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Court of Appeals of Georgia.


No. A13A1948.

Decided: March 05, 2014

Jeremy Brent Ross and R. Michael Thompson, for John Deere Construction & Forestry Company. Richard Dale Campbell, for Carl S. Parham.

John Deere Construction & Forestry Company (“Deere”) instituted a deficiency action against Carl S. Parham to recover the balance owed on a direct loan following the repossession and sale of a piece of farm equipment. After the parties stipulated to all material facts, Deere filed a motion for partial summary judgment, to which Parham filed a cross-motion for summary judgment, disputing the notice required prior to Deere's sale of the repossessed equipment. Following a hearing, the trial court denied Deere's motion for summary judgment and granted Parham's cross-motion for summary judgment, noting that although it did not agree that the notice provisions of OCGA § 10–1–10 applied, it was nonetheless bound by Parham v. Peterson, Goldman, & Villani, 296 Ga.App. 527, 675 S.E.2d 275 (2009). In his enumerations of error, Deere argues that the trial court erred (1) in holding that the notice provisions of OCGA § 10–1–10 applied to the disposition of the equipment and (2) in relying upon Peterson in denying Deere's motion for partial summary judgment and granting Parham's cross-motion for summary judgment. We agree with the trial court that the notice provisions of OCGA § 10–1–10 are inapplicable to the loan contract at issue in this case, but we further conclude that the holding of Peterson does not require us to find otherwise. Accordingly, we reverse.

The evidence, as stipulated,1 shows that Parham purchased a John Deere 700 Crawler Dozer (“Dozer”) from Metrac, Inc. on November 20, 2007 for $79,646. Contemporaneous with the purchase of the Dozer, Parham executed a Loan Contract and Security Agreement (“Loan”) in favor of Deere to finance the purchase for a total of $84,568.72. Under the terms of the loan, Parham agreed to pay 60 monthly payments of $1,735.05 and granted Deere a purchase money security interest in the Dozer.

The parties have further stipulated that the Dozer was purchased and used for commercial and agricultural purposes, and not for personal, family, or household use, and that the Loan was a direct loan from Deere to Parham, and not a retail installment contract. Parham defaulted under the terms of the Loan by failing to make any required payments after September 2008, leaving a principal balance due on the Loan of $74,423.89. On January 20, 2009, Deere repossessed the Dozer following Parham's voluntary return of the equipment. On February 26, 2009, Deere sent, by certified mail, a letter to Parham at the address provided by him on the Loan, notifying him of Deere's intent to sell the Dozer via private sale sometime after March 8, 2009. Deere then sold the Dozer on March 19, 2009, for $40,000.00.

Deere subsequently filed this deficiency action, seeking the remaining balance due under the terms of the Loan. Deere contends that the notice it provided to Parham was proper pursuant to the applicable disposition provisions of Georgia's Uniform Commercial Code (“UCC”), specifically OCGA § 11–9–613.2 On the other hand, Parham, relying on Peterson, maintains that the stricter notice provisions of OCGA § 10–1–10 should apply, and, therefore, Deere's deficiency claim is barred for failure to meet those additional requirements.3 See generally Credithrift of America, Inc. v. Smith, 168 Ga.App. 45, 308 S.E.2d 53 (1983).

1. OCGA § 10–1–10 is included in the Retail Installment and Home Solicitation Sales Act (“Retail Installment Act”) and provides, in part:

When any goods have been repossessed after default in accordance with [UCC], the seller or holder shall not be entitled to recover a deficiency against the buyer unless within ten days after said repossession he forwards by registered or certified mail or statutory overnight delivery to the address of the buyer shown on the contract or later designated by the buyer a notice of the seller's or holder's intention to pursue a deficiency claim against the buyer. The notice shall also advise the buyer of his rights of redemption, as well as his right to demand a public sale of the repossessed goods.

OCGA § 10–1–10. The Retail Installment Act expressly defines the term “goods” as “all personalty when purchased primarily for personal, family, or household use.” OCGA § 10–1–2(a)(2). This Court has long held that these provisions do not apply to equipment purchased for commercial use, as is the case here. Compare, e.g., Gold Kist, Inc. v. McNair, 166 Ga.App. 66, 67(1), 303 S.E.2d 290 (1983) (equipment purchased for hog raising business does not fall within the Retail Installment Act); Rigdon v. Walker Sales & Service, Inc., 161 Ga.App. 459, 460, 288 S.E.2d 711 (1982) (Retail Installment Act not applicable to tobacco combine used for commercial farming operation); and Holder v. Brock, 129 Ga.App. 732, 732(3), 200 S.E.2d 912 (1973) (Retail Installment Act does not apply to a mobile home), overruled on other grounds, Tucker v. Chung Studio of Karate, Inc., 142 Ga.App. 818, 237 S.E.2d 223 (1977) with Vikowsky v. Savannah Appliance Service Corp., 179 Ga.App. 135, 345 S.E.2d 621 (1986) (consumer's financed purchase of a television fell within Retail Installment Act); Bell v. Loosier of Albany, Inc., 140 Ga.App. 393, 231 S.E.2d 142 (1976) (applying Retail Installment Act to household electronics and appliances); and Brown v. Jenkins, 135 Ga.App. 694, 218 S.E.2d 690 (1975) (Retail Installment Act applied to household goods).

Parham nonetheless contends that the Retail Installment Act has a “commercial application.” He urges that, because OCGA § 10–1–10 includes the phrase “[w]hen any goods have been repossessed after default in accordance with [the UCC],” the Retail Installment Act therefore applies to all transactions covered by the UCC. However, this interpretation ignores both the precise definitions set forth within the Retail Installment Act itself and this Court's decisions interpreting and applying those definitions.4 Id. Because the parties here have stipulated that the Dozer was purchased for commercial and agricultural purposes, and not for personal, family, or household use, we find that the Loan does not fall within the definition of a “good” pursuant to the Retail Installment Act. Therefore, the notice provisions of OCGA § 10–1–10 do not apply to the Loan. See OCGA § 10–1–2(a)(2).

2. We now turn to the trial court's reliance on Peterson, a case involving the same Carl S. Parham as Appellee herein. In that case, Parham defaulted following the purchase of certain equipment and its financing through The CIT Group/Equipment Financing, Inc. (“CIT”). CIT later assigned its interest in Parham's note to Peterson, Goldman, & Villani (“PGV”). Following repossession and sale of the equipment, PGV initiated a deficiency action. The trial court granted summary judgment to PGV, and Parham appealed, arguing that CIT failed to provide sufficient notice pursuant to OCGA § 10–1–10. This Court agreed that CIT's notice failed to comply with OCGA § 10–1–10 and reversed the trial court's grant of summary judgment in favor of PGV. Peterson, 296 Ga.App. at 529, 531, 675 S.E.2d 275.

Parham claims that the equipment at issue in Peterson was also commercial in nature and thus, this Court is bound to apply OCGA § 10–1–10 to this transaction. But in Peterson, the creditor apparently agreed that the equipment was for personal use and thus did “not contest the applicability of OCGA § 10–1–10.”5 Peterson, 296 Ga.App. at 529, n. 2, 675 S.E.2d 275. Accordingly, the Court did not consider whether that notice provision applied, nor is there any indication that this Court intended to depart from decades' worth of precedent defining the applicability of the Retail Installment Act. Where, as here, the equipment at issue was purchased for commercial use, and thus outside the purview of the Retail Installment Act, and the parties have properly raised that Act's applicability on appeal, we will follow our long-standing precedent and decline to broaden the scope of the Act. Accordingly, we reverse the trial court's grant of summary judgment to Parham.

Judgment reversed.


ANDREWS, P.J., and DILLARD, J., concur.

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