Texas Supreme Court Decision on Article 9 of the Uniform Commercial Code
December 3, 2012 Case Study
Regal Finance Co. v. Tex Star Motors, Inc., 355 S.W.3d 595 (Tex. 2010)
This case about Article 9 of the Uniform Commercial Code arose from a dispute involving over 900 defaults on secured notes. A financing partnership had won more than $4 million at trial under the “deficiency judgment” provisions of UCC Article 9, in a trial handled by Beck Redden partner David Beck. The court of appeals reversed that judgment, holding that expert testimony was required to prove that the secured creditor had acted in a “commercially reasonable” manner, but then the Texas Supreme Court reversed that ruling and reinstated the judgment. The Texas Supreme Court appeal was handled by Beck Redden partner Russell Post, who was joined on the briefs by Beck Redden partner David Gunn.
Following the Supreme Court decision, the case was remanded for further proceedings in the court of appeals, where virtually the entire $4 million judgment was upheld in a second appeal handled by Beck Redden partner Russell Post. See Tex Star Motors, Inc. v. Regal Fin. Co., Ltd., ___ S.W.3d ___, 2012 WL 58945 (Tex. App.—Houston [14th Dist.] 2012, no pet.).