## Facts

- General Electric Capital Corporation (GE) financed Nichols Equipment, LLC’s purchase of six Mack trucks equipped with concrete pumps, in a transaction totaling about $3.3 million, secured by the trucks.
- Gary Nichols executed an individual guaranty, agreeing to pay amounts due under the finance agreement if Nichols Equipment defaulted.
- Nichols Equipment defaulted in 2009, and GE sent default and demand letters seeking payment under the guaranty.
- GE sued Nichols in federal court in the District of Connecticut to recover the unpaid balance under the guaranty.
- In separate Alabama proceedings involving Nichols Equipment, an Alabama judge ordered surrender of the trucks; GE obtained the trucks in August 2009.
- GE directed Value Centers, LLC (Value Centers) to take possession and to inspect, market, and sell the trucks.
- Value Centers estimated the trucks’ combined value at roughly $1.095 million, while GE’s internal valuation was about $985,000.
- Value Centers advertised the trucks on its website and in the paper and internet versions of Truck Paper and Machinery Trader, and made phone calls to construction-industry contacts; the record contained limited detail about when ads ran, for how long, and the scope of outreach.
- The trucks were sold through multiple transactions (including sales to Canadian buyers), producing net proceeds of roughly $1.2 million.
- After crediting the sale proceeds, GE claimed Nichols owed a deficiency of about $2.5 million.
- Nichols defended on the ground that GE’s disposition of the collateral was not commercially reasonable under Connecticut’s UCC Article 9.
- Nichols offered testimony from James Bodeker, a vice president of sales and marketing at a concrete-pumping service company who had sold or supervised sales of more than 1,000 concrete pumps; Bodeker opined that GE (1) undervalued the trucks using incorrect calculations and (2) used inadequate marketing efforts.

## Issues

1. Whether Bodeker’s testimony should be excluded under Federal Rule of Evidence 702 and Daubert principles.
2. Whether GE was entitled to summary judgment on the guaranty and claimed deficiency despite Nichols’s defense that the collateral disposition was not commercially reasonable under Connecticut UCC Article 9.
3. Whether the evidentiary record (including the limited documentation of advertising and outreach) created triable fact disputes about GE’s compliance with Article 9 that could reduce or bar a deficiency recovery.

## Decision

- The court denied GE’s motion to preclude Bodeker’s testimony.
- The court denied GE’s motion for summary judgment on its claim against Nichols under the guaranty.
- The court terminated Nichols’s motions to strike as moot in light of the denial of summary judgment.

## Legal Principles

- Under Connecticut’s enactment of UCC Article 9, a secured party’s disposition of collateral after default must be “commercially reasonable,” considering the method, manner, time, place, and other sale terms.
- Commercial reasonableness is often a question of fact, making summary judgment inappropriate when the record permits competing inferences about the adequacy of marketing, timing, valuation, and sale conduct.
- If a secured party fails to dispose of collateral in a commercially reasonable manner, any claimed deficiency may be reduced substantially or eliminated.
- Under Federal Rule of Evidence 702, a witness may offer opinion testimony based on specialized knowledge from extensive industry work; challenges to the basis for the opinion commonly go to weight rather than admissibility when the testimony is tied to facts and experience and will assist the factfinder.
- On summary judgment, the court must deny relief where a reasonable factfinder could credit the nonmovant’s evidence that the secured party’s sale efforts and pricing were not commercially reasonable.

## Conclusion

General Electric Capital Corp. v. Nichols held that GE was not entitled to summary judgment on a guaranty-based deficiency claim where Nichols produced evidence—including Bodeker’s industry-based opinions and gaps in the record about advertising duration and outreach—that could support a finding the truck sales were not commercially reasonable under Connecticut UCC Article 9; the court therefore allowed the testimony and left the commercial reasonableness and deficiency questions for trial.


General Electric Capital Corp. v. Nichols, 2011 WL 1638048 (2011)