Security State Bank v. Burk

RCW 62A.9-504(3) of the Uniform Commercial Code (U.C.C.) requires a creditor to dispose of a defaulting debtors collateral in a commercially reasonable manner. We hold that an Article 9 guarantor may assert noncompliance with this requirement as an affirmative defense to a creditor action to enforce the guaranty, notwithstanding the guarantors waiver of defenses arising out of the creditors unjustified impairment of the collateral. Because the guarantors here, Fred and Randelle Burk, raised an issue of material fact as to creditor Security State Banks commercially reasonable disposition of the debtors collateral, we reverse the summary judgment in favor of the Bank and remand for trial.