Perez-Medina v. First Team Auction, Inc.

426 S.E. 2d 397 (1992)

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Perez-Medina v. First Team Auction, Inc.

Georgia Court of Appeals
426 S.E. 2d 397 (1992)

  • Written by Mike Begovic, JD

Facts

Perez-Medina (plaintiff) bought a tractor at an auction for $66,500. At the auction, Perez-Medina met Julio Lara, who had also been bidding on the tractor. Perez-Medina and Lara met again at a second auction, at which the two agreed that Lara would install certain equipment on the tractor. With Perez-Medina’s permission, Lara took the tractor to his shop to install the equipment. Four months later, Perez-Medina visited Lara’s shop and paid him $10,000 to install the equipment. According to Perez-Medina, Lara’s place of business appeared to be a repair shop rather than a shop dealing in heavy equipment. However, Lara regularly bought and sold heavy equipment such as tractors. Without Perez-Medina’s knowledge or consent, Lara put the tractor up for sale at an auction conducted by First Team Auction (First Team) (defendant). In doing so, Lara represented that he owned the tractor free and clear of any liens. After the auction resulted in no bids, Lara sold the tractor to First Team for $54,000. Perez-Medina filed a suit against First Team. A trial court sided with First Team, based on Official Code of Georgia Annotated (O.C.G.A.) § 11-2-403 (the entrusting statute), which protected the possession rights of buyers who purchased goods from merchants. The trial court found that because Lara was a merchant and First Team was a buyer in the course of ordinary business, Perez-Medina had legally entrusted the tractor to Lara, and consequently, First Team had legal title. Perez-Medina appealed, arguing that Lara was not a merchant under the entrusting statute.

Rule of Law

Issue

Holding and Reasoning (Andrews, J.)

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