ÿWPCg …# VUNa %¯ 0(µBÝU: w@Y 4™ ­ ¼ bÄ 0JÌ 0T 0^j 0hÈ 0r0 0|¢ 0† 0¤ 1u4 U,© 0dÕ U,9U>e B£B)ÀDCé AM,U*y D3£õÖfË 0@1v~qvÓï AOÂÆ 0D× D/ BJ˜HP LaserJet 4Si/4SiMX PS 600dpiPSCRIPTÀÌÀääÀÀÌ0 (ÖÃ9 Z ‹6Times New Roman RegularX($¡¡C:\WPWIN60\TEMPLATE\STANDARD.WPT<þ6X9`("Courier NewTT `[aDbcDdDeUfUghÓ€rGav <3|xr- ù-2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)< Œ 9p`(ModernP ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(Monaco< Œ 9p`(&Times New Roman d% Line 7 d&&&&7Border 1dd€-'Cþÿ << Gÿÿ< Œ 9p`(Arial%%%%'ÿÿdxd ëÝ ƒ!ÝÔ€ÔÔ€$ÔÝ  ÝÔ€)ÔÔ€)ÔÓ  Óò òÔ YYY ÔFILEDÔ€)XÔÌÌApril€10,€1996ÌÌCecil€W.€CrowsonÌAppellate€Court€ClerkÔ  Ôó ó \Ñ\R AØ'\Ñ("ÿÿ$££Ò  ÒÒ  ÒPtPtHHÚ(ÿáÿâùFG(üHHÚ(d'@Styl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑMonacoÑÑ ÑÒ  BA:Op Monaco ÒÒ  BA:Op Monaco Ò€-‚ƒCþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5($$””ò òÚ  Ú1Ú  Úó ó„„'÷ÿ dxdüÿP PdÝ ƒ!ÝÔ . ÔÔ€ÔÓ&€##X„d&ÓÑ#€##Xd#ÑÔ€$ÔÝ  ÝÓ ` ܆XœÈ“X ÓÑ\R AØ'\ÑÔ€Ô›œNATIONSBANK,›à àà àà àà à)Ìà àà àà àà àà àà à)ÌÓ#` Ü‚Xœôx‘X#Óà àPlaintiff/Appellant,à à)à àAppeal€No.Ìà àà à)à à01„A„01„9510„CH„00469Ìv.à àà à)Ìà àà à)à àDavidson€ChanceryÌFREDERICK€N.€CLEGG,€SR.,à à)à àNo.€94„461„II(III)ÌÙ€€ÙœßL€(+';+'h|i9` ç `€€Lß›à àà à)Ìà àDefendant/Appellee.à à)ÌÌÌÌÌÌÓ  ÓÔ€¼ÔCOURT€OF€APPEALS€OF€TENNESSEEÌÌMIDDLE€SECTION€AT€NASHVILLEÌÌÌÌAPPEAL€FROM€THE€CHANCERY€COURT€FOR€DAVIDSON€COUNTYÌÌAT€NASHVILLE,€TENNESSEEÌÌÌÌTHE€HONORABLE€ROBERT€S.€BRANDT,€CHANCELLORÌÓ ` Ü‚XœÈ“X ÓÌÌÓ  ÓÌÌÔ€XÔRON€CUNNINGHAMÌP.€O.€Box€1ÌKnoxville,€Tennessee€37901Ìà àATTORNEY€FOR€PLAINTIFF/APPELLANTÌÌÌÌBRADLEY€A.€WILSONÌParkway€Towers,€Suite€1400Ì404€James€Robertson€ParkwayÌNashville,€Tennessee€37219Ìà àATTORNEY€FOR€DEFENDANT/APPELLEEÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÓ  ÓAFFIRMED€AND€REMANDEDÌÌÌÌÌÌÓ  ÓÔ€¼ÔSAMUEL€L.€LEWIS,€JUDGEÔ€XÔÌÑ7€8XXdìXXdì7ÑÑ€ ÑÓÓÓ  Ӝ̛à@ àÔ€ŠÔò òOPINIONó óÌÔ€XÔÌÓ  Óà àOn€February€16,€1994,€Nationsbank€sued€the€Appellee,ÏFrederick€Clegg,€for€a€deficiency€resulting€from€the€sale€ofÏcollateral€used€in€an€installment€loan.€€The€chancery€courtÏconcluded€that€Nationsbank€did€not€dispose€of€the€collateral€in€aÏcommercially€reasonable€manner,€and€denied€it€recovery.€€ÌÌà àOn€May€7,€1990,€Mr.€Clegg€bought€a€new€1990€Volkswagen€from€aÏNashville€car€dealer€and€financed€$14,839.00€of€the€$18,459.00Ïpurchase€price€with€Sovran€Bank.€In€February€of€1992,€while€stillÏcurrent€on€his€obligation,€Mr.€Clegg€contacted€Sovran€to€informÏthem€that€he€no€longer€could€make€the€monthly€payments€and€wishedÏto€surrender€the€collateral.€€Mr.€Clegg€also€volunteered€toÏdeliver€the€vehicle€to€his€lender.€€Sovran€Bank€informed€Mr.€CleggÏthat€it€would€retrieve€the€vehicle€itself€in€accord€with€its€ownÏinternal€procedures€for€repossession,€and€that€he€was€not€toÍdeliver€the€car€to€them.€€€ÌÌà àSovran€Bank€never€recovered€the€vehicle.€€The€car€satÏundriven,€at€Mr.€Clegg's€daughter's€home€in€Rutherford€County,ÏTennessee,€for€more€than€thirteen€months.€€During€the€time€the€carÏlay€idle€two€events€transpired:€Mr.€Clegg€moved€to€Kansas;€andÏSovran€Bank€merged€with€another€institution€to€become€Nationsbank.€ÏPrior€to€leaving€Tennessee€Mr.€Clegg€informed€Sovran€Bank€of€hisÏnew€address.€ÌÌà àOn€March€11,€1993,€Nationsbank€repossessed€the€unusedÏvehicle.€€(In€oral€argument€Nationsbank€claimed€the€delay€wasÏcaused€by€"bureaucratic€snafus"€associated€with€the€merger.)€€OnÏMarch€30,€1993,€Mr.€Clegg€received€a€certified€letter€in€KansasÏfrom€Nationsbank€in€North€Carolina.€€The€letter,€dated€March€16,Ï1993,€informed€Mr.€Clegg€that€the€car€would€be€sold€unless€he€Ìcontacted€the€bank€within€10€days€of€March€16,€or€March€26.€€Mr.ÏClegg€phoned€Nationsbank€regarding€the€letter€on€March€31€and€wasÏinformed€that€the€car€had€been€sold.€ÌÌà àIn€its€brief€and€argument€the€Appellant€argued€that€theÏletter€sent€to€Mr.€Clegg€in€Kansas€was€initially€received€by€himÏon€March€23.€€The€Court€of€Appeals€reviews€findings€of€facts€madeÏby€trial€courts€sitting€without€juries€"de€novo€upon€the€record€ofÏthe€trial€court,€accompanied€by€a€presumption€of€correctness€ofÏthe€finding€unless€the€preponderance€of€the€evidence€isÍotherwise."€€òòTenn.€R.€App.€P.óó€13(d).€€After€reviewing€the€recordÏthis€Court€cannot€find€any€evidence€in€the€record€which€supportsÏthe€Appellants€assertion€that€the€letter€was€received€on€March€23,Ï1993,€and€not€March€30,€1993,€as€the€Chancery€Court€concluded.ÏThus,€we€accept€the€trial€courtððs€finding€of€fact€on€this€issue€asÏthe€preponderance€of€the€evidence€is€not€otherwise.€€€€€ÌÌÌÌà@ àòòAnalysisóóÌÌÌÌà àThis€suit€is€governed€by€Chapter€9€of€Tennesseeððs€UniformÏCommercial€Code,€which€applies€to€any€transaction€designed€toÏcreate€a€security€interest€in€personal€property.€€In€this€case€aÏlender€sought€a€deficiency€judgment€after€repossessing€collateralÏwhich€secured€a€loan€used€to€acquire€a€car.€€Deficiency€judgmentsÏgenerally€seek€damages€measured€by€the€difference€between€theÏoutstanding€loan€balance€and€the€resale€price€after€repossession.€€Ìà àà àà àòòTenn.€Code€Ann.óó€ðð€47„9„503€states€in€relevant€part:ÌÌà8 àUnless€otherwise€agreed€a€secured€party€has€on€defaultÏthe€right€to€take€possession€of€the€collateral.€.€.€.ÌÌà àòòTenn.€Code€Ann.óó€ðð€47„9„504(1)€states€in€relevant€part:ÌÌà8 àA€secured€party€after€default€may€sell,€lease€orÏotherwise€dispose€of€any€or€all€of€the€collateral€in€itsÏthen€condition€or€following€any€commercially€reasonableÏpreparation€or€processing.€.€.€.€€ÌÌòòà àóóThe€Uniform€Commercial€Code€does€not€define€"default."€€InÏthe€absence€of€a€definition€in€the€security€agreement,€the€termÏ"default"€has€been€given€the€ordinary€meaning€of€failure€to€pay.€ÏòòJefferds€v.€Ellis,óó€486€N.Y.S.2d€649,€655€(N.Y.Sup.Ct.€1985).ÏòòMobile€Discount€Corp.€v.€Price,€óó656€P.2d€851,852,€35€UCC€Rep.ÏServ.€850.€€What€constitutes€default€may€also€be€determined€by€theÏobligation€imposed€by€the€security€agreement,€a€breach€of€whichÏconstitutes€default.€òòBarsco,€Inc.€v.€H.W.W.€Inc.,€óó346€So.2dÏ134,135€(Fla.Dist.Ct.App.D1€1977).€€Although€the€securityÏagreement€between€the€parties€on€appeal€was€not€in€the€technicalÏrecord,€Mr.€Clegg€was€most€likely€in€default€when€he€failed€to€payÏa€monthly€installment€for€his€vehicle,€most€likely€in€March€ofÏ1992.€€€€ÌÌà àUnlike€most€debtors€in€default,€Mr.€Clegg€offered€to€deliverÏthe€collateral€to€the€secured€party€prior€to€going€into€default.€ÏWhen€the€collateral€has€been€voluntarily€surrendered€to€theÏcreditor€after€default€the€debtorððs€right€to€possession€ceases,Ïunless€he€later€chooses€to€redeem€the€property.€òò€See€Cordova€v.ÏLee€Galles€Oldsmobile,€Inc.€óó668€P.2d€320,322,€36€UCC€Rep.€Serv.Í1456€(N.M.Ct.App.€1993).€€However,€simply€because€the€debtorÏvoluntarily€surrenders€the€collateral€does€not€remove€theÏtransaction€from€the€operation€of€the€Uniform€Commercial€Code.€òòÏTajalli€v.€Gharibi,€óó758€P.2d€190,191€(Colo.€Ct.€App.€1988).€€MostÏimportantly,€the€fact€that€the€surrender€of€the€collateral€isÏvoluntary€does€not€alter€the€character€of€the€transaction€as€aÏrepossession€of€collateral.€€òòId.€Accord€Linberg€v.€WillistonÏIndustrial€Supply€Corp.óó,€411€N.W.2d€368,372,€4€UCC€Rep.€Serv.€2dÏ739€(N.D.€1987).€€Of€course,€a€secured€creditor€is€not€required€toÏrepossess€upon€default;€he€may€refuse€surrender€and€sue€for€theÏdebt.€€òòTenn.€Code€Ann.óó€ðð€47„9„501.€€However,€if€he€chooses€toÏrepossess,€he€is€bound€by€the€provisions€of€the€statutes€regardingÏrepossession.€€òòTenn.€Code€Ann.óó€ðððð€47„9„501,€47„9„503,€47„9„504.ÌÌà àòòTenn.€Code€Ann.€óóðð€47„9„207(1)€requires€the€secured€party,Ïboth€before€and€after€default€to€use€"reasonable€care€in€custodyÏand€preservation"€of€collateral.€€The€determination€of€who€hasÏpossession€of€the€collateral€with€regard€to€òòTenn.€Code€Ann.€óóðð€47„9„207€is€one€of€fact.€òò€E.g.,€First€Natððl€Bank€v.€Milford,óó€718€P.2dÏ1291,€1296€(Kan.€1986).€€Strict€physical€possession€is€notÏrequired,€and€the€obligation€found€in€òòTenn.€Code€Ann.óó€ðð€47„9„207Ïhas€been€imposed€if€the€secured€party€merely€has€constructiveÏpossession€of€the€collateral.€òò€See€The€Bank€of€Josephine€v.€Conn.,Ïóó599€S.W.2d€773,774€(Ky.Ct.€App.€1980).€€Possession€has€beenÏdescribed€as€including€"the€right€to€control€goods€in€the€physicalÏpossession€of€another."€€òòIn€Re€Aultóó,€6€Bankr.€58,€65,€(Bankr.€E.D.ÍTenn.€1980).€Ì€Ìà àIn€òòFirst€Natððl€Bank€v.€Helwigóó,€the€court€found€constructiveÏpossession€of€the€collateral€where€the€secured€party€did€not€takeÏphysical€possession€after€the€debtor€"agreed€to€turn€over"Ïmortgaged€inventory€and€equipment€to€the€bank.€€òòSeeóó€464€S.W.2dÑ€,ÑÇ953,954„5€(Texas€Civ.€App.€1971).€€Thereafter,€the€plant€housingÏthe€collateral€was€damaged€by€fire.€€The€Court€held€that€the€bankÏhad€sufficient€control€at€the€time€of€the€loss€so€as€to€constituteÏ"possession."€€òòId.óó€at€955.€€ÌÌà àAfter€reviewing€these€authorities€we€conclude€that€the€twoÏbanks€in€this€case€had€sufficient€"right€to€control"€of€the€carÏafter€Mr.€Cleggððs€default€to€constitute€constructive€possessionÏsince€they€could€have€retrieved€the€vehicle€at€any€time.€€Also,Ïthe€car€was€in€close€geographic€proximity€to€the€secured€partiesÏat€all€times€after€default,€and€the€record€contains€no€evidenceÏwhich€suggests€the€secured€parties€experienced€any€hardship€orÏdifficulty€in€recovering€the€collateral.€€€€€€ÌÌà àòòTenn.€Code€Ann.óó€ðð€47„9„504(3)€states€in€relevant€part:Ì€Ìà8 àDisposition€of€the€collateral€may€be€by€public€orÏprivate€proceedings€and€may€be€made€by€way€of€(1)€orÏmore€contracts.€€Sale€or€other€disposition€may€be€as€aÏunit€or€in€parcels€and€at€any€time€and€place€and€on€anyÏterms€but€every€aspect€of€the€disposition€including€theÏmethod,€manner,€time,€place€and€terms€must€beÏcommercially€reasonable.€.€.€.ÌÌÌà àTo€determine€whether€this€sale€was€commercially€reasonableÍthis€Court€must€consider€whether€the€disposition€is€in€keepingÏwith€prevailing€trade€practices€among€reputable€firms€engaged€inÏsimilar€business€activities.€€òòAmerican€City€Bank€of€Tullahoma€v.ÏWestern€Auto€Supply.,€óó631€S.W.2d€410,421€(Tenn.€App.€1981);ÏòòMallicoat€v.€Volunteer€Finance€&€Loan€Corp.óó,€415€S.W.2d€347,350Ï(Tenn.€App.€1966).€ÌÌà àOf€concern€to€this€Court€is€the€fact€that€the€secured€partiesÏin€this€instance€permitted€an€automobile€to€sit€idly€for€over€13Ïmonths€after€default.€€The€UCC€does€not€state€particular€timeÏlimits€for€a€secured€party€to€take€possession€of€the€collateral,Ïor€to€proceed€with€a€sale€following€the€taking€of€possession.€€TheÏdetermination€of€whether€delay€is€commercially€unreasonableÏrequires€a€consideration€of€all€surrounding€circumstances,Ïincluding€market€conditions,€the€possible€physical€deteriorationÏof€the€collateral,€its€economic€deterioration€throughÏobsolescence,€and€the€time€required€to€assemble€the€collateral€andÏprepare€it€for€sale.€€òòErickson€v.€Marshall,óó€771€P.2d€68,70,€9€UCCÏRep.€Serv.€2d€418€(Idaho€Ct.€App.€1989).€€ÌÌà àThe€policy€of€the€Uniform€Commercial€Code,€as€to€theÏdisposition€of€collateral,€is€to€balance€and€protect€the€rights€ofÏboth€debtor€and€creditor,€while€maximizing€the€recovery€fromÏdisposition€of€the€collateral€for€the€benefit€of€all€parties.€òò€SeeóóÏòòBryant€v.€American€Natððl€Bank€&€Trust€Co.,óó€407€F.Supp.€360,364,€19ÏUCC€Rep.€Serv.€1217€(N.D.€Ill.€1976).€€òòSee€also€In€re€Zsa€ZsaÍLtd.,€óó352€F.Supp.€665,€671€(S.D.N.Y.€1972).€ÌÌà àWe€have€found€no€evidence€in€the€record,€or€other€authorityÏwhich€indicates€that€the€13€month€delay€in€selling€the€automobile,Ïa€depreciating€asset,€is€"in€keeping€with€the€prevailing€tradeÏpractices€among€reputable€firms€engaged€in€similar€businessÏactivities,"€in€Tennessee.€€Thus,€the€delay€appears€unreasonableÏto€this€Court.€òò€See€Moran€v.€Holman,€óó514€P.2d€817,820€(AlaskaÏ1973)(a€motor€vehicle€is€a€depreciating€asset€and€a€secured€partyÏwho€has€taken€possession€cannot€wait€an€inordinate€period€and€thenÏelect€to€sue€for€the€full€amount).€òò€See€also€Mackóó€òòFinancial€Corp.,Ïv.€Scott,€óó606€P.2d€993,997€(Idaho€1980)(unexcused€delay€of€nearlyÏ2€years€between€the€secured€partyððs€repossession€of€trucks€and€itsÏsale€at€public€auction€resulted€in€a€reduced€price€as€aÏconsequence€of€depreciation€and€constituted€a€commerciallyÏunreasonable€disposition€of€the€collateral).€€ÌÌà àIn€exercising€its€rights€upon€default,€Nationsbank€is€boundÏby€the€good€faith€requirement€applicable€throughout€the€UniformÏCommercial€Code.€€òòTenn.€Code€Ann.óó€ðð€47„1„203.€€òòAmerican€City€BankÏof€Tullahoma€v.€Western€Auto€Supply.,€óó631€S.W.2d€410,420€(Tenn.ÏApp.€1981).€€The€obligation€of€good€faith€required€the€securedÏœparties€in€this€instance€to›€have€sold€the€car€with€greater€haste.€ÏThat€the€lender€here€was€engaged€in€a€merger€does€not€absolve€itÏfrom€being€responsible€for€maximizing€the€recovery€from€the€saleÏof€the€car€at€auction.€€Mr.€Clegg,€the€debtor€here,€should€notÍhave€to€pay€a€greater€deficiency€judgment€because€his€lenderÏdelays€in€retrieving€the€depreciating€collateral€due€to€its€mergerÏwith€another€bank.ÌÌÌà àòòTenn.€Code€Annóó.€ðð€47„9„504(3)€also€states€in€part:ÌÌà8 à.€.€.€€Unless€the€collateral€is€perishable€or€threatensÏto€decline€speedily€in€value€or€is€a€type€customarilyÏsold€on€a€recognized€market,€reasonable€notification€ofÏthe€time€and€place€of€any€public€sale€or€reasonableÏnotification€of€the€time€after€which€any€private€sale€orÏother€intended€disposition€is€to€be€made€shall€be€sentÏby€the€secured€party€to€the€debtor,€if€he€has€not€signedÏafter€default€a€statement€renouncing€or€modifying€hisÏright€to€notification€of€sale.€.€.€.€ÌÌà àFor€Uniform€Commercial€Code€purposes,€a€used€automobile€isÏnot€considered€perishable,€nor€the€type€of€collateral€whichÏdeclines€speedily€in€value.€òò€Wheeless€v.€Eudora€Bank,óó€509€S.W.2dÏ532,534€(Ark.€1974).€€In€1966€the€Arkansas€Supreme€Court€decidedÏòòNorton€v.€National€Bank€of€Commerceóó,€a€case€which€stood€for€theÏproposition€that€used€cars€are€not€the€type€of€collateralÏcustomarily€sold€on€a€recognized€market.€€398€S.W.2d€538€(Ark.Ï1966).€òò€See€also€Bob€Bales€Ford,€Inc.€v.€Martin,óó€31€UCC€Rep.€Serv.Ï789,791€(Tenn.App.€1981).€€In€òòNortonóó,€a€car€dealer€sold€a€vehicleÍto€a€consumer€and€assigned€the€contract€to€the€creditor€bank.€ÏAfter€default€the€bank€repossessed€the€car,€sold€it€at€privateÏsale€without€notice€to€either€Norton€or€the€consumer,€and€suedÏNorton€for€the€deficiency.€€The€Court€denied€that€a€used€car€wasÏthe€type€of€collateral€customarily€sold€on€a€recognized€market,Ïstating:ÌÌà8 àWe€cannot€approve€the€bankððs€contention€that€a€used€carÏfalls€in€this€category.€€Obviously€the€Code€dispensesÏwith€notice€in€this€situation€only€because€the€debtorÏwould€not€be€prejudiced€by€want€of€notice.€€Thus€aÏ"recognized€market"€might€well€be€a€stock€market€or€aÏcommodity€market,€where€sales€involve€many€items€soÏsimilar€that€individual€differences€are€nonexistent€orÏimmaterial,€where€haggling€and€competitive€bidding€areÏnot€primary€factors€in€each€sale,€and€where€the€pricesÏpaid€in€actual€sales€of€comparable€property€areÏcurrently€available€by€quotation.€.€.€.€What€one€1957ÏOldsmobile€sells€for€does€not€fix€the€amount€a€differentÏone€may€be€expected€to€bring.€€ÌÌà àòòId.€óóat€540.ÌòòÌóóÌà àIn€fact,€the€recognized€market€exception€has€been€interpretedÏvery€narrowly.€€Stock,€bond,€and€commodities€exchanges€areÍvirtually€the€only€markets€deemed€to€receive€"recognized€market"Ïtreatment.€€òòSee€Kitmitto€v.€First€Pa.€Bank,€N.A.,€óó518€F.Supp.Ï297,302€(E.D.€Pa.€1981)(privately€held€stock);€€òòSee€Bankers€TrustÏCo.€v.€J.V.Dowler€&€Co.,€óó390€N.E.2d€766,769€(N.Y.€App.€Div.Ï1979)(municipal€bonds).€€Because€the€collateral€involved€in€thisÏappeal€is€not€perishable,€not€likely€to€decline€speedily€in€value,Ïnor€a€type€of€collateral€sold€on€a€recognized€market,€notice€wasÏrequired.€€€€ÌÌà àThe€purpose€of€notice€is€to€enable€the€debtor€to€"protect€hisÏinterest€in€the€property€by€paying€the€debt,€finding€a€buyer€orÏbeing€present€at€the€sale€to€bid€on€the€property€or€have€others€doÏso,€to€the€end€that€it€be€not€sacrificed€by€a€sale€at€less€thanÏits€true€value."€€òòMallicoat€v.€Volunteer€Finance€&€Loan€Corp.óó,€415ÏS.W.2d€347,350€(Tenn.€App.€1966).€€Notice€also€provides€the€debtorÏwith€an€opportunity€to€seek€a€judicial€injunction€if€it€objects€toÏthe€form€of€the€sale.€€Lastly,€a€notified€debtor€can€attend€theÏdisposition€and€testify€later€if€litigation€ensues.€€The€failureÏto€provide€proper€notice€can€have€significant€consequences€on€aÏsecured€party,€including€the€award€of€damages€to€the€creditor€andÏthe€impairment€of€the€right€to€recover€a€deficiency€judgment.€ÌÌà àWhether€the€notice€given€by€the€creditor€is€sufficient€is€aÏquestion€for€the€trier€of€fact€(òòMcCoy€v.€American€Fidelity€Bank€&ÏTrust€Co.,óó€715€S.W.2d€228,231€(Ky.€1986),€with€the€secured€partyÏbearing€the€burden€of€proof€of€proving€this,€and€all€elements€ofÍthe€commercially€reasonable€sale.€òò€Mallicoat€v.€Volunteer€Fin.&ÏLoan€Corp.,óó€415€S.W.2d€347€(Tenn.€App.€1966);€òòInvestors€AcceptanceÏCo.€of€Livingston,€Inc.€v.€James€Talcott,€Inc.,óó€454€S.W.2d€130,140Ï(Tenn.€App.€1969);€òòCullum€&€Maxey€Camping€Center,€Inc.óó€òòv.€Adams,Ïóó640€S.W.2d€22,25€(Tenn.€App.€1982).€€òò€óó€ÌÌà àWith€regard€to€timing,€the€Code€does€not€define€"reasonableÏnotification"€but€Official€Comment€5€of€òòTenn.€Code€Ann.óó€ðð€47„9„504(3)€provides€that€at€a€minimum€[notice]€must€be€sent€in€suchÏtime€that€persons€entitled€to€receive€it€will€have€sufficient€timeÏto€take€appropriate€steps€to€protect€their€interests€by€takingÏpart€in€the€sale€or€other€disposition€if€they€so€desire.€€NotÏsurprisingly,€notice€provided€after€the€sale€is€not€consideredÏvalid.€€òòWells€v.€Central€Bank,€N.A.,óó€347€So.2d€114,119€(Ala.€Civ.ÏApp.€1977);€First€State€Bank€v.€Northrop,€519€S.W.2d€161,162€(Tex.ÏCiv.€App.€1975).€€However,€the€creditor€will€not€forced€to€takeÏresponsibility€for€lost€mail€or€the€debtorððs€refusal€to€acceptÏproperly€delivered€œmail.€€òòSeeóó›€òòFirst€Natððl€Bank€&€Trust€Co.€ofÏLincoln€v.€Hermann,€óó286€N.W.2d€750€(Neb.€1980),€28€UCC€Rep.€Serv.Ï604,€607€òòquoting€óóWhite€and€Summers,òò€Uniform€Commercial€Code€óóðð€26„10€p.€984„5.€ÌÌà àIn€òòMallicoat€v.€Volunteer€Fin.&€Loan€Corp.,€óóthe€EasternÏSection€of€this€Court€held€that€the€requirement€of€notice€ofÏpublic€sale€was€not€satisfied€where€the€creditor€sent€notice€byÏregistered€mail,€but€was€aware€that€the€debtor€had€not€receivedÍnotice€since€the€letter€was€returned.€€415€S.W.2d€347€(Tenn.€App.Ï1966).€€Additionally,€the€debtor€lived€in€the€creditorððs€city€andÏthe€creditor€had€information€as€to€where€the€debtor€was€employedÏbut€made€no€further€effort€to€comply€with€the€notice€requirement.€ÏHere,€Nationsbank€sent€notice€of€the€public€sale€of€the€collateralÏto€Mr.€Clegg€dated€March€16,€1993,€informing€him€that€theÏdisposition€would€take€place€within€10€days.€€Mr.€Clegg€receivedÏthe€notice€on€March€30,€1993,€and€phoned€Nationsbank€the€followingÏday,€only€to€be€told€that€the€collateral€had€been€sold.€€Ìà àNationsbank€did€not€provide€Mr.€Clegg€with€sufficient€time€toÏtake€the€steps€he€could€have€to€protect€himself€in€the€sale€ofÏwhat€formerly€was€his€car.€€Mr.€Clegg€is€entitled€to€more€than€oneÏday€of€notice€of€the€pending€auction.€€In€this€instanceÏNationsbank€only€made€one€attempt€at€informing€Mr.€Clegg€of€theÏsale€and€was€unaware€of€whether€that€notice€had€been€received.€€ÌœÌà àWhile›€absolute€proof€of€receipt€of€notice€may€not€be€requiredÏin€every€instance,€a€creditor,€who€only€makes€one€attempt€toÏcontact€the€debtor,€and€is€left€uncertain€of€receipt€of€theÏnotice,€has€not€fulfilled€its€obligation€to€the€debtor€when€itÏproceeds€with€a€disposition€less€than€two€weeks€from€mailing€itsÏfirst€notice.€€€ÌÌÌÌÌà@ àòòConclusionÌÌÌà àóóThe€notice€sent€to€Mr.€Clegg,€the€debtor,€was€not€sufficientÏand€the€sale€of€the€collateral€was€not€effected€in€a€commerciallyÏreasonable€manner.€€We€therefore€affirm€the€decision€of€theÏchancery€court€in€denying€Nationsbankððs€request€for€a€deficiencyÏjudgment.€€Costs€on€appeal€are€taxed€to€the€Appellant€and€the€œcaseÏis›€remanded€to€the€chancery€court€for€any€further€proceedingsÏnecessary.€€€€€€€Ì€Ìà àà àÌÓÓà àà à________________________________Ìà àà àSAMUEL€L.€LEWIS,€J.ÌÌÌÌœÌÌÌÌÌÌÌÌÌÌÌÌÌÌCONCUR:›ÌÌÌÌ_______________________________ÌHENRY€F.€TODD,€P.J.,€M.S.ÌÌÌÌ_______________________________ÌBEN€H.€CANTRELL,€J.ÌÔ€ôÔœ›