{ "id": 4170803, "name": "COMMERCIAL CREDIT GROUP, INC., Plaintiff v. LELAND BARBER, JR., individually and d/b/a B.M.E. RECYCLING, Defendant", "name_abbreviation": "Commercial Credit Group, Inc. v. Barber", "decision_date": "2009-09-15", "docket_number": "No. COA09-42", "first_page": "731", "last_page": "743", "citations": [ { "type": "official", "cite": "199 N.C. App. 731" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "648 S.E.2d 510", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12639083 ], "year": 2007, "pin_cites": [ { "page": "517", "parenthetical": "citations omitted" } ], "opinion_index": 0, "case_paths": [ "/se2d/648/0510-01" ] }, { "cite": "595 S.E.2d 154", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12631286, 12631287 ], "year": 2004, "opinion_index": 0, "case_paths": [ "/se2d/595/0154-02", "/se2d/595/0154-01" ] }, { "cite": "358 N.C. 236", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 12631226, 12631290, 12631286 ], "year": 2004, "opinion_index": 0, "case_paths": [ "/se2d/594/0188-03", "/se2d/595/0437-02", "/se2d/595/0154-02" ] }, { "cite": "631 S.E.2d 520", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12636184, 12636183 ], "weight": 2, "year": 2006, "opinion_index": 0, "case_paths": [ "/se2d/631/0520-02", "/se2d/631/0520-01" ] }, { "cite": "622 S.E.2d 187", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12634490 ], "year": 2005, "pin_cites": [ { "page": "190", "parenthetical": "citations omitted" } ], "opinion_index": 0, "case_paths": [ "/se2d/622/0187-01" ] }, { "cite": "N.C. 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App.", "case_ids": [ 8519876 ], "year": 1991, "pin_cites": [ { "page": "152", "parenthetical": "citations omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/103/0149-01" ] }, { "cite": "245 S.E.2d 566", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1978, "pin_cites": [ { "page": "569", "parenthetical": "applying former N.C.G.S. \u00a7 25-9-507(2)" } ], "opinion_index": 0 }, { "cite": "37 N.C. App. 114", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8550810 ], "year": 1978, "pin_cites": [ { "page": "118", "parenthetical": "applying former N.C.G.S. \u00a7 25-9-507(2)" } ], "opinion_index": 0, "case_paths": [ "/nc-app/37/0114-01" ] }, { "cite": "589 F.2d 949", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 827147 ], "year": 1978, "pin_cites": [ { "page": "954" } ], "opinion_index": 0, "case_paths": [ "/f2d/589/0949-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 25-9-603", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 2007, "pin_cites": [ { "page": "(a)" } ], "opinion_index": 0 }, { "cite": "329 S.E.2d 728", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1985, "pin_cites": [ { "page": "730" }, { "page": "730" } ], "opinion_index": 0 }, { "cite": "74 N.C. App. 719", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526054 ], "weight": 2, "year": 1985, "pin_cites": [ { "page": "722" }, { "page": "722" } ], "opinion_index": 0, "case_paths": [ "/nc-app/74/0719-01" ] }, { "cite": "297 S.E.2d 409", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1982, "pin_cites": [ { "page": "411", "parenthetical": "citation omitted" }, { "page": "411" } ], "opinion_index": 0 }, { "cite": "59 N.C. App. 482", "category": "reporters:state", "reporter": "N.C. 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Stat.", "weight": 3, "year": 2007, "pin_cites": [ { "page": "(a)(l)" } ], "opinion_index": 0 }, { "cite": "593 S.E.2d 404", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2004, "pin_cites": [ { "page": "408" }, { "page": "408" } ], "opinion_index": 0 }, { "cite": "163 N.C. App. 114", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8915511 ], "weight": 2, "year": 2004, "pin_cites": [ { "page": "116" }, { "page": "116" } ], "opinion_index": 0, "case_paths": [ "/nc-app/163/0114-01" ] }, { "cite": "360 N.C. 491", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 3789633, 3787619, 3789029, 3786345, 3796682, 3794669, 3794801, 3794097, 3790106 ], "year": 2006, "opinion_index": 0, "case_paths": [ "/nc/360/0491-03", "/nc/360/0491-06", "/nc/360/0491-09", "/nc/360/0491-02", "/nc/360/0491-01", "/nc/360/0491-05", "/nc/360/0491-07", "/nc/360/0491-08", "/nc/360/0491-04" ] }, { "cite": "174 N.C. App. 714", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8353103 ], "year": 2005, "pin_cites": [ { "page": "718", "parenthetical": "citations omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/174/0714-01" ] } ], "analysis": { "cardinality": 1044, "char_count": 28585, "ocr_confidence": 0.76, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.13656066434761255 }, "sha256": "471db785fb686340c3533c46e681e91e0b31a528b6fc2c6e232ee13021599c40", "simhash": "1:2a25efa7bc67d5de", "word_count": 4565 }, "last_updated": "2023-07-14T20:19:28.879345+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Chief Judge MARTIN and Judge STEPHENS concur." ], "parties": [ "COMMERCIAL CREDIT GROUP, INC., Plaintiff v. LELAND BARBER, JR., individually and d/b/a B.M.E. RECYCLING, Defendant" ], "opinions": [ { "text": "HUNTER, JR., Robert N., Judge.\nPlaintiff Commercial Credit Group, Inc. (\u201cCreditor\u201d) appeals the trial court\u2019s findings and conclusions concerning a non-consumer secured transaction. We affirm.\nI. BACKGROUND\nIn July 2007, defendant Leland Barber, Jr. d/b/a B.M.E. Recycling (\u201cDebtor\u201d), purchased a Peterson Pacific 5400 heavy duty waste recycler (\u201crecycler\u201d) from Pioneer Machinery, LLC (\u201cPioneer\u201d) for $225,000. The recycler, powered by an 860-horsepower Caterpillar engine, grinds logs into wood chips for commercial use. The purchase included two warranties: an extended service agreement for 6,000 hours on the machine and a 5-year limited warranty on the engine. Debtor financed the transaction with a promissory note and security agreement to Creditor with the recycler serving as collateral. Subsection (c)(iii) of section 9 of the parties\u2019 security agreement provided:\nAny public sale will be deemed commercially reasonable if notice thereof shall be mailed to Debtor at least 10 days before such sale and advertised in at least one newspaper of general circulation in the area of the sale at least twice prior to the date of sale and if upon terms of 25% cash down with the balance payable in good funds within 24 hours[.]\nThe recycler ceased operating after six hours of use, and in September 2007, Debtor brought the inoperable recycler to the Pioneer dealership in Glen Allen, Virginia, for warranted repairs. The absence of the recycler eventually resulted in Debtor defaulting on his loan, because he could not generate revenue to make payments. Consequently, Debtor and Creditor both separately and repeatedly encouraged Pioneer to repair the recycler. Pioneer reportedly told Debtor and Creditor on numerous occasions that it would repair the recycler \u201cwithin a number of weeks or no more than thirty days.\u201d In spite of these assurances, the inoperable recycler sat disassembled and unrepaired at Pioneer\u2019s dealership through December 2007.\nCreditor notified Debtor of his payment default by letters dated 19 and 28 November 2007, and on 28 November 2007, Creditor constructively repossessed the recycler. Creditor then mailed Debtor notice on 17 December 2007 that it would conduct a public auction of the inoperable recycler at Pioneer\u2019s dealership in Glen Allen, Virginia, on Thursday, 27 December 2007. Debtor\u2019s attorney acknowledged receipt of notice by letter dated 20 December 2007.\nCreditor placed identical advertisements for the auction of the recycler in two newspapers of general circulation \u2014 the Richmond Times-Dispatch of Richmond, Virginia, and The Daily Reflector of Greenville, North Carolina. The ads ran in both papers on Sunday, 23 December 2007, and Thursday, 26 December 2007. Although the recycler had active warranties, Creditor\u2019s ads indicated that the recycler would be sold \u201cas-is\u201d with no warranties. Creditor did not place any additional advertisements in advance of the auction in trade magazines or other newspapers, nor did it individually notify any prospective buyers of the recycler.\nCreditor conducted the public auction for the recycler at 1 p.m. on Thursday, 27 December 2007. Only one other bidder was in attendance in addition to Creditor. Debtor did not attend the auction. Acting on behalf of Creditor, Commercial Credit Group\u2019s Senior Vice President, Mr. Mattocks, offered an opening bid of $100,000. No other bids were offered. As the high bidder, Creditor purchased the disassembled and inoperable recycler, and shipped it to a rental facility in Charlotte, North Carolina, where it was stored for approximately three months in like condition.\nMr. Mattocks testified at trial that Creditor calculated its $100,000 opening bid by determining a wholesale value for the recycler, deducting an estimated $65,000 engine repair cost from the wholesale value, and then deducting the cost of additional mechanical \u201cunknowns\u201d (i.e., possible repairs). Mr. Mattocks stated that additional mechanical \u201cunknowns\u201d included the possibility that some other components of the machine may have been out of service. Creditor did not include the warranties on the recycler in its opening bid calculations.\nDebtor owed Creditor approximately $227,017.63 as of the date of auction. After the auction, Creditor deducted the $100,000 net sale proceeds from Debtor\u2019s outstanding debt and found that Debtor\u2019s total outstanding balance was $128,168.09 as of 28 December 2007. Debtor made no further payments on the loan.\nIn January 2008, Creditor commenced action against Debtor in Pitt County Superior Court seeking a deficiency judgment against Debtor in the amount of $128,168.09, plus accrued interest and attorneys\u2019 fees. In March of 2008, Creditor sold the still-inoperable recycler to an unrelated third party for $190,000.00 at a private sale.\nThe matter was heard by the trial court sitting without a jury. Following the trial, the court entered a judgment and order in which it concluded as a matter of law that: (1) Creditor held \u201ca proper and valid security interest in the collateral,\u201d (2) Creditor constructively repossessed the recycler because Debtor was in default on the note, and (3) the sale of the recycler at the public auction was not commercially reasonable. As such, the trial court deemed that the price bid at the public auction was fairly worth the debt owed by Debtor, concluded that Creditor was not entitled to a deficiency judgment, and ordered that the costs of the action be taxed to Creditor. \u25a0\nII. ISSUES\nCreditor now raises several issues on appeal, and contends that the trial court erred by: (IV) concluding as a matter of law that the sale of the recycler at the public auction was not commercially reasonable, (V) concluding as a matter of law that the auction value of the recycler was fairly worth the debt owed to Creditor by Debtor, and (VI) ordering the costs of the action be taxed to Creditor. For the reasons stated herein, we affirm.\nIII. STANDARD OF REVIEW\nFrom a non-jury trial, \u201c \u2018 \u201cthe standard of review on appeal is whether there was competent evidence to support the trial court\u2019s findings of fact and whether its conclusions of law were proper in light of such facts.\u201d \u2019 \u201d Willen v. Hewson, 174 N.C. App. 714, 718, 622 S.E.2d 187, 190 (2005) (citations omitted), disc. review denied, 360 N.C. 491, 631 S.E.2d 520 (2006). The trial court\u2019s conclusions of law are reviewed de novo. Id. \u201cWhen competent evidence supports the trial court\u2019s findings of fact and the findings of fact support its conclusions of law, the judgment should be affirmed' in the absence of an error of law.\u201d Resort Realty of the Outer Banks, Inc. v. Brandt, 163 N.C. App. 114, 116, 593 S.E.2d 404, 408 (2004), disc. review denied, 358 N.C. 236, 595 S.E.2d 154 (2004).\nTV.\nAs to the issue of whether the auction of the recycler on 27 December 2007 was commercially reasonable, Creditor argues that: (A) Creditor was entitled to a rebuttable presumption of commercial reasonableness under N.C. Gen. Stat. \u00a7 25-9-626(a)(l) (2007); (B) the trial court erred in finding that Creditor had not sent Debtor notification of the auction \u201cten (10) full days prior to the sale of the property\u201d; (C) Creditor\u2019s pre-auction advertisements of the recycler were commercially reasonable, and that the trial court erred in finding that the recycler was purchased with an extended warranty; (D) the recycler\u2019s inoperable status had no relevance as to the commercial reasonableness of the auction; and (E) the recycler\u2019s auction price of $100,000 was an accurate valuation of the collateral, the recycler\u2019s being auctioned at a different time or under other conditions would not have changed the outcome of the auction, and Creditor\u2019s March 2008 resale of the recycler was not legally relevant. We will address each in turn.\nA. Rebuttable Presumption\nCreditor first argues that it was entitled to a rebuttable presumption of commercial reasonableness under N.C.G.S. \u00a7 25-9-626(a)(l). We do not agree.\nIf the amount of a deficiency after the sale of collateral is in question in a secured transaction, \u201c[a] secured party need not prove compliance with the provisions of this Part relating to collection, enforcement, disposition, or acceptance unless the debtor or a secondary obligor places the secured party\u2019s compliance in issue.\u201d N.C.G.S. \u00a7 25-9-626(a)(l). If this presumption applies, a secured party need not prove compliance with Part 6 as \u201cpart of its prima facie case\u201d unless \u201cthe debtor or a secondary obligor raises the issue [of compliance.]\u201d N.C. Gen. Stat. \u00a7 25-9-626 official cmt. 3 (2007). Where compliance becomes a matter in dispute, \u201cthe secured party bears the burden of proving [compliance with Part 6].\u201d Id.\nDebtor explicitly denied in its answer Creditor\u2019s claim of performing a commercially reasonable public auction, and the primary issue at trial was whether Creditor\u2019s auction was commercially reasonable. Thus, Creditor\u2019s compliance with Part 6 was clearly in issue, and the trial court properly declined to recognize a presumption of commercial reasonableness under G.S. \u00a7 25-9~626(a)(l) in Creditor\u2019s favor. This assignment of error is overruled.\nB. Ten Full Days\u2019 Notice\nCreditor next contends that the trial court erred in finding that it had not sent Debtor notification of the auction \u201cten (10) full days prior to the sale of the property.\u201d (Emphasis added.) We do not agree.\nIn a non-consumer transaction, \u201ca notification of disposition sent after default and 10 days or more before the earliest time of disposition set forth in the notification is sent within a reasonable time before the disposition.\u201d N.C. Gen. Stat. \u00a7 25-9-612(b) (2007). This rule applies so long as notice is sent in a commercially reasonable manner. N.C. Gen. Stat. \u00a7 25-9-612 official cmt. 3 (2007). \u201c[I]n computing the time for the performance of an act or event. . . one of the terminal days is included in the count and the other is excluded, unless there is something to an intention to count only \u2018clear\u2019 and \u2018entire\u2019 days.\u201d Harris v. Latta, 298 N.C. 555, 556, 259 S.E.2d 239, 240 (1979) (citations omitted).\nHere, Creditor sent notification of the 27 December 2007 auction to Debtor on 17 December 2007, and the receipt of the letter was acknowledged by Debtor\u2019s attorney. Because there was no clear intent to include the entire tenth day in the language of the loan documents, it follows that Creditor properly sent notification of disposition ten days prior to an auction that took place on the tenth day of ' the period in question. Therefore, Creditor\u2019s notification is presumed reasonable by statute. N.C.G.S. \u00a7 25-9-612(b).\nHowever, Creditor\u2019s statutory compliance with N.C.G.S. \u00a7 25-9-612(b) does not warrant a reversal of the trial court\u2019s finding. The fact remains that 17 December 2007 was the day the letter was sent. Had Creditor sent the letter on 16 December 2007, then 17 December would have been a full day of notice rather than a partial day to be included under this State\u2019s General Statutes. The trial court therefore was technically correct in finding that Creditor did not send notification ten \u201cfull\u201d days prior to the date of sale.\nThis technicality aside, Creditor fails to cite any authority showing how this notification to Debtor relates to commercial reasonableness, and declines to identify a specific conclusion of law to which this finding correlates. As a result, Creditor\u2019s argument as to this issue is abandoned. N.C. R. App. P. 28(b)(6) (2009). This assignment of error is overruled.\nC. Advertisements and Warranties\nCreditor claims that the pre-auction advertisements of the auction of the recycler were commercially reasonable. We do not agree.\nThe Uniform Commercial Code does not define the term \u201ccommercially reasonable.\u201d Hodges v. Norton, 29 N.C. App. 193, 197, 223 S.E.2d 848, 851 (1976). However, N.C. Gen. Stat. \u00a7 25-9-627(b) (2007) provides that:\nA disposition of collateral is made in a commercially reasonable manner if the disposition is made:\n(1) In the usual manner on any recognized market;\n(2) At the price current in any recognized market at the time of the disposition; or\n(3) Otherwise in conformity with reasonable commercial practices among dealers in the type of property that was the subject of the disposition.\nN.C. Gen. Stat. \u00a7 25-9-627(b)(1)-(3); see Hodges, 29 N.C. App. at 197, 223 S.E.2d at 851 (public sale of tractor found commercially unreasonable using same criteria under former N.C. Gen. Stat. \u00a7 25-9-507(2)).\nThis test for commercial reasonableness, however, is not exhaustive, and the U.C.C. further requires that \u201c[e]very aspect of a disposition of collateral, including the method, manner, time, place, and other terms, must be commercially reasonable.\u201d N.C. Gen. Stat. \u00a7 25-9-610(b) (2007). \u201cWhen deciding if a sale of repossessed collateral meets the statute[,] the trier of fact must consider all the elements of the sale together.\u201d Don Jenkins & Son v. Catlette, 59 N.C. App. 482, 484, 297 S.E.2d 409, 411 (1982) (citation omitted). As a result, whether a sale is commercially reasonable is an issue of fact determined \u201cin light of the relevant circumstances of each case.\u201d Parks Chevrolet, Inc. v. Watkins, 74 N.C. App. 719, 722, 329 S.E.2d 728, 730 (1985).\nCreditor makes no argument on appeal that the auction of the recycler satisfies the criteria for commercial reasonableness outlined in N.C.G.S. \u00a7 25-9-627(b). As a result, we examine the circumstances surrounding the auction in light of the broad requirements of the case law above, and conclude that the content, time, and manner of Creditor\u2019s advertising effort were not commercially reasonable.\nContent of the Advertisements\n\u201c[P]arties may determine by agreement the standards measuring the fulfillment of the rights of a debtor or obligor and the duties of a secured party under a rule stated in G.S. 25-9-602[] if the standards are not manifestly unreasonable.\u201d N.C. Gen. Stat. \u00a7 25-9-603(a) (2007). Creditor contends that its advertisements were commercially reasonable because it complied with the term of the security agreement which required Creditor to advertise the auction \u201cin at least one newspaper of general circulation in the area of the sale at least twice prior to the date of sale[.]\u201d While Creditor is correct in its assertion that its compliance with this section could demonstrate commercial reasonableness under N.C.G.S. \u00a7 25-9-603(a), Creditor may not now use this argument as a shield given that it failed to follow all the terms of the security agreement regarding the sale of the collateral.\nSubsection (c)(iii) of section 9 of the security agreement, the same subsection cited by Creditor, provides that the recycler could only be sold to a buyer with \u201c25% cash down with the balance payable in good funds within 24 hours.\u201d However, Creditor\u2019s advertisements stated that \u201c[Creditor] . .. may in its sole discretion require payment in full or a larger percentage of the bid price at the time of the auction[.]\u201d (Emphasis added.) Creditor\u2019s representative made the same statement at the opening of the auction.\nThe parties never agreed that it would be commercially reasonable for Creditor to have \u201csole discretion\u201d to demand greater than 25% cash down upon sale, and Creditor was not entitled to add terms to the sale unilaterally. It is reasonable to conclude that this breach was far from immaterial, because there may have been buyers willing to bid if only a 25% down payment was required at sale rather than the entire bid price. Consequently, Creditor\u2019s breach of the security agreement on this term renders its compliance argument meritless.\nCreditor also contends that an extended warranty on the recycler did not exist at the time of auction, and therefore, advertising the recycler \u201cas-is, where-is, without any representations or warranties\u201d was commercially reasonable. The record is clearly contrary.\nMr. Mattocks, Creditor\u2019s representative responsible for the ads, testified that he was aware of: (1) a 6,000 hour extended warranty on the recycler that was part of Debtor\u2019s purchase invoice, and (2) a 1,970 hour engine warranty that was identified in Debtor\u2019s credit application. Thus, Creditor\u2019s own witness supports the trial court\u2019s finding that the inoperable recycler was covered by at least one warranty.\nIn light of this testimony, we believe that it was misleading and unreasonable for Creditor to advertise a piece of expensive, inoperable machinery \u201cas-is\u201d when an extended warranty existed at the time of auction that could have defrayed some or all of the costs of repairing the machine. It is common sense that an inoperable piece of machinery with a warranty is more attractive to a potential bidder than an inoperable piece of machinery without one. Accordingly, Creditor\u2019s argument that the trial court erred in finding that the recycler was sold with a warranty also fails.\nTime and Manner of the Advertisements\nIn. addition to the insufficient content of the advertisements, Creditor\u2019s advertising effort was grossly inadequate and poorly timed.\nThough not defined in Article 9, a public sale or disposition \u201cis one at which the price is determined after the public has had a meaningful opportunity for competitive bidding.\u201d N.C. Gen. Stat. \u00a7 25-9-610 official cmt. 7 (emphasis added). \u201c \u2018Meaningful opportunity\u2019 is meant to imply that some form of advertisement or public notice must precede the sale (or other disposition) and that the public must have access to the sale[.]\u201d Id. In addition to these general requirements, \u201cthe method, manner, time, place, and other terms [of a public sale of collateral] must be commercially reasonable.\u201d N.C.G.S. \u00a7 25-9-610(b).\nThe recycler at issue in this case has a narrow commercial use, and as a result, the pool of bidders potentially interested in this equipment was necessarily limited from the outset. This fact was then inexplicably exacerbated by Creditor\u2019s decision to run advertisements for the auction in two general circulation newspapers just two days before and one day after the Christmas holiday. Obviously, scheduling a public auction for a highly specialized and expensive piece of inoperable machinery just two days after Christmas would almost certainly not enhance \u201ccompetitive bidding\u201d under N.C.G.S. \u00a7 25-9-610. Perhaps the best evidence of the result of Creditor\u2019s decision was that only one other person in addition to Creditor attended the auction.\nCreditor was not bound by law or agreement to hold the auction on such an inconvenient date. See N.C. Gen. Stat. \u00a7 25-9-610 official cmt. 3 (2007) (\u201cThis article does not specify a period within which a secured party must dispose of collateral.\u201d). Given the esoteric nature of the recycler and the fact that it was inoperable, Creditor should have chosen a more appropriate date of sale, and tried considerably harder to market the recycler by targeting legitimate prospective buyers. See, e.g., United States v. Conrad Pub. Co., 589 F.2d 949, 954 (8th Cir. 1978) (advertising insufficient where: printing equipment was not promoted in national or regional trade publications; bidders not given enough time to travel; invitations to bid not sent to potential publisher-bidders; and \u201c[o]nly two advertisements were placed in North Dakota newspapers\u201d). Although marketing defective equipment may often be more difficult than marketing functioning equipment, this is still no excuse for putting forth clandestine advertisements that are misleading, obtuse, and targeted to no one during the busiest holiday season of the year.\nTherefore, after examining \u201call the elements of the sale together\u201d in \u201clight of the relevant circumstances\u201d of this case, we believe there is sufficient competent evidence in support of the trial court\u2019s findings of fact and conclusion of law that Creditor\u2019s auction was not commercially reasonable. Don Jenkins & Son, 59 N.C. App. at 484, 297 S.E.2d at 411; Parks Chevrolet, Inc., 74 N.C. App. at 722, 329 S.E.2d at 730. These assignments of error are accordingly overruled.\nD. Recycler\u2019s Inoperable Status\nCreditor next argues that the recycler\u2019s inoperable status had no relevance as to the commercial reasonableness of the auction. However, Creditor failed to assign error to any part of the record as to this issue, and this argument is therefore abandoned. N.C. R. App. P. 28(b)(6).\nE. Auction Price and Resale\nCreditor contends that the recycler\u2019s auction price of $100,000 was an accurate valuation of the collateral. We do not agree.\nWe recognize \u201c[t]he fact that a greater amount could have been obtained\u201d by a disposition occurring \u201cat a different time or in a different method from that selected by the secured party is not of itself sufficient to preclude the secured party from establishing\u201d that the disposition \u201cwas made in a commercially reasonable manner.\u201d N.C.G.S. \u00a7 25-9-627(a). However, while this provision hinders \u201csecond-guessing\u201d the secured party subsequent to a sale of collateral, \u201cit does not give him unbridled discretion.\u201d Allis-Chalmers Corp. v. Davis, 37 N.C. App. 114, 118, 245 S.E.2d 566, 569 (1978) (applying former N.C.G.S. \u00a7 25-9-507(2)).\nThis Court has identified three factors to be considered in determining the commercial reasonableness of the resale price of collateral: \u201c(1) the price reflected by price handbooks, (2) the fair market value of the collateral, and (3) the price received on a second resale.[]\u201d Fritts v. Selvais, 103 N.C. App. 149, 152, 404 S.E.2d 505, 507 (1991) (citations omitted). \u201cWhile not itself sufficient to establish a violation[,] ... a low price suggests that a court should scrutinize carefully all aspects of a disposition to ensure that each aspect was commercially reasonable.\u201d N.C.G.S. \u00a7 25-9-627 official cmt. 2.\nSince Creditor offered no evidence of the recycler\u2019s price as reflected by price handbooks or fair market value at trial, we are left only with Debtor\u2019s purchase price of $225,000 and the recycler\u2019s second resale price of $190,000 to gauge the commercial reasonableness of the recycler\u2019s resale price at auction. Assuming that Creditor\u2019s estimated $65,000 engine repair cost was accurate, deducting this amount from the initial purchase price of $225,000 brings the estimated value of the recycler down to $160,000.\nAt trial, Mr. Mattocks cited mechanical \u201cunknowns\u201d as a possible source for the $60,000 discrepancy between the $160,000 estimated value of the inoperable recycler and Creditor\u2019s actual opening bid. However, even if \u201cunknown\u201d repairs would have actually cost $60,000, those repairs were apparently not a factor in Creditor\u2019s private sale in March 2008 where the recycler sold for $190,000. Under careful scrutiny, the gross disparity between the second resale private price and Creditor\u2019s winning bid, which was a direct result of commercially unreasonable advertising methods discussed supra, demonstrates that the auction price of the recycler was not reasonable. Therefore, there was competent evidence in support of the trial court\u2019s determination that the auction was commercially unreasonable. Brandt, 163 N.C. App. at 116, 593 S.E.2d at 408. These assignments of error are overruled.\nV.\nCreditor next argues that the trial court erred by not granting a deficiency judgment. We do not agree.\nWhen a secured party sues for a deficiency judgment and compliance with Part 6 is in issue, the secured party has the burden of proving that the disposition of the collateral was conducted in a commercially reasonable manner. See N.C.G.S. \u00a7 25-9-626(a)(2). We have already concluded that Creditor failed to meet this burden, and that the disposition of the recycler at auction was commercially unreasonable.\nIf a secured party does not prove the sale to be commercially reasonable, then\na deficiency is limited to an amount by which the sum of the secured obligation, expenses, and attorney\u2019s fees exceeds the greater of:\na. The proceeds of the collection, enforcement, disposition, or acceptance; or\nb. The amount of proceeds that would have been realized had the noncomplying secured party proceeded in accordance with the provisions of this Part relating to collection, enforcement, disposition, or acceptance.\nN.C.G.S. \u00a7 25-9-626(a)(3)(a)-(b). In other words, a presumption in favor of a debtor arises that a commercially reasonable disposition would have yielded a price equal to the debt plus expenses and attorney\u2019s fees, unless the creditor \u201cproves that the amount is less than that sum.\u201d N.C.G.S. \u00a7 25-9-626(a)(4) official cmt. 3 (\u201c[D]ebtor or obligor is to be credited with the greater of the actual proceeds of the disposition or the proceeds that would have been realized had the secured party complied with the relevant provisions.\u201d). \u201c[A] secured party may not recover any deficiency unless it meets this burden.\u201d N.C.G.S. \u00a7 25-9-626 official cmt. 3.\nUnder N.C.G.S. \u00a7 25-9-626, Creditor had the burden of proving that a commercially reasonable sale would have yielded a smaller amount than Debtor\u2019s outstanding debt at trial, and Creditor failed to establish any amount that could have been obtained from a commercially reasonable sale. Accordingly, the trial court properly concluded that the collateral was worth at least the amount of Debtor\u2019s debt, and that Creditor is entitled to no deficiency judgment. This assignment of error is overruled.\nVI.\nCreditor lastly contends that the trial court erred in ordering the costs of the action be taxed to Creditor. We do not agree.\nSection 6.1 of North Carolina\u2019s General Statutes \u201cestablishes'the general rule that costs may be allowed to the party in favor of whom judgment has been awarded.\u201d Cail v. Cerwin, 185 N.C. App. 176, 187, 648 S.E.2d 510, 517 (2007) (citations omitted). Here, the trial court explicitly ordered that Creditor \u201chave and recover nothing from [Debtor] . .. and that the costs of [the] action be taxed to [Creditor].\u201d There is nothing to suggest that the trial court lacked jurisdiction to issue such an order, and we find no reason to disturb the trial court\u2019s judgment. This assignment of error is overruled.\nAffirmed.\nChief Judge MARTIN and Judge STEPHENS concur.\n. Creditor\u2019s heading of this argument in its brief purports to tie the trial court\u2019s finding to commercial reasonableness.\n. Section 602 contains a list of sections within Article 9 that may not be waived or altered through agreement by the debtor or obligor. N.C. Gen. Stat. \u00a7 25-9-602 (2007). The content of an advertisement for a sale of collateral is not included within any of the listed sections. See id.\n. This requirement is contained in subsection (c)(iii) of section 9 of the security agreement.\n. Because the third factor requires this Court to examine Creditor\u2019s second, private resale of the recycler, we will not address Creditor\u2019s argument that the March 2008 resale of the recycler is not legally relevant.\n. This conclusion also disposes of Creditor\u2019s argument that auctioning the recycler at a different time or under other conditions would not have changed the outcome of the auction.", "type": "majority", "author": "HUNTER, JR., Robert N., Judge." } ], "attorneys": [ "Robert G. Qulia for plaintiff-appellant.", "Colombo, Kitchin, Dunn, Ball & Porter, LLP, by W. Walton Kitchin, for defendant-appellee." ], "corrections": "", "head_matter": "COMMERCIAL CREDIT GROUP, INC., Plaintiff v. LELAND BARBER, JR., individually and d/b/a B.M.E. RECYCLING, Defendant\nNo. COA09-42\n(Filed 15 September 2009)\n1. Uniform Commercial Code\u2014 resale of collateral \u2014 commercial reasonableness\nThe trial court did not err by concluding that the auction of a recycler was commercially unreasonable because the creditor was not entitled to a presumption of commercial reasonableness under N.C.G.S. \u00a7 25-9-626(a)(l) and the gross disparity between the second resale private price and the creditor\u2019s winning bid, which was a direct result of commercially unreasonable advertising methods, demonstrated that the auction price of the recycler was not reasonable.\n2. Uniform Commercial Code\u2014 resale of collateral \u2014 deficiency judgment\nThe trial court did not err by failing to grant a deficiency judgment because the creditor failed to establish any amount that could have been obtained from a commercially reasonable sale of the collateral, and thus, the trial court properly concluded that the collateral was worth at least the amount of the debtor\u2019s debt.\n3. Costs\u2014 taxed to creditor \u2014 jurisdiction\nThe trial court did not err by ordering the costs of the action be taxed to the creditor because judgment was \u00e9ntered in favor of the debtor and the trial court had jurisdiction to issue the order.\nAppea\u00ed'by plaintiff from judgment entered 24 September 2008 by Judge W. Russell Duke, Jr., in Pitt County Superior Court. Heard in the Court of Appeals 18 May 2009.\nRobert G. Qulia for plaintiff-appellant.\nColombo, Kitchin, Dunn, Ball & Porter, LLP, by W. Walton Kitchin, for defendant-appellee." }, "file_name": "0731-01", "first_page_order": 757, "last_page_order": 769 }