On January 14, 2006, Sam and Odalis Groome entered into a sales contract with Alpacas of America LLC (AOA) to purchase an Alpaca named “Phasion Model” for $18,750. Almost exactly one year later, the Groomes purchased another Alpaca named “Black Thunder’s Midnight” from AOA for $20,250. The Groomes had to finance the purchases, and, together with the sales contract, the Groomes executed a promissory note which outlined a payment plan and contained a security agreement. In 2012, AOA sued the Groomes for allegedly failing to make payments since October 2007. The Groomes filed a motion to dismiss AOA’s claims, contending that the four-year statute of limitations for the sale of goods had expired. AOA fired back by arguing that they were basing their claim on promissory notes which were negotiable instruments; furthermore, the statute of limitations on negotiable instruments is six years. The trial court granted the Groome’s motion, reasoning that because the promissory notes enforced a sales contract, and because the promissory notes and the sales contract were part of the same transaction, the promissory notes were not negotiable instruments. On February 4, 2014, the appeals court reversed the trial court decision. What did the results of the case hinge on? What was the appeals court’s reasoning to reverse the decision in favor of Alpacas of America LLC?

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