Regions Bank v. ThomasAnnotate this Case
In this case arising out of a secured transaction between Debtor and the predecessor to Plaintiff, Bank, both the trial court and the court of appeals erred in their respective applications of the statutory “rebuttable presumption rule” under Article 9 of the Uniform Commercial Code, as codified at Tenn. Code Ann. 47-9-626.
Debtor borrowed more than $2.3 million from Bank’s predecessor for the purchase of an aircraft, which secured the loan. The trial court later found that Debtor had defaulted on the loan agreement, that Bank had disposed of the aircraft in a commercial reasonable manner, and that Bank was entitled to recover a judgment for a deficiency of over $1.6 million. The court of appeals vacated the deficiency judgment, concluding that Bank’s sale of the aircraft had not been commercially reasonable. On remand, the trial court concluded that Bank had met its burden to rebut the presumption under section 47-9-626 and that Bank was entitled to recover a deficiency in the amount of $1.2 million. The court of appeals reversed, concluding that Bank had not rebutted the statutory presumption and was thus not entitled to a deficiency. The Supreme Court reversed the court of appeals, vacated the trial court’s judgment and remanded, holding that Bank sufficiently rebutted the statutory rebuttable presumption.
Authoring Judge: Chief Justice Jeffrey S. Bivins
Trial Court Judge: Judge Robert L. Childers
We granted this appeal to determine whether the Court of Appeals correctly applied the statutory rebuttable presumption rule under Article 9 of the Uniform Commercial Code, as codified at Tennessee Code Annotated section 47-9-626, in reversing the trial court and concluding that the Plaintiff, Regions Bank, was not entitled to recover a deficiency from the Defendants, Thomas D. Thomas, Helen L. Thomas, and The Thomas Family Living Trust. We conclude that both the trial court and the Court of Appeals erred in their respective applications of the rebuttable presumption rule. Accordingly, the judgment of the Court of Appeals is reversed, the judgment of the trial court is vacated, and this matter is remanded to the trial court for further proceedings as set forth herein.