Hutzenbiler v. RJC Investment

Charlene Hutzenbiler (plaintiff) entered into an installment sale contract and security agreement with Cherry Creek Development, Inc. (Cherry Creek) to purchase a mobile home. Cherry Creek retained a security interest in the mobile home to secure Hutzenbiler’s payment obligations. Hutzenbiler agreed to monthly payments and to late fees for any payments more than five days past due. Cherry Creek assigned Hutzenbiler’s contract to its parent company, RJC Investment, Inc. (RJC) (defendant). Hutzenbiler vacated the mobile home and allowed RJC to possess it, signing a full release of contract and relinquishing all rights to the property. At the time of the release, Hutzenbiler still owed over $30,000 under the contract. RJC resold the home without notice to Hutzenbiler. Hutzenbiler hired an attorney and requested an accounting on the sale, but RJC did not provide one. RJC did not refund any surplus to Hutzenbiler, claiming that none was owed. Hutzenbiler sued RJC in Montana state court on Uniform Commercial Code (UCC) grounds for failing to provide an accounting of the home’s resale and failing to pay her the surplus proceeds of the sale. The trial court granted summary judgment in favor of RJC, finding that the signed release severed all security interests created by the original contract and that the UCC did not apply. The court also ruled that even if the UCC applied, the release constituted full satisfaction of Hutzenbiler and RJC’s contractual obligations as strict foreclosure. The court did not determine whether Hutzenbiler was in default on her loan. Hutzenbiler appealed to the Montana Supreme Court.