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Gemini Capital Group, LLC v. Jones

Court of Appeals of Wisconsin, District III

October 17, 2017

Gemini Capital Group, LLC, Plaintiff-Respondent,
v.
Leroy Jones and Roger Jones, Defendants-Appellants.

         APPEAL from an order of the circuit court for Sawyer County, No. 2015CV45 JOHN M. YACKEL, Judge. Reversed and cause remanded for further proceedings.

          Before Stark, P.J., Hruz and Seidl, JJ.

          STARK, P.J.

         ¶1 Leroy and Roger Jones (collectively, Jones) appeal an order granting summary judgment to Gemini Capital Group, LLC. Gemini filed the instant lawsuit in attempt to recover a deficiency judgment against Jones. Jones argues the circuit court improperly granted summary judgment in Gemini's favor because: (1) Gemini failed to establish its ownership of the debt; (2) Gemini failed to prove the collateral at issue was sold in a commercially reasonable manner, as required by WIS . STAT . § 425.209(1) (2015-16);[1] and (3) a material issue of fact exists as to whether Gemini's complaint was timely filed, pursuant to the applicable statute of limitations.

         ¶2 We conclude Gemini failed to make a prima facie case for summary judgment with respect to the first two issues raised by Jones, and a genuine issue of material fact exists regarding the third issue. We therefore reverse the order granting summary judgment to Gemini and remand for further proceedings.

         BACKGROUND

         ¶3 In July 2007, Jones purchased a 2004 Ford Ranger from Timber Ford Mercury of Hayward, Inc. To finance the purchase, Jones entered into a "Motor Vehicle Consumer Simple Interest Installment Sale and Security Agreement" with Timber Ford Mercury. It is undisputed that Jones made some of the payments due under this agreement, but he eventually stopped making payments. In March 2009, HSBC Auto Finance, Inc., filed a small claims lawsuit against Jones in Sawyer County, seeking to repossess the vehicle. That lawsuit resulted in a default judgment against Jones, and the vehicle was subsequently repossessed and sold.

         ¶4 On March 23, 2015, Gemini filed the present lawsuit in attempt to recover a deficiency judgment against Jones. In its complaint, Gemini alleged it had "purchased the deficiency amount owed on the [Motor Vehicle Consumer Simple Interest Installment Sale and Security Agreement]" and was "the successor-in-interest for the HSBC Serv Auto Loan."

         ¶5 Gemini ultimately moved for summary judgment. As relevant to this appeal, Gemini relied on an affidavit of Roger Neustadt to establish its ownership of Jones' debt. In his affidavit, Neustadt averred:

I am a custodian of records for [Gemini] and the facts recited herein are based upon my personal knowledge of the electronic business records of the account in question, which are part of [Gemini's] regular business records. These records are kept by [Gemini] in the regular course of business, and it was the regular course of business of [Gemini] or its predecessor in interest for an employee or representative of [Gemini] or its predecessor in interest, with knowledge of the act or event recorded, to make the record or to transmit information thereof to be included in such record, and the record was made at or near the time or reasonably soon thereafter.

         ¶6 Neustadt averred that Jones entered into a Motor Vehicle Consumer Simple Interest Installment Sale and Security Agreement with Timber Ford Mercury on or around July 12, 2007, and, "[a]s indicated on the contract, " Timber Ford Mercury assigned Jones' debt to "HSBC." Neustadt further averred that, on or about November 9, 2009, HSBC "transferred the contract and the rights therein to Santander Consumer USA Inc." Neustadt next averred that, on or about September 7, 2012, Santander "sold the contract and the rights therein to Main Street Acquisition Corp." Finally, Neustadt averred that, on or about July 16, 2014, Main Street "sold the contract and the rights therein" to Gemini. Neustadt averred Gemini is "the current holder and owner of [Jones'] contract and the rights therein." Various documents were attached to Neustadt's affidavit in support of these averments.

         ¶7 Jones filed a brief and affidavits in opposition to Gemini's summary judgment motion, but he did not submit any evidence disputing Gemini's claim that it was the current owner of Jones' debt. Instead, Jones argued the evidence Gemini submitted was insufficient to make a prima facie showing regarding Gemini's ownership.

         ¶8 The circuit court granted summary judgment in Gemini's favor. Addressing Jones' argument that Gemini had failed to establish its ownership of the debt, the court stated Gemini had presented a "logical … step by step … from the point the vehicle was purchased, was financed by HSBC all the way up to Gemini." The court observed that, while Jones was critical of Neustadt's affidavit, he had "not necessarily challenged the affidavit with any counter affidavits."

         ¶9 The circuit court also rejected Jones' argument that Gemini was not entitled to summary judgment because it had failed to show that the vehicle was disposed of in a commercially reasonable manner, as required by Wis.Stat. § 425.209(1). The court reasoned further proceedings were not necessary on that issue because Jones had never alleged or presented any evidence to indicate that the sale of the vehicle was not commercially reasonable. Stated differently, the court concluded Jones had failed to show the existence of a genuine issue of material fact regarding the reasonableness of the sale.

         ¶10 Finally, the circuit court concluded there was no "issue" regarding the statute of limitations. The court explained, "[T]he deficiency became due in mid 2009 and [Gemini] began this action in early 2015 under the six-year statute of limitations, so that does not forego or prohibit the action."

         ¶11 Jones now appeals, arguing the circuit court erred by granting Gemini summary judgment.

         STANDARD OF REVIEW

         ¶12 We independently review a grant of summary judgment, using the same methodology as the circuit court. Hardy v. Hoefferle, 2007 WI.App. 264, ¶6, 306 Wis.2d 513, 743 N.W.2d 843. "Under that methodology, the court, trial or appellate, first examines the pleadings to determine whether claims have been stated and a material factual issue is presented." Preloznik v. City of Madison, 113 Wis.2d 112, 116, 334 N.W.2d 580 (Ct. App. 1983). If so, we then examine the moving party's submissions to determine whether they establish a prima facie case for summary judgment. Id. If the moving party has made a prima facie showing, we examine the opposing party's affidavits to determine whether a genuine issue exists as to any material fact. Id.

         ¶13 In this case, it is undisputed that Gemini's complaint stated a claim for a deficiency judgment, and that Jones' answer raised several material factual issues. The parties' arguments instead pertain to whether Gemini made a prima facie case for summary judgment and, if so, ...


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