John Deere Construction & Forestry Co. v. Mark Merritt Construction, Inc.

Citations: 678 S.E.2d 183; 297 Ga. App. 743; 2009 Fulton County D. Rep. 1695; 68 U.C.C. Rep. Serv. 2d (West) 675; 2009 Ga. App. LEXIS 529Docket: A09A0333

Court: Court of Appeals of Georgia; May 11, 2009; Georgia; State Appellate Court

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Mark Merritt Construction, Inc. and its president, Mark Merritt, financed construction equipment through loans from John Deere Construction, Forestry Company (Deere). After defaulting on payments, Deere repossessed the equipment and sold it at private sales for amounts less than owed, subsequently seeking a deficiency judgment against the Merritts. Both parties filed motions for summary judgment, with the trial court ruling in favor of the Merritts, citing Deere's failure to demonstrate the equipment's value at repossession due to inadequacies in its supporting affidavit.

On appeal, the Court of Appeals of Georgia reversed the trial court's decision, finding that Deere's affidavit was adequate. The court clarified that a secured party may sell repossessed collateral at private sales, provided the process is commercially reasonable. If the debtor challenges this reasonableness, the secured party bears the burden of proof regarding the sale's terms and the collateral's resale price.

The Merritts supported their motion with affidavits asserting that the repossessed equipment was in excellent condition and maintained a value equal to or greater than the loan amounts, as evidenced by the sales prices received (39 to 55 percent of original purchase prices). In contrast, Deere's supporting affidavit from William Ross claimed the sales were conducted reasonably and that the total sales price of $174,500 reflected fair market value, based on his extensive experience and familiarity with the equipment's resale values.

The court denied Deere's motion for summary judgment and granted the Merritts' motion, concluding that the Ross affidavit lacked the necessary foundation for admissible evidence regarding equipment values at the relevant time. The court found that while Ross was qualified based on his training and familiarity with business records, he had not examined the equipment and relied solely on his work experience, file reviews, and published resale values. His affidavit included a conclusory statement about the fairness of cumulative resale prices post-repossession without factual support regarding the equipment's condition at that time. The court determined that the affidavit had no probative value to counter the Merritts' testimony on equipment values. It referenced previous cases (Bryant, AKA Mgmt., and Dowdell) where expert opinions were deemed without probative worth due to insufficient basis for forming a correct opinion. However, the court distinguished this case from those by noting that there was no evidence of condition change post-repossession and that Ross's affidavit demonstrated at least some knowledge of property valuation without flawed methodology or unsupported assumptions. The court asserted that Ross's statements were based on personal knowledge and that he had sufficient opportunity to form his opinion, even if he did not inspect the equipment personally.

A limited exception to the requirement that affidavits be based on personal knowledge and the inadmissibility of conclusory facts has been established. The trial court made an error in granting summary judgment to the Merritts by concluding that the Ross affidavit was insufficient. Consequently, the judgment is reversed. Judges Smith and Bernes concur. The excerpt references multiple cases and legal standards, emphasizing that documents mentioned in an affidavit must be included in the record unless attached to the affidavit, following the guidelines set forth in OCGA 9-11-56(e).