In Harley-Davidson Credit Corp. v. Galvin, 2014 WL 4384632 (D.N.H. 2014), Judge McCafferty rejected the debtor’s arguments that Harley-Davidson did not fetch enough money for the aircraft that it repossessed from the debtor, and found that the debtor owed the balance.
At its core, Galvin’s argument is that SAS did not receive as much as it should have for the Aircraft, and that the only explanation for the low price is that the Aircraft was not sold in a commercially reasonable manner. Galvin argues that the Bluebook value of the Aircraft at the time it was sold was approximately $269,000, and that he agreed to allow SAS to market and sell the Aircraft with the understanding that the proceeds from the sale would cover his debt entirely. The price obtained at sale may be relevant when considering commercial reasonability, as “a wide discrepancy between the sale price and the value of the collateral compels close scrutiny into the commercial reasonableness of the sale.” Ally Fin. Inc. v. Bosch Motors, Inc., No. 3:10–cv–677–RCJ–VPC, 2013 WL 1326479, at *6 (D.Nev. Mar. 29, 2013) (internal quotation marks and citation omitted). However, “[t]he fact that a greater amount could have been obtained by a [disposition] at a different time or in a different method from that selected by the secured party is not of itself sufficient to preclude the secured party from establishing that the [disposition] was made in a commercially reasonable manner.” Id. (internal quotation marks and citation omitted). Galvin asserts that he “had a reasonable expectation that the aircraft securing the Promissory Note had a fair market value which, when sold by Plaintiff, would have paid the Promissory Note in full.” Def.’s Obj. at 2. Even if Galvin’s expectation concerning the sale price were relevant, the record evidence shows that Galvin did not expect the Aircraft to sell for a significantly higher price than it did. For example, on August 24, 2010, more than a year prior to the sale, Galvin asked O’Brien at what price he thought he might be able to sell the Aircraft. O’Brien responded: “Depending on the actual paint and boot condition, we will advertise around 225–230 [thousand]. Expect 180–200 [thousand].” Pl.’s Reply, Ex. A (doc. no. 41–2) at 3. Therefore, Galvin was informed over a year prior to the sale that SAS expected to sell the Aircraft, depending on the condition, for $180,000—$200,000, well below the amount Galvin owed under the Loan Documents. The record evidence demonstrates that Galvin did not express any dissatisfaction with O’Brien’s quoted price, and indeed, Galvin subsequently consented to the sale of the Aircraft through SAS, despite knowing of other dealers who could sell the Aircraft. See Galvin Aff. (doc. no. 39–1) at ¶ 9; see also Pl.’s Mot. for Sum. Judg., Ex. D (doc. no. 37–8) at 2. In addition, the price quoted in O’Brien’s email was dependent “on the actual paint and boot condition.” The record evidence demonstrates that the Aircraft’s paint and interior were not in good condition due to Galvin’s poor maintenance. Upon repossession in September of 2011, Strassel wrote to Galvin: “The paint and interior are in tough shape from sitting outside unattended. Billy is polishing the paint back the best he can and he is going to do some work on the interior to make it feel like someone was maintaining it.” Pl.’s Mot. for Sum. Judg., Ex. F (doc. no. 37–10) at 2. In other words, Galvin asserts that the sales price of $155,000 demonstrates that the Aircraft was not sold in a commercially reasonable manner, despite (i) being quoted a price of $180,000 to $200,000 depending on the Aircraft’s paint condition; (ii) the Aircraft being in poor paint condition; and (iii) the sale occurring more than a year after the quote, resulting in further depreciation. See, e.g., In re Nw. Airlines Corp., 393 B.R. 337, 340 (Bankr.S.D.N.Y.2008) (“[A]n aircraft depreciates in value over time.”). Thus, Galvin’s assertion concerning his expectation that the sale price would pay off his debt in full is not supported by the evidence in the record. Galvin also argues that the Aircraft had a Bluebook value at the time it was sold of $269,811. In support, he points to a chart, presumably prepared by him, that purports to list the Bluebook value of the Aircraft and several accessories and avionics which he appears to contend were installed on the Aircraft. See Def.’s Obj., Ex. B (document 39–3) at 2. Galvin’s chart lists the average dealer price of the Aircraft as $220,000, and the average wholesale price of the Aircraft as $184,000. Those figures are supported by the numbers in the Bluebook, the relevant page of which was included with Harley–Davidson’s motion. See Pl.’s Mot. for Sum. Judg., Ex. E (doc. no. 37–9).The basis for the rest of the figures in the chart, however, is unclear. Galvin does not provide copies of the Bluebook pages from which he claims to have taken those figures. Even if he had, Galvin has not shown that the independent value of those accessories would have had any impact, let alone a significant impact, on the price of the Aircraft. Moreover, Galvin’s suggestion that the Bluebook price for the Aircraft in the fall of 2011 was approximately $269,000 is belied by O’Brien’s email in August of 2010, in which he stated that, assuming that the Aircraft was in good condition, he would have advertised it at $225,000–$230,000, but expected to get much less. Galvin has raised no genuine issues of material fact concerning the commercial reasonableness of the disposition of the Aircraft. The Aircraft was sold by an independent dealer to which Galvin consented. The record evidence indicates that the Aircraft was sold to a third party in an arm’s length transaction, and Galvin does not point to anything in the record to suggest that SAS sold the Aircraft in an unusual way. Although Galvin claims that the Aircraft was not sold in a commercially reasonable manner, there is an “absence of evidence” to support that argument. Accordingly, Harley–Davidson is entitled to summary judgment on its contract claim against Galvin.