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Midlantic National Bank v. Coyne

Decided: November 12, 1987.

MIDLANTIC NATIONAL BANK, A NATIONAL BANKING ASSOCIATION, PLAINTIFF,
v.
THOMAS C. COYNE AND LEONARD BORNSTEIN, DEFENDANTS



Yanoff, J.s.c. (retired and temporarily assigned on recall).

Yanoff

The issues addressed hereafter arise on a motion to set aside a judgment entered July 31, 1987.

A broad summary of the factual context will suffice. Defendant Thomas C. Coyne ("Coyne") borrowed money from plaintiff bank on the security of five race horses. An event of default occurred. The Bank called upon the defendant, pursuant to the security instruments, to collect the security and deliver it to plaintiff. Defendant, instead, removed the horses to a farm in Hunterdon County. Plaintiff obtained possession of the horses only after recourse to the Chancery Division which issued an order commanding defendant to produce the security. Defendant complied. Thereafter, plaintiff sold the security in two places: three horses at the Meadowlands Racetrack, one at the Del Valley Racetrack in southern New Jersey. The fifth horse died before delivery to plaintiff.

Defendant was given notice of both sales and appeared at both sales. Evidence that the sales were not in conformity with reasonable commercial practice consisted of proof of lack of appropriate advertising, failure to properly groom the horses prior to sale, and similar matters.

Plaintiff claimed not only that the sales conformed to reasonable commercial practice, but that the fair market value of the horses was obtained.

The jury was instructed that the secured creditor had the burden of proving that the sales were conducted in a reasonable commercial manner, that the prices obtained were such as would have been obtained had the sales been properly held, and if the answer were in the negative, to determine what prices would have been obtained had the sales been properly conducted. The jury decided that neither sale conformed to reasonable commercial practice. It then found that $77,000 would have been obtained for the three horses at the Meadowlands sale if properly conducted, and that $5,000 would have been obtained at Del Valley if that sale had been properly conducted.

Judgment was entered in favor of plaintiff in the amount of $41,787. This figure was obtained by adding to the balance of indebtedness at time of sale the expenses of sale, interest at the contract rate, amounting to $8,809.03, and counsel fee of $13,038.17 (15% of the balance of the indebtedness at time of default) and crediting 82,000, the actual proceeds of the two sales.

As to arguments addressed to weight of evidence, the facts are sufficiently detailed. Some of them were not in dispute; others were not seriously disputed, and only three issues were subject to controversy. R. 4:42-2 controls applications to set aside a verdict. Suffice it that the jury was not obligated to accept the factual version of either side. Applying the cited Rule, the motion, insofar as it is addressed to jury determinations, must be denied. Applying also Dolson v. Anastasia, 55 N.J. 2, 7 (1969), certif. den., 59 N.J. 265 (1971), which enjoins the trial judge to give his own "feel of the case," I conclude that the jury verdict was completely justified.

However, problems under the Uniform Commercial Code, not addressed in any New Jersey case, should be considered.

The issues raised by the defendant are: (1) whether any deficiency can be found in view of the finding that the sale was not conducted in conformity with reasonable commercial practice; (2) whether counsel fee and interest can be charged

against the defendant where there is such a finding; (3) whether the amount of counsel fee was properly awarded.

Basic to the problem is N.J.S.A. 12A:9-504, which reads in ...


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