Triple J Saipan, Inc. v. Sanchez (2007)
Citation: 2007 MP 23 · Court: CNMI Supreme Court (Demapan, C.J.; Castro and Manglona, JJ.) · Decided: October 24, 2007 · Docket: Supreme Court Nos. CV-04-0027-GA and CV-04-0030-GA; Superior Court No. 01-0555. Full opinion, published by the CNMI Law Revision Commission and retained in schema/verification/northern-mariana-islands-evidence-2026-10-18/opinions/.
Facts
In August 1999 the Sanchezes bought a used vehicle from Triple J for USD 6,075, financed by the Bank of Hawaii with a dealer payment guarantee. After it broke down they left it with Triple J and stopped paying. The bank repossessed it on February 23, 2000, sent a notice of repossession and intent to sell, and reassigned the contract to Triple J when Triple J paid USD 4,499.46 under the guarantee. Triple J spent USD 3,662.57 on repairs, put the car on its lot and resold it on February 1, 2001 for USD 2,080, then sued for USD 7,056.88. The trial court found the year-long delay commercially unreasonable and credited the debtors USD 2,200 (opinion ¶¶ 2–8).
Holding
- Commercial reasonableness. On undisputed facts, the resale was commercially reasonable as a matter of law: two months on the lot after extensive repairs to a nine-year-old car on Saipan, where parts are scarce, was not untimely; speculation that a “for sale” sign would have sold it sooner does not show unreasonableness; the “recognized market” exception does not apply to used cars (¶¶ 10–14 and n.7).
- Remedies. Where a disposition is not commercially reasonable, the debtor’s loss is recovered under 5 CMC § 9507(1), and the deficiency is governed by the rebuttable presumption rule: the creditor must prove, by evidence other than the resale price, that the collateral was worth less than the debt (¶¶ 17–26). Failure to give reasonable notice under § 9504(3) remains an absolute bar to a deficiency, following Economic Development Loan Fund v. Arriola (¶ 24).
- The contract’s attorney-fee clause was enforceable; the fee award and damages were reversed and remanded (¶¶ 27–30).
Reasoning
The court applied the CNMI’s pre-revision Article 9 (it noted that 5 CMC § 9101 et seq. “has not been updated to conform to the latest revisions of Article 9”, n.4). It placed the burden of proving commercial reasonableness on the creditor (¶ 12), applied the § 9507(2) safe harbors, and rejected both the absolute-bar and set-off rules for commercial-reasonableness failures as too punitive or too weak (¶¶ 20–25). Notice was not raised in the trial court and so was not decided (¶ 15).
Practical impact
- Buyer / operator: a dealer’s lot resale of a repossessed vehicle after repairs can be a commercially reasonable disposition; the purchaser’s title follows 5 CMC § 9504(4).
- Owner / debtor: a missing § 9504(3) notice bars any deficiency; a commercially unreasonable sale shifts to the creditor the burden of proving the car’s value.
- Creditor: keep proof of notice and of the steps taken to sell (advertising, time on market, repairs).
Good-law status
needs_verification: the full opinion was read on 2026-10-18. A screen of the 772 CNMI Supreme Court opinions retained in the same evidence folder found one later citation, Commonwealth Development Authority v. Camacho, 2010 MP 19, citing ¶ 15 for refusing to consider a notice argument not raised below; no commercial citator was used.
Applies in →
northern-mariana-islands · ucc-article-9-dispositions · motor-vehicles
Legal information, not legal advice. Verify against the cited primary sources and current law before acting.