Backes

Introduction

Respondents (the secured parties) sold restaurant equipment to appellants (the debtors) in exchange for a promissory note and retained a security interest in the equipment. The debtors defaulted on the note. Two months later, without giving notice to the debtors, the secured parties privately sold the collateral and filed this action to collect the deficiency. Sitting without a jury, the superior court entered judgment for the secured parties. The court found that the secured parties’ failure to give notice was excused because the collateral “threatenjed] to decline speedily in value.” (Cal. U. Com. Code, § 9504, subd. (3).) However, the court erroneously and without explanation disregarded the undisputed two-month period during which notice could have been given. Because the evidence does not support the judgment and because the court erred in applying the California Uniform Commercial Code, we reverse.

Facts

The debtors, Village Corner, Inc., Robert Carlisle, Ruth Ann Carlisle, Terry Martin, and Julie K. Martin, are the former owners of the Village Corner Restaurant in Carmel. The secured parties, Serge L. Backes and Susan Backes, sold the restaurant to…