DiDomenico v. First National Bank

WEANT, Judge. On 28 March 1980, the appellant, Charles E. DiDomenico, obtained a loan from First National Bank of Maryland (Bank). He used the funds to purchase a mobile home in which he resided. DiDomenico entered into a purchase money security agreement with the Bank using the mobile home as collateral, and authorizing the Bank to repossess it upon default.

The appellant first fell behind in his monthly payments in the fall of 1980, when he was laid off from his job. Although he was able to make several additional payments on the loan, DiDomenico notified the Bank early in February of 1981 that he would no longer be able to do so. According to ⁶⁵ the Bank’s policy, DiDomenico was asked to and did sign a letter authorizing the Bank to repossess his home. On 16 February 1981, the appellant was recalled to work.

Several days later, he received a notice of repossession from the Bank, advising him that he could redeem the property within fifteen days after receipt of the notice for the balance owed to date. Mr. DiDomenico did not redeem his home and the Bank sold it on 2 May 1981. Following the sale the Bank sued DiDomenico in the Circuit Court for Baltimore County for the deficiency, plus attorney’s fees. DiDomenico counterclaimed for statutory damages pursuant to § 9-507(1) of the Maryland Uniform Commercial Code.

The trial court found in favor of the Bank and entered a judgment against DiDomenico in the amount of $7,523.89 plus $961.26 in attorney’s fees. The resultant appeal raises the following questions: I. Did Appellee fail to give Appellant “reasonable notification” with regard to its disposition of Appellant’s repossessed mobile home, as required by Section 9-504(3) [Md. Com. Law Code Ann. (1975) ]?

II

By informing Appellant in its written and oral communications with him that his right to redeem his mobile home would be terminated after the expiration of an arbitrary 15 day period, did Appellee fail to proceed in accordance with Section 9-506 of the [Md.Com. Law Code Ann. (1975)]? I. Section 9-504 of the Maryland Uniform Commercial Code states a secured party’s right to dispose of the collateral after the debtor’s default. Our focus in the case sub judice is upon the provision requiring that “. . . reasonable notification of the time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor. . . . ” Md.Com.

Law Code Ann. § 9-504(3) (1975 & Supp.1983). Although he does not dis ⁶⁶ pute the fact that the Bank notified him of the time after which a private sale would be made, DiDomenico claims that the notification was unreasonable because it was misleading and tended to discourage any attempt to redeem, pursuant to § 9-506, before the sale. Section 9-506 permits a debtor to redeem by tendering fulfillment of all obligations prior to the creditor’s sale of the collateral. Md.Com.

Law Code Ann. § 9-506 (1975). The appellant argues that the Bank’s repossession notice led him to believe that he could redeem the collateral only within the fifteen-day period following receipt of the notice. The redemption notice stated, in pertinent part: ... You are entitled to redeem the said goods provided that within fifteen days from the date of delivery of this notice you pay . . . $650.39 [the amount then due]....

If you do not redeem as aforesaid, the goods will thereafter be sold at a private sale and if a deficiency arises, you will be liable.... This language is similar to that in a notice of default DiDomenico had received earlier which provided that, in the event of