Request By:
Elmer E. Morgan
Morgan and Pottinger
Attorneys
521 West Market Street
Louisville, Kentucky 40202
Opinion
Opinion By: Robert F. Stephens, Attorney General; By William S. Riley, Assistant Attorney General
In your letter a question has been raised concerning OAG 79-63 which holds that sales of repossessed property must be conducted by a licensed auctioneer.
In that opinion it was stated that many financial institutions conduct repossession sales. The sales are of goods and vehicles titled in the name of the institution following private repossession or court ordered surrender. The sales are conducted in compliance with KRS 355.9-504. Employees of the financial institutions solicit bids from persons attending the sale and sell the repossessed merchandise on the spot. Sales are made to both consumers and dealers.
The question was whether such repossession sales were exempt from Chapter 330 of the Kentucky Revised Statutes, more particularly, Sections 1 and 2 of KRS 330.030.
Chapter 330 deals with auctioneers. KRS 330.020(2) defines an auctioneer as any person, who, for a fee, commission or any other valuable consideration, or with the intention or expectation of receiving the same, by the means of, or process of, an auction or sale at auction, offers, negotiates or attempts to negotiate a listing contract, sale, purchase or exchange of goods, chattels, merchandise, real or personal property, or of any other commodity which may lawfully be kept or offered for sale by or at public auction. Subsection (4) defines "goods" as any chattels, goods, merchandise, real or personal property, or commodities of any form or type which may be lawfully kept or offered for sale. Subsection (5) defines "persons" to include individuals, associations, partnerships, and corporations. The word "persons" also includes officers, directors and employees of a corporation.
KRS 330.040 lists certain exceptions to KRS 330.030. Subsection (2), as amended by the 1978 General Assembly, excepts the sale at auction of any real or personal property conducted exclusively by an individual who personally owns such real or personal property and who did not acquire such real or personal property for resale.
Sales of repossessed property are conducted pursuant to KRS 355.9-504. That section provides that such sale be by public or private proceedings with the secured parties having the right to dispose of any or all collateral after default or following any commercially reasonable preparation or processing.
Since under KRS 330.020(5) "persons" are defined to include individuals, associations, partnerships and corporations and also includes officers, directors and employees of a corporation and since the owners are selling their own property (repossessed collateral) pursuant to the provisions of KRS 355.9-504 and since the property was not acquired for resale but as security for a loan it would appear that an auction of repossessed collateral is within the exemption provided in KRS 330.040 as amended and such a sale does not require a licensed auctioneer to be present for the conduct of the sale.
OAG 79-63 is hereby withdrawn and this opinion substituted for that opinion.