## Facts

- Matthew Welch financed the purchase of a used pickup truck through Ford Motor Credit Company (Ford) under a retail installment contract that gave Ford a security interest in the vehicle.
- The contract provided that, after repossession, Ford would give Welch a notice of his right of redemption that specified the amount needed to redeem and stated that redemption could occur any time before sale.
- Welch defaulted on the loan and voluntarily surrendered the truck to Ford on June 4, 2001.
- Ford sold the truck at a private auction on June 22, 2001 for less than the outstanding debt, credited the proceeds to Welch’s account, and claimed a deficiency of $4,466.82.
- On June 2, 2003, Ford sued Welch in Rutland Superior Court to recover the deficiency.
- At trial, Ford attempted to show that it sent the required redemption notice by calling a records custodian from Ford’s New Hampshire office.
- The custodian testified generally that Ford’s practice was to prepare and send a redemption notice when a vehicle was repossessed, but he could not testify about the South Carolina office’s mailing procedures or about the particular notice allegedly sent to Welch.
- Ford introduced an unsigned copy of the purported redemption notice, with no documentation showing it was mailed (and it was not sent by return receipt).
- Welch testified that he did not receive any redemption notice.
- The trial court admitted Ford’s records but found Ford failed to prove it sent (and that Welch received) the redemption notice required by the contract, and it denied Ford’s request for a deficiency judgment.
- Ford appealed, arguing the trial court wrongly discounted the business-records evidence, used an improper “receipt” standard rather than “sending,” and that revised UCC Article 9 and waiver principles still permitted deficiency recovery.

## Issues

1. Did the trial court misapply the business-records rule by treating the records custodian’s lack of personal knowledge as a bar to Ford’s proof of mailing?
2. Did the trial court apply the wrong legal standard by focusing on Welch’s receipt of notice rather than whether Ford sent the contract-required redemption notice?
3. Was the finding that Ford failed to prove it mailed the redemption notice clearly erroneous in light of Ford’s evidence of routine practice and business records?
4. Did the 2001 revisions to UCC Article 9 apply to this 2001 repossession and sale in a way that still allowed Ford to recover a deficiency despite noncompliance?
5. Did Welch’s voluntary surrender waive any contractual right to a redemption notice before sale?

## Decision

- The Vermont Supreme Court affirmed the judgment for Welch, leaving Ford without a deficiency judgment.
- The trial court did not exclude Ford’s evidence under V.R.E. 803(6); it admitted the records and then, as fact-finder, assigned them limited weight given the weaknesses in the supporting testimony and documentation.
- The Supreme Court read the trial court’s ruling as a finding that Ford failed to prove it mailed the required notice; references to Welch’s non-receipt supported that factual conclusion and did not show an improper legal requirement of receipt.
- The trial court’s determination that Ford failed to carry its burden to prove mailing was supported by the record and was not clearly erroneous.
- Revised Article 9’s deficiency-related rules did not alter the outcome on these facts, including because the repossession and private sale occurred before the effective date of the revisions.
- Welch’s voluntary surrender did not, by itself, waive the contract’s requirement that Ford provide notice of the right of redemption before selling the collateral.

## Legal Principles

- When a contract makes a creditor’s right to sell collateral and seek a deficiency dependent on giving a debtor a specified redemption notice, the creditor bears the burden to prove it sent the notice.
- Evidence admitted as business records may still be found unconvincing on the ultimate factual question; admissibility does not make the evidence conclusive.
- Testimony about a company’s general routine may support an inference of mailing, but the fact-finder is not required to draw that inference when the witness cannot speak to the relevant office’s procedures or to the specific notice at issue and the documentation lacks proof of mailing.
- Appellate courts generally defer to trial-court fact-finding and credibility determinations and will not reweigh evidence where the findings have record support.
- Statutory revisions to secured-transactions law do not automatically govern earlier repossessions and sales absent an effective-date basis for applying the new rules.
- A debtor’s voluntary surrender of collateral does not automatically waive contractual notice protections absent a clear waiver.

## Conclusion

Because Ford did not carry its burden to prove it mailed the contract-required notice of Welch’s right to redeem the vehicle before the private auction sale, the trial court properly denied a deficiency judgment, and the Vermont Supreme Court affirmed.


Ford Motor Credit Co. v. Welch, 861 A.2d 1126 (2004)