Highland Marketplace obtained a \($28,000,000\) loan from First Community Bank in September 2007. The loan was secured by real estate located in Highland, Utah. Highland utilized the loan proceeds to develop the real estate, including connecting utilities, building roads and sidewalks, and constructing commercial buildings on several lots. However, the development stalled as a result of the 2008 recession, and Highland defaulted on the loan. SA Group Properties, Inc., as successor to First Community Bank, foreclosed on the real estate. At the time of the foreclosure, Highland owed \($14,685,370.\) The foreclosure sale yielded \($8,565,000.\) SA Group brought an action against Highland to collect the deficiency in August 2012.
At trial, Highland’s expert testified that the value of the real estate was \($14,710,000.\) The trial court rejected Highland’s valuation and instead accepted the appraisal of \($10,568,000\) by SA Group’s expert and entered a deficiency judgment against Highland in the amount of \($4,747,891 plus\) attorney fees and costs. Highland appealed to the Utah Court of Appeals.
1. How should the appellate court decide this case? Was the sales price commercially unreasonable given that it was substantially lower than both the estimates?
2. What procedures and standards should apply to lenders with respect to foreclosures upon property and resulting deficiencies? Did the lender follow these procedures and standards in this case? Why or why not?