Law School Case Brief
Betterton v. First Interstate Bank, N.A. - 800 F.2d 732 (8th Cir. 1986)
Several courts have recognized remedies in tort, rather than in contract, for breach of the Uniform Commercial Code, Ariz. Rev. Stat. § 1-203 duty of good faith. There is no Arizona authority recognizing such a claim.
C.H. Betterton bought a tractor and trailer, which he financed through First Interstate Bank of Arizona (“First Interstate”). When Betterton fell behind in his payments, he met with the bank officer and negotiated an extension of the note whereby payments were to be deducted automatically from his paycheck. However, the tractor and trailer still were repossessed and sold. Betterton challenged the summary judgment and the entry of judgment for First Interstate and the bank officer on his claim for breach of the security agreement and for failure to conduct a commercially reasonable foreclosure sale as well as on the counterclaim for a deficiency judgment.
Was there an Arizona authority that recognized Betterton’s breach of duty of good faith claim?
The court resurrected the breach of contract, fraud, and conversion claims. Although Betterton had a pre-existing duty to repair the tractor, his promise to have money subtracted from his paycheck and transferred to First Interstate supplied the consideration necessary to make the bank officer's promise not to repossess binding. The court held that there was no Arizona authority that recognized Betterton’s breach of duty of good faith claim.
Access the full text case
Not a Lexis Advance subscriber? Try it out for free.
Be Sure You're Prepared for Class