{ "id": 3181219, "name": "A. A. STORE FIXTURE CO., INC., Plaintiff-Appellant, v. ERNEST KOUZOUKAS et al., Defendants-Appellees", "name_abbreviation": "A. A. Store Fixture Co. v. Kouzoukas", "decision_date": "1980-08-11", "docket_number": "No. 79-705", "first_page": "631", "last_page": "637", "citations": [ { "type": "official", "cite": "87 Ill. App. 3d 631" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "83 N.E. 820", "category": "reporters:state_regional", "reporter": "N.E.", "opinion_index": 0 }, { "cite": "232 Ill. 238", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5638730 ], "opinion_index": 0, "case_paths": [ "/ill/232/0238-01" ] }, { "cite": "45 N.E.2d 651", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1908, "opinion_index": 0 }, { "cite": "381 Ill. 486", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2558015 ], "year": 1908, "opinion_index": 0, "case_paths": [ "/ill/381/0486-01" ] }, { "cite": "198 N.E.2d 346", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "48 Ill. App. 2d 37", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5271564 ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/48/0037-01" ] }, { "cite": "400 N.E.2d 1083", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1964, "opinion_index": 0 }, { "cite": "81 Ill. App. 3d 131", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3229368 ], "year": 1964, "opinion_index": 0, "case_paths": [ "/ill-app-3d/81/0131-01" ] }, { "cite": "303 N.E.2d 541", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "14 Ill. App. 3d 813", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2682413 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/14/0813-01" ] }, { "cite": "501 F.2d 692", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 94552 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/f2d/501/0692-01" ] }, { "cite": "271 N.E.2d 404", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "133 Ill. App. 2d 717", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 2473135 ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/133/0717-01" ] }, { "cite": "380 N.E.2d 526", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1971, "opinion_index": 0 }, { "cite": "63 Ill. App. 3d 639", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3335840 ], "year": 1971, "opinion_index": 0, "case_paths": [ "/ill-app-3d/63/0639-01" ] }, { "cite": "400 N.E.2d 1057", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1978, "opinion_index": 0 }, { "cite": "81 Ill. App. 3d 199", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3226586 ], "year": 1978, "opinion_index": 0, "case_paths": [ "/ill-app-3d/81/0199-01" ] }, { "cite": "291 N.E.2d 180", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "opinion_index": 0 }, { "cite": "8 Ill. App. 3d 789", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2767898 ], "weight": 3, "opinion_index": 0, "case_paths": [ "/ill-app-3d/8/0789-01" ] }, { "cite": "349 N.E.2d 573", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "year": 1972, "opinion_index": 0 }, { "cite": "39 Ill. App. 3d 147", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5379540 ], "weight": 3, "year": 1972, "opinion_index": 0, "case_paths": [ "/ill-app-3d/39/0147-01" ] }, { "cite": "372 N.E.2d 926", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 4, "year": 1976, "opinion_index": 0 }, { "cite": "57 Ill. App. 3d 295", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3419602 ], "weight": 4, "year": 1976, "opinion_index": 0, "case_paths": [ "/ill-app-3d/57/0295-01" ] }, { "cite": "407 N.E.2d 964", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1978, "opinion_index": 0 }, { "cite": "86 Ill. App. 3d 452", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3183746 ], "weight": 2, "year": 1978, "opinion_index": 0, "case_paths": [ "/ill-app-3d/86/0452-01" ] } ], "analysis": { "cardinality": 695, "char_count": 17064, "ocr_confidence": 0.898, "pagerank": { "raw": 1.5493420022272209e-07, "percentile": 0.674348581712679 }, "sha256": "a80fe683d68cc2d982edeea18bd4e4332f9408e0030ec7edcd61898930587871", "simhash": "1:930cd9b3b7032436", "word_count": 2898 }, "last_updated": "2023-07-14T21:56:36.886143+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "A. A. STORE FIXTURE CO., INC., Plaintiff-Appellant, v. ERNEST KOUZOUKAS et al., Defendants-Appellees." ], "opinions": [ { "text": "Mr. JUSTICE CAMPBELL\ndelivered the opinion of the court:\nThe plaintiff, A. A. Store Fixture Co., Inc., brought an action to revive a judgment entered by confession against the defendants, Ernest and Nicholas Kouzoukas, on June 8,1967. The trial court denied plaintiff\u2019s motion to strike an affirmative defense presented by the defendants and dismissed the action. The plaintiff brings the present appeal from both of these orders of the trial court. Four issues are urged:\n(1) whether the trial court incorrectly found that the plaintiff failed to notify the defendant of the sale of the collateral and failed to hold a commercially reasonable sale;\n(2) whether a finding of inadequate notice of a sale of collateral will bar a deficiency judgment under section 9 \u2014 504(3) of the Uniform Commercial Code;\n(3) whether a claim of conversion is an improper defense to a scire facias action; and\n(4) whether a claim of conversion is untimely in a scire facias action. We affirm.\nThe controversy giving rise to the present revival action arose from the November 24, 1965, contract for the sale and installation of certain restaurant equipment by the plaintiff to the defendants. To finance this purchase, the defendants executed a note and security agreement on the equipment. Upon the defendants\u2019 default in their payments, the plaintiff filed suit on the note and a judgment by confession was entered on June 8, 1967, in the amount of $43,810.60. In October or November of 1967, the plaintiff repossessed the restaurant equipment which was subject to the security agreement.\nThe immediate action was filed on November 30,1976, as an action to revive the judgment of June 8,1967, by scire facias pursuant to section 25 of \u201cAn Act in regard to limitations\u201d (Ill. Rev. Stat. 1975, ch. 83, par. 24b). The plaintiff\u2019s complaint alleged that the original judgment \u201chad not been paid or satisfied in any part whatsoever.\u201d An amended complaint, however, acknowledged that the defendants had made payments to date in the amount of $1,500 and that equipment removed from defendants\u2019 store was valued at $9,500. Therefore, according to the amended complaint, the total amount credited to the defendants upon the judgment was $9,125, after deducting certain costs. On August 28, 1978, an evidentiary hearing took place. At that time, the defendants requested and were granted leave to file an affirmative defense grounded upon the failure of the plaintiff to comply with the notice requirements of section 9 \u2014 504(3) of the Uniform Commercial Code (Ill. Rev. Stat. 1965, ch. 26, par. 9 \u2014 504(3)).\nThe following evidence was received at the evidentiary hearing. The president of plaintiff corporation, Irving Naiditch, testified that his company repossessed the equipment when it was informed by the defendants\u2019 landlord, Sol Gabriel, that the defendants had abandoned the premises of the restaurant. During this conversation, Gabriel asked him to remove the equipment. Naiditch further testified that he thought his lawyers had sent a notice of the sale to the defendants, but on cross-examination admitted that he could not remember whether he or his lawyer had sent the notice. He was unable to produce a copy of the notice. He did state, however, that he had personally attempted to reach defendants both at the restaurant and at their home but was unable to do so. No third persons were notified of the sale. Naiditch also testified that, prior to the sale, he placed a fair market value of $9,500 on the equipment. He stated that this amount differed measurably from the contract price because the contract price included the cost of the installation charges. He based his opinion of the value of the equipment upon his expertise in the valuation of restaurant equipment derived from 33 years of having been in the restaurant equipment business and 17 years of working as an insurance appraiser of restaurant equipment. Naiditch also stated that his company purchased the equipment at its fair market value at the private sale, and he credited the defendants\u2019 account with this amount minus his costs.\nNicholas Kouzoukas testified that at the time that the equipment was repossessed his restaurant was closed for remodeling. Neither he nor his brother received a notice of sale of the equipment, although during this period he picked up mail from the restaurant. Furthermore, both he and his brother were in the Chicago area, had a telephone at their residence, and also received mail there. The plaintiff was aware of this home phone because he had contacted him at his residence prior to the repossession of the equipment. In fact, Kouzoukas testified that he and his brother did not have any notice of the first judgment or otherwise learn of the judgment until 1969, nearly two years after the repossession of the equipment.\nAfter the evidentiary hearing, plaintiff filed a motion to strike the defendants\u2019 affirmative defense, which was denied on October 26, 1978. Subsequently, on December 20, 1978, the trial court dismissed the plaintiff\u2019s complaint. The trial court specifically found that (1) there was no notice of sale given to the defendants, and (2) no commercially reasonable sale was held. The order also included a provision which stated that the judgment in the first cause had been satisfied of record.\nThe pivotal issue raised in this appeal is whether a defendant debtor in a scire facias revival action may raise as an affirmative defense the plaintiff-secured party\u2019s failure to comply with the notice requirement of section 9 \u2014 504(3) of the Uniform Commercial Code. (Ill. Rev. Stat. 1965, ch. 26, par. 9 \u2014 504(3).) The burden of proving compliance with the notice requirement is on the creditor. Chicago City Bank & Trust Co. v. Wilson (1980), 86 Ill. App. 3d 452, 407 N.E.2d 964; Commercial Discount Corp. v. Bayer (1978), 57 Ill. App. 3d 295, 372 N.E.2d 926; General Foods Corp. v. Hall (1976), 39 Ill. App. 3d 147, 349 N.E.2d 573; Tauber v. Johnson (1972), 8 Ill. App. 3d 789, 291 N.E.2d 180.\nThe plaintiff argues that the evidence supports its contention that notice was given and that it was not necessary for it to show that the defendants received notice in order to sustain its burden of proof under section 9 \u2014 504(3). (Tauber v. Johnson.) We disagree. Defendant Nicholas Kouzoukas testified that notice was never received. While the plaintiff\u2019s president did testify that it was his belief that notice was sent, he could not remember whether he or his attorney sent the notice. Moreover, no copy of such notice or evidence of its contents was presented. Based on these facts, the trial court properly concluded that the plaintiff failed to prove notice. Tauber v. Johnson.\nAn examination of the Illinois decisions which have addressed the effect of a secured party\u2019s failure to comply with the notice provision of section 9 \u2014 504(3) reveals two conflicting lines of authority. One line holds that a secured party may not obtain a deficiency judgment in the absence of compliance with the notice requirement of section 9 \u2014 504(3). (Spillers v. First National Bank (1980), 81 Ill. App. 3d 199,400 N.E.2d 1057; Stensel v. Stensel (1978), 63 Ill. App. 3d 639, 380 N.E.2d 526; Morris Plan Co. v. Johnson (1971), 133 Ill. App. 2d 717,271 N.E.2d 404.) The other line holds that noncompliance with section 9 \u2014 504(3) does not act as a bar to the recovery of a deficiency but creates a rebuttable presumption that the value of the collateral equals the amount of the debt. This places the burden on the secured party of proving that the fair market value of the goods sold was less than this amount. (Chicago City Bank \u00bfr Trust Co. v. Wilson; Commercial Discount Corp. v. Bayer; General Foods Corp. v. Hall; Tauber v. Johnson.) We do not find it imperative to examine these lines of authority to determine the better reasoned view. For a full discussion see United States v. Whitehouse Plastics (5th Cir. 1974), 501 F.2d 692. Under our reading of the record the trial court must be affirmed under either view.\nUnder the more stringent line of authority, a creditor who has failed to provide notice must (1) rebut the presumption that the collateral is worth at least the amount of the debt and (2) prove that the collateral was sold at a commercially reasonable sale. (Commercial Discount Corp. v. Bayer; General Foods Corp. v. Hall; Tauber v. Johnson.) From our examination of the record, the only evidence of the value of the collateral at the time of its repossession was the testimony of Naiditch, president of plaintiff corporation, that its fair market value was $9,500. This valuation was based on his experience in evaluating equipment of this type for over 30 years. While his testimony was not refuted, contrary to the plaintiff\u2019s assertion, the testimony of an expert witness as to the value of the collateral is subject to the trier of fact\u2019s evaluation as to credibility. (See Commercial Discount Corp. v. Bayer; United States v. Whitehouse Plastics (5th Cir. 1974), 501 F.2d 692.) Here, there was a clear possibility of bias due to the affiliation of the witness with the corporate plaintiff. We think from the foregoing evidence that the trial court could have determined that the plaintiff did not rebut the presumption that the collateral was equal in value to the debt.\nThe only evidence in the record as to the commercial reasonableness of the sale is again found in the testimony of Naiditch. He stated that no third persons were contacted in order to solicit bids. He also testified that his company bought the collateral in a private sale and made a bookkeeping entry to reflect its receipt. An examination of the corporate ledger shows a zero balance for defendants\u2019 account in 1967, presumably after the purchase of the equipment. We should note that the ledger entry and the stipulated record do not support the plaintiff\u2019s argument that the zero balance entered in the ledger does not indicate the value of the equipment upon its repossession, but rather a recognition of the unlikelihood of collecting anything further on the debt.\nThe trial court, after hearing the evidence, determined that:\n\u00b0 * [A] sale never actually was conducted in any way because the plaintiff testified that he just kept it in his own office and made a bookkeeping entry as to what he thought the value was.\nThere is no way anyone can say that was a sale. There was no sale of any kind, certainly it is not commercially reasonable, even if you call it a sale.\u201d\nWe do not think that this finding was manifestly erroneous in light of the evidence. While neither the price received at the sale of the collateral (Chicago City Bank & Trust Co. v. Wilson (1980), 86 Ill. App. 3d 452, 407 N.E.2d 964; In re Application of Bickel (1973), 14 Ill. App. 3d 813, 303 N.E.2d 541) nor the secured party\u2019s purchase of the collateral in a private sale is indicative of a commercially unreasonable sale, article nine does set forth several requirements to be met in these situations. (Ill. Rev. Stat. 1965, ch. 26, pars. 9 \u2014 507(2), 9 \u2014 504(3).) Section 9 \u2014 507(2) in pertinent part provides:\n\u201cThe fact that a better price could have been obtained by a sale at a different time or in a different method from that selected by the secured party is not of itself sufficient to establish that the sale was not made in a commercially reasonable manner. If the secured party either sells the collateral in the usual manner in any recognized market therefor or if he sells at the price current in such market at the time of his sale or if he has otherwise sold in conformity with reasonable commercial practices among dealers in the type of property sold he has sold in a commercially reasonable manner.\u201d\nSection 9 \u2014 504(3) provides in pertinent part:\n\u201cThe secured party may buy at any public sale and if the collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations he may buy at private sale.\u201d\nHere the plaintiff-secured party presented no evidence of a recognized market for this equipment, a current price in a market at the time, or standard price quotations. Nor did he advertise or solicit bids. Accordingly, we conclude that the plaintiff failed to meet its burden that the sale was commercially reasonable. Ill. Rev. Stat. 1965, ch. 26, pars. 9\u2014 507(2), 9 \u2014 504(3); Commercial Discount Corp. v. Bayer (1978), 57 Ill. App. 3d 295, 372 N.E.2d 926.\nWe must next consider whether the trial court properly determined that the facts requiring the denial of a deficiency judgment also warranted a dismissal of the plaintiff\u2019s revival action. In Illinois a judgment is only enforceable pursuant to statutes found in chapter 77 of the Illinois Revised Statutes (Ill. Rev. Stat. 1975, ch. 77, par. 1 etseq.). In an action to revive a judgment by scire facias, a creditor must describe the original judgment by date and amount and state whether or not it has been partially satisfied. (Ill. Rev. Stat. 1975, ch. 83, par. 24b; J. D. Court, Inc. v. Investors Unlimited, Inc. (1980), 81 Ill. App. 3d 131, 400 N.E.2d 1083; Coby v. Turner (1964), 48 Ill. App. 2d 37, 198 N.E.2d 346.) A defendant may, thereafter, raise as an affirmative defense either (1) that the judgment did not exist, or (2) that it has been satisfied. (Bank of Edivardsville v. Raffaelle (1942), 381 Ill. 486, 45 N.E.2d 651; Bank of Eau Claire v. Reed (1908), 232 Ill. 238, 83 N.E. 820; }. D. Court, Inc. v. Investors Unlimited, Inc.; Coby v. Turner.) These defenses must appear of record. J. D. Court, Inc. v. Investors Unlimited, Inc.; Coby v. Turner.\nBecause the plaintiff here has failed to comply with the dictates of section 9 \u2014 504(3), it is estopped from arguing that the lack of notice was not apparent from the record and, therefore, not an affirmative defense. Were we to decide otherwise, the import of this provision and the purpose of the Code, generally, would be ignored. If failure to provide notice may not be raised in an action to revive a judgment, then a secured party could always seek a judgment and sell the collateral in violation of section 9 \u2014 504(3) without any recourse on the debtor\u2019s part for the loss of revenue realized on the sale of the collateral.\nMoreover, we find no reason to distinguish the present case from the line of cases which have determined the effect of failure to comply with section 9 \u2014 504(3) when this issue has been raised in an action for a deficiency judgment. An action to revive a judgment after sale of collateral pursuant to the Uniform Commercial Code is in effect an action to recover a deficiency judgment. Thus, we find that while the original judgment was valid when it was entered and the secured party consequently had the right to enforce it, this right was waived by noncompliance with section 9 \u2014 504(3), just as the right to seek a deficiency judgment is waived by noncompliance. (Commercial Discount Corp. v. Bayer (1978), 57 Ill. App. 3d 295,372 N.E.2d 926; General Foods Corp. v. Hall (1976), 39 Ill. App. 3d 147, 349 N.E.2d 573; Tauber v. Johnson (1972), 8 Ill. App. 3d 789, 291 N.E.2d 180.) Accordingly, it was proper for the trial court to dismiss the plaintiff\u2019s revival action when the plaintiff failed to meet its burden of proof as to both the delivery of notice and the commercial reasonableness of the sale. Moreover, we find no reason to distinguish the present case from the line of cases which have determined the effect of failure to comply with section 9 \u2014 504(3) when this issue has been raised in an action for a deficiency judgment. An action to revive a judgment after sale of collateral pursuant to the Uniform Commercial Code is in effect an action to recover a deficiency judgment. Thus, we find that while the original judgment was valid when it was entered and the secured party consequently had the right to enforce it, this right was waived by noncompliance with section 9 \u2014 504(3), just as the right to seek a deficiency judgment is waived by noncompliance. (Commercial Discount Corp. v. Bayer (1978), 57 Ill. App. 3d 295,372 N.E.2d 926; General Foods Corp. v. Hall (1976), 39 Ill. App. 3d 147, 349 N.E.2d 573; Tauber v. Johnson (1972), 8 Ill. App. 3d 789, 291 N.E.2d 180.) Accordingly, it was proper for the trial court to dismiss the plaintiff\u2019s revival action when the plaintiff failed to meet its burden of proof as to both the delivery of notice and the commercial reasonableness of the sale.\nBecause of the position we have taken, we find it unnecessary to consider the other arguments raised by the plaintiff. The orders of the trial court denying the plaintiff\u2019s motion to dismiss the defendants\u2019 affirmative defense and dismissing the complaint are, therefore, affirmed.\nJudgment affirmed.\nGOLDBERG, P. J., and O\u2019CONNOR, J., concur.", "type": "majority", "author": "Mr. JUSTICE CAMPBELL" } ], "attorneys": [ "Kenneth E. Scheiwe, of Chicago, for appellant.", "Paul T. Kalinich, of Glen Ellyn, for appellees." ], "corrections": "", "head_matter": "A. A. STORE FIXTURE CO., INC., Plaintiff-Appellant, v. ERNEST KOUZOUKAS et al., Defendants-Appellees.\nFirst District (1st Division)\nNo. 79-705\nOpinion filed August 11, 1980.\nKenneth E. Scheiwe, of Chicago, for appellant.\nPaul T. Kalinich, of Glen Ellyn, for appellees." }, "file_name": "0631-01", "first_page_order": 653, "last_page_order": 659 }