United States District Court, E.D. Kentucky, Central Division, Lexington
MEMORANDUM OPINION AND ORDER
C. Reeves United States District Judge
Bank (“Regions”) loaned Steven Lenox
(“Lenox”) $465, 000.00 to buy a houseboat. After
Lenox defaulted on the loan, Regions repossessed the
houseboat and sold it at a private sale for $287, 500.00.
Regions now seeks $1');">140, 682.32, which it claims is the
deficiency Lenox owes under the terms of the loan agreement.
Lenox contends that Regions may not collect the deficiency
because the sale of the houseboat was not commercially
reasonable. The parties have filed cross-motions for summary
judgment [Record Nos. 47, 49], which will be denied because
the Court cannot determine as a matter of law whether the
sale of collateral was commercially reasonable.
filed a Complaint in January 201');">18, alleging that Regions Bank
harmed him by violating provisions of the Fair Credit
Reporting Act (“FCRA”), 1');">15 U.S.C. § 1');">1681');">1 et
seq.[1');">1" name="FN1');">1" id=
"FN1');">1">1');">1]Lenox reported that after he fell
“one or two payments behind” on his loan from
Regions, Regions repossessed the houseboat and sold it. When
Lenox subsequently applied for a loan with a different
lender, he learned that Regions had furnished information to
credit reporting agencies indicating that his loan for the
houseboat was charged-off and that payment was $1');">10, 942.00
past due. Lenox maintained that, because Regions failed to
dispose of the collateral in a commercially reasonable
manner, it forfeited the right to collect a deficiency
balance and violated the FCRA by providing this information
to credit reporting agencies.
denied these allegations and filed a Counterclaim against
Lenox, alleging that it sold the houseboat in a commercially
reasonable manner on August 27, 201');">14, and that Lenox remains
indebted to Regions in the amount of $1');">140, 682.32. [Record
No. 1');">17] In November 201');">18, the Court granted Lenox's
unopposed motion to dismiss his claims against Regions,
without prejudice. [Record Nos. 44, 45] At that point,
Regions' Counterclaim against Lenox became the only
remaining issues to be resolved.
judgment is appropriate when the moving party demonstrates
that there is no genuine dispute regarding any material fact
and the movant is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(a). See also Celotex Corp. v.
Catrett, 1');">17');">477 U.S. 31');">17, 322-23 (1');">1986). When the moving
party will bear the ultimate burden of proof at trial,
summary judgment is appropriate only when it submits
evidentiary materials to establish all elements of the claim
or defense. United States v. McCain, No. 06-1');">13830,
2007 WL 2421');">1471');">1, at *3 (E.D. Mich. Aug. 22, 2007) (collecting
cases). Put differently, in this situation, the moving party
“must satisfy both the initial burden of production on
the summary judgment motion-by showing that no genuine
dispute exists as to any material fact-and the ultimate
burden of persuasion on the claim-by showing that it would be
entitled to a directed verdict at trial” Id.
(quoting William W. Schwarzer, et al., The Analysis and
Decision of Summary Judgment Motions, 1');">139 F.R.D. 441');">1');">1');">139 F.R.D. 441');">1,
when the moving party does not bear the ultimate burden of
proof, it has the initial burden of showing the absence of
evidence on an essential element of the non-moving
party's case. Celotex Corp., 477 U.S. at 323.
And once the movant satisfies that burden, the burden shifts
to the non-moving party to “set forth specific facts
showing a triable issue.” Matsushita Elec. Indus.
Co., Ltd. V. Zenith Radio Corp., 475 U.S. 574, 587
(1');">1986). The Court ultimately must determine “whether
the evidence presents a sufficient disagreement to require
submission to a jury or whether it is so one-sided that one
party must prevail as a matter of law.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 251');">1-52 (1');">1986).
See also Harrison v. Ash, 1');">10');">539 F.3d 51');">10, 51');">16 (6th
standards for evaluating motions for summary judgment do not
change simply because “both parties seek to resolve
[the] case through the vehicle of cross-motions for summary
judgment.” Craig v. Bridges Bros. Trucking
LLC, 823 F.3d 382 (6th Cir. 201');">16) (quoting Taft
Broadcasting Co. v. United States, 929 F.2d 240, 248
(6th Cir. 1');">1991');">1)).
The fact that both parties have moved for summary judgment
does not mean that the court must grant judgment as a matter
of law for one side or the other; summary judgment in favor
of either party is not proper if disputes remain as to
material facts. Rather, the court must evaluate each
party's motion on its own merits, taking care in each
instance to draw all reasonable inferences against the party
whose motion is under consideration.
Id. (internal citation omitted).
secured party may recover a deficiency judgment from a
defaulting debtor after selling the collateral for less than
the amount the debtor owes. Rexing v. Doug Evans Auto
Sales, Inc., 1');">1');">703 S.W.2d 491');">1, 493 (Ky. Ct. App. 1');">1986). It
typically is required to establish that “it acted with
commercial reasonableness in the holding and disposition of
the collateral in question.” Bailey v. Navistar
Fin. Corp., 1');">1');">709 S.W.2d 841');">1, 842 (Ky. Ct. App. 1');">1986)
(quoting Bank of Josephine v. Conn, 599 S.W.2d 773,
774 (Ky. Ct. App. 1');">1980)). However, Regions contends that
Lenox must prove that Regions' sale of the houseboat was
commercially unreasonable because he initiated
litigation against Regions in the first instance.
burden-shifting theory is based largely on the Sixth
Circuit's decision in Pivnick v. White, Getgey &
Meyer Co., LPA, 552 F.3d 479 (6th Cir. 2009). There, a
client brought a legal malpractice claim against a law firm
following the firm's failure to prosecute the
client's underlying action against a creditor for the
allegedly commercially unreasonable sale of a horse that had
been repossessed. The law firm stipulated that it failed ...