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ROBINSON v. FORD MOTOR CREDIT CO.

February 3, 1989

THEADORE J. ROBINSON, JR., Plaintiff,
v.
FORD MOTOR CREDIT COMPANY, Defendant


Ilana Diamond Rovner, United States District Judge.


The opinion of the court was delivered by: ROVNER

I. INTRODUCTION

 ILANA DIAMOND ROVNER, UNITED STATES DISTRICT JUDGE

 This action concerns issues of Illinois law relating to the sale of collateral by a secured party. Plaintiff Theadore J. Robinson, Jr. ("Robinson") filed his Amended Complaint in this action on February 16, 1988 seeking recovery of compensatory and punitive damages and costs against defendant Ford Motor Credit, Inc. ("FMC") because FMC allegedly sold plaintiff's car at a private sale without notice to plaintiff in violation of the Uniform Commercial Code ("U.C.C."). Ill. Rev. Stat., ch. 26, para. 9-504(3). In its motion to dismiss, FMC attached exhibits indicating that FMC had sent Robinson notice that his car could be sold on or after May 29, 1987 by private sale. The Court converted FMC's motion into a motion for summary judgment on the issue of whether Robinson had received "reasonable notification" under the U.C.C. and allowed both parties the opportunity to submit additional materials and affidavits in support of their respective positions. *fn1" Presently pending before the Court is FMC's motion for summary judgment. For the reasons discussed below, FMC's motion for summary judgment is granted.

 II. FACTS

 The following facts are not in dispute. On April 21, 1986, Robinson entered into a security agreement with FMC for the purchase of a 1986 Ford Mustang under which Robinson agreed to give FMC a security interest in the Mustang in exchange for financing of $ 13,763.66. Under the security agreement, Robinson was required to make payments in sixty monthly installments and was required to purchase automobile insurance to protect against loss or damage to the vehicle. Robinson's insurance was terminated on November 9, 1986 and Robinson failed to make payments under the security agreement for the months of March and April of 1987. On April 30, 1987, FMC repossessed Robinson's car.

 On May 4, 1987, two copies of a "Notice of Repossession and Right to Redeem" were sent to Robinson at his last known address, one by regular mail and one by certified mail. *fn2" The notice informed Robinson that if the Mustang was not redeemed, it would be sold at a private sale on or after May 29, 1987 at the Greater Chicago Auto Auction. Robinson admits that he was sent the notice and that he knew the vehicle would be sold by private sale on or after May 29, 1987.

 On May 29, 1987, Robinson filed a petition under Chapter 13 of the United States Bankruptcy Code. The filing of the petition resulted in an automatic stay which prevented FMC from going forward with the sale of the car. On August 14, 1987, a confirmation proceeding on the plan of Robinson, the debtor-in-bankruptcy, was scheduled to take place in the Bankruptcy Court. Severe flooding in the Chicago area left Robinson's attorney stranded in the suburbs and prevented him from attending the confirmation proceeding. Robinson's attorney's efforts to contact the Bankruptcy Court by telephone were unsuccessful because all phone lines to the Bankruptcy Court were apparently not in working condition.

 On August 14, 1987, the Bankruptcy Court dismissed Robinson's petition in bankruptcy. Dismissal of Robinson's Chapter 13 case lifted the automatic stay. On August 27, 1987, without any further notice to Robinson, FMC sold the Mustang in a private sale. *fn3"

 III. DISCUSSION

 Section 9-504(3) of the U.C.C. requires the secured party to give notice to the debtor before disposing of collateral:

 
Unless collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, reasonable notification of the time and place of any public sale or reasonable notification of the date and time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor, if he has not signed after default a statement renouncing or modifying his right to notification of sale.

 Ill. Rev. Stat., ch. 26, para. 9-504(3)(emphasis added). Section 9-507(1) of the Code provides the debtor a right to recover damages caused by the secured party's failure to provide the debtor with "reasonable notification" of the sale. Ill. Rev. Stat., ch. 26, para. 9-507(1). See also, First Galesburg Nat. Bk. & Trust Co. v. Joannides, 103 Ill. 2d 294, 300, 469 N.E.2d 180, 182, 82 Ill. Dec. 646 (1984). The sole issue to be decided in FMC's motion for summary judgment is whether FMC gave Robinson "reasonable notification" of the sale of his car.

 The U.C.C. does not contain a definition of "reasonable notification." Spillers v. First Nat. Bk. of Arenzville, 81 Ill. App. 3d 199, 400 N.E.2d 1057, 1060, 36 Ill. Dec. 477 (4th Dist. 1980). Section 9-504(3) draws a distinction between "reasonable notification" in the context of a "public sale" and "reasonable notification" in the context of a "private sale." Where the disposition of collateral is to be by a "public sale," the statute requires the secured party to send the debtor notice of the "time and place" of the sale; if the collateral is to be sold via "private sale or other intended disposition," Section 9-504(3) requires only notice of the "time after which" the disposition is to be made. In interpreting whether "reasonable notification" has been given to the debtor, courts have recognized this distinction. Ford Motor Credit Co. v. Solway, 825 F.2d 1213, 1217-18 (7th Cir. 1987); ...


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