Request By:
John T. McGarvey
Morgan and Pottinger
Attorneys at Law
521 West Market Street
Louisville, Kentucky 40202
Opinion
Opinion By: Robert F. Stephens, Attorney General; By William S. Riley, Assistant Attorney General
In your recent letter to the Attorney General the question is raised concerning the application of Chapter 330 of the Kentucky Revised Statutes relating to auctioneers to sales of repossessed goods at public auction.
Many financial institutions conduct repossession sales. The sales are of goods or 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 is whether such repossession sales are exempt from Chapter 330 of the Kentucky Revised Statutes, more particularly, Sections 1 and 2 of KRS 330.030.
Chapter 330 of the Kentucky Revised Statutes deals with auctioneers. KRS 330.020, subsection (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.
KRS 330.030 provides that on or after July 1, 1962, it is unlawful for any person to act as an auctioneer or apprentice auctioneer, or to advertise or to assume to act as an auctioneer within the commonwealth without a license issued by the board of auctioneers.
KRS 330.040 lists certain exceptions to KRS 330.030. Such sales are those conducted by or under the direction of any public authority or pursuant to any judicial order, or any sale required by law to be at auction. Subsection (2), as amended by the 1978 General Assembly, except sales 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. Subsection (3) excepts any resident or nonresident crier or auctioncer who simply calls for bids and strikes the bargain at any auction sale of registered or purebred livestock or who cries or acts as auctioneer in show cattle sales or the sale of livestock owned and sold at auction by 4-H or FFA Clubs or club members. Under subsection (4), amended by the 1974 General Assembly, there is excepted a sale conducted by or on behalf of any political party, church or charitable corporation or association if the individual conducting the sale receives no compensation and does not, by advertising or otherwise hold himself out as being available to engage in the sale of goods or real estate at auction.
The sales of the repossessed property in question are conducted pursuant to KRS 355.9-504. That section provides that such sales may 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.
Nowhere in the above section or in the sections cited from the chapter on auctioneers is there any exception to conducting a sale of repossessed property in conformity with Chapter 330. In the absence of any such specific exception, it is our opinion that such sales must be conducted by a licensed auctioneer as provided for in KRS 330.030.