WM Capital Partners, LLC v. Anthony W. Thornton, et al.

A secured creditor filed suit against a trucking company and two guarantors seeking a deficiency judgment after disposition of the collateral securing payment of the debt.  The trial court granted the secured creditor summary judgment in the amount of the deficiency.  On appeal, the trucking company and the guarantors argue that (1) the delay in repossessing the collateral rendered its disposition commercially unreasonable and (2) the secured creditor failed to present sufficient evidence of the amount of its damages.  We conclude that the requirement of a commercially reasonable disposition found in Tennessee Code Annotated § 47-9-610 only applies once the secured party has actual or constructive possession of the collateral.  The secured creditor’s refusal to repossess the collateral at the trucking company’s request did not amount to actual or constructive possession.  Nonetheless, in light of the challenge to the time aspect of the disposition, the secured creditor failed to meet its burden of production on summary judgment.  Therefore, we reverse the grant of summary judgment.