Industrial Leasing Corp. v. Lawson

Opinion

SCOTT, J.

This is an appeal of a judgment entered for respondent in an action for damages for breach of a lease of personal property. Appellant contends that (1) respondent is not entitled to a deficiency judgment after repossession and sale of the leased personal property, where the terms of the lease do not expressly provide for such a remedy, and (2) respondent is not entitled to further damages because he failed to act in a commercially reasonable manner in the sale of the leased personal property. We reject these contentions and affirm.

I

Respondent, Industrial Leasing Corporation, entered into a lease agreement with Vitamix, Inc., whereby certain office furnishings would be purchased by respondent for lease to Vitamix. The lease provided for a term of 60 months, with the property to be returned to respondent at the end of the term. Appellant, Everett Lawson, executed a written guarantee agreement at the time of the execution of the lease, whereby he became personally obligated for the lease agreement with Vitamix. At the time of the execution of this personal guarantee, appellant was an officer and member of the board of the lessee, but subsequently, and prior to the default, appellant resigned from the corporation.

After making nine installment payments under the lease, Vitamix failed to make further rental payments. Shortly thereafter, the company filed a petition for bankruptcy.

Subsequently, respondent regained possession of the leased equipment and undertook efforts to sell or release the equipment. Respondent placed advertisements in several local publications and wrote several letters of inquiry to prospective purchasers of the equipment. The equipment was ultimately sold in three private sales in the total amount of $4,193.70. Notification of the offer of sale of the leased property was provided to the com

[1101]

pany in connection with the first two private sales, but not in connection with the third sale. Appellant was not notified of the private sales.

The trial court entered judgment in favor of respondent in the amount of $13,703.54 plus attorney fees and costs of suit. In its findings of fact, the court determined that the private sales constituted a reasonable effort to minimize damages on the part of respondent.