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General Electric Capital Corp. v. FPL Serv. Corp.

United States District Court, N.D. Iowa, Cedar Rapids Division

February 3, 2014

GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware Corporation,, Plaintiff,
v.
FPL SERVICE CORP., Defendant

For General Electric Capital Corporation, a Delaware corporation, Plaintiff: Robert E Konchar, LEAD ATTORNEY, Erin R Nathan, Simmons, Perrine, Moyer & Bergman, PLC, Cedar Rapids, IA.

For FPL Service Corp., Defendant: Douglas R Lindstrom, Jr, LEAD ATTORNEY, Lane & Waterman, LLP, Davenport, IA.

OPINION

Page 936

SUPPLEMENTAL MEMORANDUM OPINION AND ORDER REGARDING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

MARK W. BENNETT, U.S. DISTRICT COURT JUDGE.

TABLE OF CONTENTS

I. INTRODUCTION

II. ANALYSIS

A. Can GECC recover deficiency damages in this case?

B. Did GECC correctly calculate its deficiency damages?.

III. CONCLUSION

Page 937

I. INTRODUCTION

This case is again before me on plaintiff General Electric Capital Corporation's (GECC's) motion for summary judgment (docket no. 9). This is the second part of a two-part opinion. On December 3, 2013, I issued the first part of my opinion (docket no. 15). See Gen. Elec. Capital Corp. v. FPL Serv. Corp., No. C 13-59-MWB, 986 F.Supp.2d 1029, 2013 WL 6238484 (N.D. Iowa Dec. 3, 2013). There, I introduced the facts of this case and the legal issues involved, which I will not repeat in detail here. In short, I held that defendant FPL Service Corporation (FPL) is liable for defaulting on its contract with GECC, by which FPL leased two industrial copiers from GECC. I also held that the contract between GECC and FPL was a secured transaction and, thus, GECC had to comply with Article 9 of Iowa's Uniform Commercial Code (UCC) when it repossessed and resold the two copiers upon FPL's default.

The amount of damages is the only remaining issue. GECC seeks $258,424.39, plus attorneys' fees and costs, as deficiency damages for FPL's default. FPL claims that the issue of damages should proceed to trial or, alternatively, that GECC incorrectly calculated its damages under the parties' contract. I deferred ruling on the issue of damages in my first summary judgment ruling to give the parties additional time to submit evidence relating to damages. Only GECC submitted additional evidence. After reviewing GECC's recent submission, I conclude that there is no genuine dispute on the issue of damages. Thus, for the reasons discussed below, GECC's motion for summary judgment is granted in full.

II. ANALYSIS

FPL raises a number of arguments that affect if, and how much, GECC can recover in deficiency damages under the parties' contract. First, FPL suggests that GECC cannot prove that it resold the two copiers in a commercially reasonable manner. FPL also notes that GECC failed to give FPL notice that it planned to resell the second copier. These issues affect whether GECC can recover any deficiency damages against FPL. Alternatively, FPL argues that GECC erred in calculating the amount of damages owed under the parties' contract. I will address these issues in turn.

A. Can GECC recover deficiency damages in this case?

" [I]f [a] secured party's compliance [with Article 9] is placed in issue, the secured party has the burden of establishing that the collection, enforcement, disposition, or acceptance was conducted in accordance with this part." Iowa Code § 554.9626(1)(b). Here, FPL has placed GECC's compliance with Article 9 at issue in two ways. First, FPL argues that " GECC has not provided any facts to show that it disposed of the collateral in a commercially reasonable manner" (docket no. 11, at 5), as required by Iowa Code § 554.9610(2). Second, FPL notes that GECC never gave FPL notice that it planned to resell the second copier, as required by Iowa Code § 554.9611. Thus, under Iowa Code § 554.9626(1)(b), GECC bears the burden of proving that it complied

Page 938

with Article 9 in repossessing and reselling the two copiers.

If GECC fails to meet its burden, then it can only recover deficiency damages allowed under the " rebuttable presumption rule." The rebuttable presumption rule provides:

[E]xcept as otherwise provided in section 554.9628, if a secured party fails to prove that the collection, enforcement, disposition, or acceptance was conducted in accordance with the provisions of this part relating to collection, enforcement, disposition, or acceptance, the liability of a debtor . . . for a deficiency is limited to an amount by ...

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