SunTrust Bank v. Venable - 299 Ga. 655, 791 S.E.2d 5 (2016)

Rule:

O.C.G.A. § 9-3-24 sets out a general six year period of limitation applicable in actions on a simple written contract. It provides, in part, that all actions upon simple contracts in writing shall be brought within six years after the same become due and payable. However, that Code section shall not apply to actions for the breach of contracts for the sale of goods under Article 2 of Title 11. O.C.G.A. § 9-3-24. Article 2 of Title 11, Georgia's enactment of the Uniform Commercial Code, applies to actions for the breach of a contract involving the sale of goods and requires such actions to be commenced within four years after the cause of action has accrued. O.C.G.A. § 11-2-725(1). Expressly exempted from that provision is any transaction intended to operate only as a security transaction. O.C.G.A. § 11-2-102.

Facts:

In March 2006, appellee Mattie Venable entered into a “Simple Interest Conditional Sale Contract with Options for Balloon Payment and Vehicle Return”, when she purchased a minivan from Team Ford of Marietta. The Contract identified the dealership as the “seller” and appellee as the “purchaser” and granted the dealership a security interest in the purchased vehicle, which interest it assigned to appellant SunTrust Bank shortly after the Contract was executed. After appellee stopped making payments, appellant bank repossessed the minivan, sold it at auction for an amount less than the amount owed under the Contract, and filed suit against appellee to recover the deficiency amount. Appellee answered, and in defense, asserted that the deficiency action was barred by the four-year statute of limitation applicable to contracts for the sale of goods. Without expressly addressing the question of the applicable statute of limitation, the trial court granted appellant’s motion for summary judgment. However, the court of appeals reversed, concluding that appellant’s deficiency action was barred by OCGA § 11-2-725 (1)’s four-year period of limitation, and therefore, appellant was not entitled to summary judgment on its deficiency claim. 

Issue:

Was the appellant’s deficiency action barred by OCGA § 11-2-725 (1)’s four-year period of limitation?

Answer:

Yes.

Conclusion:

The court affirmed the appellate court’s judgment and held that the lower appellate court properly reversed the grant of summary judgment in favor of appellant bank because the predominant purpose of the contract was the sale of a good, thus, the four year statute of limitation in O.C.G.A. § 11-2-725(1) applied and the appellant’s deficiency claim was barred since it was filed more than four years after the cause of action accrued.