Franklin-Lamoille Bank v. Wetherby

Under the default provisions of article nine of the Vermont Commercial Code, 9A V.S.A. §§ 9-501 to 9-507, a secured party is under no obligation to proceed against the collateral or release its security interest therein before electing to reduce to judgment its claim on the underlying debt. Farmers Production Credit Association v. Arena, 145 Vt. 20, 24, 481 A.2d 1064, 1066 (1984). Moreover, the secured party (plaintiff) in this case never took possession of the collateral. Thus, there is no basis in law or fact for defendant’s claim that the plaintiff acted in a commercially unreasonable manner by not selling the collateral or releasing its security interest therein before suing on the note. As the note provided for recovery of a reasonable attorney’s fee by plaintiff in the event of a default and action on the note, the fee requested for services rendered in connection with this appeal, in the amount of $271.50, is granted. Affirmed.