Ford Motor Credit Co. v. Welch

861 A.2d 1126 (2004)

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Ford Motor Credit Co. v. Welch

Vermont Supreme Court
861 A.2d 1126 (2004)

Facts

Matthew Welch (defendant) financed the purchase of an automobile through Ford Motor Credit Company (Ford) (plaintiff) and gave Ford a security interest in the automobile. In June 2001, Welch defaulted on his payment obligations and voluntarily surrendered the automobile to Ford. Thereafter, Ford sold the automobile at a private auction for less than Welch’s debt and credited the sale proceeds to Welch’s indebtedness. In June 2003, Ford sued Welch to recover the deficiency. At trial, Ford offered the testimony of the records custodian for its New Hampshire office to show that its South Carolina office sent Welch a notice of Welch’s right to redeem the automobile before the private action. The records custodian testified that Ford’s standard practice was to prepare and send a notice of the redemption right whenever Ford repossessed a vehicle. However, the records custodian was unable to testify regarding the South Carolina office’s procedures or the notice in question. Ford apparently had not sent the notice return receipt requested. Accordingly, Ford entered into evidence an unsigned copy of the notice with no indication as to whether the notice had been mailed. Conversely, Welch testified that he had not received the notice. The trial court found that Ford had failed to prove that it had sent and that Welch had received notice of the right to redemption. Thus, the trial court ruled that Ford was barred from recovering the deficiency. Ford appealed and argued that the trial court’s findings improperly focused on Welch’s receiving of the notice instead of Ford’s sending of the notice per the contract and were contrary to the weight of the evidence. Ford further argued that the revisions to Uniform Commercial Code (UCC) Article 9 effective July 2001 created a rebuttable presumption that entitled a noncomplying secured creditor to recover a deficiency under limited circumstances and that the notice requirement should be deemed waived because Welch had voluntarily surrendered the automobile.

Rule of Law

Issue

Holding and Reasoning (Dooley, Johnson, Skoglund, and Reiber, J.J.)

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