice admitted by failure to respond to requests for admissions. - In a finance corporation’s suit to recover a deficiency balance on an installment sales contract for a log loader, the trial court properly granted the corporation summary judgment upon concluding that no genuine issues of material fact existed based on the defending trucking company and the company’s president failing to answer the requests for admissions that were served simultaneously with the complaint. By failing to respond and never challenging the trial court’s denial of the motion to withdraw the admissions filed by the trucking company and the company’s president, the following allegations were deemed admitted: that true and correct copies of the relevant documents, including the demand for payment were received; that the president executed the installment sales contract and the guaranty; that the president failed to make payments thereunder; that the principal balance due under the contract and guaranty was $ 34,442.44 as of a certain date; and that the money was owed to the finance corporation. JJM Trucking, Inc. v. Caterpillar Fin. Servs. Corp., 295 Ga. App. 560, 672 S.E.2d 529, 2009 Ga. App. LEXIS 40 (2009).

RESEARCH REFERENCES U.L.A. Uniform Commercial Code (U.L.A.) § 9611. ALR. Definition and Treatment of “Instru-

ments” Under Revised Article 9 of Uniform Commercial Code, 42 A.L.R.7th Art. 5.