## Facts

- Shannon P. Hicklin bought a 1993 Ford Explorer under an installment sales contract that was assigned to Onyx Acceptance Corp.
- Hicklin became delinquent; On February 11, 2004, she was three payments past due and owed $5,741.65, and Onyx repossessed the vehicle.
- At repossession, the vehicle had minor defects (cracked windshield, dings and scratches, and a “check engine” message) with estimated repair costs of $1,365; the defects were not repaired.
- The vehicle was transported to Dulles, Virginia and sold at a private auction for $1,500.
- After applying the sale proceeds and subtracting costs, Onyx claimed a deficiency of $5,018.88 and sued Hicklin for a deficiency judgment.
- The trial court found the vehicle’s estimated value at sale was $2,335 and treated the sale as commercially reasonable because $1,500 exceeded 50% of that value.

## Issues

1. Whether the trial court applied the correct Delaware UCC Article 9 standard to determine whether the secured party’s disposition of collateral was “commercially reasonable.”
2. Whether the trial court abused its discretion by admitting allegedly hearsay evidence offered by the secured party.
3. Whether the debtor was entitled to statutory damages under the Delaware UCC for the secured party’s alleged noncompliance with Article 9 disposition requirements.

## Decision

- Affirmed in part and reversed in part.
- Held the trial court applied an incorrect commercial reasonableness standard by relying on a percentage-of-value approach resembling a “shock the conscience” test.
- Held the trial court did not abuse its discretion in admitting the challenged evidence.
- Held Hicklin was not entitled to statutory damages.
- Vacated the deficiency judgment and remanded for further proceedings under the correct Article 9 standard.

## Legal Principles

- Under UCC § 9-610(b), every aspect of a collateral disposition—including method, manner, time, place, and other terms—must be commercially reasonable.
- A secured party may establish commercial reasonableness either by proving the overall disposition satisfied § 9-610(b) or by meeting the § 9-627(b)(3) safe harbor (sale consistent with accepted practices of reputable dealers for that type of property).
- Commercial reasonableness cannot be established by a mechanical price-to-value ratio; sale price is relevant but not dispositive without evidence addressing the other required aspects of the disposition.
- Evidentiary rulings on hearsay are reviewed for abuse of discretion; no reversible error was shown on this record.
- A misapplication of the commercial reasonableness standard does not, by itself, entitle a debtor to statutory damages absent satisfaction of the statutory prerequisites for that remedy.

## Conclusion

The Delaware Supreme Court required Article 9 commercial reasonableness to be proven through evidence addressing the full circumstances of the disposition (or a statutory safe harbor), rejected a percentage-of-value proxy, vacated the deficiency judgment, and remanded while leaving the evidentiary ruling and denial of statutory damages intact.


Hicklin v. Onyx Acceptance Corp., 970 A.2d 244 (Del. 2009)