## Facts

- Melissa Wimmer bought a 1996 Plymouth Neon with financing from Auto Credit of Nashville; the loan was $7,199.88 at 29% interest, payable weekly, and Auto Credit held a UCC Article 9 security interest.
- After Wimmer fell behind on payments, she agreed during a phone call to surrender the vehicle; she was told she would receive a later letter about redemption rights.
- Auto Credit repossessed the vehicle and mailed a written pre-sale notice to Wimmer by certified mail, return receipt requested, to her correct address, stating the vehicle would be sold and could be redeemed by paying the full amount owed.
- The post office attempted delivery three times; the letter was returned to Auto Credit on February 12, 2002.
- Auto Credit sold the vehicle at auction on February 7, 2002, before the letter was returned and without knowing it had not been delivered.
- Sale proceeds were insufficient to satisfy the debt, and Auto Credit sought a deficiency judgment.
- Wimmer asserted she never received the notice and counterclaimed for statutory damages, alleging Auto Credit failed to furnish “reasonable notification” before disposition.

## Issues

1. Whether UCC Article 9’s requirement that a secured party furnish “reasonable notification” of collateral disposition requires the creditor to verify the debtor’s actual receipt of the notice before selling the collateral.

## Decision

- The Tennessee Supreme Court reversed the Court of Appeals and reinstated the trial court’s dismissal of Wimmer’s counterclaim for statutory damages.
- The court held that “reasonable notification” does not require a secured party to ensure or verify that the debtor actually received the notice.
- The court concluded Auto Credit complied by sending notice via certified mail, return receipt requested, to Wimmer’s correct address, even though the notice was not delivered and was returned after the sale.

## Legal Principles

- Under Tennessee’s UCC Article 9 (as applicable to the transaction), a secured party must furnish “reasonable notification” of disposition of collateral, not guarantee actual notice.
- Reasonableness focuses on the creditor’s method and efforts in sending notice to the proper address, not on whether the debtor in fact receives or reads the notice.
- A secured party is not required to monitor delivery status, obtain a signed return receipt, or take additional steps to confirm delivery as a condition to conducting the sale.
- Statutory damages for Article 9 noncompliance require an underlying violation; compliant notice efforts bar such damages even if the debtor did not receive the mailing.

## Conclusion

A secured party satisfies the UCC’s “reasonable notification” requirement by sending pre-sale notice in a commercially reasonable manner to the debtor’s correct address, and it has no duty to verify actual receipt before disposing of repossessed collateral; therefore, the debtor was not entitled to statutory damages for nonreceipt of the mailed notice.


Auto Credit of Nashville v. Wimmer, 231 S.W.3d 896 (Tenn. 2007)