A secured lender brought a motion for summary judgment seeking payment of accounts receivable assigned to it following borrower default.
The moving party relied on security agreements governed by Virginia law and the Uniform Commercial Code, asserting a right to collect accounts receivable directly from an account debtor.
The responding parties argued the lender’s decision to collect receivables rather than realize on other collateral was commercially unreasonable and raised triable issues.
The court accepted expert evidence on Virginia law and held the UCC’s commercial reasonableness requirement applied to the manner of collection, not the decision to pursue accounts receivable over other collateral.
The court further held that cause of action estoppel barred the applicants’ claims due to prior litigation in the United States.
Summary judgment was granted and the related application dismissed.
