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Show-Me Credit Union v. Mosely

Court of Appeals of Missouri, Eastern District, Third Division

February 27, 2018


         Appeal from the Circuit Court of the Audrain County 16AU-AC00046-01 Honorable Linda R. Hamlett



         Dustin Mosely (Mosely) appeals the trial court's dismissal and entry of judgment in favor of Show-Me Credit Union (SMCU) on Mosely's counterclaim that SMCU failed to give proper notices required by the Uniform Commercial Code (UCC) before repossessing his vehicles and seeking a deficiency judgment. Because Mosely's factual allegations show that the presale notice SMCU sent to Mosely failed to meet UCC requirements, the trial court erred. We reverse and remand.


         In February of 2016, SMCU filed a petition alleging that SMCU and Mosely[1] had entered into a contract to finance two vehicles, with the vehicles as collateral, and that Mosely had ceased making the contracted payments. SMCU alleged that it issued a right to cure letter to Mosely containing the required statutory notices, and that Mosely voluntarily surrendered the two cars. SMCU also alleged it later sent Mosely a statutory notice of intent to sell the cars. SMCU further alleged that after selling the cars and applying the payments and credits due to Mosely, there was still a deficiency of $12, 535.96 on Mosely's account. SMCU sought judgment in that amount, as well as attorney's fees, costs, and expenses.

         Mosely filed a counterclaim[2] on behalf of himself and all other similarly situated consumers, alleging that SMCU did not obtain Mosely's written consent to repossess the two cars, failed to send various notices that complied with UCC requirements, and wrongfully charged interest. SMCU filed a motion to dismiss Mosely's counterclaim, arguing that Mosely's counterclaim failed to state a claim upon which relief could be granted and that SMCU complied with all applicable statutory notice requirements. The trial court granted SMCU's motion to dismiss Mosely's counterclaim and entered judgment in favor of SMCU.[3] This appeal follows.

         Standard of Review

         Initially, we note that the trial court's judgment purports to both dismiss Mosely's counterclaim and enter judgment in favor of SMCU on the counterclaim. From the record it is clear the trial court determined a substantive element of Mosely's counterclaim; namely, that SMCU's notices were sufficient. Cf. Boulevard Bank v. Malott, 397 S.W.3d 458, 462 n.2 (Mo. App. W.D. 2013) (noting trial court's dismissal determined substantive element of counterclaim and was tantamount to judgment on pleadings).

         Here, SMCU filed a motion to dismiss for failure to state a claim upon which relief could be granted, which is also a basis for a judgment on the pleadings. Mo. R. Civ. P. 55.27(a)(6) (2017). Both require the trial court to assume the facts pleaded by the non-moving party are true and determine whether those facts sufficiently allege a legal cause of action. Mo. Mun. League v. State, 489 S.W.3d 765, 767-68 (Mo. banc 2016) (quoting State ex rel. Nixon v. Am. Tobacco Co., 34 S.W.3d 122, 134 (Mo. banc 2000)) ("The position of a party moving for judgment on the pleadings is similar to that of a movant on a motion to dismiss; i.e., assuming the facts pleaded by the opposite party to be true, these facts are, nevertheless, insufficient as a matter of law."); see also Schwartz v. Lawson, 797 S.W.2d 828, 833 (Mo. App. W.D. 1990) (noting courts accord "functional equivalence" to summary judgment, motion to dismiss, and motion for judgment on pleadings). The trial court's judgment includes the substantive determination that SMCU's notices were sufficient as a basis for its determination that Mosely could not prevail as a matter of law. Thus, regardless of the wording of the trial court's judgment, we review whether the allegations in Mosely's petition that the notices were deficient would entitle him to legal relief.


         In his sole point on appeal, Mosely argues that the facts alleged in his counterclaim sufficiently pled a violation of the UCC's notice requirements, which would entitle him to relief if proven. Mosely pled two counts in his counterclaim, both of which contained an allegation that SMCU's presale notice violated the UCC. Specifically, Mosely alleged the presale notice stated that SMCU intended to dispose of the collateral at issue "at a private or public sale." Mosely argues this notice lacked the specificity required by the UCC. We agree.

         The applicable section of the UCC is Section 9-611(b), which is codified in Missouri Section 400.9-611(b).[4] This section requires "a secured party that disposes of collateral" to send the debtor "a reasonable authenticated notification of disposition." The contents of such notice are specified in Section 400.9-614, regarding consumer-goods transactions. As relevant here, a sufficient notice "[s]tates the method of intended disposition[]" Section 400.9-613(1)(C).[5]

         While Section 400.9-614(2) specifies that "[a] particular phrasing of the notification is not required, " Comment 2 to Section 400.9-614 cautions, "[a] notification that lacks any of the [required contents] is insufficient as a matter of law." "A creditor is held to the requirement of strict compliance with these notice provisions. Any doubt about what constitutes strict ...

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