2004-525, ACG CREDIT COMPANY, LLC v. MELANIE GILL

antiques belonging to Gill. Northeast Auct ions agreed to auction the antiques an agreement by which Northeast Auctions would take possession of various October 18, 2003, Northeast Auctions and defendant Melanie Gill entered into The following facts were uncontested by ACG Credit. On or about

affirm. (ACG Credit), of certain antiques in the possession of Northeast Auctions. We Nadeau, J.) upholding an attachment by the plaintiff, ACG Credit Company Auctions), the trustee defendant, appeals an order of the Superior Court (T. DALIANIS, J. Northeast Auctions by Ronald Bourgeault, LLC (Northeast

a. on the brief, and Mr. Cuddy orally), for the trustee defendant. the brief), and Ropes & Gray LLP, of Boston, Massachusetts (Kevin M. Cuddy & Wadleigh, Starr & Peters, P.L.L.C., of Manchester (Richard Thorner on

MacDonald on the brief, and Mr. Hage orally), for the plaintiff. Nixon Peabody LLP, of Manchester (Jamie N. Hage and Gordon J.

No. 2 004 - 525 Rockingham

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. O pinions are available on the Internet by 9:00 Errors may be reported by E - mail at the following address: errors in order that corrections may be made before the opinion goes to press. Hampshire, One Noble Drive, Concord, New Hampshire 03301, of any editorial Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as 2

dispute; only their legal effect is in dispute. Coyle v. Battles, 147 N.H. 98, 10 p. 2 2 lacked standing to object to the attachment. The material facts are not in We begin by addressing the trial court’s holding that Northeast Auctions

security interest. Auctions makes several arguments about the validity and perfec tion of its (UCC) requires security agreements to be in writing. In addition Northeast argues that the trial court erred in holding that the Uniform Commercial Code finding it lacked standing to contest t he attachment. Northeast Auctions also On appeal, Northeast Auctions argues that the trial court erred by

against third parties.” security interest in the property before the agreement can be enforceable agreement to be in writin g and express the parties’ intention to create a stated: “Finally . . . the Uniform Commercial Code requires a security them at auction on Gill’s behalf and not to secure a loan to Gill. The court consignment agreement, Northeast Auctions having taken the goods to sell security interest. The court found, instead, that the agreemen t was a transaction between Gill and Northeast Auctions had not created a valid finding, the trial court addressed the merits of the claim, and found that the defendant, lacked standing to object to the attachment. Notwithstanding that After a hearing, the trial court found that Northeast Auctions, as trustee

appearance in this matter. antiques. Gill never objected to the attachment, and has not entered an Auctions lacked standing, and had n ot created a valid security interest in the Northeast Auctions’ objection to the attachment on the grounds that Northeast ACG Credit objected to the disclosure form and moved to strike

from Gill and Ronald Bourgeault, the principal of Northeast Auctions. antiques. In support of its position, Northeast Auctions submitted af fidavits form, Northeast Auctions asserted that it possessed a security interest in the restraining order. In its response to interrogatories in its trustee disclosure owned by Gill. Northeast Auctions objected to the attachment and temporary Northeast Auctions was consequently enjoined from selling any of the items antiques, belonging to Gill, which were in the possession of Northeast Auctions. On March 3, p. 2 2004, A CG Credit obtained an ex parte attachment on the

advance. risk of loss in the case that the auction failed to generate the amount of the proceeds exceeding that amount. In addition, Northeast Auctions assumed the $5 00,000 of the anticipated auction proceeds, and agreed to pay Gill any by the purchaser at auction. Northeast Auctions gave Gill an advance of commission, but would earn a “buyer’s premium” on each item sold, payable and give the proceeds to Gill. Northeast Auctions waived its seller’s p. 3 3

Northeast Auctions has already entered an appearance by virtue of its return of interest in Gill’s goods is the trustee defendant in possession of them. The distinctive factor in this case is that the third party asserting an

to protect his interest in the property. the property at issue may file a motio n to intervene or be called upon to appear therefrom.” RSA 512:27 (1997). A third party claimant who has an interest in deems proper, to appear and maintain his claim or be forever barred pract icable, otherwise by publication and in such other manner as the court does not appear, the court may order notice to be given to him personally, if Practice and Procedure §17.70, at 421 (1997). “If a claimant under RSA 512:26 RSA 512:26 (1997); see also 4 R. Wiebusch, New Hampshire Practice, Civil

offer any evidence in support thereof. may order, be admitted to defend his right, and may he shall, on motion and upon such terms as the court is sought to be charged is claimed by a third person, If . . . it appears that the property for which the trustee

reveal the interests of third parties in the defe ndant’s goods. The interrogatories on the trustee process form are clearly designed to

and asserted that Gill was not the sole owner. trustee disclosure form, Northeast Auctions claimed its rights in the antiques entered an appearance in this matter. In answering the interrogatories on the Northeast Auctions returned the trustee disclosure form, and, thus,

trustee.” RSA 512: p. 3 3. disclosure form shall operate as an answer and an appearance on behalf of the judgment. Id.; RSA 512:10 –:11 (Supp. 2004). “Return o f the trustee which may render them chargeable for a sum up to the amount of the disclosure form and return it to the plaintiff, or else face default, the effect of 2004). Trustee defendants must answer the interrogatories on the trustee the writ of attachment and summons from the plaintiff. RSA 512:3 (Supp. Trustee defendants receive a trustee disclosure form when they receive

trustee defendant; it claims an interest in the property at stake. property. In this case, however, Northeast Auctions is m ore than a mere because the trustee would have no independent interest in the subject See RSA 512:18 - a (Supp. 2004). Ordinarily, ACG Credit would be correct, trustee disclosure, acco rding to the Trustee Process statute, RSA chapter 512. ACG Credit argues that only the plaintiff and defendant may object to a

de novo. In re 199 p. 4 4 Chevrolet Cavalier, 142 N.H. 705, 707 (1998). (2001). The issue of standing is, therefore, a question of law, which we review 4

(Citation omitted.) We agree with the trial court’s reasoning.

the items on behalf of and for the benefit of the defendant. the trustee defendant as an auctionee r for the purpose of selling trustee defendant. On the contrary, the goods were delivered to payment or performance of the defendant’s obligation to the defendant’s possession of the antiques was not to secure a performance of an obligation.” . . . In this case, the trustee interest in personal property or fixtures which secures payment or . . . Moreover, the Code defines a security interest as “an

to create a security interest in the property. indication in the consignment agreement that the parties intended security interest in the goods delivered. Indeed, there is no up - front does not convert the consignment agreement into a That the trustee defendant agreed to make a guaranteed payment

“essentia lly a consignment agreement.” The trial court stated: court found that the agreement between Gill and Northeast Auctions was application of the law to the facts de novo. Coyle, 1 p. 4 47 N.H. at 100. The trial created a security interest as defined by the UCC. We review the trial court’s Instead, the dispositive issue is whether Gill and Nort heast Auctions

dispositive, we see no need to address it. Since the issue of whether a security agreement may be oral was not to be deleted, the substance of the trial court’s ruling would remain the same. states that the UCC requires a security agreement to be in writing, if th at were mention of a written or oral security agreement. While the trial court’s order quoted below constitute the substance of the trial court’s ruling, and make no that a security agreement must be in writing to be valid. The paragraphs We first note that the trial court’s order does not rely upon its conclusion

Bourgeault. that the trial court erred by ignoring the affidavits submitted by Gill and allowing ACG a greater interest in the goods than Gill herself possesses; and ( p. 4 4) with priority over the interest of ACG Credit; (3) that the trial court erred by security agreements to be in writing; (2) that it had a valid security agreement Auctions argues: (1) that the t rial court erred in holding that the UCC requires Next, we address the issues surrounding the transaction. Northeast

question, has standing to object to the attachment. Northeast Auctions by its appearance, and its asserted interest in the goods in presence in this case is as a trustee defendant. We h old, therefore, that separate motion to intervene simply because Northeast Auctions’ current the trustee disclosure form. RSA p. 5 512:3. We see no reason to require a 5

the facts offered in the affidavits does not change the result that the transaction which no mention appears in the consignment agreement. However, accepting order facts found only in the affidavits, for example, the $ p. 5 500,000 advance, of that it ignored the affidavits. In fact the trial court clearly incorporated into its between the affidavits submitted and the trial court’s order that w ould indicate the affidavits submitted by Gill and Bourgeault. We find no inconsistency Finally, Northeast Auctions asserts that the trial court erred by ignoring

Trachy v. LaF ramboise, 146 N.H. 178, 181 (2001). developed for our review, and we decline to devote appellate resources to it. to ACG Credit’s interest, we find that this argument is not sufficiently interest, apart from a security interest, in the goods in question that is superior March 22, 200 p. 5 5). To the extent that Northeast Auctions asserts it has an of another. See Hughes v. N.H. Div. of Aeronautics, 151 N.H. ___, ___ (decided rights in the goods, we hold that it does not have standing to assert the rights extent that, by this argument, Northeast Auction s attempts to assert Gill’s ACG Credit greater rights in the goods than Gill herself possesses. To the Northeast Auctions next argues that the trial court erred by allowing

addressed. perfection and priority ove r ACG Credit’s attachment, therefore, need not be their transaction, their agreement is not a security agreement. Questions of its and Northeast Auctions did not create a security interest when they structured valid securi ty agreement without a corresponding security interest. Since Gill security interest.” RSA 382 - A:9 - 102(73) (2004). The parties cannot have a A security agreement is an agreement “that creates or provides for a

agreement. No amount of legal artistry can alter this result. generate the amount of the advance. I t was not a loan but a consignment fact, Northeast Auctions assumed the risk of loss if the auction failed to obligation to repay the money advanced to her for the sale of the antiques. In obligation. Gill was not in debt to Northeast Auctions; she was under no Auctions did not create a security interest, because there was no underlying obligation.” RSA 382 - A:1 - 201(37). The transaction between Gill and Northeast personal property or fixtures which secures payment or performance of an statutory definition of a security interest. A security interest is “an interest in possession of the secured party, RSA 382 - A:9 - 203(b) (2004) – it ignores the been given, the debtor has rights in the collateral and the collateral is in the the elements necessary for an enforceable secur ity interest – that value has agreement are undisputed. But in its brief, while Northeast Auctions sets out interest. It claims that the factual elements necessary to establish a security agreement, but instead a securit y agreement creating a valid, perfected security Northeast Auctions argues that the transaction was not a consignment p. 6 6

BRODERICK, C.J.