Unpublished Disposition, 894 F.2d 409 (9th Cir. 1990)

MEMORANDUM^** 

We consider whether the district court ruled properly in granting summary judgment in favor of the plaintiff, Marine Midland.

Defendant, Jerry Martin operates a car dealership known as S & J Motors. Occasionally he purchased cars from and sold some to Valley Mazda. Valley Mazda owed him $77,800 for checks given to him and returned by the bank for insufficient funds.

Marine Midland financed Valley Mazda's inventory and in exchange took a security interest in the inventory. About three weeks before Marine Midland's assumption of the Valley Mazda dealership, Martin took possession of four vehicles from Valley's inventory. They were valued at $56,102 and are the subject of this action. That Marine Midland had a perfected security interest in the vehicles is undisputed.

Marine Midland brought a conversion action against Martin to obtain the value of the vehicles. The district court awarded summary judgment to Marine Midland. First, it disagreed with Martin's argument that Valley Mazda was a necessary party under Rule 19 of the Federal Rules of Civil Procedure.

Second, it found that Martin did not take the vehicles free of the perfected security interest because he was not a buyer in the ordinary course of business under Or.Rev.Stat. Sec. 79-3070(1). He was not such a buyer because he accepted the three cars in exchange for the debt created by the returned checks. See Or.Rev.Stat. Sec. 71.2010(9) (buying does not include a transfer for satisfaction of a money debt). With respect to the truck, though he did pay for it, the court found that he lacked good faith in "failing to comply with practices of the industry." See Or.Rev.Stat. Sec. 72.1030(1) (b) (defining good faith as honesty in fact and observance of reasonable commercial standards of fair dealing).¹ 

Finally, the court ruled against his counterclaims of fraud, finding no genuine issue of material fact.

We review the grant of summary judgment de novo. Ferguson v. Greater Pocatello Chamber of Commerce, 848 F.2d 976, 979 (9th Cir. 1988).

The moving party must establish that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law.... the burden then moves to the opposing party, who must present significant probative evidence tending to support its claim or defense.

Richards v. Neilsen Freight Lines, 810 F.2d 898 at 902 (9th Cir. 1987) (citations omitted).

We affirm the district's court's decision in favor of Marine Midland for the reasons stated in its opinion.²