AN ACT
Relating to secured transactions, revising Article 9 of the uniform commercial
code with conforming amendments and additions to other statutes; amending RCW
62A.1‑105, 62A.1‑201, 62A.2‑103, 62A.2‑210, 62A.2‑326,
62A.2‑502, 62A.2‑716, 62A.2A‑103, 62A.2A‑303, 62A.2A‑307,
62A.2A‑309, 62A.2A-310, 62A.4‑210, 62A.7‑503, 62A.8‑103,
62A.8‑106, 62A.8‑110, 62A.8‑301, 62A.8‑302, 62A.8‑510,
9.38.020, 46.12.095, 46.12.103, 60.11.010, 60.11.020, 60.11.030, 60.11.040,
60.11.050, 60.11.060, 60.11.070, 60.11.100, 60.11.120, 60.11.130, 60.11.140,
and 65.20.030; adding new sections to chapter 60.11 RCW; adding a new section
to Article 62A.5 RCW; adding a new Article to Title 62A RCW; repealing RCW
62A.9‑101, 62A.9‑102, 62A.9‑103, 62A.9‑104, 62A.9‑105,
62A.9‑106, 62A.9‑107, 62A.9‑108, 62A.9‑109, 62A.9‑110,
62A.9‑112, 62A.9‑113, 62A.9‑114, 62A.9‑115, 62A.9‑116,
62A.9‑201, 62A.9‑202, 62A.9‑203, 62A.9‑204, 62A.9‑205,
62A.9‑206, 62A.9‑207, 62A.9‑208, 62A.9‑301, 62A.9‑302,
62A.9‑303, 62A.9‑304, 62A.9‑305, 62A.9‑306, 62A.9‑307,
62A.9‑308, 62A.9‑309, 62A.9‑310, 62A.9‑311, 62A.9‑312,
62A.9‑313, 62A.9‑314, 62A.9‑315, 62A.9‑316, 62A.9‑317,
62A.9‑318, 62A.9‑401, 62A.9‑402, 62A.9‑403, 62A.9‑404,
62A.9‑405, 62A.9‑406, 62A.9‑407, 62A.9‑408, 62A.9‑409,
62A.9‑420, 62A.9‑501, 62A.9‑502, 62A.9‑503, 62A.9‑504,
62A.9‑505, 62A.9‑506, and 62A.9‑507; and providing an
effective date.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
NEW
SECTION. Sec. 1. A
new section is added to chapter 60.11 RCW, to be codified as RCW 60.11.9001, to
read as follows:
TRANSITION RULE FOR
EXISTING FILINGS. All
statements filed with the department of licensing under this chapter before
July 1, 2001, shall be deemed to satisfy the requirements of RCW 60.11.030 and
62A.9A-310 for filing a financing statement.
NEW
SECTION. Sec. 2. A
new section is added to Article 62A.5 RCW, to be codified as RCW 62A.5-118, to
read as follows:
SECURITY
INTEREST OF ISSUER OR NOMINATED PERSON. (a) An issuer or nominated person has
a security interest in a document presented under a letter of credit to the
extent that the issuer or nominated person honors or gives value for the
presentation.
(b)
So long as and to the extent that an issuer or nominated person has not been
reimbursed or has not otherwise recovered the value given with respect to a
security interest in a document under subsection (a) of this section, the
security interest continues and is subject to Article 9, but:
(1)
A security agreement is not necessary to make the security interest enforceable
under RCW 62A.9A‑203(b)(3);
(2)
If the document is presented in a medium other than a written or other tangible
medium, the security interest is perfected; and
(3)
If the document is presented in a written or other tangible medium and is not a
certificated security, chattel paper, a document of title, an instrument, or a
letter of credit, the security interest is perfected and has priority over a
conflicting security interest in the document so long as the debtor does not
have possession of the document.
PART
1
GENERAL
PROVISIONS
NEW
SECTION. Sec. 9A‑101. SHORT
TITLE. This Article may be cited as the Uniform Commercial Code-Secured
Transactions.
NEW
SECTION. Sec. 9A‑102.
DEFINITIONS AND INDEX OF DEFINITIONS. (a) Article 9 definitions. In
this Article:
(1)
"Accession" means goods that are physically united with other goods
in such a manner that the identity of the original goods is not lost.
(2)(A)
"Account," except as used in "account for," means a right
to payment of a monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned, or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for
a policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising
out of the use of a credit or charge card or information contained on or for
use with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a state, governmental unit of a state, or person
licensed or authorized to operate the game by a state or governmental unit of a
state. The term includes health-care-insurance receivables.
(B)
The term does not include (i) rights to payment evidenced by chattel paper or
an instrument, (ii) commercial tort claims, (iii) deposit accounts, (iv)
investment property, (v) letter-of-credit rights or letters of credit, or (vi)
rights to payment for money or funds advanced or sold, other than rights
arising out of the use of a credit or charge card or information contained on
or for use with the card.
(3)
"Account debtor" means a person obligated on an account, chattel
paper, or general intangible. The term does not include persons obligated to
pay a negotiable instrument, even if the instrument constitutes part of chattel
paper.
(4)
"Accounting," except as used in "accounting for," means a
record:
(A)
Authenticated by a secured party;
(B)
Indicating the aggregate unpaid secured obligations as of a date not more than
thirty-five days earlier or thirty-five days later than the date of the record;
and
(C)
Identifying the components of the obligations in reasonable detail.
(5)
"Agricultural lien" means an interest, other than a security
interest, in farm products:
(A)
Which secures payment or performance of an obligation for:
(i)
Goods or services furnished in connection with a debtor's farming operation; or
(ii)
Rent on real property leased by a debtor in connection with its farming
operation;
(B)
Which is created by statute in favor of a person that:
(i)
In the ordinary course of its business, furnished goods or services to a debtor
in connection with a debtor's farming operation; or
(ii)
Leased real property to a debtor in connection with the debtor's farming
operation; and
(C)
Whose effectiveness does not depend on the person's possession of the personal
property.
(6)
"As-extracted collateral" means:
(A)
Oil, gas, or other minerals that are subject to a security interest that:
(i)
Is created by a debtor having an interest in the minerals before extraction;
and
(ii)
Attaches to the minerals as extracted; or
(B)
Accounts arising out of the sale at the wellhead or minehead of oil, gas, or
other minerals in which the debtor had an interest before extraction.
(7)
"Authenticate" means:
(A)
To sign; or
(B)
To execute or otherwise adopt a symbol, or encrypt or similarly process a
record in whole or in part, with the present intent of the authenticating
person to identify the person and adopt or accept a record.
(8)
"Bank" means an organization that is engaged in the business of
banking. The term includes savings banks, savings and loan associations,
credit unions, and trust companies.
(9)
"Cash proceeds" means proceeds that are money, checks, deposit
accounts, or the like.
(10)
"Certificate of title" means a certificate of title with respect to
which a statute provides for the security interest in question to be indicated
on the certificate as a condition or result of the security interest's
obtaining priority over the rights of a lien creditor with respect to the
collateral.
(11)
"Chattel paper" means a record or records that evidence both a
monetary obligation and a security interest in specific goods, a security
interest in specific goods and software used in the goods, a security interest
in specific goods and license of software used in the goods, a lease of
specific goods, or a lease of specific goods and license of software used in
the goods. In this subsection, "monetary obligation" means a
monetary obligation secured by the goods or owed under a lease of the goods and
includes a monetary obligation with respect to software used in the goods. The
term "chattel paper" does not include charters or other contracts
involving the use or hire of a vessel. If a transaction is evidenced by
records that include an instrument or series of instruments, the group of
records taken together constitutes chattel paper.
(12)
"Collateral" means the property subject to a security interest or
agricultural lien. The term includes:
(A)
Proceeds to which a security interest attaches;
(B)
Accounts, chattel paper, payment intangibles, and promissory notes that have
been sold; and
(C)
Goods that are the subject of a consignment.
(13)
"Commercial tort claim" means a claim arising in tort with respect to
which:
(A)
The claimant is an organization; or
(B)
The claimant is an individual, and the claim:
(i)
Arose in the course of the claimant's business or profession; and
(ii)
Does not include damages arising out of personal injury to, or the death of, an
individual.
(14)
"Commodity account" means an account maintained by a commodity
intermediary in which a commodity contract is carried for a commodity customer.
(15)
"Commodity contract" means a commodity futures contract, an option on
a commodity futures contract, a commodity option, or another contract if the
contract or option is:
(A)
Traded on or subject to the rules of a board of trade that has been designated
as a contract market for such a contract pursuant to federal commodities laws;
or
(B)
Traded on a foreign commodity board of trade, exchange, or market, and is carried
on the books of a commodity intermediary for a commodity customer.
(16)
"Commodity customer" means a person for which a commodity
intermediary carries a commodity contract on its books.
(17)
"Commodity intermediary" means a person that:
(A)
Is registered as a futures commission merchant under federal commodities law;
or
(B)
In the ordinary course of its business, provides clearance or settlement
services for a board of trade that has been designated as a contract market
pursuant to federal commodities law.
(18)
"Communicate" means:
(A)
To send a written or other tangible record;
(B)
To transmit a record by any means agreed upon by the persons sending and
receiving the record; or
(C)
In the case of transmission of a record to or by a filing office, to transmit a
record by any means prescribed by filing-office rule.
(19)
"Consignee" means a merchant to which goods are delivered in a
consignment.
(20)
"Consignment" means a transaction, regardless of its form, in which a
person delivers goods to a merchant for the purpose of sale and:
(A)
The merchant:
(i)
Deals in goods of that kind under a name other than the name of the person
making delivery;
(ii)
Is not an auctioneer; and
(iii)
Is not generally known by its creditors to be substantially engaged in selling
the goods of others;
(B)
With respect to each delivery, the aggregate value of the goods is one thousand
dollars or more at the time of delivery;
(C)
The goods are not consumer goods immediately before delivery; and
(D)
The transaction does not create a security interest that secures an obligation.
(21)
"Consignor" means a person that delivers goods to a consignee in a
consignment.
(22)
"Consumer debtor" means a debtor in a consumer transaction.
(23)
"Consumer goods" means goods that are used or bought for use
primarily for personal, family, or household purposes.
(24)
"Consumer-goods transaction" means a consumer transaction in which:
(A)
An individual incurs a consumer obligation; and
(B)
A security interest in consumer goods secures the obligation.
(25)
"Consumer obligation" means an obligation which:
(A)
Is incurred as part of a transaction entered into primarily for personal,
family, or household purposes; and
(B)
Arises from an extension of credit, or commitment to extend credit, in an
aggregate amount not exceeding forty thousand dollars, or is secured by
personal property used or expected to be used as a principal dwelling.
"Consumer
obligor" means an obligor who is an individual and who incurred a consumer
obligation.
(26)
"Consumer transaction" means a transaction in which (A) an individual
incurs a consumer obligation, (B) a security interest secures the obligation,
and (C) the collateral is held or acquired primarily for personal, family, or
household purposes. The term includes consumer-goods transactions.
(27)
"Continuation statement" means an amendment of a financing statement
which:
(A)
Identifies, by its file number, the initial financing statement to which it
relates; and
(B)
Indicates that it is a continuation statement for, or that it is filed to
continue the effectiveness of, the identified financing statement.
(28)
"Debtor" means:
(A)
A person having an interest, other than a security interest or other lien, in
the collateral, whether or not the person is an obligor;
(B)
A seller of accounts, chattel paper, payment intangibles, or promissory notes;
or
(C)
A consignee.
(29)
"Deposit account" means a demand, time, savings, passbook, or similar
account maintained with a bank. The term does not include investment property
or accounts evidenced by an instrument.
(30)
"Document" means a document of title or a receipt of the type
described in RCW 62A.7‑201(2).
(31)
"Electronic chattel paper" means chattel paper evidenced by a record
or records consisting of information stored in an electronic medium.
(32)
"Encumbrance" means a right, other than an ownership interest, in
real property. The term includes mortgages and other liens on real property.
(33)
"Equipment" means goods other than inventory, farm products, or
consumer goods.
(34)
"Farm products" means goods, other than standing timber, with respect
to which the debtor is engaged in a farming operation and which are:
(A)
Crops grown, growing, or to be grown, including:
(i)
Crops produced on trees, vines, and bushes; and
(ii)
Aquatic goods produced in aquacultural operations;
(B)
Livestock, born or unborn, including aquatic goods produced in aquacultural
operations;
(C)
Supplies used or produced in a farming operation; or
(D)
Products of crops or livestock in their unmanufactured states.
(35)
"Farming operation" means raising, cultivating, propagating,
fattening, grazing, or any other farming, livestock, or aquacultural operation.
(36)
"File number" means the number assigned to an initial financing
statement pursuant to RCW 62A.9A‑519(a).
(37)
"Filing office" means an office designated in RCW 62A.9A‑501 as
the place to file a financing statement.
(38)
"Filing-office rule" means a rule adopted pursuant to RCW 62A.9A‑526.
(39)
"Financing statement" means a record or records composed of an
initial financing statement and any filed record relating to the initial
financing statement.
(40)
"Fixture filing" means the filing of a financing statement covering
goods that are or are to become fixtures and satisfying RCW 62A.9A‑502
(a) and (b). The term includes the filing of a financing statement covering
goods of a transmitting utility which are or are to become fixtures.
(41)
"Fixtures" means goods that have become so related to particular real
property that an interest in them arises under real property law.
(42)
"General intangible" means any personal property, including things in
action, other than accounts, chattel paper, commercial tort claims, deposit
accounts, documents, goods, instruments, investment property, letter-of-credit
rights, letters of credit, money, and oil, gas, or other minerals before
extraction. The term includes payment intangibles and software.
(43)
"Good faith" means honesty in fact and the observance of reasonable
commercial standards of fair dealing.
(44)
"Goods" means all things that are movable when a security interest
attaches. The term includes (A) fixtures, (B) standing timber that is to be
cut and removed under a conveyance or contract for sale, (C) the unborn young
of animals, (D) crops grown, growing, or to be grown, even if the crops are
produced on trees, vines, or bushes, and (E) manufactured homes. The term also
includes a computer program embedded in goods and any supporting information
provided in connection with a transaction relating to the program if (i) the
program is associated with the goods in such a manner that it customarily is
considered part of the goods, or (ii) by becoming the owner of the goods, a
person acquires a right to use the program in connection with the goods. The
term does not include a computer program embedded in goods that consist solely
of the medium in which the program is embedded. The term also does not include
accounts, chattel paper, commercial tort claims, deposit accounts, documents,
general intangibles, instruments, investment property, letter-of-credit rights,
letters of credit, money, or oil, gas, or other minerals before extraction or a
manufactured home converted to real property under chapter 65.20 RCW.
(45)
"Governmental unit" means a subdivision, agency, department, county,
parish, municipality, or other unit of the government of the United States, a
state, or a foreign country. The term includes an organization having a
separate corporate existence if the organization is eligible to issue debt on
which interest is exempt from income taxation under the laws of the United
States.
(46)
"Health-care-insurance receivable" means an interest in or claim
under a policy of insurance which is a right to payment of a monetary
obligation for health-care goods or services provided.
(47)
"Instrument" means a negotiable instrument or any other writing that
evidences a right to the payment of a monetary obligation, is not itself a
security agreement or lease, and is of a type that in ordinary course of
business is transferred by delivery with any necessary indorsement or
assignment. The term does not include (A) investment property, (B) letters of
credit, (C) writings that evidence a right to payment arising out of the use of
a credit or charge card or information contained on or for use with the card,
(D) writings that do not contain a promise or order to pay, or (E) writings
that are expressly nontransferable or nonassignable.
(48)
"Inventory" means goods, other than farm products, which:
(A)
Are leased by a person as lessor;
(B)
Are held by a person for sale or lease or to be furnished under a contract of
service;
(C)
Are furnished by a person under a contract of service; or
(D)
Consist of raw materials, work in process, or materials used or consumed in a
business.
(49)
"Investment property" means a security, whether certificated or
uncertificated, security entitlement, securities account, commodity contract,
or commodity account.
(50)
"Jurisdiction of organization," with respect to a registered
organization, means the jurisdiction under whose law the organization is
organized.
(51)
"Letter-of-credit right" means a right to payment or performance
under a letter of credit, whether or not the beneficiary has demanded or is at
the time entitled to demand payment or performance. The term does not include
the right of a beneficiary to demand payment or performance under a letter of
credit.
(52)
"Lien creditor" means:
(A)
A creditor that has acquired a lien on the property involved by attachment,
levy, or the like;
(B)
An assignee for benefit of creditors from the time of assignment;
(C)
A trustee in bankruptcy from the date of the filing of the petition; or
(D)
A receiver in equity from the time of appointment.
(53)
"Manufactured home" means a manufactured home or mobile home as
defined in RCW 46.04.302.
(54)
[Reserved]
(55)
"Mortgage" means a consensual interest in real property, including
fixtures, which secures payment or performance of an obligation.
(56)
"New debtor" means a person that becomes bound as debtor under RCW
62A.9A‑203(d) by a security agreement previously entered into by another
person.
(57)
"New value" means (A) money, (B) money's worth in property, services,
or new credit, or (C) release by a transferee of an interest in property
previously transferred to the transferee. The term does not include an
obligation substituted for another obligation.
(58)
"Noncash proceeds" means proceeds other than cash proceeds.
(59)
"Obligor" means a person that, with respect to an obligation secured
by a security interest in or an agricultural lien on the collateral, (A) owes
payment or other performance of the obligation, (B) has provided property other
than the collateral to secure payment or other performance of the obligation,
or (C) is otherwise accountable in whole or in part for payment or other
performance of the obligation. The term does not include issuers or nominated
persons under a letter of credit.
(60)
"Original debtor" means a person that, as debtor, entered into a
security agreement to which a new debtor has become bound under RCW 62A.9A‑203(d).
(61)
"Payment intangible" means a general intangible under which the
account debtor's principal obligation is a monetary obligation.
(62)
"Person related to," with respect to an individual, means:
(A)
The spouse of the individual;
(B)
A brother, brother-in-law, sister, or sister-in-law of the individual;
(C)
An ancestor or lineal descendant of the individual or the individual's spouse;
or
(D)
Any other relative, by blood or marriage, of the individual or the individual's
spouse who shares the same home with the individual.
(63)
"Person related to," with respect to an organization, means:
(A)
A person directly or indirectly controlling, controlled by, or under common
control with the organization;
(B)
An officer or director of, or a person performing similar functions with
respect to, the organization;
(C)
An officer or director of, or a person performing similar functions with
respect to, a person described in (64)(A) of this subsection;
(D)
The spouse of an individual described in (64)(A), (B), or (C) of this
subsection; or
(E)
An individual who is related by blood or marriage to an individual described in
(64)(A), (B), (C), or (D) of this subsection and shares the same home with the
individual.
(64)
"Proceeds" means the following property:
(A)
Whatever is acquired upon the sale, lease, license, exchange, or other
disposition of collateral;
(B)
Whatever is collected on, or distributed on account of, collateral;
(C)
Rights arising out of collateral;
(D)
To the extent of the value of collateral, claims arising out of the loss,
nonconformity, or interference with the use of, defects or infringement of
rights in, or damage to, the collateral; or
(E)
To the extent of the value of collateral and to the extent payable to the
debtor or the secured party, insurance payable by reason of the loss or
nonconformity of, defects or infringement of rights in, or damage to, the
collateral.
(65)
"Promissory note" means an instrument that evidences a promise to pay
a monetary obligation, does not evidence an order to pay, and does not contain
an acknowledgment by a bank that the bank has received for deposit a sum of
money or funds.
(66)
"Proposal" means a record authenticated by a secured party, which
includes the terms on which the secured party is willing to accept collateral
in full or partial satisfaction of the obligation it secures pursuant to RCW
62A.9A‑620, 62A.9A‑621, and 62A.9A‑622.
(67)
"Public-finance transaction" means a secured transaction in
connection with which:
(A)
Debt securities are issued;
(B)
All or a portion of the securities issued have an initial stated maturity of at
least twenty years; and
(C)
The debtor, obligor, secured party, account debtor or other person obligated on
collateral, assignor or assignee of a secured obligation, or assignor or
assignee of a security interest is a state or a governmental unit of a state.
(68)
"Pursuant to commitment," with respect to an advance made or other
value given by a secured party, means pursuant to the secured party's
obligation, whether or not a subsequent event of default or other event not
within the secured party's control has relieved or may relieve the secured
party from its obligation.
(69)
"Record," except as used in "for record," "of
record," "record or legal title," and "record owner,"
means information that is inscribed on a tangible medium or which is stored in
an electronic or other medium and is retrievable in perceivable form.
(70)
"Registered organization" means an organization organized solely
under the law of a single state or the United States and as to which the state
or the United States must maintain a public record showing the organization to
have been organized.
(71)
"Secondary obligor" means an obligor to the extent that:
(A)
The obligor's obligation is secondary; or
(B)
The obligor has a right of recourse with respect to an obligation secured by
collateral against the debtor, another obligor, or property of either.
(72)
"Secured party" means:
(A)
A person in whose favor a security interest is created or provided for under a
security agreement, whether or not any obligation to be secured is outstanding;
(B)
A person that holds an agricultural lien;
(C)
A consignor;
(D)
A person to which accounts, chattel paper, payment intangibles, or promissory
notes have been sold;
(E)
A trustee, indenture trustee, agent, collateral agent, or other representative
in whose favor a security interest or agricultural lien is created or provided
for; or
(F)
A person that holds a security interest arising under RCW 62A.2‑401,
62A.2‑505, 62A.2‑711(3), 62A.2A‑508(5), 62A.4‑210, or
62A.5‑118.
(73)
"Security agreement" means an agreement that creates or provides for
a security interest.
(74)
"Send," in connection with a record or notification, means:
(A)
To deposit in the mail, deliver for transmission, or transmit by any other
usual means of communication, with postage or cost of transmission provided
for, addressed to any address reasonable under the circumstances; or
(B)
To cause the record or notification to be received within the time that it
would have been received if properly sent under (75)(A) of this subsection.
(75)
"Software" means a computer program and any supporting information
provided in connection with a transaction relating to the program. The term
does not include a computer program that is included in the definition of
goods.
(76)
"State" means a state of the United States, the District of Columbia,
Puerto Rico, the United States Virgin Islands, or any territory or insular
possession subject to the jurisdiction of the United States.
(77)
"Supporting obligation" means a letter-of-credit right or secondary
obligation that supports the payment or performance of an account, chattel
paper, a document, a general intangible, an instrument, or investment property.
(78)
"Tangible chattel paper" means chattel paper evidenced by a record or
records consisting of information that is inscribed on a tangible medium.
(79)
"Termination statement" means an amendment of a financing statement
which:
(A)
Identifies, by its file number, the initial financing statement to which it
relates; and
(B)
Indicates either that it is a termination statement or that the identified
financing statement is no longer effective.
(80)
"Transmitting utility" means a person primarily engaged in the
business of:
(A)
Operating a railroad, subway, street railway, or trolley bus;
(B)
Transmitting communications electrically, electromagnetically, or by light;
(C)
Transmitting goods by pipeline or sewer; or
(D)
Transmitting or producing and transmitting electricity, steam, gas, or water.
(b)
Definitions in other Articles. The following definitions in other
Articles apply to this Article:
"Applicant." RCW
62A.5‑102.
"Beneficiary." RCW
62A.5‑102.
"Broker." RCW
62A.8‑102.
"Certificated
security." RCW 62A.8‑102.
"Check." RCW
62A.3‑104.
"Clearing
corporation." RCW 62A.8‑102.
"Contract
for sale." RCW 62A.2‑106.
"Customer." RCW
62A.4‑104.
"Entitlement
holder." RCW 62A.8‑102.
"Financial
asset." RCW 62A.8‑102.
"Holder
in due course." RCW 62A.3‑302.
"Issuer"
with respect to a letter of
credit
or letter-of-credit right. RCW 62A.5‑102.
"Issuer"
with respect to a security. RCW 62A.8‑201.
"Lease." RCW
62A.2A‑103.
"Lease
agreement." RCW 62A.2A‑103.
"Lease
contract." RCW 62A.2A‑103.
"Leasehold
interest." RCW 62A.2A‑103.
"Lessee." RCW
62A.2A‑103.
"Lessee
in ordinary course of business." RCW 62A.2A‑103.
"Lessor." RCW
62A.2A‑103.
"Lessor's
residual interest." RCW 62A.2A‑103.
"Letter
of credit." RCW 62A.5‑102.
"Merchant." RCW
62A.2‑104.
"Negotiable
instrument." RCW 62A.3‑104.
"Nominated
person." RCW 62A.5‑102.
"Note." RCW
62A.3‑104.
"Proceeds
of a letter of credit." RCW 62A.5‑114.
"Prove." RCW
62A.3‑103.
"Sale." RCW
62A.2‑106.
"Securities
account." RCW 62A.8‑501.
"Securities
intermediary." RCW 62A.8‑102.
"Security." RCW
62A.8‑102.
"Security
certificate." RCW 62A.8‑102.
"Security
entitlement." RCW 62A.8‑102.
"Uncertificated
security." RCW 62A.8‑102.
(c)
Article 1 definitions and principles. Article 1 contains general
definitions and principles of construction and interpretation applicable
throughout this Article.
NEW
SECTION. Sec. 9A‑103.
PURCHASE-MONEY SECURITY INTEREST; APPLICATION OF PAYMENTS; BURDEN OF
ESTABLISHING. (a) Definitions. In this section:
(1)
"Purchase-money collateral" means goods or software that secures a
purchase-money obligation incurred with respect to that collateral; and
(2)
"Purchase-money obligation" means an obligation of an obligor
incurred as all or part of the price of the collateral or for value given to
enable the debtor to acquire rights in, or the use of, the collateral, if the
value is in fact so used.
(b)
Purchase-money security interest in goods. A security interest in goods
is a purchase-money security interest:
(1)
To the extent that the goods are purchase-money collateral with respect to that
security interest;
(2)
If the security interest is in inventory that is or was purchase-money
collateral, also to the extent that the security interest secures a
purchase-money obligation incurred with respect to other inventory in which the
secured party holds or held a purchase-money security interest; and
(3)
Also to the extent that the security interest secures a purchase-money
obligation incurred with respect to software in which the secured party holds
or held a purchase-money security interest.
(c)
Purchase-money security interest in software. A security interest in
software is a purchase-money security interest to the extent that the security
interest also secures a purchase-money obligation incurred with respect to
goods in which the secured party holds or held a purchase-money security
interest if:
(1)
The debtor acquired its interest in the software in an integrated transaction
in which it acquired an interest in the goods; and
(2)
The debtor acquired its interest in the software for the principal purpose of
using the software in the goods.
(d)
Consignor's inventory purchase-money security interest. The security
interest of a consignor in goods that are the subject of a consignment is a
purchase-money security interest in inventory.
(e)
Application of payment in nonconsumer-goods transaction. In a
transaction other than a consumer-goods transaction, if the extent to which a
security interest is a purchase-money security interest depends on the
application of a payment to a particular obligation, the payment must be
applied:
(1)
In accordance with any reasonable method of application to which the parties
agree;
(2)
In the absence of the parties' agreement to a reasonable method, in accordance
with any intention of the obligor manifested at or before the time of payment;
or
(3)
In the absence of an agreement to a reasonable method and a timely
manifestation of the obligor's intention, in the following order:
(A)
To obligations that are not secured; and
(B)
If more than one obligation is secured, to obligations secured by
purchase-money security interests in the order in which those obligations were
incurred.
(f)
No loss of status of purchase-money security interest in nonconsumer-goods
transaction. In a transaction other than a consumer-goods transaction, a
purchase-money security interest does not lose its status as such, even if:
(1)
The purchase-money collateral also secures an obligation that is not a
purchase-money obligation;
(2)
Collateral that is not purchase-money collateral also secures the
purchase-money obligation; or
(3)
The purchase-money obligation has been renewed, refinanced, consolidated, or
restructured.
(g)
Burden of proof in nonconsumer-goods transaction. In a transaction
other than a consumer-goods transaction, a secured party claiming a
purchase-money security interest has the burden of establishing the extent to
which the security interest is a purchase-money security interest.
(h)
Nonconsumer-goods transactions; no inference. The limitation of the
rules in subsections (e), (f), and (g) of this section to transactions other
than consumer-goods transactions is intended to leave to the court the determination
of the proper rules in consumer-goods transactions. The court may not infer
from that limitation the nature of the proper rule in consumer-goods
transactions and may continue to apply established approaches.
NEW
SECTION. Sec. 9A‑104.
CONTROL OF DEPOSIT ACCOUNT. (a) Requirements for control. A secured
party has control of a deposit account if:
(1)
The secured party is the bank with which the deposit account is maintained;
(2)
The debtor, secured party, and bank have agreed in an authenticated record that
the bank will comply with instructions originated by the secured party
directing disposition of the funds in the account without further consent by
the debtor; or
(3)
The secured party becomes the bank's customer with respect to the deposit
account.
(b)
Debtor's right to direct disposition. A secured party that has
satisfied subsection (a) of this section has control, even if the debtor
retains the right to direct the disposition of funds from the deposit account.
NEW
SECTION. Sec. 9A‑105.
CONTROL OF ELECTRONIC CHATTEL PAPER. A secured party has control of electronic
chattel paper if the record or records comprising the chattel paper are created,
stored, and assigned in such a manner that:
(1)
A single authoritative copy of the record or records exists which is unique,
identifiable and, except as otherwise provided in (4), (5), and (6) of this
section, unalterable;
(2)
The authoritative copy identifies the secured party as the assignee of the
record or records;
(3)
The authoritative copy is communicated to and maintained by the secured party
or its designated custodian;
(4)
Copies or revisions that add or change an identified assignee of the
authoritative copy can be made only with the participation of the secured
party;
(5)
Each copy of the authoritative copy and any copy of a copy is readily
identifiable as a copy that is not the authoritative copy; and
(6)
Any revision of the authoritative copy is readily identifiable as an authorized
or unauthorized revision.
NEW
SECTION. Sec. 9A‑106.
CONTROL OF INVESTMENT PROPERTY. (a) Control under RCW 62A.8-106. A
person has control of a certificated security, uncertificated security, or
security entitlement as provided in RCW 62A.8‑106.
(b)
Control of commodity contract. A secured party has control of a
commodity contract if:
(1)
The secured party is the commodity intermediary with which the commodity
contract is carried; or
(2)
The commodity customer, secured party, and commodity intermediary have agreed
that the commodity intermediary will apply any value distributed on account of
the commodity contract as directed by the secured party without further consent
by the commodity customer.
(c)
Effect of control of securities account or commodity account. A secured
party having control of all security entitlements or commodity contracts
carried in a securities account or commodity account has control over the
securities account or commodity account.
NEW
SECTION. Sec. 9A‑107.
CONTROL OF LETTER-OF-CREDIT RIGHT. A secured party has control of a
letter-of-credit right to the extent of any right to payment or performance by
the issuer or any nominated person if the issuer or nominated person has
consented to an assignment of proceeds of the letter of credit under RCW 62A.5‑114(c)
or otherwise applicable law or practice.
NEW
SECTION. Sec. 9A‑108.
SUFFICIENCY OF DESCRIPTION IN SECURITY AGREEMENT. (a) Sufficiency of
description. Except as otherwise provided in subsections (c), (d), and (e)
of this section, a description of personal or real property is sufficient,
whether or not it is specific, if it reasonably identifies what is described.
(b)
Examples of reasonable identification. Except as otherwise provided in
subsection (d) of this section, a description of collateral reasonably
identifies the collateral if it identifies the collateral by:
(1)
Specific listing;
(2)
Category;
(3)
Except as otherwise provided in subsection (e) of this section, a type of
collateral defined in the Uniform Commercial Code;
(4)
Quantity;
(5)
Computational or allocational formula or procedure; or
(6)
Except as otherwise provided in subsection (c) of this section, any other
method, if the identity of the collateral is objectively determinable.
(c)
Supergeneric description not sufficient. A description of collateral as
"all the debtor's assets" or "all the debtor's personal
property" or using words of similar import does not reasonably identify
the collateral. However, as provided in RCW 62A.9A-504, such a description is
sufficient in a financing statement.
(d)
Investment property. Except as otherwise provided in subsection (e) of
this section, a description of a security entitlement, securities account, or
commodity account is sufficient if it describes:
(1)
The collateral by those terms or as investment property; or
(2)
The underlying financial asset or commodity contract.
(e)
When description by type insufficient. A description only by type of
collateral defined in the Uniform Commercial Code is an insufficient
description of:
(1)
A commercial tort claim; or
(2)
In a consumer transaction, consumer goods, a security entitlement, a securities
account, or a commodity account.
NEW
SECTION. Sec. 9A‑109.
SCOPE. (a) General scope of Article. Except as otherwise provided in
subsections (c) and (d) of this section, this Article applies to:
(1)
A transaction, regardless of its form, that creates a security interest in
personal property or fixtures by contract;
(2)
An agricultural lien;
(3)
A sale of accounts, chattel paper, payment intangibles, or promissory notes;
(4)
A consignment;
(5)
A security interest arising under RCW 62A.2‑401, 62A.2‑505, 62A.2‑711(3),
or 62A.2A‑508(5), as provided in RCW 62A.9A‑110; and
(6)
A security interest arising under RCW 62A.4‑210 or 62A.5‑118.
(b)
Security interest in secured obligation. The application of this
Article to a security interest in a secured obligation is not affected by the
fact that the obligation is itself secured by a transaction or interest to
which this Article does not apply.
(c)
Extent to which Article does not apply. This Article does not apply to
the extent that:
(1)
A statute, regulation, or treaty of the United States preempts this Article;
(2)
Another statute of this state expressly governs the creation, perfection, priority,
or enforcement of a security interest created by this state or a governmental
unit of this state;
(3)
A statute of another state, a foreign country, or a governmental unit of
another state or a foreign country, other than a statute generally applicable
to security interests, expressly governs creation, perfection, priority, or
enforcement of a security interest created by the state, country, or
governmental unit; or
(4)
The rights of a transferee beneficiary or nominated person under a letter of
credit are independent and superior under RCW 62A.5‑114.
(d)
Inapplicability of Article. This Article does not apply to:
(1)
A landlord's lien, other than an agricultural lien;
(2)
A lien, other than an agricultural lien, given by statute or other rule of law
for services or materials, but RCW 62A.9A‑333 applies with respect to
priority of the lien;
(3)
An assignment of a claim for wages, salary, or other compensation of an employee;
(4)
A sale of accounts, chattel paper, payment intangibles, or promissory notes as
part of a sale of the business out of which they arose;
(5)
An assignment of accounts, chattel paper, payment intangibles, or promissory
notes which is for the purpose of collection only;
(6)
An assignment of a right to payment under a contract to an assignee that is
also obligated to perform under the contract;
(7)
An assignment of a single account, payment intangible, or promissory note to an
assignee in full or partial satisfaction of a preexisting indebtedness;
(8)
A transfer of an interest in or an assignment of a claim under a policy of
insurance, other than an assignment by or to a health-care provider of a
health-care-insurance receivable and any subsequent assignment of the right to
payment, but RCW 62A.9A‑315 and 62A.9A‑322 apply with respect to
proceeds and priorities in proceeds;
(9)
An assignment of a right represented by a judgment, other than a judgment taken
on a right to payment that was collateral;
(10)
A right of recoupment or set-off, but:
(A)
RCW 62A.9A‑340 applies with respect to the effectiveness of rights of
recoupment or set-off against deposit accounts; and
(B)
RCW 62A.9A‑404 applies with respect to defenses or claims of an account
debtor;
(11)
The creation or transfer of an interest in or lien on real property, including
a lease or rents thereunder, except to the extent that provision is made for:
(A)
Liens on real property in RCW 62A.9A‑203 and 62A.9A‑308;
(B)
Fixtures in RCW 62A.9A‑334;
(C)
Fixture filings in RCW 62A.9A‑501, 62A.9A‑502, 62A.9A‑512,
62A.9A‑516, and 62A.9A‑519; and
(D)
Security agreements covering personal and real property in RCW 62A.9A‑604;
(12)
An assignment of a claim arising in tort, other than a commercial tort claim,
but RCW 62A.9A‑315 and 62A.9A‑322 apply with respect to proceeds
and priorities in proceeds;
(13)
An assignment in a consumer transaction of a deposit account on which checks
can be drawn, but RCW 62A.9A‑315 and 62A.9A‑322 apply with respect
to proceeds and priorities in proceeds; or
(14)
A transfer by this state or a governmental unit of this state.
NEW
SECTION. Sec. 9A‑110.
SECURITY INTERESTS ARISING UNDER ARTICLE 2 OR 2A. A security interest arising
under RCW 62A.2‑401, 62A.2‑505, 62A.2‑711(3), or 62A.2A‑508(5)
is subject to this Article. However, until the debtor obtains possession of
the goods:
(1)
The security interest is enforceable, even if RCW 62A.9A‑203(b)(3) has
not been satisfied;
(2)
Filing is not required to perfect the security interest;
(3)
The rights of the secured party after default by the debtor are governed by
Article 2 or 2A; and
(4)
The security interest has priority over a conflicting security interest created
by the debtor.
PART
2
EFFECTIVENESS
OF SECURITY AGREEMENT;
ATTACHMENT
OF SECURITY INTEREST;
RIGHTS
OF PARTIES TO SECURITY AGREEMENT
NEW
SECTION. Sec. 9A‑201.
GENERAL EFFECTIVENESS OF SECURITY AGREEMENT. (a) General effectiveness. Except
as otherwise provided in the Uniform Commercial Code, a security agreement is
effective according to its terms between the parties, against purchasers of the
collateral, and against creditors.
(b)
Applicable consumer laws and other law. A transaction subject to this
Article is subject to any applicable rule of law which establishes a different
rule for consumers and (i) any other statute or regulation that regulates the
rates, charges, agreements, and practices for loans, credit sales, or other
extensions of credit and (ii) any consumer-protection statute or regulation.
(c)
Other applicable law controls. In case of conflict between this Article
and a rule of law, statute, or regulation described in subsection (b) of this
section, the rule of law, statute, or regulation controls. Failure to comply
with a statute or regulation described in subsection (b) of this section has
only the effect the statute or regulation specifies.
(d)
Further deference to other applicable law. This Article does not:
(1)
Validate any rate, charge, agreement, or practice that violates a rule of law,
statute, or regulation described in subsection (b) of this section; or
(2)
Extend the application of the rule of law, statute, or regulation to a
transaction not otherwise subject to it.
NEW
SECTION. Sec. 9A‑202. TITLE
TO COLLATERAL IMMATERIAL. Except as otherwise provided with respect to
consignments or sales of accounts, chattel paper, payment intangibles, or
promissory notes, the provisions of this Article with regard to rights and
obligations apply whether title to collateral is in the secured party or the
debtor.
NEW
SECTION. Sec. 9A‑203.
ATTACHMENT AND ENFORCEABILITY OF SECURITY INTEREST; PROCEEDS; SUPPORTING
OBLIGATIONS; FORMAL REQUISITES. (a) Attachment. A security interest
attaches to collateral when it becomes enforceable against the debtor with
respect to the collateral, unless an agreement expressly postpones the time of
attachment.
(b)
Enforceability. Except as otherwise provided in subsections (c) through
(i) of this section, a security interest is enforceable against the debtor and
third parties with respect to the collateral only if:
(1)
Value has been given;
(2)
The debtor has rights in the collateral or the power to transfer rights in the
collateral to a secured party; and
(3)
One of the following conditions is met:
(A)
The debtor has authenticated a security agreement that provides a description
of the collateral and, if the security interest covers timber to be cut, a
description of the land concerned;
(B)
The collateral is not a certificated security and is in the possession of the
secured party under RCW 62A.9A‑313 pursuant to the debtor's security
agreement;
(C)
The collateral is a certificated security in registered form and the security
certificate has been delivered to the secured party under RCW 62A.8‑301
pursuant to the debtor's security agreement; or
(D)
The collateral is deposit accounts, electronic chattel paper, investment
property, or letter-of-credit rights, and the secured party has control under
RCW 62A.9A‑104, 62A.9A‑105, 62A.9A‑106, or 62A.9A‑107
pursuant to the debtor's security agreement.
(c)
Other UCC provisions. Subsection (b) of this section is subject to RCW
62A.4‑210 on the security interest of a collecting bank, RCW 62A.5‑118
on the security interest of a letter-of-credit issuer or nominated person, RCW
62A.9A‑110 on a security interest arising under Article 2 or 2A, and RCW
62A.9A‑206 on security interests in investment property.
(d)
When person becomes bound by another person's security agreement. A
person becomes bound as debtor by a security agreement entered into by another
person if, by operation of law other than this Article or by contract:
(1)
The security agreement becomes effective to create a security interest in the person's
property; or
(2)
The person becomes generally obligated for the obligations of the other person,
including the obligation secured under the security agreement, and acquires or
succeeds to all or substantially all of the assets of the other person.
(e)
Effect of new debtor becoming bound. If a new debtor becomes bound as
debtor by a security agreement entered into by another person:
(1)
The agreement satisfies subsection (b)(3) of this section with respect to
existing or after-acquired property of the new debtor to the extent the
property is described in the agreement; and
(2)
Another agreement is not necessary to make a security interest in the property
enforceable.
(f)
Proceeds and supporting obligations. The attachment of a security
interest in collateral gives the secured party the rights to proceeds provided
by RCW 62A.9A‑315 and is also attachment of a security interest in a
supporting obligation for the collateral.
(g)
Lien securing right to payment. The attachment of a security interest
in a right to payment or performance secured by a security interest or other
lien on personal or real property is also attachment of a security interest in
the security interest, mortgage, or other lien.
(h)
Security entitlement carried in securities account. The attachment of a
security interest in a securities account is also attachment of a security
interest in the security entitlements carried in the securities account.
(i)
Commodity contracts carried in commodity account. The attachment of a
security interest in a commodity account is also attachment of a security
interest in the commodity contracts carried in the commodity account.
NEW
SECTION. Sec. 9A‑204.
AFTER-ACQUIRED PROPERTY; FUTURE ADVANCES. (a) After-acquired collateral. Except
as otherwise provided in subsection (b) of this section, a security agreement
may create or provide for a security interest in after-acquired collateral.
(b)
When after-acquired property clause not effective. A security interest
does not attach, under a term constituting an after‑acquired property
clause, to:
(1)
Consumer goods, other than an accession when given as additional security,
unless the debtor acquires rights in them within ten days after the secured
party gives value; or
(2)
A commercial tort claim.
(c)
Future advances and other value. A security agreement may provide that
collateral secures, or that accounts, chattel paper, payment intangibles, or
promissory notes are sold in connection with, future advances or other value,
whether or not the advances or value are given pursuant to commitment.
NEW
SECTION. Sec. 9A‑205. USE
OR DISPOSITION OF COLLATERAL PERMISSIBLE. (a) When security interest not
invalid or fraudulent. A security interest is not invalid or fraudulent
against creditors solely because:
(1)
The debtor has the right or ability to:
(A)
Use, commingle, or dispose of all or part of the collateral, including returned
or repossessed goods;
(B)
Collect, compromise, enforce, or otherwise deal with collateral;
(C)
Accept the return of collateral or make repossessions; or
(D)
Use, commingle, or dispose of proceeds; or
(2)
The secured party fails to require the debtor to account for proceeds or
replace collateral.
(b)
Requirements of possession not relaxed. This section does not relax the
requirements of possession if attachment, perfection, or enforcement of a
security interest depends upon possession of the collateral by the secured
party.
NEW
SECTION. Sec. 9A‑206.
SECURITY INTEREST ARISING IN PURCHASE OR DELIVERY OF FINANCIAL ASSET. (a) Security
interest when person buys through securities intermediary. A security
interest in favor of a securities intermediary attaches to a person's security
entitlement if:
(1)
The person buys a financial asset through the securities intermediary in a
transaction in which the person is obligated to pay the purchase price to the
securities intermediary at the time of the purchase; and
(2)
The securities intermediary credits the financial asset to the buyer's
securities account before the buyer pays the securities intermediary.
(b)
Security interest secures obligation to pay for financial asset. The
security interest described in subsection (a) of this section secures the
person's obligation to pay for the financial asset.
(c)
Security interest in payment against delivery transaction. A security
interest in favor of a person that delivers a certificated security or other
financial asset represented by a writing attaches to the security or other
financial asset if:
(1)
The security or other financial asset:
(A)
In the ordinary course of business, is transferred by delivery with any
necessary indorsement or assignment; and
(B)
Is delivered under an agreement between persons in the business of dealing with
such securities or financial assets; and
(2)
The agreement calls for delivery against payment.
(d)
Security interest secures obligation to pay for delivery. The security
interest described in subsection (c) of this section secures the obligation to
make payment for the delivery.
NEW
SECTION. Sec. 9A‑207.
RIGHTS AND DUTIES OF SECURED PARTY HAVING POSSESSION OR CONTROL OF COLLATERAL.
(a) Duty of care when secured party in possession. Except as otherwise
provided in subsection (d) of this section, a secured party shall use
reasonable care in the custody and preservation of collateral in the secured
party's possession. In the case of chattel paper or an instrument, reasonable
care includes taking necessary steps to preserve rights against prior parties
unless otherwise agreed.
(b)
Expenses, risks, duties, and rights when secured party in possession. Except
as otherwise provided in subsection (d) of this section, if a secured party has
possession of collateral:
(1)
Reasonable expenses, including the cost of insurance and payment of taxes or
other charges, incurred in the custody, preservation, use, or operation of the
collateral are chargeable to the debtor and are secured by the collateral;
(2)
The risk of accidental loss or damage is on the debtor to the extent of a
deficiency in any effective insurance coverage;
(3)
The secured party shall keep the collateral identifiable, but fungible
collateral may be commingled; and
(4)
The secured party may use or operate the collateral:
(A)
For the purpose of preserving the collateral or its value;
(B)
As permitted by an order of a court having competent jurisdiction; or
(C)
Except in the case of consumer goods, in the manner and to the extent agreed by
the debtor.
(c)
Duties and rights when secured party in possession or control. Except
as otherwise provided in subsection (d) of this section, a secured party having
possession of collateral or control of collateral under RCW 62A.9A‑104,
62A.9A‑105, 62A.9A‑106, or 62A.9A‑107:
(1)
May hold as additional security any proceeds, except money or funds, received
from the collateral;
(2)
Shall apply money or funds received from the collateral to reduce the secured
obligation, unless remitted to the debtor; and
(3)
May create a security interest in the collateral.
(d)
Buyer of certain rights to payment. If the secured party is a buyer of
accounts, chattel paper, payment intangibles, or promissory notes or a
consignor:
(1)
Subsection (a) of this section does not apply unless the secured party is
entitled under an agreement:
(A)
To charge back uncollected collateral; or
(B)
Otherwise to full or limited recourse against the debtor or a secondary obligor
based on the nonpayment or other default of an account debtor or other obligor
on the collateral; and
(2)
Subsections (b) and (c) of this section do not apply.
NEW
SECTION. Sec. 9A‑208.
ADDITIONAL DUTIES OF SECURED PARTY HAVING CONTROL OF COLLATERAL. (a) Applicability
of section. This section applies to cases in which there is no outstanding
secured obligation and the secured party is not committed to make advances,
incur obligations, or otherwise give value.
(b)
Duties of secured party after receiving demand from debtor. Within ten
days after receiving an authenticated demand by the debtor:
(1)
A secured party having control of a deposit account under RCW 62A.9A‑104(a)(2)
shall send to the bank with which the deposit account is maintained an
authenticated statement that releases the bank from any further obligation to
comply with instructions originated by the secured party;
(2)
A secured party having control of a deposit account under RCW 62A.9A‑104(a)(3)
shall:
(A)
Pay the debtor the balance on deposit in the deposit account; or
(B)
Transfer the balance on deposit into a deposit account in the debtor's name;
(3)
A secured party, other than a buyer, having control of electronic chattel paper
under RCW 62A.9A‑105 shall:
(A)
Communicate the authoritative copy of the electronic chattel paper to the
debtor or its designated custodian;
(B)
If the debtor designates a custodian that is the designated custodian with
which the authoritative copy of the electronic chattel paper is maintained for
the secured party, communicate to the custodian an authenticated record
releasing the designated custodian from any further obligation to comply with
instructions originated by the secured party and instructing the custodian to
comply with instructions originated by the debtor; and
(C)
Take appropriate action to enable the debtor or its designated custodian to
make copies of or revisions to the authoritative copy which add or change an
identified assignee of the authoritative copy without the consent of the
secured party;
(4)
A secured party having control of investment property under RCW 62A.8‑106(d)(2)
or 62A.9A‑106(b) shall send to the securities intermediary or commodity
intermediary with which the security entitlement or commodity contract is
maintained an authenticated record that releases the securities intermediary or
commodity intermediary from any further obligation to comply with entitlement
orders or directions originated by the secured party; and
(5)
A secured party having control of a letter-of-credit right under RCW 62A.9A‑107
shall send to each person having an unfulfilled obligation to pay or deliver
proceeds of the letter of credit to the secured party an authenticated release
from any further obligation to pay or deliver proceeds of the letter of credit
to the secured party.
NEW
SECTION. Sec. 9A‑209.
DUTIES OF SECURED PARTY IF ACCOUNT DEBTOR HAS BEEN NOTIFIED OF ASSIGNMENT. (a)
Applicability of section. Except as otherwise provided in subsection
(c) of this section, this section applies if:
(1)
There is no outstanding secured obligation; and
(2)
The secured party is not committed to make advances, incur obligations, or
otherwise give value.
(b)
Duties of secured party after receiving demand from debtor. Within ten
days after receiving an authenticated demand by the debtor, a secured party
shall send to an account debtor that has received notification of an assignment
to the secured party as assignee under RCW 62A.9A‑406(a) an authenticated
record that releases the account debtor from any further obligation to the
secured party.
(c)
Inapplicability to sales. This section does not apply to an assignment
constituting the sale of an account, chattel paper, or payment intangible.
NEW
SECTION. Sec. 9A‑210.
REQUEST FOR ACCOUNTING; REQUEST REGARDING LIST OF COLLATERAL OR STATEMENT OF
ACCOUNT. (a) Definitions. In this section:
(1)
"Request" means a record of a type described in (2), (3), or (4) of
this subsection.
(2)
"Request for an accounting" means a record authenticated by a debtor
requesting that the recipient provide an accounting of the unpaid obligations
secured by collateral and reasonably identifying the transaction or
relationship that is the subject of the request.
(3)
"Request regarding a list of collateral" means a record authenticated
by a debtor requesting that the recipient approve or correct a list of what the
debtor believes to be the collateral securing an obligation and reasonably
identifying the transaction or relationship that is the subject of the request.
(4)
"Request regarding a statement of account" means a record
authenticated by a debtor requesting that the recipient approve or correct a
statement indicating what the debtor believes to be the aggregate amount of
unpaid obligations secured by collateral as of a specified date and reasonably
identifying the transaction or relationship that is the subject of the request.
(b)
Duty to respond to requests. Subject to subsections (c), (d), (e), and (f)
of this section, a secured party, other than a buyer of accounts, chattel
paper, payment intangibles, or promissory notes or a consignor, shall comply
with a request within fourteen days after receipt:
(1)
In the case of a request for an accounting, by authenticating and sending to
the debtor an accounting; and
(2)
In the case of a request regarding a list of collateral or a request regarding
a statement of account, by authenticating and sending to the debtor an approval
or correction.
(c)
Request regarding list of collateral; statement concerning type of collateral.
A secured party that claims a security interest in all of a particular type of
collateral owned by the debtor may comply with a request regarding a list of
collateral by sending to the debtor an authenticated record including a
statement to that effect within fourteen days after receipt.
(d)
Request regarding list of collateral; no interest claimed. A person that
receives a request regarding a list of collateral, claims no interest in the
collateral when it receives the request, and claimed an interest in the
collateral at an earlier time shall comply with the request within fourteen
days after receipt by sending to the debtor an authenticated record:
(1)
Disclaiming any interest in the collateral; and
(2)
If known to the recipient, providing the name and mailing address of any
assignee of, or successor to, the recipient's interest in the collateral.
(e)
Request for accounting or regarding statement of account; no interest in obligation
claimed. A person that receives a request for an accounting or a request
regarding a statement of account, claims no interest in the obligations when it
receives the request, and claimed an interest in the obligations at an earlier
time shall comply with the request within fourteen days after receipt by
sending to the debtor an authenticated record:
(1)
Disclaiming any interest in the obligations; and
(2)
If known to the recipient, providing the name and mailing address of any
assignee of, or successor to, the recipient's interest in the obligations.
(f)
Charges for responses. A debtor is entitled without charge to one response
to a request under this section during any six-month period. The secured party
may require payment of a charge not exceeding twenty-five dollars for each
additional response.
PART
3
PERFECTION
AND PRIORITY
NEW
SECTION. Sec. 9A‑301. LAW
GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS. Except as otherwise
provided in RCW 62A.9A‑303 through 62A.9A‑306, the following rules
determine the law governing perfection, the effect of perfection or
nonperfection, and the priority of a security interest in collateral:
(1)
Except as otherwise provided in this section, while a debtor is located in a
jurisdiction, the local law of that jurisdiction governs perfection, the effect
of perfection or nonperfection, and the priority of a security interest in collateral.
(2)
While collateral is located in a jurisdiction, the local law of that
jurisdiction governs perfection, the effect of perfection or nonperfection, and
the priority of a possessory security interest in that collateral.
(3)
Except as otherwise provided in (4) of this section, while negotiable
documents, goods, instruments, money, or tangible chattel paper is located in a
jurisdiction, the local law of that jurisdiction governs:
(A)
Perfection of a security interest in the goods by filing a fixture filing;
(B)
Perfection of a security interest in timber to be cut; and
(C)
The effect of perfection or nonperfection and the priority of a nonpossessory
security interest in the collateral.
(4)
The local law of the jurisdiction in which the wellhead or minehead is located
governs perfection, the effect of perfection or nonperfection, and the priority
of a security interest in as-extracted collateral.
NEW
SECTION. Sec. 9A‑302. LAW
GOVERNING PERFECTION AND PRIORITY OF AGRICULTURAL LIENS. While farm products
are located in a jurisdiction, the local law of that jurisdiction governs
perfection, the effect of perfection or nonperfection, and the priority of an
agricultural lien on the farm products.
NEW
SECTION. Sec. 9A‑303. LAW
GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS IN GOODS COVERED BY A
CERTIFICATE OF TITLE. (a) Applicability of section. This section
applies to goods covered by a certificate of title, even if there is no other
relationship between the jurisdiction under whose certificate of title the
goods are covered and the goods or the debtor.
(b)
When goods covered by certificate of title. Goods become covered by a
certificate of title when a valid application for the certificate of title and
the applicable fee are delivered to the appropriate authority. Goods cease to
be covered by a certificate of title at the earlier of the time the certificate
of title ceases to be effective under the law of the issuing jurisdiction or
the time the goods become covered subsequently by a certificate of title issued
by another jurisdiction.
(c)
Applicable law. The local law of the jurisdiction under whose certificate
of title the goods are covered governs perfection, the effect of perfection or
nonperfection, and the priority of a security interest in goods covered by a
certificate of title from the time the goods become covered by the certificate
of title until the goods cease to be covered by the certificate of title.
NEW
SECTION. Sec. 9A‑304. LAW
GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS IN DEPOSIT ACCOUNTS.
(a) Law of bank's jurisdiction governs. The local law of a bank's
jurisdiction governs perfection, the effect of perfection or nonperfection, and
the priority of a security interest in a deposit account maintained with that
bank.
(b)
Bank's jurisdiction. The following rules determine a bank's jurisdiction
for purposes of this part:
(1)
If an agreement between the bank and the debtor governing the deposit account
expressly provides that a particular jurisdiction is the bank's jurisdiction
for purposes of this part, this Article, or the Uniform Commercial Code, that
jurisdiction is the bank's jurisdiction.
(2)
If (1) of this subsection does not apply and an agreement between the bank and
its customer governing the deposit account expressly provides that the
agreement is governed by the law of a particular jurisdiction, that
jurisdiction is the bank's jurisdiction.
(3)
If neither (1) nor (2) of this subsection applies and an agreement between the
bank and its customer governing the deposit account expressly provides that the
deposit account is maintained at an office in a particular jurisdiction, that
jurisdiction is the bank's jurisdiction.
(4)
If (1) through (3) of this subsection do not apply, the bank's jurisdiction is
the jurisdiction in which the office identified in an account statement as the
office serving the customer's account is located.
(5)
If (1) through (4) of this subsection do not apply, the bank's jurisdiction is
the jurisdiction in which the chief executive office of the bank is located.
NEW
SECTION. Sec. 9A‑305. LAW
GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS IN INVESTMENT
PROPERTY. (a) Governing law: General rules. Except as otherwise
provided in subsection (c) of this section, the following rules apply:
(1)
While a security certificate is located in a jurisdiction, the local law of
that jurisdiction governs perfection, the effect of perfection or
nonperfection, and the priority of a security interest in the certificated
security represented thereby.
(2)
The local law of the issuer's jurisdiction as specified in RCW 62A.8‑110(d)
governs perfection, the effect of perfection or nonperfection, and the priority
of a security interest in an uncertificated security.
(3)
The local law of the securities intermediary's jurisdiction as specified in RCW
62A.8‑110(e) governs perfection, the effect of perfection or
nonperfection, and the priority of a security interest in a security
entitlement or securities account.
(4)
The local law of the commodity intermediary's jurisdiction governs perfection,
the effect of perfection or nonperfection, and the priority of a security
interest in a commodity contract or commodity account.
(b)
Commodity intermediary's jurisdiction. The following rules determine a
commodity intermediary's jurisdiction for purposes of this part:
(1)
If an agreement between the commodity intermediary and commodity customer
governing the commodity account expressly provides that a particular
jurisdiction is the commodity intermediary's jurisdiction for purposes of this
part, this Article, or the Uniform Commercial Code, that jurisdiction is the
commodity intermediary's jurisdiction.
(2)
If (1) of this subsection does not apply and an agreement between the commodity
intermediary and commodity customer governing the commodity account expressly
provides that the agreement is governed by the law of a particular
jurisdiction, that jurisdiction is the commodity intermediary's jurisdiction.
(3)
If neither (1) nor (2) of this subsection applies and an agreement between the
commodity intermediary and commodity customer governing the commodity account
expressly provides that the commodity account is maintained at an office in a
particular jurisdiction, that jurisdiction is the commodity intermediary's
jurisdiction.
(4)
If (1) through (3) of this subsection do not apply, the commodity
intermediary's jurisdiction is the jurisdiction in which the office identified
in an account statement as the office serving the commodity customer's account
is located.
(5)
If (1) through (4) of this subsection do not apply, the commodity
intermediary's jurisdiction is the jurisdiction in which the chief executive
office of the commodity intermediary is located.
(c)
When perfection governed by law of jurisdiction where debtor located. The
local law of the jurisdiction in which the debtor is located governs:
(1)
Perfection of a security interest in investment property by filing;
(2)
Automatic perfection of a security interest in investment property created by a
broker or securities intermediary; and
(3)
Automatic perfection of a security interest in a commodity contract or
commodity account created by a commodity intermediary.
NEW
SECTION. Sec. 9A‑306. LAW
GOVERNING PERFECTION AND PRIORITY OF SECURITY INTERESTS IN LETTER-OF-CREDIT
RIGHTS. (a) Governing law: Issuers or nominated person's jurisdiction.
Subject to subsection (c) of this section, the local law of the issuer's
jurisdiction or a nominated person's jurisdiction governs perfection, the
effect of perfection or nonperfection, and the priority of a security interest
in a letter-of-credit right if the issuer's jurisdiction or nominated person's
jurisdiction is a state.
(b)
Issuer's or nominated person's jurisdiction. For purposes of this part, an
issuer's jurisdiction or nominated person's jurisdiction is the jurisdiction
whose law governs the liability of the issuer or nominated person with respect
to the letter-of-credit right as provided in RCW 62A.5‑116.
(c)
When section not applicable. This section does not apply to a security
interest that is perfected only under RCW 62A.9A‑308(d).
NEW
SECTION. Sec. 9A‑307.
LOCATION OF DEBTOR. (a) "Place of business." In this
section, "place of business" means a place where a debtor conducts
its affairs.
(b)
Debtor's location: General rules. Except as otherwise provided in this
section, the following rules determine a debtor's location:
(1)
A debtor who is an individual is located at the individual's principal
residence.
(2)
A debtor that is an organization and has only one place of business is located
at its place of business.
(3)
A debtor that is an organization and has more than one place of business is
located at its chief executive office.
(c)
Limitation of applicability of subsection (b). Subsection (b) of this
section applies only if a debtor's residence, place of business, or chief
executive office, as applicable, is located in a jurisdiction whose law
generally requires information concerning the existence of a nonpossessory
security interest to be made generally available in a filing, recording, or
registration system as a condition or result of the security interest's
obtaining priority over the rights of a lien creditor with respect to the
collateral. If subsection (b) of this section does not apply, the debtor is
located in the District of Columbia.
(d)
Continuation of location: Cessation of existence, etc. A person that
ceases to exist, have a residence, or have a place of business continues to be
located in the jurisdiction specified by subsections (b) and (c) of this
section.
(e)
Location of registered organization organized under state law. A
registered organization that is organized under the law of a state is located
in that state.
(f)
Location of registered organization organized under federal law; bank branches
and agencies. Except as otherwise provided in subsection (i) of this
section, a registered organization that is organized under the law of the
United States and a branch or agency of a bank that is not organized under the
law of the United States or a state are located:
(1)
In the state that the law of the United States designates, if the law
designates a state of location;
(2)
In the state that the registered organization, branch, or agency designates, if
the law of the United States authorizes the registered organization, branch, or
agency to designate its state of location; or
(3)
In the District of Columbia, if neither (1) nor (2) of this subsection applies.
(g)
Continuation of location: Change in status of registered organization. A
registered organization continues to be located in the jurisdiction specified
by subsection (e) or (f) of this section notwithstanding:
(1)
The suspension, revocation, forfeiture, or lapse of the registered
organization's status as such in its jurisdiction of organization; or
(2)
The dissolution, winding up, or cancellation of the existence of the registered
organization.
(h)
Location of United States. The United States is located in the District of
Columbia.
(i)
Location of foreign bank branch or agency if licensed in only one state. A
branch or agency of a bank that is not organized under the law of the United
States or a state is located in the state in which the branch or agency is
licensed, if all branches and agencies of the bank are licensed in only one
state.
(j)
Location of foreign air carrier. A foreign air carrier under the Federal
Aviation Act of 1958, as amended, is located at the designated office of the
agent upon which service of process may be made on behalf of the carrier.
(k)
Section applies only to this part. This section applies only for purposes
of this part.
NEW
SECTION. Sec. 9A‑308. WHEN
SECURITY INTEREST OR AGRICULTURAL LIEN IS PERFECTED; CONTINUITY OF PERFECTION.
(a) Perfection of security interest. Except as otherwise
provided in this section and RCW 62A.9A‑309, a security interest is
perfected if it has attached and all of the applicable requirements for
perfection in RCW 62A.9A‑310 through 62A.9A‑316 have been
satisfied. A security interest is perfected when it attaches if the applicable
requirements are satisfied before the security interest attaches.
(b)
Perfection of agricultural lien. An agricultural lien is perfected if it
has become effective and all of the applicable requirements for perfection in
RCW 62A.9A‑310 have been satisfied. An agricultural lien is perfected
when it becomes effective if the applicable requirements are satisfied before
the agricultural lien becomes effective.
(c)
Continuous perfection; perfection by different methods. A security
interest or agricultural lien is perfected continuously if it is originally
perfected by one method under this Article and is later perfected by another
method under this Article, without an intermediate period when it was
unperfected.
(d)
Supporting obligation. Perfection of a security interest in collateral
also perfects a security interest in a supporting obligation for the collateral.
(e)
Lien securing right to payment. Perfection of a security interest in a
right to payment or performance also perfects a security interest in a security
interest, mortgage, or other lien on personal or real property securing the
right.
(f)
Security entitlement carried in securities account. Perfection of a
security interest in a securities account also perfects a security interest in
the security entitlements carried in the securities account.
(g)
Commodity contract carried in commodity account. Perfection of a security
interest in a commodity account also perfects a security interest in the
commodity contracts carried in the commodity account.
NEW
SECTION. Sec. 9A‑309.
SECURITY INTEREST PERFECTED UPON ATTACHMENT. The following security interests
are perfected when they attach:
(1)
A purchase-money security interest in consumer goods, except as otherwise
provided in RCW 62A.9A‑311(b) with respect to consumer goods that are
subject to a statute or treaty described in RCW 62A.9A‑311(a);
(2)
An assignment of accounts or payment intangibles which does not by itself or in
conjunction with other assignments to the same assignee transfer more than
fifty thousand dollars, or ten percent of the total amount of the assignor's
outstanding accounts and payment intangibles;
(3)
A sale of a payment intangible;
(4)
A sale of a promissory note;
(5)
A security interest created by the assignment of a health-care-insurance
receivable to the provider of the health-care goods or services;
(6)
A security interest arising under RCW 62A.2‑401, 62A.2‑505, 62A.2‑711(3),
or 62A.2A‑508(5), until the debtor obtains possession of the collateral;
(7)
A security interest of a collecting bank arising under RCW 62A.4‑210;
(8)
A security interest of an issuer or nominated person arising under RCW 62A.5‑118;
(9)
A security interest arising in the delivery of a financial asset under RCW
62A.9A‑206(c);
(10)
A security interest in investment property created by a broker or securities
intermediary;
(11)
A security interest in a commodity contract or a commodity account created by a
commodity intermediary;
(12)
An assignment for the benefit of all creditors of the transferor and subsequent
transfers by the assignee thereunder; and
(13)
A security interest created by an assignment of a beneficial interest in a
decedent's estate.
NEW
SECTION. Sec. 9A‑310. WHEN
FILING REQUIRED TO PERFECT SECURITY INTEREST OR AGRICULTURAL LIEN; SECURITY
INTERESTS AND AGRICULTURAL LIENS TO WHICH FILING PROVISIONS DO NOT APPLY. (a)
General rule: Perfection by filing. Except as otherwise provided in
subsections (b) and (d) of this section and RCW 62A.9A‑312(b), a
financing statement must be filed to perfect all security interests and
agricultural liens.
(b)
Exceptions: Filing not necessary. The filing of a financing statement is
not necessary to perfect a security interest:
(1)
That is perfected under RCW 62A.9A‑308 (d), (e), (f), or (g);
(2)
That is perfected under RCW 62A.9A‑309 when it attaches;
(3)
In property subject to a statute, regulation, or treaty described in RCW 62A.9A‑311(a);
(4)
In goods in possession of a bailee which is perfected under RCW 62A.9A‑312(d)
(1) or (2);
(5)
In certificated securities, documents, goods, or instruments which is perfected
without filing or possession under RCW 62A.9A‑312 (e), (f), or (g);
(6)
In collateral in the secured party's possession under RCW 62A.9A‑313;
(7)
In a certificated security which is perfected by delivery of the security
certificate to the secured party under RCW 62A.9A‑313;
(8)
In deposit accounts, electronic chattel paper, investment property, or
letter-of-credit rights which is perfected by control under RCW 62A.9A‑314;
(9)
In proceeds which is perfected under RCW 62A.9A‑315; or
(10)
That is perfected under RCW 62A.9A‑316.
(c)
Assignment of perfected security interest. If a secured party assigns a
perfected security interest or agricultural lien, a filing under this Article
is not required to continue the perfected status of the security interest
against creditors of and transferees from the original debtor.
(d)
Further exception: Filing not necessary for handler's lien. The filing
of a financing statement is not necessary to perfect the agricultural lien of a
handler on orchard crops as provided in RCW 60.11.020(3).
NEW
SECTION. Sec. 9A‑311.
PERFECTION OF SECURITY INTERESTS IN PROPERTY SUBJECT TO CERTAIN STATUTES,
REGULATIONS, AND TREATIES. (a) Security interest subject to other law.
Except as otherwise provided in subsection (d) of this section, the filing of a
financing statement is not necessary or effective to perfect a security
interest in property subject to:
(1)
A statute, regulation, or treaty of the United States whose requirements for a
security interest's obtaining priority over the rights of a lien creditor with
respect to the property preempt RCW 62A.9A‑310(a);
(2)
RCW 46.12.095 or 88.02.070, or chapter 65.12 RCW; or
(3)
A certificate-of-title statute of another jurisdiction which provides for a
security interest to be indicated on the certificate as a condition or result
of the security interest's obtaining priority over the rights of a lien
creditor with respect to the property.
(b)
Compliance with other law. Compliance with the requirements of a statute,
regulation, or treaty described in subsection (a) of this section for obtaining
priority over the rights of a lien creditor is equivalent to the filing of a
financing statement under this Article. Except as otherwise provided in
subsection (d) of this section, RCW 62A.9A‑313, and 62A.9A‑316 (d)
and (e) for goods covered by a certificate of title, a security interest in
property subject to a statute, regulation, or treaty described in subsection
(a) of this section may be perfected only by compliance with those
requirements, and a security interest so perfected remains perfected
notwithstanding a change in the use or transfer of possession of the
collateral.
(c)
Duration and renewal of perfection. Except as otherwise provided in
subsection (d) of this section and RCW 62A.9A‑316 (d) and (e), duration
and renewal of perfection of a security interest perfected by compliance with
the requirements prescribed by a statute, regulation, or treaty described in subsection
(a) of this section are governed by the statute, regulation, or treaty. In
other respects, the security interest is subject to this Article.
(d)
Inapplicability to certain inventory. During any period in which
collateral is inventory held for sale or lease by a person or leased by that
person as lessor and that person is in the business of selling or leasing goods
of that kind, this section does not apply to a security interest in that
collateral created by that person as debtor.
NEW
SECTION. Sec. 9A‑312.
PERFECTION OF SECURITY INTERESTS IN CHATTEL PAPER, DEPOSIT ACCOUNTS, DOCUMENTS,
GOODS COVERED BY DOCUMENTS, INSTRUMENTS, INVESTMENT PROPERTY, LETTER-OF-CREDIT
RIGHTS, AND MONEY; PERFECTION BY PERMISSIVE FILING; TEMPORARY PERFECTION
WITHOUT FILING OR TRANSFER OF POSSESSION. (a) Perfection by filing
permitted. A security interest in chattel paper, negotiable documents,
instruments, or investment property may be perfected by filing.
(b)
Control or possession of certain collateral. Except as otherwise provided
in RCW 62A.9A‑315 (c) and (d) for proceeds:
(1)
A security interest in a deposit account may be perfected only by control under
RCW 62A.9A‑314;
(2)
And except as otherwise provided in RCW 62A.9A‑308(d), a security
interest in a letter-of-credit right may be perfected only by control under RCW
62A.9A‑314; and
(3)
A security interest in money may be perfected only by the secured party's
taking possession under RCW 62A.9A‑313.
(c)
Goods covered by negotiable document. While goods are in the possession of
a bailee that has issued a negotiable document covering the goods:
(1)
A security interest in the goods may be perfected by perfecting a security
interest in the document; and
(2)
A security interest perfected in the document has priority over any security
interest that becomes perfected in the goods by another method during that
time.
(d)
Goods covered by nonnegotiable document. While goods are in the possession
of a bailee that has issued a nonnegotiable document covering the goods, a
security interest in the goods may be perfected by:
(1)
Issuance of a document in the name of the secured party;
(2)
The bailee's receipt of notification of the secured party's interest; or
(3)
Filing as to the goods.
(e)
Temporary perfection: New value. A security interest in certificated
securities, negotiable documents, or instruments is perfected without filing or
the taking of possession for a period of twenty days from the time it attaches
to the extent that it arises for new value given under an authenticated
security agreement.
(f)
Temporary perfection: Goods or documents made available to debtor. A
perfected security interest in a negotiable document or goods in possession of
a bailee, other than one that has issued a negotiable document for the goods,
remains perfected for twenty days without filing if the secured party makes
available to the debtor the goods or documents representing the goods for the
purpose of:
(1)
Ultimate sale or exchange; or
(2)
Loading, unloading, storing, shipping, transshipping, manufacturing,
processing, or otherwise dealing with them in a manner preliminary to their
sale or exchange.
(g)
Temporary perfection: Delivery of security certificate or instrument to
debtor. A perfected security interest in a certificated security or
instrument remains perfected for twenty days without filing if the secured
party delivers the security certificate or instrument to the debtor for the
purpose of:
(1)
Ultimate sale or exchange; or
(2)
Presentation, collection, enforcement, renewal, or registration of transfer.
(h)
Expiration of temporary perfection. After the twenty‑day period
specified in subsection (e), (f), or (g) of this section expires, perfection
depends upon compliance with this Article.
NEW
SECTION. Sec. 9A‑313. WHEN
POSSESSION BY OR DELIVERY TO SECURED PARTY PERFECTS SECURITY INTEREST WITHOUT
FILING. (a) Perfection by possession or delivery. Except as otherwise
provided in subsection (b) of this section, a secured party may perfect a
security interest in negotiable documents, goods, instruments, money, or
tangible chattel paper by taking possession of the collateral. A secured party
may perfect a security interest in certificated securities by taking delivery
of the certificated securities under RCW 62A.8‑301.
(b)
Goods covered by certificate of title. With respect to goods covered by a
certificate of title issued by this state, a secured party may perfect a
security interest in the goods by taking possession of the goods only in the
circumstances described in RCW 62A.9A‑316(d).
(c)
Collateral in possession of person other than debtor. With respect to
collateral other than certificated securities and goods covered by a document,
a secured party takes possession of collateral in the possession of a person
other than the debtor, the secured party, or a lessee of the collateral from
the debtor in the ordinary course of the debtor's business, when:
(1)
The person in possession authenticates a record acknowledging that it holds
possession of the collateral for the secured party's benefit; or
(2)
The person takes possession of the collateral after having authenticated a
record acknowledging that it will hold possession of collateral for the secured
party's benefit.
(d)
Time of perfection by possession; continuation of perfection. If
perfection of a security interest depends upon possession of the collateral by
a secured party, perfection occurs no earlier than the time the secured party
takes possession and continues only while the secured party retains possession.
(e)
Time of perfection by delivery; continuation of perfection. A security
interest in a certificated security in registered form is perfected by delivery
when delivery of the certificated security occurs under RCW 62A.8‑301 and
remains perfected by delivery until the debtor obtains possession of the
security certificate.
(f)
Acknowledgment not required. A person in possession of collateral is not
required to acknowledge that it holds possession for a secured party's benefit.
(g)
Effectiveness of acknowledgment; no duties or confirmation. If a person
acknowledges that it holds possession for the secured party's benefit:
(1)
The acknowledgment is effective under subsection (c) of this section or RCW
62A.8‑301(a), even if the acknowledgment violates the rights of a debtor;
and
(2)
Unless the person otherwise agrees or law other than this Article otherwise
provides, the person does not owe any duty to the secured party and is not
required to confirm the acknowledgment to another person.
(h)
Secured party's delivery to person other than debtor. A secured party
having possession of collateral does not relinquish possession by delivering the
collateral to a person other than the debtor or a lessee of the collateral from
the debtor in the ordinary course of the debtor's business if the person was
instructed before the delivery or is instructed contemporaneously with the
delivery:
(1)
To hold possession of the collateral for the secured party's benefit; or
(2)
To redeliver the collateral to the secured party.
(i)
Effect of delivery under subsection (h); no duties or confirmation. A
secured party does not relinquish possession, even if a delivery under
subsection (h) of this section violates the rights of a debtor. A person to
which collateral is delivered under subsection (h) of this section does not owe
any duty to the secured party and is not required to confirm the delivery to
another person unless the person otherwise agrees or law other than this
Article otherwise provides.
NEW
SECTION. Sec. 9A‑314.
PERFECTION BY CONTROL. (a) Perfection by control. A security interest
in investment property, deposit accounts, letter-of-credit rights, or
electronic chattel paper may be perfected by control of the collateral under
RCW 62A.9A‑104, 62A.9A‑105, 62A.9A‑106, or 62A.9A‑107.
(b)
Specified collateral: Time of perfection by control; continuation of
perfection. A security interest in deposit accounts, electronic chattel
paper, or letter-of-credit rights is perfected by control under RCW 62A.9A‑104,
62A.9A‑105, or 62A.9A‑107 when the secured party obtains control
and remains perfected by control only while the secured party retains control.
(c)
Investment property: Time of perfection by control; continuation of
perfection. A security interest in investment property is perfected by
control under RCW 62A.9A‑106 from the time the secured party obtains
control and remains perfected by control until:
(1)
The secured party does not have control; and
(2)
One of the following occurs:
(A)
If the collateral is a certificated security, the debtor has or acquires
possession of the security certificate;
(B)
If the collateral is an uncertificated security, the issuer has registered or
registers the debtor as the registered owner; or
(C)
If the collateral is a security entitlement, the debtor is or becomes the
entitlement holder.
NEW
SECTION. Sec. 9A‑315.
SECURED PARTY'S RIGHTS ON DISPOSITION OF COLLATERAL AND IN PROCEEDS. (a)
Disposition of collateral: Continuation of security interest or agricultural
lien; proceeds. Except as otherwise provided in this Article and in RCW
62A.2‑403(2):
(1)
A security interest or agricultural lien continues in collateral
notwithstanding sale, lease, license, exchange, or other disposition thereof
unless the secured party authorized the disposition free of the security
interest or agricultural lien; and
(2)
A security interest attaches to any identifiable proceeds of collateral.
(b)
When commingled proceeds identifiable. Proceeds that are commingled with
other property are identifiable proceeds:
(1)
If the proceeds are goods, to the extent provided by RCW 62A.9A‑336; and
(2)
If the proceeds are not goods, to the extent that the secured party identifies
the proceeds by a method of tracing, including application of equitable
principles, that is permitted under law other than this Article with respect to
commingled property of the type involved.
(c)
Perfection of security interest in proceeds. A security interest in
proceeds is a perfected security interest if the security interest in the
original collateral was perfected.
(d)
Continuation of perfection. A perfected security interest in proceeds
becomes unperfected on the twenty-first day after the security interest
attaches to the proceeds unless:
(1)
The following conditions are satisfied:
(A)
A filed financing statement covers the original collateral;
(B)
The proceeds are collateral in which a security interest may be perfected by
filing in the office in which the financing statement has been filed; and
(C)
The proceeds are not acquired with cash proceeds;
(2)
The proceeds are identifiable cash proceeds; or
(3)
The security interest in the proceeds is perfected other than under subsection
(c) of this section when the security interest attaches to the proceeds or
within twenty days thereafter.
(e)
When perfected security interest in proceeds becomes unperfected. If a
filed financing statement covers the original collateral, a security interest
in proceeds which remains perfected under subsection (d)(1) of this section
becomes unperfected at the later of:
(1)
When the effectiveness of the filed financing statement lapses under RCW 62A.9A‑515
or is terminated under RCW 62A.9A‑513; or
(2)
The twenty-first day after the security interest attaches to the proceeds.
NEW
SECTION. Sec. 9A‑316.
CONTINUED PERFECTION OF SECURITY INTEREST FOLLOWING CHANGE IN GOVERNING LAW.
(a) General rule: Effect on perfection of change in governing law. A
security interest perfected pursuant to the law of the jurisdiction designated
in RCW 62A.9A‑301(1) or 62A.9A‑305(c) remains perfected until the
earliest of:
(1)
The time perfection would have ceased under the law of that jurisdiction;
(2)
The expiration of four months after a change of the debtor's location to
another jurisdiction; or
(3)
The expiration of one year after a transfer of collateral to a person that
thereby becomes a debtor and is located in another jurisdiction.
(b)
Security interest perfected or unperfected under law of new jurisdiction.
If a security interest described in subsection (a) of this section becomes
perfected under the law of the other jurisdiction before the earliest time or
event described in subsection (a) of this section, it remains perfected
thereafter. If the security interest does not become perfected under the law
of the other jurisdiction before the earliest time or event, it becomes
unperfected and is deemed never to have been perfected as against a purchaser
of the collateral for value.
(c)
Possessory security interest in collateral moved to new jurisdiction. A
possessory security interest in collateral, other than goods covered by a
certificate of title and as-extracted collateral consisting of goods, remains
continuously perfected if:
(1)
The collateral is located in one jurisdiction and subject to a security
interest perfected under the law of that jurisdiction;
(2)
Thereafter the collateral is brought into another jurisdiction; and
(3)
Upon entry into the other jurisdiction, the security interest is perfected
under the law of the other jurisdiction.
(d)
Goods covered by certificate of title from this state. Except as otherwise
provided in subsection (e) of this section, a security interest in goods
covered by a certificate of title which is perfected by any method under the
law of another jurisdiction when the goods become covered by a certificate of
title from this state remains perfected until the security interest would have
become unperfected under the law of the other jurisdiction had the goods not become
so covered.
(e)
When subsection (d) security interest becomes unperfected against purchasers.
A security interest described in subsection (d) of this section becomes
unperfected as against a purchaser of the goods for value and is deemed never
to have been perfected as against a purchaser of the goods for value if the
applicable requirements for perfection under RCW 62A.9A‑311(b) or 62A.9A‑313
are not satisfied before the earlier of:
(1)
The time the security interest would have become unperfected under the law of
the other jurisdiction had the goods not become covered by a certificate of
title from this state; or
(2)
The expiration of four months after the goods had become so covered.
(f)
Change in jurisdiction of bank, issuer, nominated person, securities
intermediary, or commodity intermediary. A security interest in deposit
accounts, letter-of-credit rights, or investment property which is perfected
under the law of the bank's jurisdiction, the issuer's jurisdiction, a
nominated person's jurisdiction, the securities intermediary's jurisdiction, or
the commodity intermediary's jurisdiction, as applicable, remains perfected
until the earlier of:
(1)
The time the security interest would have become unperfected under the law of
that jurisdiction; or
(2)
The expiration of four months after a change of the applicable jurisdiction to
another jurisdiction.
(g)
Subsection (f) of this section security interest perfected or
unperfected under law of new jurisdiction. If a security interest
described in subsection (f) of this section becomes perfected under the law of
the other jurisdiction before the earlier of the time or the end of the period
described in subsection (f) of this section, it remains perfected thereafter.
If the security interest does not become perfected under the law of the other
jurisdiction before the earlier of that time or the end of that period, it
becomes unperfected and is deemed never to have been perfected as against a
purchaser of the collateral for value.
NEW
SECTION. Sec. 9A‑317.
INTERESTS THAT TAKE PRIORITY OVER OR TAKE FREE OF SECURITY INTEREST OR
AGRICULTURAL LIEN. (a) Conflicting security interests and rights of lien
creditors. A security interest or agricultural lien is subordinate to the
rights of:
(1)
A person entitled to priority under RCW 62A.9A‑322; and
(2)
Except as otherwise provided in subsection (e) of this section, a person that
becomes a lien creditor before the earlier of the time the security interest or
agricultural lien is perfected or a financing statement covering the collateral
is filed.
(b)
Buyers that receive delivery. Except as otherwise provided in subsection
(e) of this section, a buyer, other than a secured party, of tangible chattel
paper, documents, goods, instruments, or a security certificate takes free of a
security interest or agricultural lien if the buyer gives value and receives
delivery of the collateral without knowledge of the security interest or
agricultural lien and before it is perfected.
(c)
Lessees that receive delivery. Except as otherwise provided in subsection
(e) of this section, a lessee of goods takes free of a security interest or
agricultural lien if the lessee gives value and receives delivery of the
collateral without knowledge of the security interest or agricultural lien and
before it is perfected.
(d)
Licensees and buyers of certain collateral. A licensee of a general
intangible or a buyer, other than a secured party, of accounts, electronic
chattel paper, general intangibles, or investment property other than a
certificated security takes free of a security interest if the licensee or
buyer gives value without knowledge of the security interest and before it is
perfected.
(e)
Purchase-money security interest. Except as otherwise provided in RCW
62A.9A‑320 and 62A.9A‑321, if a person files a financing statement
with respect to a purchase-money security interest before or within twenty days
after the debtor receives delivery of the collateral, the security interest
takes priority over the rights of a buyer, lessee, or lien creditor which arise
between the time the security interest attaches and the time of filing.
NEW
SECTION. Sec. 9A‑318. NO
INTEREST RETAINED IN RIGHT TO PAYMENT THAT IS SOLD; RIGHTS AND TITLE OF SELLER
OF ACCOUNT OR CHATTEL PAPER WITH RESPECT TO CREDITORS AND PURCHASERS. (a)
Seller retains no interest. A debtor that has sold an account, chattel
paper, payment intangible, or promissory note does not retain a legal or
equitable interest in the collateral sold.
(b)
Deemed rights of debtor if buyer's security interest unperfected. For
purposes of determining the rights of creditors of, and purchasers for value of
an account or chattel paper from, a debtor that has sold an account or chattel
paper, while the buyer's security interest is unperfected, the debtor is deemed
to have rights and title to the account or chattel paper identical to those the
debtor sold.
NEW
SECTION. Sec. 9A‑319.
RIGHTS AND TITLE OF CONSIGNEE WITH RESPECT TO CREDITORS AND PURCHASERS. (a)
Consignee has consignor's rights. Except as otherwise provided in
subsection (b) of this section, for purposes of determining the rights of
creditors of, and purchasers for value of goods from, a consignee, while the
goods are in the possession of the consignee, the consignee is deemed to have
rights and title to the goods identical to those the consignor had or had power
to transfer.
(b)
Applicability of other law. For purposes of determining the rights of a
creditor of a consignee, law other than this Article determines the rights and
title of a consignee while goods are in the consignee's possession if, under
this part, a perfected security interest held by the consignor would have
priority over the rights of the creditor.
NEW
SECTION. Sec. 9A‑320. BUYER
OF GOODS. (a) Buyer in ordinary course of business. Except as
otherwise provided in subsection (e) of this section, a buyer in ordinary
course of business, other than a person buying farm products from a person
engaged in farming operations, takes free of a security interest created by the
buyer's seller, even if the security interest is perfected and the buyer knows
of its existence.
(b)
Buyer of consumer goods. Except as otherwise provided in subsection (e) of
this section, a buyer of goods from a person who used or bought the goods for
use primarily for personal, family, or household purposes takes free of a
security interest, even if perfected, if the buyer buys:
(1)
Without knowledge of the security interest;
(2)
For value;
(3)
Primarily for the buyer's personal, family, or household purposes; and
(4)
Before the filing of a financing statement covering the goods.
(c)
Effectiveness of filing for subsection (b) of this section. To the extent
that it affects the priority of a security interest over a buyer of goods under
subsection (b) of this section, the period of effectiveness of a filing made in
the jurisdiction in which the seller is located is governed by RCW 62A.9A‑316
(a) and (b).
(d)
Buyer in ordinary course of business at wellhead or minehead. A buyer in
ordinary course of business buying oil, gas, or other minerals at the wellhead
or minehead or after extraction takes free of an interest arising out of an
encumbrance.
(e)
Possessory security interest not affected. Subsections (a) and (b) of this
section do not affect a security interest in goods in the possession of the
secured party under RCW 62A.9A‑313.
NEW
SECTION. Sec. 9A‑321.
LICENSEE OF GENERAL INTANGIBLE AND LESSEE OF GOODS IN ORDINARY COURSE OF
BUSINESS. (a) "Licensee in ordinary course of business." In
this section, "licensee in ordinary course of business" means a
person that becomes a licensee of a general intangible in good faith, without
knowledge that the license violates the rights of another person in the general
intangible, and in the ordinary course from a person in the business of
licensing general intangibles of that kind. A person becomes a licensee in the
ordinary course if the license to the person comports with the usual or
customary practices in the kind of business in which the licensor is engaged or
with the licensor's own usual or customary practices.
(b)
Rights of licensee in ordinary course of business. A licensee in
ordinary course of business takes its rights under a nonexclusive license free
of a security interest in the general intangible created by the licensor, even
if the security interest is perfected and the licensee knows of its existence.
(c)
Rights of lessee in ordinary course of business. A lessee in ordinary
course of business takes its leasehold interest free of a security interest in
the goods created by the lessor, even if the security interest is perfected and
the lessee knows of its existence.
NEW
SECTION. Sec. 9A‑322.
PRIORITIES AMONG CONFLICTING SECURITY INTERESTS IN AND AGRICULTURAL LIENS ON
SAME COLLATERAL. (a) General priority rules. Except as otherwise
provided in this section, priority among conflicting security interests and
agricultural liens in the same collateral is determined according to the
following rules:
(1)
Conflicting perfected security interests and agricultural liens rank according
to priority in time of filing or perfection. Priority dates from the earlier
of the time a filing covering the collateral is first made or the security
interest or agricultural lien is first perfected, if there is no period
thereafter when there is neither filing nor perfection.
(2)
A perfected security interest or agricultural lien has priority over a
conflicting unperfected security interest or agricultural lien.
(3)
The first security interest or agricultural lien to attach or become effective
has priority if conflicting security interests and agricultural liens are
unperfected.
(b)
Time of perfection: Proceeds and supporting obligations. For the
purposes subsection (a)(1) of this section:
(1)
The time of filing or perfection as to a security interest in collateral is
also the time of filing or perfection as to a security interest in proceeds;
and
(2)
The time of filing or perfection as to a security interest in collateral
supported by a supporting obligation is also the time of filing or perfection
as to a security interest in the supporting obligation.
(c)
Special priority rules: Proceeds and supporting obligations. Except as
otherwise provided in subsection (f) of this section, a security interest in
collateral which qualifies for priority over a conflicting security interest
under RCW 62A.9A‑327, 62A.9A‑328, 62A.9A‑329, 62A.9A‑330,
or 62A.9A‑331 also has priority over a conflicting security interest in:
(1)
Any supporting obligation for the collateral; and
(2)
Proceeds of the collateral if:
(A)
The security interest in proceeds is perfected;
(B)
The proceeds are cash proceeds or of the same type as the collateral; and
(C)
In the case of proceeds that are proceeds of proceeds, all intervening proceeds
are cash proceeds, proceeds of the same type as the collateral, or an account
relating to the collateral.
(d)
First-to-file priority rule for certain collateral. Subject to
subsection (e) of this section and except as otherwise provided in subsection
(f) of this section, if a security interest in chattel paper, deposit accounts,
negotiable documents, instruments, investment property, or letter-of-credit
rights is perfected by a method other than filing, conflicting perfected
security interests in proceeds of the collateral rank according to priority in
time of filing.
(e)
Applicability of subsection (d) of this section. Subsection (d) of this
section applies only if the proceeds of the collateral are not cash proceeds,
chattel paper, negotiable documents, instruments, investment property, or
letter-of-credit rights.
(f)
Limitations on subsections (a) through (e) of this section. Subsections
(a) through (e) of this section are subject to:
(1)
Subsection (g) of this section and the other provisions of this part;
(2)
RCW 62A.4‑210 with respect to a security interest of a collecting bank;
(3)
RCW 62A.5‑118 with respect to a security interest of an issuer or
nominated person; and
(4)
RCW 62A.9A‑110 with respect to a security interest arising under Article
2 or 2A.
(g)
Priority under agricultural lien statute. A perfected agricultural lien
on collateral has priority over a conflicting security interest in or
agricultural lien on the same collateral if the statute creating the
agricultural lien so provides. Conflicts as to priority between and among
security interests in crops and agricultural liens subject to chapter 60.11 RCW
are governed by the provisions of that chapter.
NEW
SECTION. Sec. 9A‑323.
FUTURE ADVANCES. (a) When priority based on time of advance. Except as
otherwise provided in subsection (c) of this section, for purposes of
determining the priority of a perfected security interest under RCW 62A.9A‑322(a)(1),
perfection of the security interest dates from the time an advance is made to
the extent that the security interest secures an advance that:
(1)
Is made while the security interest is perfected only:
(A)
Under RCW 62A.9A‑309 when it attaches; or
(B)
Temporarily under RCW 62A.9A‑312 (e), (f), or (g); and
(2)
Is not made pursuant to a commitment entered into before or while the security
interest is perfected by a method other than under RCW 62A.9A‑309 or
62A.9A‑312 (e), (f), or (g).
(b)
Lien creditor. Except as otherwise provided in subsection (c) of this
section, a security interest is subordinate to the rights of a person that
becomes a lien creditor to the extent that the security interest secures an
advance made more than forty-five days after the person becomes a lien creditor
unless the advance is made:
(1)
Without knowledge of the lien; or
(2)
Pursuant to a commitment entered into without knowledge of the lien.
(c)
Buyer of receivables. Subsections (a) and (b) of this section do not
apply to a security interest held by a secured party that is a buyer of
accounts, chattel paper, payment intangibles, or promissory notes or a
consignor.
(d)
Buyer of goods. Except as otherwise provided in subsection (e) of this
section, a buyer of goods other than a buyer in ordinary course of business
takes free of a security interest to the extent that it secures advances made
after the earlier of:
(1)
The time the secured party acquires knowledge of the buyer's purchase; or
(2)
Forty-five days after the purchase.
(e)
Advances made pursuant to commitment: Priority of buyer of goods.
Subsection (d) of this section does not apply if the advance is made pursuant
to a commitment entered into without knowledge of the buyer's purchase and
before the expiration of the forty-five day period.
(f)
Lessee of goods. Except as otherwise provided in subsection (g) of this
section, a lessee of goods, other than a lessee in ordinary course of business,
takes the leasehold interest free of a security interest to the extent that it
secures advances made after the earlier of:
(1)
The time the secured party acquires knowledge of the lease; or
(2)
Forty-five days after the lease contract becomes enforceable.
(g)
Advances made pursuant to commitment: Priority of lessee of goods.
Subsection (f) of this section does not apply if the advance is made pursuant
to a commitment entered into without knowledge of the lease and before the
expiration of the forty-five day period.
NEW
SECTION. Sec. 9A‑324.
PRIORITY OF PURCHASE-MONEY SECURITY INTERESTS. (a) General rule:
Purchase-money priority. Except as otherwise provided in subsection (g) of
this section, a perfected purchase-money security interest in goods other than
inventory or livestock has priority over a conflicting security interest in the
same goods, and, except as otherwise provided in RCW 62A.9A‑327, a
perfected security interest in its identifiable proceeds also has priority, if
the purchase-money security interest is perfected when the debtor receives
possession of the collateral or within twenty days thereafter.
(b)
Inventory purchase-money priority. Subject to subsection (c) of this
section and except as otherwise provided in subsection (g) of this section, a
perfected purchase-money security interest in inventory has priority over a
conflicting security interest in the same inventory, has priority over a
conflicting security interest in chattel paper or an instrument constituting
proceeds of the inventory and in proceeds of the chattel paper, if so provided
in RCW 62A.9A‑330, and, except as otherwise provided in RCW 62A.9A‑327,
also has priority in identifiable cash proceeds of the inventory to the extent
the identifiable cash proceeds are received on or before the delivery of the
inventory to a buyer, if:
(1)
The purchase-money security interest is perfected when the debtor receives
possession of the inventory;
(2)
The purchase-money secured party sends an authenticated notification to the
holder of the conflicting security interest;
(3)
The holder of the conflicting security interest receives the notification
within five years before the debtor receives possession of the inventory; and
(4)
The notification states that the person sending the notification has or expects
to acquire a purchase-money security interest in inventory of the debtor and
describes the inventory.
(c)
Holders of conflicting inventory security interests to be notified.
Subsections (b)(2) through (4) of this section apply only if the holder of the
conflicting security interest had filed a financing statement covering the same
types of inventory:
(1)
If the purchase-money security interest is perfected by filing, before the date
of the filing; or
(2)
If the purchase-money security interest is temporarily perfected without filing
or possession under RCW 62A.9A‑312(f), before the beginning of the twenty‑day
period thereunder.
(d)
Livestock purchase-money priority. Subject to subsection (e) of this
section and except as otherwise provided in subsection (g) of this section, a
perfected purchase-money security interest in livestock that are farm products
has priority over a conflicting security interest in the same livestock, and,
except as otherwise provided in RCW 62A.9A‑327, a perfected security
interest in their identifiable proceeds and identifiable products in their
unmanufactured states also has priority, if:
(1)
The purchase-money security interest is perfected when the debtor receives
possession of the livestock;
(2)
The purchase-money secured party sends an authenticated notification to the
holder of the conflicting security interest;
(3)
The holder of the conflicting security interest receives the notification
within six months before the debtor receives possession of the livestock; and
(4)
The notification states that the person sending the notification has or expects
to acquire a purchase-money security interest in livestock of the debtor and
describes the livestock.
(e)
Holders of conflicting livestock security interests to be notified.
Subsections (d)(2) through (4) of this section apply only if the holder of the
conflicting security interest had filed a financing statement covering the same
types of livestock:
(1)
If the purchase-money security interest is perfected by filing, before the date
of the filing; or
(2)
If the purchase-money security interest is temporarily perfected without filing
or possession under RCW 62A.9A‑312(f), before the beginning of the twenty‑day
period thereunder.
(f)
Software purchase-money priority. Except as otherwise provided in
subsection (g) of this section, a perfected purchase-money security interest in
software has priority over a conflicting security interest in the same
collateral, and, except as otherwise provided in RCW 62A.9A‑327, a
perfected security interest in its identifiable proceeds also has priority, to
the extent that the purchase-money security interest in the goods in which the
software was acquired for use has priority in the goods and proceeds of the
goods under this section.
(g)
Conflicting purchase-money security interests. If more than one
security interest qualifies for priority in the same collateral under
subsection (a), (b), (d), or (f) of this section:
(1)
A security interest securing an obligation incurred as all or part of the price
of the collateral has priority over a security interest securing an obligation
incurred for value given to enable the debtor to acquire rights in or the use
of collateral; and
(2)
In all other cases, RCW 62A.9A‑322(a) applies to the qualifying security
interests.
NEW
SECTION. Sec. 9A‑325.
PRIORITY OF SECURITY INTERESTS IN TRANSFERRED COLLATERAL. (a) Subordination
of security interest in transferred collateral. Except as otherwise
provided in subsection (b) of this section, a security interest created by a
debtor is subordinate to a security interest in the same collateral created by
another person if:
(1)
The debtor acquired the collateral subject to the security interest created by
the other person;
(2)
The security interest created by the other person was perfected when the debtor
acquired the collateral; and
(3)
There is no period thereafter when the security interest is unperfected.
(b)
Limitation of subsection (a) of this section subordination. Subsection
(a) of this section subordinates a security interest only if the security
interest:
(1)
Otherwise would have priority solely under RCW 62A.9A‑322(a) or 62A.9A‑324;
or
(2)
Arose solely under RCW 62A.2‑711(3) or 62A.2A‑508(5).
NEW
SECTION. Sec. 9A‑326.
PRIORITY OF SECURITY INTERESTS CREATED BY NEW DEBTOR. (a) Subordination of
security interest created by new debtor. Subject to subsection (b) of this
section, a security interest created by a new debtor which is perfected by a
filed financing statement that is effective solely under RCW 62A.9A‑508
in collateral in which a new debtor has or acquires rights is subordinate to a
security interest in the same collateral which is perfected other than by a
filed financing statement that is effective solely under RCW 62A.9A‑508.
(b)
Priority under other provisions; multiple original debtors. The other
provisions of this part determine the priority among conflicting security
interests in the same collateral perfected by filed financing statements that
are effective solely under RCW 62A.9A‑508. However, if the security agreements
to which a new debtor became bound as debtor were not entered into by the same
original debtor, the conflicting security interests rank according to priority
in time of the new debtor's having become bound.
NEW
SECTION. Sec. 9A‑327.
PRIORITY OF SECURITY INTERESTS IN DEPOSIT ACCOUNT. The following rules govern
priority among conflicting security interests in the same deposit account:
(1)
A security interest held by a secured party having control of the deposit account
under RCW 62A.9A‑104 has priority over a conflicting security interest
held by a secured party that does not have control.
(2)
Except as otherwise provided in (3) and (4) of this section, security interests
perfected by control under RCW 62A.9A‑314 rank according to priority in
time of obtaining control.
(3)
Except as otherwise provided in (4) of this section, a security interest held
by the bank with which the deposit account is maintained has priority over a
conflicting security interest held by another secured party.
(4)
A security interest perfected by control under RCW 62A.9A‑104(a)(3) has
priority over a security interest held by the bank with which the deposit
account is maintained.
NEW
SECTION. Sec. 9A‑328.
PRIORITY OF SECURITY INTERESTS IN INVESTMENT PROPERTY. The following rules
govern priority among conflicting security interests in the same investment
property:
(1)
A security interest held by a secured party having control of investment
property under RCW 62A.9A‑106 has priority over a security interest held
by a secured party that does not have control of the investment property.
(2)
Except as otherwise provided in (3) and (4) of this section, conflicting
security interests held by secured parties each of which has control under RCW
62A.9A‑106 rank according to priority in time of:
(A)
If the collateral is a security, obtaining control;
(B)
If the collateral is a security entitlement carried in a securities account
and:
(i)
If the secured party obtained control under RCW 62A.8‑106(d)(1), the
secured party's becoming the person for which the securities account is
maintained;
(ii)
If the secured party obtained control under RCW 62A.8‑106(d)(2), the
securities intermediary's agreement to comply with the secured party's
entitlement orders with respect to security entitlements carried or to be
carried in the securities account; or
(iii)
If the secured party obtained control through another person under RCW 62A.8‑106(d)(3),
the time on which priority would be based under this paragraph if the other
person were the secured party; or
(C)
If the collateral is a commodity contract carried with a commodity
intermediary, the satisfaction of the requirement for control specified in RCW
62A.9A‑106(b)(2) with respect to commodity contracts carried or to be
carried with the commodity intermediary.
(3)
A security interest held by a securities intermediary in a security entitlement
or a securities account maintained with the securities intermediary has
priority over a conflicting security interest held by another secured party.
(4)
A security interest held by a commodity intermediary in a commodity contract or
a commodity account maintained with the commodity intermediary has priority
over a conflicting security interest held by another secured party.
(5)
A security interest in a certificated security in registered form which is
perfected by taking delivery under RCW 62A.9A‑313(a) and not by control
under RCW 62A.9A‑314 has priority over a conflicting security interest
perfected by a method other than control.
(6)
Conflicting security interests created by a broker, securities intermediary, or
commodity intermediary which are perfected without control under RCW 62A.9A‑106
rank equally.
(7)
In all other cases, priority among conflicting security interests in investment
property is governed by RCW 62A.9A‑322 and 62A.9A‑323.
NEW
SECTION. Sec. 9A‑329.
PRIORITY OF SECURITY INTERESTS IN LETTER-OF-CREDIT RIGHT. The following rules
govern priority among conflicting security interests in the same letter-of-credit
right:
(1)
A security interest held by a secured party having control of the
letter-of-credit right under RCW 62A.9A‑107 has priority to the extent of
its control over a conflicting security interest held by a secured party that
does not have control.
(2)
Security interests perfected by control under RCW 62A.9A‑314 rank
according to priority in time of obtaining control.
NEW
SECTION. Sec. 9A‑330.
PRIORITY OF PURCHASER OF CHATTEL PAPER OR INSTRUMENT. (a) Purchaser's priority:
Security interest claimed merely as proceeds. A purchaser of chattel paper
has priority over a security interest in the chattel paper which is claimed
merely as proceeds of inventory subject to a security interest if:
(1)
In good faith and in the ordinary course of the purchaser's business, the
purchaser gives new value and takes possession of the chattel paper or obtains
control of the chattel paper under RCW 62A.9A‑105; and
(2)
The chattel paper does not indicate that it has been assigned to an identified
assignee other than the purchaser.
(b)
Purchaser's priority: Other security interests. A purchaser of
chattel paper has priority over a security interest in the chattel paper which
is claimed other than merely as proceeds of inventory subject to a security
interest if the purchaser gives new value and takes possession of the chattel
paper or obtains control of the chattel paper under RCW 62A.9A‑105 in
good faith, in the ordinary course of the purchaser's business, and without
knowledge that the purchase violates the rights of the secured party.
(c)
Chattel paper purchaser's priority in proceeds. Except as
otherwise provided in RCW 62A.9A‑327, a purchaser having priority in
chattel paper under subsection (a) or (b) of this section also has priority in
proceeds of the chattel paper to the extent that:
(1)
RCW 62A.9A‑322 provides for priority in the proceeds; or
(2)
The proceeds consist of the specific goods covered by the chattel paper or cash
proceeds of the specific goods, even if the purchaser's security interest in
the proceeds is unperfected.
(d)
Instrument purchaser's priority. Except as otherwise provided in RCW
62A.9A‑331(a), a purchaser of an instrument has priority over a security
interest in the instrument perfected by a method other than possession if the
purchaser gives value and takes possession of the instrument in good faith and
without knowledge that the purchase violates the rights of the secured party.
(e)
Holder of purchase-money security interest gives new value. For purposes
of subsections (a) and (b) of this section, the holder of a purchase-money
security interest in inventory gives new value for chattel paper constituting
proceeds of the inventory.
(f)
Indication of assignment gives knowledge. For purposes of subsections
(b) and (d) of this section, if chattel paper or an instrument indicates that
it has been assigned to an identified secured party other than the purchaser, a
purchaser of the chattel paper or instrument has knowledge that the purchase
violates the rights of the secured party.
NEW
SECTION. Sec. 9A‑331.
PRIORITY OF RIGHTS OF PURCHASERS OF INSTRUMENTS, DOCUMENTS, AND SECURITIES
UNDER OTHER ARTICLES; PRIORITY OF INTERESTS IN FINANCIAL ASSETS AND SECURITY
ENTITLEMENTS UNDER ARTICLE 8. (a) Rights under Articles 3, 7, and 8 not
limited. This Article does not limit the rights of a holder in due course
of a negotiable instrument, a holder to which a negotiable document of title
has been duly negotiated, or a protected purchaser of a security. These
holders or purchasers take priority over an earlier security interest, even if
perfected, to the extent provided in Articles 3, 7, and 8.
(b)
Protection under Article 8. This Article does not limit the rights of
or impose liability on a person to the extent that the person is protected
against the assertion of an adverse claim under Article 8.
(c)
Filing not notice. Filing under this Article does not constitute notice
of a claim or defense to the holders, or purchasers, or persons described in
subsections (a) and (b) of this section.
NEW
SECTION. Sec. 9A‑332.
TRANSFER OF MONEY; TRANSFER OF FUNDS FROM DEPOSIT ACCOUNT. (a) Transferee
of money. A transferee of money takes the money free of a security interest
unless the transferee acts in collusion with the debtor in violating the rights
of the secured party.
(b)
Transferee of funds from deposit account. A transferee of funds from a
deposit account takes the funds free of a security interest in the deposit
account unless the transferee acts in collusion with the debtor in violating
the rights of the secured party.
NEW
SECTION. Sec. 9A‑333.
PRIORITY OF CERTAIN LIENS ARISING BY OPERATION OF LAW. (a) "Possessory
lien." In this section, "possessory lien" means an
interest, other than a security interest or an agricultural lien:
(1)
Which secures payment or performance of an obligation for services or materials
furnished with respect to goods by a person in the ordinary course of the
person's business;
(2)
Which is created by statute or rule of law in favor of the person; and
(3)
Whose effectiveness depends on the person's possession of the goods.
(b)
Priority of possessory lien. A possessory lien on goods has priority
over a security interest in the goods only if the lien is created by a statute
that expressly provides otherwise.
NEW
SECTION. Sec. 9A‑334.
PRIORITY OF SECURITY INTERESTS IN FIXTURES AND CROPS. (a) Security interest
in fixtures under this Article. A security interest under this Article may
be created in goods that are fixtures or may continue in goods that become
fixtures. A security interest does not exist under this Article in ordinary
building materials incorporated into an improvement on land.
(b)
Security interest in fixtures under real-property law. This Article
does not prevent creation of an encumbrance upon fixtures under real property
law.
(c)
General rule: Subordination of security interest in fixtures. In cases
not governed by subsections (d) through (h) of this section, a security
interest in fixtures is subordinate to a conflicting interest of an
encumbrancer or owner of the related real property other than the debtor.
(d)
Fixtures purchase-money priority. Except as otherwise provided in
subsection (h) of this section, a perfected security interest in fixtures has
priority over a conflicting interest of an encumbrancer or owner of the real
property if the debtor has an interest of record in, or is in possession of,
the real property and:
(1)
The security interest is a purchase-money security interest;
(2)
The interest of the encumbrancer or owner arises before the goods become
fixtures; and
(3)
The security interest is perfected by a fixture filing before the goods become
fixtures or within twenty days thereafter.
(e)
Priority of security interest in fixtures over interests in real property.
A perfected security interest in fixtures has priority over a conflicting
interest of an encumbrancer or owner of the real property if:
(1)
The debtor has an interest of record in the real property or is in possession
of the real property and the security interest:
(A)
Is perfected by a fixture filing before the interest of the encumbrancer or
owner is of record; and
(B)
Has priority over any conflicting interest of a predecessor in title of the
encumbrancer or owner;
(2)
Before the goods become fixtures, the security interest is perfected by any
method permitted by this Article and the fixtures are readily removable:
(A)
Factory or office machines;
(B)
Equipment that is not primarily used or leased for use in the operation of the
real property; or
(C)
Replacements of domestic appliances that are consumer goods; or
(3)
The conflicting interest is a lien on the real property obtained by legal or
equitable proceedings after the security interest was perfected by any method
permitted by this Article.
(f)
Priority based on consent, disclaimer, or right to remove. A security
interest in fixtures, whether or not perfected, has priority over a conflicting
interest of an encumbrancer or owner of the real property if:
(1)
The encumbrancer or owner has, in an authenticated record, consented to the
security interest or disclaimed an interest in the goods as fixtures; or
(2)
The debtor has a right to remove the goods as against the encumbrancer or
owner.
(g)
Continuation of subsection (f) priority. The priority of the security
interest under subsection (f) of this section continues for a reasonable time
if the debtor's right to remove the goods as against the encumbrancer or owner
terminates.
(h)
Priority of construction mortgage. A mortgage is a construction
mortgage to the extent that it secures an obligation incurred for the
construction of an improvement on land, including the acquisition cost of the
land, if a recorded record of the mortgage so indicates. Except as otherwise
provided in subsections (e) and (f) of this section, a security interest in
fixtures is subordinate to a construction mortgage if a record of the mortgage
is recorded before the goods become fixtures and the goods become fixtures
before the completion of the construction. A mortgage has this priority to the
same extent as a construction mortgage to the extent that it is given to
refinance a construction mortgage.
(i)
Priority of security interest in crops. A perfected security interest
in crops growing on real property has priority over a conflicting interest of
an encumbrancer or owner of the real property if the debtor has an interest of
record in or is in possession of the real property.
(j)
Subsection (i) prevails. Subsection (i) of this section prevails over
inconsistent provisions of any other statute except RCW 60.11.050.
NEW
SECTION. Sec. 9A‑335.
ACCESSIONS. (a) Creation of security interest in accession. A security
interest may be created in an accession and continues in collateral that
becomes an accession.
(b)
Perfection of security interest. If a security interest is perfected
when the collateral becomes an accession, the security interest remains
perfected in the collateral.
(c)
Priority of security interest. Except as otherwise provided in
subsection (d) of this section, the other provisions of this part determine the
priority of a security interest in an accession.
(d)
Compliance with certificate-of-title statute. A security interest in an
accession is subordinate to a security interest in the whole which is perfected
by compliance with the requirements of a certificate-of-title statute under RCW
62A.9A‑311(b).
(e)
Removal of accession after default. After default, subject to Part 6 of
this Article, a secured party may remove an accession from other goods if the
security interest in the accession has priority over the claims of every person
having an interest in the whole.
(f)
Reimbursement following removal. A secured party that removes an
accession from other goods under subsection (e) of this section shall promptly
reimburse any holder of a security interest or other lien on, or owner of, the
whole or of the other goods, other than the debtor, for the cost of repair of
any physical injury to the whole or the other goods. The secured party need
not reimburse the holder or owner for any diminution in value of the whole or
the other goods caused by the absence of the accession removed or by any
necessity for replacing it. A person entitled to reimbursement may refuse
permission to remove until the secured party gives adequate assurance for the
performance of the obligation to reimburse.
NEW
SECTION. Sec. 9A‑336.
COMMINGLED GOODS. (a) "Commingled goods." In this section,
"commingled goods" means goods that are physically united with other
goods in such a manner that their identity is lost in a product or mass.
(b)
No security interest in commingled goods as such. A security interest
does not exist in commingled goods as such. However, a security interest may
attach to a product or mass that results when goods become commingled goods.
(c)
Attachment of security interest to product or mass. If collateral
becomes commingled goods, a security interest attaches to the product or mass.
(d)
Perfection of security interest. If a security interest in collateral
is perfected before the collateral becomes commingled goods, the security
interest that attaches to the product or mass under subsection (c) of this
section is perfected.
(e)
Priority of security interest. Except as otherwise provided in
subsection (f) of this section, the other provisions of this part determine the
priority of a security interest that attaches to the product or mass under
subsection (c) of this section.
(f)
Conflicting security interests in product or mass. If more than one
security interest attaches to the product or mass under subsection (c) of this
section, the following rules determine priority:
(1)
A security interest that is perfected under subsection (d) of this section has
priority over a security interest that is unperfected at the time the
collateral becomes commingled goods.
(2)
If more than one security interest is perfected under subsection (d) of this
section, the security interests rank equally in proportion to value of the
collateral at the time it became commingled goods.
NEW
SECTION. Sec. 9A‑337.
PRIORITY OF SECURITY INTERESTS IN GOODS COVERED BY CERTIFICATE OF TITLE. If,
while a security interest in goods is perfected by any method under the law of
another jurisdiction, this state issues a certificate of title that does not
show that the goods are subject to the security interest or contain a statement
that they may be subject to security interests not shown on the certificate:
(1)
A buyer of the goods, other than a person in the business of selling goods of
that kind, takes free of the security interest if the buyer gives value and
receives delivery of the goods after issuance of the certificate and without
knowledge of the security interest; and
(2)
The security interest is subordinate to a conflicting security interest in the
goods that attaches, and is perfected under RCW 62A.9A‑311(b), after
issuance of the certificate and without the conflicting secured party's
knowledge of the security interest.
NEW
SECTION. Sec. 9A‑338.
PRIORITY OF SECURITY INTEREST OR AGRICULTURAL LIEN PERFECTED BY FILED FINANCING
STATEMENT PROVIDING CERTAIN INCORRECT INFORMATION. If a security interest or
agricultural lien is perfected by a filed financing statement providing
information described in RCW 62A.9A‑516(b)(5) which is incorrect at the
time the financing statement is filed:
(1)
The security interest or agricultural lien is subordinate to a conflicting
perfected security interest in the collateral to the extent that the holder of
the conflicting security interest gives value in reasonable reliance upon the
incorrect information; and
(2)
A purchaser, other than a secured party, of the collateral takes free of the
security interest or agricultural lien to the extent that, in reasonable reliance
upon the incorrect information, the purchaser gives value and, in the case of
chattel paper, documents, goods, instruments, or a security certificate,
receives delivery of the collateral.
NEW
SECTION. Sec. 9A‑339.
PRIORITY SUBJECT TO SUBORDINATION. This Article does not preclude
subordination by agreement by a person entitled to priority.
NEW
SECTION. Sec. 9A‑340.
EFFECTIVENESS OF RIGHT OF RECOUPMENT OR SET-OFF AGAINST DEPOSIT ACCOUNT. (a) Exercise
of recoupment or set-off. Except as otherwise provided in subsection (c)
of this section, a bank with which a deposit account is maintained may exercise
any right of recoupment or set-off against a secured party that holds a
security interest in the deposit account.
(b)
Recoupment or set-off not affected by security interest. Except as
otherwise provided in subsection (c) of this section, the application of this
Article to a security interest in a deposit account does not affect a right of
recoupment or set-off of the secured party as to a deposit account maintained
with the secured party.
(c)
When set-off ineffective. The exercise by a bank of a set-off against a
deposit account is ineffective against a secured party that holds a security
interest in the deposit account which is perfected by control under RCW 62A.9A‑104(a)(3),
if the set-off is based on a claim against the debtor.
NEW
SECTION. Sec. 9A‑341.
BANK'S RIGHTS AND DUTIES WITH RESPECT TO DEPOSIT ACCOUNT. Except as otherwise
provided in RCW 62A.9A‑340(c), and unless the bank otherwise agrees in an
authenticated record, a bank's rights and duties with respect to a deposit
account maintained with the bank are not terminated, suspended, or modified by:
(1)
The creation, attachment, or perfection of a security interest in the deposit
account;
(2)
The bank's knowledge of the security interest; or
(3)
The bank's receipt of instructions from the secured party.
NEW
SECTION. Sec. 9A‑342.
BANK'S RIGHT TO REFUSE TO ENTER INTO OR DISCLOSE EXISTENCE OF CONTROL
AGREEMENT. This Article does not require a bank to enter into an agreement of
the kind described in RCW 62A.9A‑104(a)(2), even if its customer so
requests or directs. A bank that has entered into such an agreement is not
required to confirm the existence of the agreement to another person unless
requested to do so by its customer.
PART
4
RIGHTS
OF THIRD PARTIES
NEW
SECTION. Sec. 9A‑401.
ALIENABILITY OF DEBTOR'S RIGHTS. (a) Other law governs alienability;
exceptions. Except as otherwise provided in subsection (b) of this section
and RCW 62A.9A‑406, 62A.9A‑407, 62A.9A‑408, and 62A.9A‑409,
whether a debtor's rights in collateral may be voluntarily or involuntarily
transferred is governed by law other than this Article.
(b)
Agreement does not prevent transfer. An agreement between the debtor
and secured party which prohibits a transfer of the debtor's rights in
collateral or makes the transfer a default does not prevent the transfer from
taking effect.
NEW
SECTION. Sec. 9A‑402.
SECURED PARTY NOT OBLIGATED ON CONTRACT OF DEBTOR OR IN TORT. The existence of
a security interest, agricultural lien, or authority given to a debtor to
dispose of or use collateral, without more, does not subject a secured party to
liability in contract or tort for the debtor's acts or omissions.
NEW
SECTION. Sec. 9A‑403.
AGREEMENT NOT TO ASSERT DEFENSES AGAINST ASSIGNEE. (a) "Value."
In this section, "value" has the meaning provided in RCW 62A.3‑303(a).
(b)
Agreement not to assert claim or defense. Except as otherwise provided
in this section, an agreement between an account debtor and an assignor not to
assert against an assignee any claim or defense that the account debtor may
have against the assignor is enforceable by an assignee that takes an
assignment:
(1)
For value;
(2)
In good faith;
(3)
Without notice of a claim of a property or possessory right to the property
assigned; and
(4)
Without notice of a defense or claim in recoupment of the type that may be
asserted against a person entitled to enforce a negotiable instrument under RCW
62A.3‑305(a).
(c)
When subsection (b) of this section not applicable. Subsection (b) of
this section does not apply to defenses of a type that may be asserted against
a holder in due course of a negotiable instrument under RCW 62A.3‑305(b).
(d)
Omission of required statement in consumer transaction. In a consumer
transaction, if a record evidences the account debtor's obligation, law other
than this Article requires that the record include a statement to the effect
that the rights of an assignee are subject to claims or defenses that the
account debtor could assert against the original obligee, and the record does
not include such a statement:
(1)
The record has the same effect as if the record included such a statement; and
(2)
The account debtor may assert against an assignee those claims and defenses
that would have been available if the record included such a statement.
(e)
Rule for individual under other law. This section is subject to law
other than this Article which establishes a different rule for an account
debtor who is an individual and who incurred the obligation primarily for
personal, family, or household purposes.
(f)
Other law not displaced. Except as otherwise provided in subsection (d)
of this section, this section does not displace law other than this Article
which gives effect to an agreement by an account debtor not to assert a claim
or defense against an assignee.
NEW
SECTION. Sec. 9A‑404.
RIGHTS ACQUIRED BY ASSIGNEE; CLAIMS AND DEFENSES AGAINST ASSIGNEE. (a) Assignee's
rights subject to terms, claims, and defenses; exceptions. Unless an
account debtor has made an enforceable agreement not to assert defenses or
claims, and subject to subsections (b) through (e) of this section, the rights
of an assignee are subject to:
(1)
All terms of the agreement between the account debtor and assignor and any
defense or claim in recoupment arising from the transaction that gave rise to
the contract; and
(2)
Any other defense or claim of the account debtor against the assignor which
accrues before the account debtor receives a notification of the assignment
authenticated by the assignor or the assignee.
(b)
Account debtor's claim reduces amount owed to assignee. Subject to
subsection (c) of this section, and except as otherwise provided in subsection
(d) of this section, the claim of an account debtor against an assignor may be
asserted against an assignee under subsection (a) of this section only to
reduce the amount the account debtor owes.
(c)
Rule for individual under other law. This section is subject to law
other than this Article which establishes a different rule for an account
debtor who is an individual and who incurred the obligation primarily for
personal, family, or household purposes.
(d)
Omission of required statement in consumer transaction. In a consumer
transaction, if a record evidences the account debtor's obligation, law other
than this Article requires that the record include a statement to the effect
that the account debtor's recovery against an assignee with respect to claims
and defenses against the assignor may not exceed amounts paid by the account
debtor under the record, and the record does not include such a statement, the
extent to which a claim of an account debtor against the assignor may be
asserted against an assignee is determined as if the record included such a
statement.
(e)
Inapplicability to health-care-insurance receivable. This section does
not apply to an assignment of a health-care-insurance receivable.
NEW
SECTION. Sec. 9A‑405.
MODIFICATION OF ASSIGNED CONTRACT. (a) Effect of modification on assignee.
A modification of or substitution for an assigned contract is effective against
an assignee if made in good faith. The assignee acquires corresponding rights
under the modified or substituted contract. The assignment may provide that
the modification or substitution is a breach of contract by the assignor. This
subsection is subject to subsections (b) through (d) of this section.
(b)
Applicability of subsection (a) of this section. Subsection (a) of this
section applies to the extent that:
(1)
The right to payment or a part thereof under an assigned contract has not been
fully earned by performance; or
(2)
The right to payment or a part thereof has been fully earned by performance and
the account debtor has not received notification of the assignment under RCW
62A.9A‑406(a).
(c)
Rule for individual under other law. This section is subject to law
other than this Article which establishes a different rule for an account
debtor who is an individual and who incurred the obligation primarily for
personal, family, or household purposes.
(d)
Inapplicability to health-care-insurance receivable. This section does
not apply to an assignment of a health-care-insurance receivable.
NEW
SECTION. Sec. 9A‑406.
DISCHARGE OF ACCOUNT DEBTOR; NOTIFICATION OF ASSIGNMENT; IDENTIFICATION AND
PROOF OF ASSIGNMENT; RESTRICTIONS ON ASSIGNMENT OF ACCOUNTS, CHATTEL PAPER,
PAYMENT INTANGIBLES, AND PROMISSORY NOTES INEFFECTIVE. (a) Discharge of
account debtor; effect of notification. Subject to subsections (b) through
(i) of this section, an account debtor on an account, chattel paper, or a
payment intangible may discharge its obligation by paying the assignor until,
but not after, the account debtor receives a notification, authenticated by the
assignor or the assignee, that the amount due or to become due has been
assigned and that payment is to be made to the assignee. After receipt of the
notification, the account debtor may discharge its obligation by paying the
assignee and may not discharge the obligation by paying the assignor.
(b)
When notification ineffective. Subject to subsection (h) of this
section, notification is ineffective under subsection (a) of this section:
(1)
If it does not reasonably identify the rights assigned;
(2)
To the extent that an agreement between an account debtor and a seller of a
payment intangible limits the account debtor's duty to pay a person other than
the seller and the limitation is effective under law other than this Article;
or
(3)
At the option of an account debtor, if the notification notifies the account
debtor to make less than the full amount of any installment or other periodic
payment to the assignee, even if:
(A)
Only a portion of the account, chattel paper, or general intangible has been
assigned to that assignee;
(B)
A portion has been assigned to another assignee; or
(C)
The account debtor knows that the assignment to that assignee is limited.
(c)
Proof of assignment. Subject to subsection (h) of this section, if
requested by the account debtor, an assignee shall seasonably furnish
reasonable proof that the assignment has been made. Unless the assignee
complies, the account debtor may discharge its obligation by paying the
assignor, even if the account debtor has received a notification under
subsection (a) of this section.
(d)
Term restricting assignment generally ineffective. Except as otherwise
provided in subsection (e) of this section and RCW 62A.2A‑303 and 62A.9A‑407,
and subject to subsection (h) of this section, a term in an agreement between
an account debtor and an assignor or in a promissory note is ineffective to the
extent that it:
(1)
Prohibits, restricts, or requires the consent of the account debtor or person
obligated on the promissory note to the assignment or transfer of, or the
creation, attachment, perfection, or enforcement of a security interest in, the
account, chattel paper, payment intangible, or promissory note; or
(2)
Provides that the assignment or transfer or the creation, attachment,
perfection, or enforcement of the security interest may give rise to a default,
breach, right of recoupment, claim, defense, termination, right of termination,
or remedy under the account, chattel paper, payment intangible, or promissory
note.
(e)
Inapplicability of subsection (d) to certain sales. Subsection (d) of
this section does not apply to the sale of a payment intangible or promissory note.
(f)
[Reserved]
(g)
Subsection (b)(3) not waivable. Subject to subsection (h) of this
section, an account debtor may not waive or vary its option under subsection
(b)(3) of this section.
(h)
Rule for individual under other law. This section is subject to law
other than this Article which establishes a different rule for an account
debtor who is an individual and who incurred the obligation primarily for
personal, family, or household purposes.
(i)
Inapplicability to health-care-insurance receivable. This section does
not apply to an assignment of a health-care-insurance receivable.
NEW
SECTION. Sec. 9A‑407.
RESTRICTIONS ON CREATION OR ENFORCEMENT OF SECURITY INTEREST IN LEASEHOLD
INTEREST OR IN LESSOR'S RESIDUAL INTEREST. (a) Term restricting assignment
generally ineffective. Except as otherwise provided in subsection (b) of
this section, a term in a lease agreement is ineffective to the extent that it:
(1)
Prohibits, restricts, or requires the consent of a party to the lease to the
assignment or transfer of, or the creation, attachment, perfection, or
enforcement of a security interest in an interest of a party under the lease
contract or in the lessor's residual interest in the goods; or
(2)
Provides that the assignment or transfer or the creation, attachment,
perfection, or enforcement of the security interest may give rise to a default,
breach, right of recoupment, claim, defense, termination, right of termination,
or remedy under the lease.
(b)
Effectiveness of certain terms. Except as otherwise provided in RCW
62A.2A‑303(7), a term described in subsection (a)(2) of this section is
effective to the extent that there is:
(1)
A transfer by the lessee of the lessee's right of possession or use of the
goods in violation of the term; or
(2)
A delegation of a material performance of either party to the lease contract in
violation of the term.
(c)
Security interest not material impairment. The creation, attachment,
perfection, or enforcement of a security interest in the lessor's interest
under the lease contract or the lessor's residual interest in the goods is not
a transfer that materially impairs the lessee's prospect of obtaining return
performance or materially changes the duty of or materially increases the burden
or risk imposed on the lessee within the purview of RCW 62A.2A‑303(4)
unless, and then only to the extent that, enforcement actually results in a
delegation of material performance of the lessor.
NEW
SECTION. Sec. 9A‑408.
RESTRICTIONS ON ASSIGNMENT OF PROMISSORY NOTES, HEALTH-CARE-INSURANCE
RECEIVABLES, AND CERTAIN GENERAL INTANGIBLES INEFFECTIVE. (a) Term
restricting assignment generally ineffective. Except as otherwise provided
in subsection (b) of this section, a term in a promissory note or in an
agreement between an account debtor and a debtor which relates to a
health-care-insurance receivable or a general intangible, including a contract,
permit, license, or franchise, and which term prohibits, restricts, or requires
the consent of the person obligated on the promissory note or the account
debtor to, the assignment or transfer of, or creation, attachment, or
perfection of a security interest in, the promissory note,
health-care-insurance receivable, or general intangible, is ineffective to the
extent that the term:
(1)
Would impair the creation, attachment, or perfection of a security interest; or
(2)
Provides that the assignment or transfer or the creation, attachment, or
perfection of the security interest may give rise to a default, breach, right
of recoupment, claim, defense, termination, right of termination, or remedy
under the promissory note, health-care-insurance receivable, or general
intangible.
(b)
Applicability of subsection (a) of this section to sales of certain rights
to payment. Subsection (a) of this section applies to a security interest
in a payment intangible or promissory note only if the security interest arises
out of a sale of the payment intangible or promissory note.
(c)
Legal restrictions on assignment generally ineffective. A rule of law,
statute, or regulation that prohibits, restricts, or requires the consent of a
government, governmental body or official, person obligated on a promissory
note, or account debtor to the assignment or transfer of, or creation of a
security interest in, a promissory note, health-care-insurance receivable, or
general intangible, including a contract, permit, license, or franchise between
an account debtor and a debtor, is ineffective to the extent that the rule of
law, statute, or regulation:
(1)
Would impair the creation, attachment, or perfection of a security interest; or
(2)
Provides that the assignment or transfer or the creation, attachment, or
perfection of the security interest may give rise to a default, breach, right
of recoupment, claim, defense, termination, right of termination, or remedy
under the promissory note, health-care-insurance receivable, or general
intangible.
(d)
Limitation on ineffectiveness under subsections (a) and (c) of this section.
To the extent that a term in a promissory note or in an agreement between an
account debtor and a debtor which relates to a health-care-insurance receivable
or general intangible or a rule of law, statute, or regulation described in
subsection (c) of this section would be effective under law other than this
Article but is ineffective under subsection (a) or (c) of this section, the
creation, attachment, or perfection of a security interest in the promissory
note, health-care-insurance receivable, or general intangible:
(1)
Is not enforceable against the person obligated on the promissory note or the
account debtor;
(2)
Does not impose a duty or obligation on the person obligated on the promissory
note or the account debtor;
(3)
Does not require the person obligated on the promissory note or the account
debtor to recognize the security interest, pay or render performance to the
secured party, or accept payment or performance from the secured party;
(4)
Does not entitle the secured party to use or assign the debtor's rights under
the promissory note, health-care-insurance receivable, or general intangible,
including any related information or materials furnished to the debtor in the
transaction giving rise to the promissory note, health-care-insurance
receivable, or general intangible;
(5)
Does not entitle the secured party to use, assign, possess, or have access to
any trade secrets or confidential information of the person obligated on the
promissory note or the account debtor; and
(6)
Does not entitle the secured party to enforce the security interest in the
promissory note, health-care-insurance receivable, or general intangible.
NEW
SECTION. Sec. 9A‑409.
RESTRICTIONS ON ASSIGNMENT OF LETTER-OF-CREDIT RIGHTS INEFFECTIVE. (a) Term
or law restricting assignment generally ineffective. A term in a letter of
credit or a rule of law, statute, regulation, custom, or practice applicable to
the letter of credit which prohibits, restricts, or requires the consent of an
applicant, issuer, or nominated person to a beneficiary's assignment of or
creation of a security interest in a letter-of-credit right is ineffective to
the extent that the term or rule of law, statute, regulation, custom, or
practice:
(1)
Would impair the creation, attachment, or perfection of a security interest in
the letter-of-credit right; or
(2)
Provides that the assignment or the creation, attachment, or perfection of the
security interest may give rise to a default, breach, right of recoupment,
claim, defense, termination, right of termination, or remedy under the
letter-of-credit right.
(b)
Limitation on ineffectiveness under subsection (a) of this section. To
the extent that a term in a letter of credit is ineffective under subsection
(a) of this section but would be effective under law other than this Article or
a custom or practice applicable to the letter of credit, to the transfer of a
right to draw or otherwise demand performance under the letter of credit, or to
the assignment of a right to proceeds of the letter of credit, the creation,
attachment, or perfection of a security interest in the letter-of-credit right:
(1)
Is not enforceable against the applicant, issuer, nominated person, or
transferee beneficiary;
(2)
Imposes no duties or obligations on the applicant, issuer, nominated person, or
transferee beneficiary; and
(3)
Does not require the applicant, issuer, nominated person, or transferee beneficiary
to recognize the security interest, pay or render performance to the secured
party, or accept payment or other performance from the secured party.
PART
5
FILING
NEW
SECTION. Sec. 9A‑501.
FILING OFFICE. (a) Filing offices. Except as otherwise provided in
subsection (b) of this section, if the local law of this state governs
perfection of a security interest or agricultural lien, the office in which to
file a financing statement to perfect the security interest or agricultural
lien is:
(1)
The office designated for the filing or recording of a record of a mortgage on
the related real property, if:
(A)
The collateral is as-extracted collateral or timber to be cut; or
(B)
The financing statement is filed as a fixture filing and the collateral is
goods that are or are to become fixtures; or
(2)
The department of licensing, in all other cases, including a case in which the
collateral is goods that are or are to become fixtures and the financing
statement is not filed as a fixture filing.
(b)
Filing office for transmitting utilities. The office in which to file a
financing statement to perfect a security interest in collateral, including
fixtures, of a transmitting utility is the department of licensing. The financing
statement also constitutes a fixture filing as to the collateral indicated in
the financing statement which is or is to become fixtures.
NEW
SECTION. Sec. 9A‑502.
CONTENTS OF FINANCING STATEMENT; RECORD OF MORTGAGE AS FINANCING STATEMENT;
TIME OF FILING FINANCING STATEMENT. (a) Sufficiency of financing statement.
Subject to subsection (b) of this section, a financing statement is sufficient
only if it:
(1)
Provides the name of the debtor;
(2)
Provides the name of the secured party or a representative of the secured
party; and
(3)
Indicates the collateral covered by the financing statement.
(b)
Real-property-related financing statements. Except as otherwise
provided in RCW 62A.9A‑501(b), to be sufficient, a financing statement
that covers as-extracted collateral or timber to be cut, or which is filed as a
fixture filing and covers goods that are or are to become fixtures, must
satisfy subsection (a) of this section and also:
(1)
Indicate that it covers this type of collateral;
(2)
Indicate that it is to be filed for record in the real property records;
(3)
Provide a description of the real property to which the collateral is related
sufficient to give constructive notice of a mortgage under the law of this
state if the description were contained in a record of the mortgage of the real
property; and
(4)
If the debtor does not have an interest of record in the real property, provide
the name of a record owner.
(c)
Record of mortgage as financing statement. A record of a mortgage is
effective, from the date of recording, as a financing statement filed as a
fixture filing or as a financing statement covering as-extracted collateral or
timber to be cut only if:
(1)
The record indicates the goods or accounts that it covers;
(2)
The goods are or are to become fixtures related to the real property described
in the record or the collateral is related to the real property described in
the record and is as-extracted collateral or timber to be cut;
(3)
The record satisfies the requirements for a financing statement in this section
other than an indication that it is to be filed in the real property records;
and
(4)
The record is recorded.
(d)
Filing before security agreement or attachment. A financing statement
may be filed before a security agreement is made or a security interest
otherwise attaches.
NEW
SECTION. Sec. 9A‑503. NAME
OF DEBTOR AND SECURED PARTY. (a) Sufficiency of debtor's name. A
financing statement sufficiently provides the name of the debtor:
(1)
If the debtor is a registered organization, only if the financing statement
provides the name of the debtor indicated on the public record of the debtor's
jurisdiction of organization which shows the debtor to have been organized;
(2)
If the debtor is a decedent's estate, only if the financing statement provides
the name of the decedent and indicates that the debtor is an estate;
(3)
If the debtor is a trust or a trustee acting with respect to property held in
trust, only if the financing statement:
(A)
Provides the name specified for the trust in its organic documents or, if no
name is specified, provides the name of the settlor and additional information
sufficient to distinguish the debtor from other trusts having one or more of
the same settlors; and
(B)
Indicates, in the debtor's name or otherwise, that the debtor is a trust or is
a trustee acting with respect to property held in trust; and
(4)
In other cases:
(A)
If the debtor has a name, only if it provides the individual or organizational
name of the debtor; and
(B)
If the debtor does not have a name, only if it provides the names of the
partners, members, associates, or other persons comprising the debtor.
(b)
Additional debtor-related information. A financing statement that
provides the name of the debtor in accordance with subsection (a) of this
section is not rendered ineffective by the absence of:
(1)
A trade name or other name of the debtor; or
(2)
Unless required under subsection (a)(4)(B) of this section, names of partners,
members, associates, or other persons comprising the debtor.
(c)
Debtor's trade name insufficient. A financing statement that provides
only the debtor's trade name does not sufficiently provide the name of the
debtor.
(d)
Representative capacity. Failure to indicate the representative
capacity of a secured party or representative of a secured party does not
affect the sufficiency of a financing statement.
(e)
Multiple debtors and secured parties. A financing statement may provide
the name of more than one debtor and the name of more than one secured party.
NEW
SECTION. Sec. 9A‑504.
INDICATION OF COLLATERAL. A financing statement sufficiently indicates the
collateral that it covers if the financing statement provides:
(1)
A description of the collateral pursuant to RCW 62A.9A‑108; or
(2)
An indication that the financing statement covers all assets or all personal
property.
NEW
SECTION. Sec. 9A‑505.
FILING AND COMPLIANCE WITH OTHER STATUTES AND TREATIES FOR CONSIGNMENTS,
LEASES, OTHER BAILMENTS, AND OTHER TRANSACTIONS. (a) Use of terms other
than "debtor" and "secured party." A consignor,
lessor, or other bailor of goods, a licensor, or a buyer of a payment
intangible or promissory note may file a financing statement, or may comply
with a statute or treaty described in RCW 62A.9A‑311(a), using the terms
"consignor," "consignee," "lessor,"
"lessee," "bailor," "bailee,"
"licensor," "licensee," "owner," "registered
owner," "buyer," "seller," or words of similar import,
instead of the terms "secured party" and "debtor."
(b)
Effect of financing statement under subsection (a) of this section.
This part applies to the filing of a financing statement under subsection (a)
of this section and, as appropriate, to compliance that is equivalent to filing
a financing statement under RCW 62A.9A‑311(b), but the filing or
compliance is not of itself a factor in determining whether the collateral
secures an obligation. If it is determined for another reason that the
collateral secures an obligation, a security interest held by the consignor,
lessor, bailor, licensor, owner, or buyer which attaches to the collateral is
perfected by the filing or compliance.
NEW
SECTION. Sec. 9A‑506.
EFFECT OF ERRORS OR OMISSIONS. (a) Minor errors and omissions. A
financing statement substantially satisfying the requirements of this part is
effective, even if it has minor errors or omissions, unless the errors or
omissions make the financing statement seriously misleading.
(b)
Financing statement seriously misleading. Except as otherwise provided
in subsection (c) of this section, a financing statement that fails
sufficiently to provide the name of the debtor in accordance with RCW 62A.9A‑503(a)
is seriously misleading.
(c)
Financing statement not seriously misleading. If a search of the
records of the filing office under the debtor's correct name, using the filing
office's standard search logic, if any, would disclose a financing statement
that fails sufficiently to provide the name of the debtor in accordance with
RCW 62A.9A‑503(a), the name provided does not make the financing
statement seriously misleading.
(d)
"Debtor's correct name." For purposes of RCW 62A.9A‑508(b),
the "debtor's correct name" in subsection (c) of this section means
the correct name of the new debtor.
NEW
SECTION. Sec. 9A‑507.
EFFECT OF CERTAIN EVENTS ON EFFECTIVENESS OF FINANCING STATEMENT. (a) Disposition.
A filed financing statement remains effective with respect to collateral that
is sold, exchanged, leased, licensed, or otherwise disposed of and in which a
security interest or agricultural lien continues, even if the secured party
knows of or consents to the disposition.
(b)
Information becoming seriously misleading. Except as otherwise provided
in subsection (c) of this section and RCW 62A.9A‑508, a financing
statement is not rendered ineffective if, after the financing statement is
filed, the information provided in the financing statement becomes seriously
misleading under RCW 62A.9A‑506.
(c)
Change in debtor's name. If a debtor so changes its name that a filed
financing statement becomes seriously misleading under RCW 62A.9A‑506:
(1)
The financing statement is effective to perfect a security interest in
collateral acquired by the debtor before, or within four months after, the
change; and
(2)
The financing statement is not effective to perfect a security interest in
collateral acquired by the debtor more than four months after the change,
unless an amendment to the financing statement which renders the financing
statement not seriously misleading is filed within four months after the
change.
NEW
SECTION. Sec. 9A‑508.
EFFECTIVENESS OF FINANCING STATEMENT IF NEW DEBTOR BECOMES BOUND BY SECURITY
AGREEMENT. (a) Financing statement naming original debtor. Except as
otherwise provided in this section, a filed financing statement naming an
original debtor is effective to perfect a security interest in collateral in
which a new debtor has or acquires rights to the extent that the financing
statement would have been effective had the original debtor acquired rights in
the collateral.
(b)
Financing statement becoming seriously misleading. If the difference
between the name of the original debtor and that of the new debtor causes a
filed financing statement that is effective under subsection (a) of this
section to be seriously misleading under RCW 62A.9A‑506:
(1)
The financing statement is effective to perfect a security interest in
collateral acquired by the new debtor before, and within four months after, the
new debtor becomes bound under RCW 62A.9A‑203(d); and
(2)
The financing statement is not effective to perfect a security interest in
collateral acquired by the new debtor more than four months after the new
debtor becomes bound under RCW 62A.9A‑203(d) unless an initial financing
statement providing the name of the new debtor is filed before the expiration
of that time.
(c)
When section not applicable. This section does not apply to collateral
as to which a filed financing statement remains effective against the new
debtor under RCW 62A.9A‑507(a).
NEW
SECTION. Sec. 9A‑509.
PERSONS ENTITLED TO FILE A RECORD. (a) Person entitled to file record.
A person may file an initial financing statement, amendment that adds
collateral covered by a financing statement, or amendment that adds a debtor to
a financing statement only if:
(1)
The debtor authorizes the filing in an authenticated record; or
(2)
The person holds an agricultural lien that has become effective at the time of
filing and the financing statement covers only collateral in which the person
holds an agricultural lien.
(b)
Security agreement as authorization. By authenticating or becoming
bound as debtor by a security agreement, a debtor or new debtor authorizes the
filing of an initial financing statement, and an amendment, covering:
(1)
The collateral described in the security agreement; and
(2)
Property that becomes collateral under RCW 62A.9A‑315(a)(2), whether or
not the security agreement expressly covers proceeds.
(c)
Acquisition of collateral as authorization. By acquiring collateral in
which a security interest or agricultural lien continues under RCW 62A.9A‑315(a)(1),
a debtor authorizes the filing of an initial financing statement, and an
amendment, covering the collateral and property that becomes collateral under
RCW 62A.9A‑315(a)(2).
(d)
Person entitled to file certain amendments. A person may file an
amendment other than an amendment that adds collateral covered by a financing
statement or an amendment that adds a debtor to a financing statement only if:
(1)
The secured party of record authorizes the filing; or
(2)
The amendment is a termination statement for a financing statement as to which
the secured party of record has failed to file or send a termination statement
as required by RCW 62A.9A‑513 (a) or (c), the debtor authorizes the
filing, and the termination statement indicates that the debtor authorized it
to be filed.
(e)
Multiple secured parties of record. If there is more than one secured
party of record for a financing statement, each secured party of record may
authorize the filing of an amendment under subsection (d) of this section.
NEW
SECTION. Sec. 9A‑510.
EFFECTIVENESS OF FILED RECORD. (a) Filed record effective if authorized.
A filed record is effective only to the extent that it was filed by a person
that may file it under RCW 62A.9A‑509.
(b)
Authorization by one secured party of record. A record authorized by
one secured party of record does not affect the financing statement with
respect to another secured party of record.
(c)
Continuation statement not timely filed. A continuation statement that
is not filed within the six-month period prescribed by RCW 62A.9A‑515(d)
is ineffective.
NEW
SECTION. Sec. 9A‑511.
SECURED PARTY OF RECORD. (a) Secured party of record. A secured party
of record with respect to a financing statement is a person whose name is
provided as the name of the secured party or a representative of the secured
party in an initial financing statement that has been filed. If an initial
financing statement is filed under RCW 62A.9A‑514(a), the assignee named
in the initial financing statement is the secured party of record with respect
to the financing statement.
(b)
Amendment naming secured party of record. If an amendment of a
financing statement which provides the name of a person as a secured party or a
representative of a secured party is filed, the person named in the amendment
is a secured party of record. If an amendment is filed under RCW 62A.9A‑514(b),
the assignee named in the amendment is a secured party of record.
(c)
Amendment deleting secured party of record. A person remains a secured
party of record until the filing of an amendment of the financing statement
which deletes the person.
NEW
SECTION. Sec. 9A‑512. AMENDMENT
OF FINANCING STATEMENT. (a) Amendment of information in financing
statement. Subject to RCW 62A.9A‑509, a person may add or delete
collateral covered by, continue or terminate the effectiveness of, or, subject
to subsection (e) of this section, otherwise amend the information provided in,
a financing statement by filing an amendment that:
(1)
Identifies, by its file number, the initial financing statement to which the
amendment relates; and
(2)
If the amendment relates to an initial financing statement filed or recorded in
a filing office described in RCW 62A.9A‑501(a)(1), provides the
information specified in RCW 62A.9A‑502(b).
(b)
Period of effectiveness not affected. Except as otherwise provided in
RCW 62A.9A‑515, the filing of an amendment does not extend the period of
effectiveness of the financing statement.
(c)
Effectiveness of amendment adding collateral. A financing statement
that is amended by an amendment that adds collateral is effective as to the
added collateral only from the date of the filing of the amendment.
(d)
Effectiveness of amendment adding debtor. A financing statement that is
amended by an amendment that adds a debtor is effective as to the added debtor
only from the date of the filing of the amendment.
(e)
Certain amendments ineffective. An amendment is ineffective to the
extent it:
(1)
Purports to delete all debtors and fails to provide the name of a debtor to be
covered by the financing statement; or
(2)
Purports to delete all secured parties of record and fails to provide the name
of a new secured party of record.
NEW
SECTION. Sec. 9A‑513.
TERMINATION STATEMENT. (a) Consumer goods. A secured party shall cause
the secured party of record for a financing statement to file a termination
statement for the financing statement if the financing statement covers
consumer goods and:
(1)
There is no obligation secured by the collateral covered by the financing
statement and no commitment to make an advance, incur an obligation, or
otherwise give value; or
(2)
The debtor did not authorize the filing of the initial financing statement.
(b)
Time for compliance with subsection (a) of this section. To comply with
subsection (a) of this section, a secured party shall cause the secured party
of record to file the termination statement:
(1)
Within one month after there is no obligation secured by the collateral covered
by the financing statement and no commitment to make an advance, incur an
obligation, or otherwise give value; or
(2)
If earlier, within twenty days after the secured party receives an
authenticated demand from a debtor.
(c)
Other collateral. In cases not governed by subsection (a) of this
section, within twenty days after a secured party receives an authenticated
demand from a debtor, the secured party shall cause the secured party of record
for a financing statement to send to the debtor a termination statement for the
financing statement or file the termination statement in the filing office if:
(1)
Except in the case of a financing statement covering accounts or chattel paper
that has been sold or goods that are the subject of a consignment, there is no
obligation secured by the collateral covered by the financing statement and no
commitment to make an advance, incur an obligation, or otherwise give value;
(2)
The financing statement covers accounts or chattel paper that has been sold but
as to which the account debtor or other person obligated has discharged its
obligation;
(3)
The financing statement covers goods that were the subject of a consignment to
the debtor but are not in the debtor's possession; or
(4)
The debtor did not authorize the filing of the initial financing statement.
(d)
Effect of filing termination statement. Except as otherwise provided in
RCW 62A.9A‑510, upon the filing of a termination statement with the
filing office, the financing statement to which the termination statement
relates ceases to be effective.
NEW
SECTION. Sec. 9A‑514.
ASSIGNMENT OF POWERS OF SECURED PARTY OF RECORD. (a) Assignment reflected
on initial financing statement. Except as otherwise provided in subsection
(c) of this section, an initial financing statement may reflect an assignment
of all of the secured party's power to authorize an amendment to the financing
statement by providing the name and mailing address of the assignee as the name
and address of the secured party.
(b)
Assignment of filed financing statement. Except as otherwise provided
in subsection (c) of this section, a secured party of record may assign of
record all or part of its power to authorize an amendment to a financing
statement by filing in the filing office an amendment of the financing
statement which:
(1)
Identifies, by its file number, the initial financing statement to which it
relates;
(2)
Provides the name of the assignor; and
(3)
Provides the name and mailing address of the assignee.
(c)
Assignment of record of mortgage. An assignment of record of a security
interest in a fixture covered by a record of a mortgage which is effective as a
financing statement filed as a fixture filing under RCW 62A.9A‑502(c) may
be made only by an assignment of record of the mortgage in the manner provided
by law of this state other than the Uniform Commercial Code.
NEW
SECTION. Sec. 9A‑515.
DURATION AND EFFECTIVENESS OF FINANCING STATEMENT; EFFECT OF LAPSED FINANCING
STATEMENT. (a) Five-year effectiveness. Except as otherwise provided
in subsections (b), (e), (f), and (g) of this section, a filed financing
statement is effective for a period of five years after the date of filing.
(b)
[Reserved]
(c)
Lapse and continuation of financing statement. The effectiveness of a
filed financing statement lapses on the expiration of the period of its
effectiveness unless before the lapse a continuation statement is filed
pursuant to subsection (d) of this section. Upon lapse, a financing statement
ceases to be effective and any security interest or agricultural lien that was
perfected by the financing statement becomes unperfected, unless the security
interest is perfected otherwise. If the security interest or agricultural lien
becomes unperfected upon lapse, it is deemed never to have been perfected as
against a purchaser of the collateral for value.
(d)
When continuation statement may be filed. A continuation statement may
be filed only within six months before the expiration of the five-year period
specified in subsection (a) of this section or the thirty-year period specified
in subsection (b) of this section, whichever is applicable.
(e)
Effect of filing continuation statement. Except as otherwise provided
in RCW 62A.9A‑510, upon timely filing of a continuation statement, the
effectiveness of the initial financing statement continues for a period of five
years commencing on the day on which the financing statement would have become
ineffective in the absence of the filing. Upon the expiration of the five-year
period, the financing statement lapses in the same manner as provided in
subsection (c) of this section, unless, before the lapse, another continuation
statement is filed pursuant to subsection (d) of this section. Succeeding
continuation statements may be filed in the same manner to continue the
effectiveness of the initial financing statement.
(f)
Transmitting utility financing statement. If a debtor is a transmitting
utility and a filed financing statement so indicates, the financing statement
is effective until a termination statement is filed.
(g)
Record of mortgage as financing statement. A record of a mortgage that
is effective as a financing statement filed as a fixture filing under RCW
62A.9A‑502(c) remains effective as a financing statement filed as a
fixture filing until the mortgage is released or satisfied of record or its
effectiveness otherwise terminates as to the real property.
NEW
SECTION. Sec. 9A‑516. WHAT
CONSTITUTES FILING; EFFECTIVENESS OF FILING. (a) What constitutes filing.
Except as otherwise provided in subsection (b) of this section, communication
of a record to a filing office and tender of the filing fee or acceptance of
the record by the filing office constitutes filing.
(b)
Refusal to accept record; filing does not occur. Filing does not occur
with respect to a record that a filing office refuses to accept because:
(1)
The record is not communicated by a method or medium of communication
authorized by the filing office;
(2)
An amount equal to or greater than the applicable filing fee is not tendered;
(3)
The filing office is unable to index the record because:
(A)
In the case of an initial financing statement, the record does not provide a
name for the debtor;
(B)
In the case of an amendment or correction statement, the record:
(i)
Does not identify the initial financing statement as required by RCW 62A.9A‑512
or 62A.9A‑518, as applicable; or
(ii)
Identifies an initial financing statement whose effectiveness has lapsed under
RCW 62A.9A‑515;
(C)
In the case of an initial financing statement that provides the name of a
debtor identified as an individual or an amendment that provides a name of a
debtor identified as an individual which was not previously provided in the
financing statement to which the record relates, the record does not identify
the debtor's last name; or
(D)
In the case of a record filed or recorded in the filing office described in RCW
62A.9A‑501(a)(1), the record does not provide a sufficient description of
the real property to which it relates;
(4)
In the case of an initial financing statement or an amendment that adds a
secured party of record, the record does not provide a name and mailing address
for the secured party of record;
(5)
In the case of an initial financing statement or an amendment that provides a
name of a debtor which was not previously provided in the financing statement
to which the amendment relates, the record does not:
(A)
Provide a mailing address for the debtor;
(B)
Indicate whether the debtor is an individual or an organization; or
(C)
If the financing statement indicates that the debtor is an organization,
provide:
(i)
A type of organization for the debtor;
(ii)
A jurisdiction of organization for the debtor; or
(iii)
An organizational identification number for the debtor or indicate that the
debtor has none;
(6)
In the case of an assignment reflected in an initial financing statement under
RCW 62A.9A‑514(a) or an amendment filed under RCW 62A.9A‑514(b),
the record does not provide a name and mailing address for the assignee; or
(7)
In the case of a continuation statement, the record is not filed within the
six-month period prescribed by RCW 62A.9A‑515(d).
(c)
Rules applicable to subsection (b) of this section. For purposes of
subsection (b) of this section:
(1)
A record does not provide information if the filing office is unable to read or
decipher the information; and
(2)
A record that does not indicate that it is an amendment or identify an initial
financing statement to which it relates, as required by RCW 62A.9A‑512,
62A.9A‑514, or 62A.9A‑518, is an initial financing statement.
(d)
Refusal to accept record; record effective as filed record. A record
that is communicated to the filing office with tender of the filing fee, but
which the filing office refuses to accept for a reason other than one set forth
in subsection (b) of this section, is effective as a filed record except as
against a purchaser of the collateral which gives value in reasonable reliance
upon the absence of the record from the files.
NEW
SECTION. Sec. 9A‑517.
EFFECT OF INDEXING ERRORS. The failure of the filing office to index a record
correctly does not affect the effectiveness of the filed record.
NEW
SECTION. Sec. 9A‑518. CLAIM
CONCERNING INACCURATE OR WRONGFULLY FILED RECORD. (a) Correction statement.
A person may file in the filing office a correction statement with respect to a
record indexed there under the person's name if the person believes that the
record is inaccurate or was wrongfully filed.
(b)
Sufficiency of correction statement. A correction statement must:
(1)
Identify the record to which it relates by the file number assigned to the
initial financing statement to which the record relates;
(2)
Indicate that it is a correction statement; and
(3)
Provide the basis for the person's belief that the record is inaccurate and
indicate the manner in which the person believes the record should be amended
to cure any inaccuracy or provide the basis for the person's belief that the
record was wrongfully filed.
(c)
Record not affected by correction statement. The filing of a correction
statement does not affect the effectiveness of an initial financing statement
or other filed record.
NEW
SECTION. Sec. 9A‑519.
NUMBERING, MAINTAINING, AND INDEXING RECORDS; COMMUNICATING INFORMATION
PROVIDED IN RECORDS. (a) Filing office duties. For each record filed
in a filing office, the filing office shall:
(1)
Assign a unique number to the filed record;
(2)
Create a record that bears the number assigned to the filed record and the date
and time of filing;
(3)
Maintain the filed record for public inspection; and
(4)
Index the filed record in accordance with subsections (c), (d), and (e) of this
section.
(b)
File number. A file number assigned after January 1, 2002, must include
a digit that:
(1)
Is mathematically derived from or related to the other digits of the file
number; and
(2)
Aids the filing office in determining whether a number communicated as the file
number includes a single-digit or transpositional error.
(c)
Indexing: General. Except as otherwise provided in subsections (d) and
(e) of this section, the filing office shall:
(1)
Index an initial financing statement according to the name of the debtor and
index all filed records relating to the initial financing statement in a manner
that associates with one another an initial financing statement and all filed
records relating to the initial financing statement; and
(2)
Index a record that provides a name of a debtor which was not previously
provided in the financing statement to which the record relates also according
to the name that was not previously provided.
(d)
Indexing: Real-property-related financing statement. If a financing
statement is filed as a fixture filing or covers as-extracted collateral or
timber to be cut, it must be filed for record and the filing office shall index
it:
(1)
Under the names of the debtor and of each owner of record shown on the
financing statement as if they were the mortgagors under a mortgage of the real
property described; and
(2)
To the extent that the law of this state provides for indexing of records of
mortgages under the name of the mortgagee, under the name of the secured party
as if the secured party were the mortgagee thereunder, or, if indexing is by
description, as if the financing statement were a record of a mortgage of the
real property described.
(e)
Indexing: Real-property-related assignment. If a financing statement
is filed as a fixture filing or covers as-extracted collateral or timber to be
cut, the filing office shall index an assignment filed under RCW 62A.9A‑514(a)
or an amendment filed under RCW 62A.9A‑514(b):
(1)
Under the name of the assignor as grantor; and
(2)
To the extent that the law of this state provides for indexing a record of the
assignment of a mortgage under the name of the assignee, under the name of the
assignee.
(f)
Retrieval and association capability. The filing office shall maintain
a capability:
(1)
To retrieve a record by the name of the debtor and by the file number assigned
to the initial financing statement to which the record relates; and
(2)
To associate and retrieve with one another an initial financing statement and
each filed record relating to the initial financing statement.
(g)
Removal of debtor's name. The filing office may not remove a debtor's
name from the index until one year after the effectiveness of a financing
statement naming the debtor lapses under RCW 62A.9A‑515 with respect to
all secured parties of record.
(h)
Timeliness of filing office performance. The filing office shall
perform the acts required by subsections (a) through (e) of this section at the
time and in the manner prescribed by filing-office rule, but not later than two
business days after the filing office receives the record in question.
(i)
Inapplicability to real-property-related filing office. Subsections (b)
and (h) of this section do not apply to a filing office described in RCW 62A.9A‑501(a)(1).
NEW
SECTION. Sec. 9A‑520.
ACCEPTANCE AND REFUSAL TO ACCEPT RECORD. (a) Mandatory refusal to accept
record. A filing office shall refuse to accept a record for filing for a
reason set forth in RCW 62A.9A‑516(b) and may refuse to accept a record
for filing only for a reason set forth in RCW 62A.9A‑516(b).
(b)
Communication concerning refusal. If a filing office refuses to accept
a record for filing, it shall communicate to the person that presented the
record the fact of and reason for the refusal and the date and time the record
would have been filed had the filing office accepted it. The communication
must be made at the time and in the manner prescribed by filing-office rule
but, in the case of a filing office described in RCW 62A.9A‑501(a)(2), in
no event more than two business days after the filing office receives the
record.
(c)
When filed financing statement effective. A filed financing statement
satisfying RCW 62A.9A‑502 (a) and (b) is effective, even if the filing
office is required to refuse to accept it for filing under subsection (a) of
this section. However, RCW 62A.9A‑338 applies to a filed financing
statement providing information described in RCW 62A.9A‑516(b)(5) which
is incorrect at the time the financing statement is filed.
(d)
Separate application to multiple debtors. If a record communicated to a
filing office provides information that relates to more than one debtor, this
part applies as to each debtor separately.
NEW
SECTION. Sec. 9A‑521.
UNIFORM FORM OF WRITTEN FINANCING STATEMENT AND AMENDMENT. (a) Initial
financing statement form. A filing office that accepts written records may
not refuse to accept a written initial financing statement in the following
form and format except for a reason set forth in RCW 62A.9A‑516(b):
UCC
FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGMENT TO: (Name and Address)
THE ABOVE SPACE IS FOR
FILING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b) - do not abbreviate or combine names
1a. ORGANIZATION'S NAME
OR
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE
NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL
CODE COUNTRY
1d. TAX ID #: ADD'L INFO RE 1e. TYPE OF 1f. JURISDICTION OF 1g.
ORGANIZATIONAL
SSN OR EIN ORGANIZATION ORGANIZATION ORGANIZATION ID
#, If any
DEBTOR GNONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATION'S NAME
OR
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE
NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL
CODE COUNTRY
2d. TAX ID #: ADD'L INFO RE 2e. TYPE OF 2f. JURISDICTION OF 2g.
ORGANIZATIONAL
SSN OR EIN ORGANIZATION ORGANIZATION ORGANIZATION ID
#: If any
DEBTOR GNONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) -
insert only one secured party name (3a or 3b)
3a. ORGANIZATION'S NAME
OR
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE
NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL
CODE COUNTRY
4. This FINANCING STATEMENT covers the following collateral:
5. ALTERNATIVE DESIGNATION [if applicable]: G LESSEE/LESSOR G
CONSIGNEE/CONSIGNOR G BAILEE/BAILOR
G SELLER/BUYER G AG. LIEN G NON-UCC
FILING
6. GThis FINANCING STATEMENT is to be filed [for record] (or recorded) in
the REAL ESTATE RECORDS. Attach Addendum [if applicable]
7. Check to REQUEST SEARCH REPORT(S) on Debtor(s) G All Debtors G Debtor 1 G Debtor 2
[Additional Fee] [optional]
8. OPTIONAL FILER REFERENCE DATA
NATIONAL UCC FINANCING STATEMENT (FORM UCC1) (REV.
07/29/98)
UCC
FINANCING STATEMENT ADDENDUM
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
9. NAME OF FIRST DEBTOR (1a or 1b) ON RELATED FINANCING STATEMENT
9a. ORGANIZATION'S NAME
OR
9b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE
NAME, SUFFIX
10. MISCELLANEOUS:
THE ABOVE SPACE IS FOR
FILING OFFICE USE ONLY
11. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one name (11a or 11b) - do not abbreviate or combine names
11a. ORGANIZATION'S NAME
OR
11b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE
NAME SUFFIX
11c. MAILING ADDRESS CITY STATE POSTAL
CODE COUNTRY
11d. TAX ID #: ADD'L INFO RE 11e. TYPE OF 11f.
JURISDICTION OF 11g. ORGANIZATIONAL
SSN OR EIN ORGANIZATION ORGANIZATION ORGANIZATION ID
#, If any
DEBTOR GNONE
12. G ADDITIONAL SECURED PARTY'S or G ASSIGNOR
S/P'S NAME - insert only one name (12a or 12b)
12a. ORGANIZATION'S NAME
OR
12b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE
NAME SUFFIX
12c. MAILING ADDRESS CITY STATE POSTAL
CODE COUNTRY
13. This FINANCING STATEMENT covers G timber to be cut or 16. Additional collateral description:
Gas-extracted
collateral, or is filed as a G fixture filing.
14. Description of real estate:
15. Name and address of a RECORD OWNER of above-described real estate
(if Debtor does not have a record interest):
17. Check only if applicable and check only one box.
Debtor is a G Trust or G Trustee
acting with respect to property held in trust
or G Decedent's
Estate
18. Check only if applicable and check only one box.
G Debtor is a
TRANSMITTING UTILITY
G Filed in
connection with a Manufactured-Home Transaction C effective 30
years
G Filed in
connection with a Public-Finance Transaction C effective 30
years
NATIONAL UCC FINANCING STATEMENT ADDENDUM (FORM UCC1Ad)
(REV. 07/29/98)
(b)
Amendment form. A filing office that accepts written records may not
refuse to accept a written record in the following form and format except for a
reason set forth in RCW 62A.9A‑516(b):
UCC
FINANCING STATEMENT AMENDMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGMENT TO: (Name and Address)
THE ABOVE SPACE IS FOR
FILING OFFICE USE ONLY
1a. INITIAL FINANCING STATEMENT FILE # 1b. This
FINANCING STATEMENT AMENDMENT is
to be filed [for
record] (or recorded) in the
G REAL ESTATE
RECORDS.
2. G TERMINATION: Effectiveness of the Financing Statement identified above
is terminated with respect to security interest(s) of the Secured Party
authorizing this Termination Statement.
3. G CONTINUATION: Effectiveness of the Financing Statement identified
above with respect to security interest(s) of the Secured Party authorizing
this Continuation Statement is continued for the additional period provided by
applicable law.
4. G ASSIGNMENT (full or partial): Give name of assignee in item 7a or 7b
and address of assignee in item 7c; and also give name of assignor in item 9.
5. AMENDMENT (PARTY INFORMATION): This Amendment affects G Debtor or G Secured Party of record. Check only one of these two boxes.
Also check one of the following three boxes and provide appropriate information in items 6 and/or 7.
G CHANGE name
and/or address: Give current record name in G DELETE name:
Give record name to G ADD name: Complete item 7a or 7b,
item 6a or 6b; also give new name (if name changed) in item 7a be
deleted in item 6a or 6b. and also item 7c; also complete items 7d-7g
or 7b and/or new address (if address change) in item 7c. (if
applicable).
6. CURRENT RECORD INFORMATION:
6a. ORGANIZATION'S NAME
OR
6b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE
NAME SUFFIX
7. CHANGED (NEW) OR ADDED INFORMATION:
7a. ORGANIZATION'S NAME
OR
7b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE
NAME SUFFIX
7c. MAILING ADDRESS CITY STATE POSTAL
CODE COUNTRY
7d. TAX ID #: ADD'L INFO RE 7e. TYPE OF 7f.
JURISDICTION OF 7g. ORGANIZATIONAL
SSN OR EIN ORGANIZATION ORGANIZATION ORGANIZATION
ID #, if any
DEBTOR GNONE
8. AMENDMENT (COLLATERAL CHANGE): check only one box.
Describe collateral G deleted or G added, or give entire G restated collateral description, or describe collateral G assigned.
9. NAME OF SECURED PARTY OF RECORD AUTHORIZING THIS AMENDMENT (name of
assignor, if this is an Assignment). If this is an Amendment authorized by a
Debtor which adds collateral or adds the authorizing Debtor, or if this is a
Termination authorized by a Debtor, check here G and enter
name of DEBTOR authorizing this Amendment.
9a. ORGANIZATION'S NAME
OR
9b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE
NAME SUFFIX
10. OPTIONAL FILER REFERENCE DATA
NATIONAL UCC FINANCING STATEMENT AMENDMENT (FORM UCC3)
(REV. 07/29/98)
UCC
FINANCING STATEMENT AMENDMENT ADDENDUM
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
11. INITIAL FINANCING STATEMENT FILE #
(same as item 1a on Amendment form)
12. NAME OF PARTY AUTHORIZING THIS AMENDMENT
(same as item 9 on Amendment form)
12a. ORGANIZATION'S NAME
OR
12b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME, SUFFIX
13. Use this space for additional information
THE ABOVE SPACE
IS FOR FILING OFFICE USE ONLY
NATIONAL UCC FINANCING STATEMENT AMENDMENT ADDENDUM (FORM UCC3Ad)
(REV. 07/29/98)
NEW
SECTION. Sec. 9A‑522.
MAINTENANCE AND DESTRUCTION OF RECORDS. (a) Post-lapse maintenance and
retrieval of information. The filing office shall maintain a record of the
information provided in a filed financing statement for at least one year after
the effectiveness of the financing statement has lapsed under RCW 62A.9A‑515
with respect to all secured parties of record. The record must be retrievable
by using the name of the debtor and by using the file number assigned to the
initial financing statement to which the record relates.
(b)
Destruction of written records. Except to the extent that a statute
governing disposition of public records provides otherwise, the filing office
immediately may destroy any written record evidencing a financing statement.
However, if the filing office destroys a written record, it shall maintain
another record of the financing statement which complies with subsection (a) of
this section.
NEW
SECTION. Sec. 9A‑523.
INFORMATION FROM FILING OFFICE; SALE OR LICENSE OF RECORDS. (a) Acknowledgment
of filing written record. If a person that files a written record requests
an acknowledgment of the filing, the filing office shall send to the person an
image of the record showing the number assigned to the record pursuant to RCW
62A.9A‑519(a)(1) and the date and time of the filing of the record.
However, if the person furnishes a copy of the record to the filing office, the
filing office may instead:
(1)
Note upon the copy the number assigned to the record pursuant to RCW 62A.9A‑519(a)(1)
and the date and time of the filing of the record; and
(2)
Send the copy to the person.
(b)
Acknowledgment of filing other record. If a person files a record other
than a written record, the filing office shall communicate to the person an
acknowledgment that provides:
(1)
The information in the record;
(2)
The number assigned to the record pursuant to RCW 62A.9A‑519(a)(1); and
(3)
The date and time of the filing of the record.
(c)
Communication of requested information. The filing office shall
communicate or otherwise make available in a record the following information
to any person that requests it:
(1)
Whether there is on file on a date and time specified by the filing office, but
not a date earlier than three business days before the filing office receives
the request, any financing statement that:
(A)
Designates a particular debtor or, if the request so states, designates a
particular debtor at the address specified in the request;
(B)
Has not lapsed under RCW 62A.9A‑515 with respect to all secured parties
of record; and
(C)
If the request so states, has lapsed under RCW 62A.9A‑515 and a record of
which is maintained by the filing office under RCW 62A.9A‑522(a);
(2)
The date and time of filing of each financing statement; and
(3)
The information provided in each financing statement.
(d)
Medium for communicating information. In complying with its duty under
subsection (c) of this section, the filing office may communicate information
in any medium. However, if requested, the filing office shall communicate
information by issuing a record that can be admitted into evidence in the
courts of this state without extrinsic evidence of its authenticity.
(e)
Timeliness of filing office performance. The filing office shall
perform the acts required by subsections (a) through (d) of this section at the
time and in the manner prescribed by filing-office rule, but not later than two
business days after the filing office receives the request.
(f)
Public availability of records. At least weekly, the filing office
shall offer to sell or license to the public on a nonexclusive basis, in bulk,
copies of all records filed in it under this part, in every medium from time to
time available to the filing office. If information provided pursuant to this
section includes a list of individuals, disclosure of the list is specifically
authorized.
NEW
SECTION. Sec. 9A‑524. DELAY
BY FILING OFFICE. Delay by the filing office beyond a time limit prescribed by
this part is excused if:
(1)
The delay is caused by interruption of communication or computer facilities,
war, emergency conditions, failure of equipment, or other circumstances beyond
control of the filing office; and
(2)
The filing office exercises reasonable diligence under the circumstances.
NEW
SECTION. Sec. 9A‑525.
FEES. (a) Filing with department of licensing. Except as otherwise
provided in subsection (b) or (e) of this section, the fee for filing and
indexing a record under this part is the fee set by department of licensing
rule pursuant to subsection (f) of this section. Without limitation, different
fees may be charged for:
(1)
A record that is communicated in writing and consists of one or two pages;
(2)
A record that is communicated in writing and consists of more than two pages,
which fee may be a multiple of the fee described in (1) of this subsection; and
(3)
A record that is communicated by another medium authorized by department of
licensing rule, which fee may be a fraction of the fee described in (1) of this
subsection.
(b)
Filing with other filing offices. Except as otherwise provided in
subsection (e) of this section, the fee for filing and indexing a record under
this part that is filed in a filing office described in RCW 62A.9A‑501(a)(1)
is the fee that would otherwise be applicable to the recording of a mortgage in
that filing office, as set forth in RCW 36.18.010.
(c)
Number of names. The number of names required to be indexed does not
affect the amount of the fee in subsections (a) and (b) of this section.
(d)
Response to information request. The fee for responding to a request
for information from a filing office, including for issuing a certificate
showing, or otherwise communicating, whether there is on file any financing
statement naming a particular debtor, is the fee set by department of licensing
rule pursuant to subsection (f) of this section; provided however, if the
request is to a filing office described in RCW 62A.9A-501(a)(1) and that office
charges a different fee, then that different fee shall apply instead. Without
limitation, different fees may be charged:
(1)
If the request is communicated in writing;
(2)
If the request is communicated by another medium authorized by filing-office
rule; and
(3)
If the request is for expedited service.
(e)
Record of mortgage. This section does not require a fee with respect to
a record of a mortgage which is effective as a financing statement filed as a
fixture filing or as a financing statement covering as-extracted collateral or
timber to be cut under RCW 62A.9A‑502(c). However, the recording and
satisfaction fees that otherwise would be applicable to the record of the
mortgage apply.
(f)
Filing office rules. The department of licensing shall by rule set the
fees called for in this section for filing with, and obtaining information
from, the department of licensing. The director shall set fees at a sufficient
level to defray the costs of administering the program. All receipts from fees
collected under this title, except fees for services covered under RCW
62A.9A-501(a)(1), shall be deposited to the uniform commercial code fund in the
state treasury. Moneys in the fund may be spent only after appropriation and
may be used only to administer the uniform commercial code program.
(g)
Transition. This section continues the fee-setting authority conferred
on the department of licensing by former RCW 62A.9‑409 and nothing herein
shall invalidate fees set by the department of licensing under the authority of
former RCW 62A.9‑409.
NEW
SECTION. Sec. 9A‑526.
FILING-OFFICE RULES. (a) Adoption of filing-office rules. The
department of licensing shall adopt and publish rules to implement this
Article. The filing-office rules must be:
(1)
Consistent with this Article; and
(2)
Adopted and published in accordance with chapter 34.05 RCW.
(b)
Harmonization of rules. To keep the filing-office rules and practices
of the filing office in harmony with the rules and practices of filing offices
in other jurisdictions that enact substantially this part, and to keep the
technology used by the filing office compatible with the technology used by
filing offices in other jurisdictions that enact substantially this part, the
department of licensing, so far as is consistent with the purposes, policies,
and provisions of this Article, in adopting, amending, and repealing
filing-office rules, shall:
(1)
Consult with filing offices in other jurisdictions that enact substantially
this part; and
(2)
Consult the most recent version of the Model Rules promulgated by the
International Association of Corporate Administrators or any successor
organization; and
(3)
Take into consideration the rules and practices of, and the technology used by,
filing offices in other jurisdictions that enact substantially this part.
NEW
SECTION. Sec. 9A‑527. DUTY
TO REPORT. The department of licensing shall report annually on or before
December 31st to the governor on the operation of the filing office.
PART
6
DEFAULT
NEW
SECTION. Sec. 9A‑601.
RIGHTS AFTER DEFAULT; JUDICIAL ENFORCEMENT; CONSIGNOR OR BUYER OF ACCOUNTS,
CHATTEL PAPER, PAYMENT INTANGIBLES, OR PROMISSORY NOTES. (a) Rights
of secured party after default. After default, a secured party has the
rights provided in this part and, except as otherwise provided in RCW 62A.9A‑602,
those provided by agreement of the parties. A secured party:
(1)
May reduce a claim to judgment, foreclose, or otherwise enforce the claim,
security interest, or agricultural lien by any available judicial procedure;
and
(2)
If the collateral is documents, may proceed either as to the documents or as to
the goods they cover.
(b)
Rights and duties of secured party in possession or control. A secured
party in possession of collateral or control of collateral under RCW 62A.9A‑104,
62A.9A‑105, 62A.9A‑106, or 62A.9A‑107 has the rights and
duties provided in RCW 62A.9A‑207.
(c)
Rights cumulative; simultaneous exercise. The rights under subsections
(a) and (b) of this section are cumulative and may be exercised simultaneously.
(d)
Rights of debtor and obligor. Except as otherwise provided in
subsection (g) of this section and RCW 62A.9A‑605, after default, a
debtor and an obligor have the rights provided in this part and by agreement of
the parties.
(e)
Lien of levy after judgment. If a secured party has reduced its claim
to judgment, the lien of any levy that may be made upon the collateral by
virtue of an execution based upon the judgment relates back to the earliest of:
(1)
The date of perfection of the security interest or agricultural lien in the
collateral;
(2)
The date of filing a financing statement covering the collateral; or
(3)
Any date specified in a statute under which the agricultural lien was created.
(f)
Execution sale. A sale pursuant to an execution is a foreclosure of the
security interest or agricultural lien by judicial procedure within the meaning
of this section. A secured party may purchase at the sale and thereafter hold
the collateral free of any other requirements of this Article.
(g)
Consignor or buyer of certain rights to payment. Except as otherwise
provided in RCW 62A.9A‑607(c), this part imposes no duties upon a secured
party that is a consignor or is a buyer of accounts, chattel paper, payment
intangibles, or promissory notes.
(h)
Enforcement restrictions. All rights and remedies provided in this part
with respect to promissory notes or an agreement between an account debtor and
a debtor which relates to a health-care-insurance receivable or a general
intangible, including a contract, permit, license, or franchise, are subject to
RCW 62A.9A-408 to the extent applicable.
NEW
SECTION. Sec. 9A‑602.
WAIVER AND VARIANCE OF RIGHTS AND DUTIES. Except as otherwise provided in RCW
62A.9A‑624, to the extent that they give rights to an obligor (other than
a secondary obligor) or a debtor and impose duties on a secured party, the
debtor or obligor may not waive or vary the rules stated in the following
listed sections:
(1)
RCW 62A.9A‑207(b)(4)(C), which deals with use and operation of the
collateral by the secured party;
(2)
RCW 62A.9A‑210, which deals with requests for an accounting and requests
concerning a list of collateral and statement of account;
(3)
RCW 62A.9A‑607(c), which deals with collection and enforcement of
collateral;
(4)
RCW 62A.9A‑608(a) and 62A.9A‑615(c) to the extent that they deal
with application or payment of noncash proceeds of collection, enforcement, or
disposition;
(5)
RCW 62A.9A‑608(a) and 62A.9A‑615(d) to the extent that they require
accounting for or payment of surplus proceeds of collateral;
(6)
RCW 62A.9A‑609 to the extent that it imposes upon a secured party that
takes possession of collateral without judicial process the duty to do so
without breach of the peace;
(7)
RCW 62A.9A‑610(b), 62A.9A‑611, 62A.9A‑613, and 62A.9A‑614,
which deal with disposition of collateral;
(8)
[Reserved]
(9)
RCW 62A.9A‑616, which deals with explanation of the calculation of a
surplus or deficiency;
(10)
RCW 62A.9A‑620, 62A.9A‑621, and 62A.9A‑622, which deal with
acceptance of collateral in satisfaction of obligation;
(11)
RCW 62A.9A‑623, which deals with redemption of collateral;
(12)
RCW 62A.9A‑624, which deals with permissible waivers; and
(13)
RCW 62A.9A‑625 and 62A.9A‑626, which deal with the secured party's
liability for failure to comply with this Article.
NEW
SECTION. Sec. 9A‑603.
AGREEMENT ON STANDARDS CONCERNING RIGHTS AND DUTIES. (a) Agreed standards.
The parties may determine by agreement the standards measuring the fulfillment
of the rights of a debtor or obligor and the duties of a secured party under a
rule stated in RCW 62A.9A‑602 if the standards are not manifestly
unreasonable.
(b)
Agreed standards inapplicable to breach of peace. Subsection (a) of
this section does not apply to the duty under RCW 62A.9A‑609 to refrain
from breaching the peace.
NEW
SECTION. Sec. 9A‑604.
PROCEDURE IF SECURITY AGREEMENT COVERS REAL PROPERTY, FIXTURES, OR MANUFACTURED
HOME. (a) Enforcement: Personal and real property. If a security
agreement covers both personal and real property, a secured party may proceed:
(1)
Under this part as to the personal property without prejudicing any rights with
respect to the real property; or
(2)
As to both the personal property and the real property in accordance with the
rights with respect to the real property, in which case the other provisions of
this part do not apply.
(b)
Enforcement: Fixtures. Subject to subsection (c) of this section, if a
security agreement covers goods that are or become fixtures, a secured party
may proceed:
(1)
Under this part; or
(2)
In accordance with the rights with respect to real property, in which case the
other provisions of this part do not apply.
(c)
Removal of fixtures or manufactured home. Subject to the other
provisions of this part, if a secured party holding a security interest in
fixtures or a manufactured home has priority over all owners and encumbrancers
of the real property, the secured party, after default, may remove the
collateral from the real property.
(d)
Injury caused by removal. A secured party that removes collateral
consisting of fixtures or a manufactured home shall promptly reimburse any
encumbrancer or owner of the real property, other than the debtor, for the cost
of repair of any physical injury caused by the removal. The secured party need
not reimburse the encumbrancer or owner for any diminution in value of the real
property caused by the absence of the goods removed or by any necessity of
replacing them. A person entitled to reimbursement may refuse permission to
remove until the secured party gives adequate assurance for the performance of
the obligation to reimburse.
NEW
SECTION. Sec. 9A‑605.
UNKNOWN DEBTOR OR SECONDARY OBLIGOR. A secured party does not owe a duty based
on its status as secured party:
(1)
To a person that is a debtor or obligor, unless the secured party knows:
(A)
That the person is a debtor or obligor;
(B)
The identity of the person; and
(C)
How to communicate with the person; or
(2)
To a secured party or lienholder that has filed a financing statement against a
person, unless the secured party knows:
(A)
That the person is a debtor; and
(B)
The identity of the person.
NEW
SECTION. Sec. 9A‑606. TIME
OF DEFAULT FOR AGRICULTURAL LIEN. For purposes of this part, a default occurs
in connection with an agricultural lien at the time the secured party becomes
entitled to enforce the lien in accordance with the statute under which it was
created.
NEW
SECTION. Sec. 9A‑607.
COLLECTION AND ENFORCEMENT BY SECURED PARTY. (a) Collection and enforcement
generally. If so agreed, and in any event after default, a secured party:
(1)
May notify an account debtor or other person obligated on collateral to make
payment or otherwise render performance to or for the benefit of the secured
party;
(2)
May take any proceeds to which the secured party is entitled under RCW 62A.9A‑315;
(3)
May enforce the obligations of an account debtor or other person obligated on
collateral and exercise the rights of the debtor with respect to the obligation
of the account debtor or other person obligated on collateral to make payment
or otherwise render performance to the debtor, and with respect to any property
that secures the obligations of the account debtor or other person obligated on
the collateral;
(4)
If it holds a security interest in a deposit account perfected by control under
RCW 62A.9A‑104(a)(1), may apply the balance of the deposit account to the
obligation secured by the deposit account; and
(5)
If it holds a security interest in a deposit account perfected by control under
RCW 62A.9A‑104(a) (2) or (3), may instruct the bank to pay the balance of
the deposit account to or for the benefit of the secured party.
(b)
Nonjudicial enforcement of mortgage. If necessary to enable a secured
party to exercise, under subsection (a)(3) of this section, the right of a
debtor to enforce a mortgage nonjudicially, the secured party may record in the
office in which a record of the mortgage is recorded the secured party's sworn
affidavit stating that:
(1)
Default has occurred under the security agreement that creates or provides for
a security interest in the obligations secured by the mortgage;
(2)
A copy of the security agreement is attached to the affidavit; and
(3)
The secured party is entitled to enforce the mortgage nonjudicially.
If
the secured party's affidavit and attached copy of the security agreement in
the form prescribed by chapter 65.04 RCW are presented with the applicable fee
to the office in which a record of the mortgage is recorded, the affidavit and
attached copy of the security agreement shall be recorded pursuant to RCW 65.04.030(3).
(c)
Commercially reasonable collection and enforcement. A secured party
shall proceed in a commercially reasonable manner if the secured party:
(1)
Undertakes to collect from or enforce an obligation of an account debtor or
other person obligated on collateral; and
(2)
Is entitled to charge back uncollected collateral or otherwise to full or
limited recourse against the debtor or a secondary obligor.
(d)
Expenses of collection and enforcement. A secured party may deduct from
the collections made pursuant to subsection (c) of this section reasonable
expenses of collection and enforcement, including reasonable attorneys' fees
and legal expenses incurred by the secured party.
(e)
Duties to secured party not affected. This section does not determine
whether an account debtor, bank, or other person obligated on collateral owes a
duty to a secured party.
NEW
SECTION. Sec. 9A‑608.
APPLICATION OF PROCEEDS OF COLLECTION OR ENFORCEMENT; LIABILITY FOR DEFICIENCY
AND RIGHT TO SURPLUS. (a) Application of proceeds, surplus, and deficiency
if obligation secured. If a security interest or agricultural lien secures
payment or performance of an obligation, the following rules apply:
(1)
A secured party shall apply or pay over for application the cash proceeds of
collection or enforcement under this section in the following order to:
(A)
The reasonable expenses of collection and enforcement and, to the extent
provided for by agreement and not prohibited by law, reasonable attorneys' fees
and legal expenses incurred by the secured party;
(B)
The satisfaction of obligations secured by the security interest or
agricultural lien under which the collection or enforcement is made; and
(C)
The satisfaction of obligations secured by any subordinate security interest in
or other lien on the collateral subject to the security interest or
agricultural lien under which the collection or enforcement is made if the
secured party receives an authenticated demand for proceeds before distribution
of the proceeds is completed.
(2)
If requested by a secured party, a holder of a subordinate security interest or
other lien shall furnish reasonable proof of the interest or lien within a
reasonable time. Unless the holder complies, the secured party need not comply
with the holder's demand under (1)(C) of this subsection.
(3)
A secured party need not apply or pay over for application noncash proceeds of
collection and enforcement under this section unless the failure to do so would
be commercially unreasonable. A secured party that applies or pays over for
application noncash proceeds shall do so in a commercially reasonable manner.
(4)
A secured party shall account to and pay a debtor for any surplus, and the
obligor is liable for any deficiency.
(b)
No surplus or deficiency in sales of certain rights to payment. If the
underlying transaction is a sale of accounts, chattel paper, payment
intangibles, or promissory notes, the debtor is not entitled to any surplus,
and the obligor is not liable for any deficiency.
NEW
SECTION. Sec. 9A‑609.
SECURED PARTY'S RIGHT TO TAKE POSSESSION AFTER DEFAULT. (a) Possession;
rendering equipment unusable; disposition on debtor's premises. After
default, a secured party:
(1)
May take possession of the collateral; and
(2)
Without removal, may render equipment unusable and dispose of collateral on a
debtor's premises under RCW 62A.9A‑610.
(b)
Judicial and nonjudicial process. A secured party may proceed under
subsection (a) of this section:
(1)
Pursuant to judicial process; or
(2)
Without judicial process, if it proceeds without breach of the peace.
(c)
Assembly of collateral. If so agreed, and in any event after default, a
secured party may require the debtor to assemble the collateral and make it
available to the secured party at a place to be designated by the secured party
which is reasonably convenient to both parties.
NEW
SECTION. Sec. 9A‑610.
DISPOSITION OF COLLATERAL AFTER DEFAULT. (a) Disposition after default.
After default, a secured party may sell, lease, license, or otherwise dispose
of any or all of the collateral in its present condition or following any
commercially reasonable preparation or processing.
(b)
Commercially reasonable disposition. Every aspect of a disposition of
collateral, including the method, manner, time, place, and other terms, must be
commercially reasonable. If commercially reasonable, a secured party may
dispose of collateral by public or private proceedings, by one or more
contracts, as a unit or in parcels, and at any time and place and on any terms.
(c)
Purchase by secured party. A secured party may purchase collateral:
(1)
At a public disposition; or
(2)
At a private disposition only if the collateral is of a kind that is
customarily sold on a recognized market or the subject of widely distributed
standard price quotations.
(d)
Warranties on disposition. A contract for sale, lease, license, or
other disposition includes the warranties relating to title, possession, quiet
enjoyment, and the like which by operation of law accompany a voluntary
disposition of property of the kind subject to the contract.
(e)
Disclaimer of warranties. A secured party may disclaim or modify
warranties under subsection (d) of this section:
(1)
In a manner that would be effective to disclaim or modify the warranties in a
voluntary disposition of property of the kind subject to the contract of
disposition; or
(2)
By communicating to the purchaser a record evidencing the contract for
disposition and including an express disclaimer or modification of the
warranties.
(f)
Record sufficient to disclaim warranties. A record is sufficient to
disclaim under subsection (e) of this section all warranties included under subsection
(d) of this section if it indicates "There is no warranty relating to
title, possession, quiet enjoyment, or the like in this disposition" or
uses words of similar import.
NEW
SECTION. Sec. 9A‑611.
NOTIFICATION BEFORE DISPOSITION OF COLLATERAL. (a) "Notification
date." In this section, "notification date" means the
earlier of the date on which:
(1)
A secured party sends to the debtor and any secondary obligor an authenticated
notification of disposition; or
(2)
The debtor and any secondary obligor waive the right to notification.
(b)
Notification of disposition required. Except as otherwise provided in
subsection (d) of this section, a secured party that disposes of collateral
under RCW 62A.9A‑610 shall send to the persons specified in subsection
(c) of this section a reasonable authenticated notification of disposition.
(c)
Persons to be notified. To comply with subsection (b) of this section,
the secured party shall send an authenticated notification of disposition to:
(1)
The debtor;
(2)
Any secondary obligor; and
(3)
If the collateral is other than consumer goods:
(A)
Any other secured party or lienholder that, ten days before the notification
date, held a security interest in or other lien on the collateral perfected by
the filing of a financing statement that:
(i)
Identified the collateral;
(ii)
Was indexed under the debtor's name as of that date; and
(iii)
Was filed in the office in which to file a financing statement against the
debtor covering the collateral as of that date; and
(B)
Any other secured party that, ten days before the notification date, held a security
interest in the collateral perfected by compliance with a statute, regulation,
or treaty described in RCW 62A.9A‑311(a).
(d)
Subsection (b) of this section inapplicable: Perishable collateral;
recognized market. Subsection (b) of this section does not apply if the
collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market.
(e)
Compliance with subsection (c)(3)(A) of this section. A secured party
complies with the requirement for notification prescribed by subsection
(c)(3)(A) of this section if:
(1)
Not later than twenty days or earlier than thirty days before the notification
date, the secured party requests, in a commercially reasonable manner,
information concerning financing statements indexed under the debtor's name in
the office indicated in subsection (c)(3)(A) of this section; and
(2)
Before the notification date, the secured party:
(A)
Did not receive a response to the request for information; or
(B)
Received a response to the request for information and sent an authenticated
notification of disposition to each secured party or other lienholder named in
that response whose financing statement covered the collateral.
NEW
SECTION. Sec. 9A‑612.
TIMELINESS OF NOTIFICATION BEFORE DISPOSITION OF COLLATERAL. (a) Reasonable
time is question of fact. Except as otherwise provided in subsection (b)
of this section, whether a notification is sent within a reasonable time is a
question of fact.
(b)
Ten-day period sufficient in nonconsumer transaction. In a transaction
other than a consumer transaction, a notification of disposition sent after
default and ten days or more before the earliest time of disposition set forth
in the notification is sent within a reasonable time before the disposition.
NEW
SECTION. Sec. 9A‑613.
CONTENTS AND FORM OF NOTIFICATION BEFORE DISPOSITION OF COLLATERAL: GENERAL.
Except in a consumer-goods transaction, the following rules apply:
(1)
The contents of a notification of disposition are sufficient if the
notification:
(A)
Describes the debtor and the secured party;
(B)
Describes the collateral that is the subject of the intended disposition;
(C)
States the method of intended disposition;
(D)
States that the debtor is entitled to an accounting of the unpaid indebtedness
and states the charge, if any, for an accounting; and
(E)
States the time and place of a public sale or the time after which any other
disposition is to be made.
(2)
Whether the contents of a notification that lacks any of the information
specified in (1) of this section are nevertheless sufficient is a question of
fact.
(3)
The contents of a notification providing substantially the information
specified in (1) of this section are sufficient, even if the notification
includes:
(A)
Information not specified by (1) of this section; or
(B)
Minor errors that are not seriously misleading.
(4)
A particular phrasing of the notification is not required.
(5)
The following form of notification and the form appearing in RCW 62A.9A‑614(3),
when completed, each provides sufficient information:
NOTIFICATION
OF DISPOSITION OF COLLATERAL
To: [Name of
debtor, obligor, or other person to which the notification is sent]
From: [Name,
address, and telephone number of secured party]
Name
of Debtor(s): [Include
only if debtor(s) are not an addressee]
[For
a public disposition:]
We
will sell [or lease or license, as applicable] the [describe
collateral] [to the highest qualified
bidder] in public as follows:
Day
and Date:
Time:
Place:
[For
a private disposition:]
We
will sell [or lease or license, as applicable] the [describe
collateral] privately sometime after [day and
date] .
You
are entitled to an accounting of the unpaid indebtedness secured by the
property that we intend to sell [or lease or license, as applicable]
[for a charge of $ ]. You
may request an accounting by calling us at [telephone
number]
NEW
SECTION. Sec. 9A‑614.
CONTENTS AND FORM OF NOTIFICATION BEFORE DISPOSITION OF COLLATERAL:
CONSUMER-GOODS TRANSACTION. In a consumer-goods transaction, the following
rules apply:
(1)
A notification of disposition must provide the following information:
(A)
The information specified in RCW 62A.9A‑613(1);
(B)
A description of any liability for a deficiency of the person to which the
notification is sent;
(C)
A telephone number from which the amount that must be paid to the secured party
to redeem the collateral under RCW 62A.9A‑623 is available; and
(D)
A telephone number or mailing address from which additional information
concerning the disposition and the obligation secured is available.
(2)
A particular phrasing of the notification is not required.
(3)
The following form of notification, when completed, provides sufficient
information:
[Name
and address of secured party]
[Date]
NOTICE
OF OUR PLAN TO SELL PROPERTY
[Name
and address of any obligor who is also a debtor]
Subject: [Identification
of Transaction]
We have
your
[describe collateral] ,
because you broke promises in our agreement.
[For
a public disposition:]
We will
sell [describe
collateral] at public sale. A sale
could include a lease or license. The sale will be held as follows:
Date:
Time:
Place:
You may
attend the sale and bring bidders if you want.
[For
a private disposition:]
We will
sell [describe
collateral] at private sale sometime
after [date] . A
sale could include a lease or license.
The
money that we get from the sale (after paying our costs) will reduce the amount
you owe. If we get less money than you owe, you [will or
will not, as applicable] still
owe us the difference. If we get more money than you owe, you will get the
extra money, unless we must pay it to someone else.
You can
get the property back at any time before we sell it by paying us the full
amount you owe (not just the past due payments), including our expenses. To
learn the exact amount you must pay, call us at [telephone
number] .
If you
want us to explain to you in writing how we have figured the amount that you
owe us, you may call us at [telephone
number] [or write us at [secured
party's address] ] and request a written
explanation. [We will charge you $ for
the explanation if we sent you another written explanation of the amount you
owe us within the last six months.]
If you
need more information about the sale call us at [telephone
number] [or write us at [secured
party's address] ].
We are
sending this notice to the following other people who have an interest in [describe
collateral] or who owe money under your
agreement:
[Names
of all other debtors and obligors, if any]
(4)
A notification in the form of (3) of this section is sufficient, even if
additional information appears at the end of the form.
(5)
A notification in the form of (3) of this section is sufficient, even if it
includes errors in information not required by (1) of this section, unless the
error is misleading with respect to rights arising under this Article.
(6)
If a notification under this section is not in the form of (3) of this section,
law other than this Article determines the effect of including information not
required by (1) of this section.
NEW
SECTION. Sec. 9A‑615.
APPLICATION OF PROCEEDS OF DISPOSITION; LIABILITY FOR DEFICIENCY AND RIGHT TO
SURPLUS. (a) Application of proceeds. A secured party shall apply or
pay over for application the cash proceeds of disposition in the following
order to:
(1)
The reasonable expenses of retaking, holding, preparing for disposition,
processing, and disposing, and, to the extent provided for by agreement and not
prohibited by law, reasonable attorneys' fees and legal expenses incurred by
the secured party;
(2)
The satisfaction of obligations secured by the security interest or
agricultural lien under which the disposition is made;
(3)
The satisfaction of obligations secured by any subordinate security interest in
or other subordinate lien on the collateral if:
(A)
The secured party receives from the holder of the subordinate security interest
or other lien an authenticated demand for proceeds before distribution of the
proceeds is completed; and
(B)
In a case in which a consignor has an interest in the collateral, the subordinate
security interest or other lien is senior to the interest of the consignor; and
(4)
A secured party that is a consignor of the collateral if the secured party
receives from the consignor an authenticated demand for proceeds before
distribution of the proceeds is completed.
(b)
Proof of subordinate interest. If requested by a secured party, a
holder of a subordinate security interest or other lien shall furnish
reasonable proof of the interest or lien within a reasonable time. Unless the
holder does so, the secured party need not comply with the holder's demand
under subsection (a)(3) of this section.
(c)
Application of noncash proceeds. A secured party need not apply or pay
over for application noncash proceeds of disposition under this section unless
the failure to do so would be commercially unreasonable. A secured party that
applies or pays over for application noncash proceeds shall do so in a
commercially reasonable manner.
(d)
Surplus or deficiency if obligation secured. If the security interest
under which a disposition is made secures payment or performance of an obligation,
after making the payments and applications required by subsection (a) of this
section and permitted by subsection (c) of this section:
(1)
Unless subsection (a)(4) of this section requires the secured party to apply or
pay over cash proceeds to a consignor, the secured party shall account to and
pay a debtor for any surplus; and
(2)
The obligor is liable for any deficiency.
(e)
No surplus or deficiency in sales of certain rights to payment. If the
underlying transaction is a sale of accounts, chattel paper, payment
intangibles, or promissory notes:
(1)
The debtor is not entitled to any surplus; and
(2)
The obligor is not liable for any deficiency.
(f)
[Reserved]
(g)
Cash proceeds received by junior secured party. A secured party that
receives cash proceeds of a disposition in good faith and without knowledge
that the receipt violates the rights of the holder of a security interest or
other lien that is not subordinate to the security interest or agricultural
lien under which the disposition is made:
(1)
Takes the cash proceeds free of the security interest or other lien;
(2)
Is not obligated to apply the proceeds of the disposition to the satisfaction
of obligations secured by the security interest or other lien; and
(3)
Is not obligated to account to or pay the holder of the security interest or
other lien for any surplus.
NEW
SECTION. Sec. 9A‑616.
EXPLANATION OF CALCULATION OF SURPLUS OR DEFICIENCY. (a) Definitions.
In this section:
(1)
"Explanation" means a writing that:
(A)
States the amount of the surplus or deficiency;
(B)
Provides an explanation in accordance with subsection (c) of this section of
how the secured party calculated the surplus or deficiency;
(C)
States, if applicable, that future debits, credits, charges, including
additional credit service charges or interest, rebates, and expenses may affect
the amount of the surplus or deficiency; and
(D)
Provides a telephone number or mailing address from which additional
information concerning the transaction is available.
(2)
"Request" means a record:
(A)
Authenticated by a debtor or consumer obligor;
(B)
Requesting that the recipient provide an explanation; and
(C)
Sent after disposition of the collateral under RCW 62A.9A‑610.
(b)
Explanation of calculation. In a consumer-goods transaction in which
the debtor is entitled to a surplus or a consumer obligor is liable for a
deficiency under RCW 62A.9A‑615, the secured party shall:
(1)
Send an explanation to the debtor or consumer obligor, as applicable, after the
disposition and:
(A)
Before or when the secured party accounts to the debtor and pays any surplus or
first makes written demand on the consumer obligor after the disposition for
payment of the deficiency; and
(B)
Within fourteen days after receipt of a request; or
(2)
In the case of a consumer obligor who is liable for a deficiency, within
fourteen days after receipt of a request, send to the consumer obligor a record
waiving the secured party's right to a deficiency.
(c)
Required information. To comply with subsection (a)(1)(B) of this
section, a writing must provide the following information in the following
order:
(1)
The aggregate amount of obligations secured by the security interest under
which the disposition was made, and, if the amount reflects a rebate of
unearned interest or credit service charge, an indication of that fact,
calculated as of a specified date:
(A)
If the secured party takes or receives possession of the collateral after
default, not more than thirty-five days before the secured party takes or
receives possession; or
(B)
If the secured party takes or receives possession of the collateral before
default or does not take possession of the collateral, not more than
thirty-five days before the disposition;
(2)
The amount of proceeds of the disposition;
(3)
The aggregate amount of the obligations after deducting the amount of proceeds;
(4)
The amount, in the aggregate or by type, and types of expenses, including
expenses of retaking, holding, preparing for disposition, processing, and
disposing of the collateral, and attorneys' fees secured by the collateral
which are known to the secured party and relate to the current disposition;
(5)
The amount, in the aggregate or by type, and types of credits, including
rebates of interest or credit service charges, to which the obligor is known to
be entitled and which are not reflected in the amount in (1) of this
subsection; and
(6)
The amount of the surplus or deficiency.
(d)
Substantial compliance. A particular phrasing of the explanation is not
required. An explanation complying substantially with the requirements of
subsection (a) of this section is sufficient, even if it includes minor errors
that are not seriously misleading.
(e)
Charges for responses. A debtor or consumer obligor is entitled without
charge to one response to a request under this section during any six-month
period in which the secured party did not send to the debtor or consumer
obligor an explanation pursuant to subsection (b)(1) of this section. The
secured party may require payment of a charge not exceeding twenty-five dollars
for each additional response.
NEW
SECTION. Sec. 9A‑617.
RIGHTS OF TRANSFEREE OF COLLATERAL. (a) Effects of disposition. A
secured party's disposition of collateral after default:
(1)
Transfers to a transferee for value all of the debtor's rights in the
collateral;
(2)
Discharges the security interest under which the disposition is made; and
(3)
Discharges any subordinate security interest or other subordinate lien.
(b)
Rights of good-faith transferee. A transferee that acts in good faith
takes free of the rights and interests described in subsection (a) of this
section, even if the secured party fails to comply with this Article or the
requirements of any judicial proceeding.
(c)
Rights of other transferee. If a transferee does not take free of the
rights and interests described in subsection (a) of this section, the
transferee takes the collateral subject to:
(1)
The debtor's rights in the collateral;
(2)
The security interest or agricultural lien under which the disposition is made;
and
(3)
Any other security interest or other lien.
NEW
SECTION. Sec. 9A‑618.
RIGHTS AND DUTIES OF CERTAIN SECONDARY OBLIGORS. (a) Rights and duties of
secondary obligor. A secondary obligor acquires the rights and becomes
obligated to perform the duties of the secured party after the secondary
obligor:
(1)
Receives an assignment of a secured obligation from the secured party;
(2)
Receives a transfer of collateral from the secured party and agrees to accept
the rights and assume the duties of the secured party; or
(3)
Is subrogated to the rights of a secured party with respect to collateral.
(b)
Effect of assignment, transfer, or subrogation. An assignment,
transfer, or subrogation described in subsection (a) of this section:
(1)
Is not a disposition of collateral under RCW 62A.9A‑610; and
(2)
Relieves the secured party of further duties under this Article.
NEW
SECTION. Sec. 9A‑619.
TRANSFER OF RECORD OR LEGAL TITLE. (a) "Transfer statement."
In this section, "transfer statement" means a record authenticated by
a secured party stating:
(1)
That the debtor has defaulted in connection with an obligation secured by
specified collateral;
(2)
That the secured party has exercised its post-default remedies with respect to
the collateral;
(3)
That, by reason of the exercise, a transferee has acquired the rights of the
debtor in the collateral; and
(4)
The name and mailing address of the secured party, debtor, and transferee.
(b)
Effect of transfer statement. A transfer statement entitles the
transferee to the transfer of record of all rights of the debtor in the
collateral specified in the statement in any official filing, recording,
registration, or certificate-of-title system covering the collateral. If a
transfer statement is presented with the applicable fee and request form to the
official or office responsible for maintaining the system, the official or
office shall:
(1)
Accept the transfer statement;
(2)
Promptly amend its records to reflect the transfer; and
(3)
If applicable, issue a new appropriate certificate of title in the name of the
transferee.
(c)
Transfer not a disposition; no relief of secured party's duties. A
transfer of the record or legal title to collateral to a secured party under
subsection (b) of this section or otherwise is not of itself a disposition of
collateral under this Article and does not of itself relieve the secured party
of its duties under this Article.
NEW
SECTION. Sec. 9A‑620.
ACCEPTANCE OF COLLATERAL IN FULL OR PARTIAL SATISFACTION OF OBLIGATION;
COMPULSORY DISPOSITION OF COLLATERAL. (a) Conditions to acceptance in
satisfaction. A secured party may accept collateral in full or partial
satisfaction of the obligation it secures only if:
(1)
The debtor consents to the acceptance under subsection (c) of this section;
(2)
The secured party does not receive, within the time set forth in subsection (d)
of this section, a notification of objection to the proposal authenticated by:
(A)
A person to which the secured party was required to send a proposal under RCW
62A.9A‑621; or
(B)
Any other person, other than the debtor, holding an interest in the collateral
subordinate to the security interest that is the subject of the proposal; and
(3)
Subsection (e) of this section does not require the secured party to dispose of
the collateral or the debtor waives the requirement pursuant to RCW 62A.9A‑624.
(b)
Purported acceptance ineffective. A purported or apparent acceptance of
collateral under this section is ineffective unless:
(1)
The secured party consents to the acceptance in an authenticated record or
sends a proposal to the debtor; and
(2)
The conditions of subsection (a) of this section are met.
(c)
Debtor's consent. For purposes of this section:
(1)
A debtor consents to an acceptance of collateral in partial satisfaction of the
obligation it secures only if the debtor agrees to the terms of the acceptance
in a record authenticated after default; and
(2)
A debtor consents to an acceptance of collateral in full satisfaction of the
obligation it secures only if the debtor agrees to the terms of the acceptance
in a record authenticated after default or the secured party:
(A)
Sends to the debtor after default a proposal that is unconditional or subject
only to a condition that collateral not in the possession of the secured party
be preserved or maintained;
(B)
In the proposal, proposes to accept collateral in full satisfaction of the
obligation it secures; and
(C)
Does not receive a notification of objection authenticated by the debtor within
twenty days after the proposal is sent.
(d)
Effectiveness of notification. To be effective under subsection (a)(2)
of this section, a notification of objection must be received by the secured
party:
(1)
In the case of a person to which the proposal was sent pursuant to RCW 62A.9A‑621,
within twenty days after notification was sent to that person; and
(2)
In other cases:
(A)
Within twenty days after the last notification was sent pursuant to RCW 62A.9A‑621;
or
(B)
If a notification was not sent, before the debtor consents to the acceptance
under subsection (c) of this section.
(e)
Mandatory disposition of consumer goods. A secured party that has taken
possession of collateral shall dispose of the collateral pursuant to RCW 62A.9A‑610
within the time specified in subsection (f) of this section if:
(1)
Sixty percent of the cash price has been paid in the case of a purchase-money
security interest in consumer goods; or
(2)
Sixty percent of the principal amount of the obligation secured has been paid
in the case of a nonpurchase-money security interest in consumer goods.
(f)
Compliance with mandatory disposition requirement. To comply with
subsection (e) of this section, the secured party shall dispose of the
collateral:
(1)
Within ninety days after taking possession; or
(2)
Within any longer period to which the debtor and all secondary obligors have
agreed in an agreement to that effect entered into and authenticated after
default.
NEW
SECTION. Sec. 9A‑621.
NOTIFICATION OF PROPOSAL TO ACCEPT COLLATERAL. (a) Persons to which
proposal to be sent. A secured party that desires to accept collateral in
full or partial satisfaction of the obligation it secures shall send its
proposal to:
(1)
Any other secured party or lienholder that, ten days before the debtor
consented to the acceptance, held a security interest in or other lien on the
collateral perfected by the filing of a financing statement that:
(A)
Identified the collateral;
(B)
Was indexed under the debtor's name as of that date; and
(C)
Was filed in the office or offices in which to file a financing statement
against the debtor covering the collateral as of that date; and
(2)
Any other secured party that, ten days before the debtor consented to the
acceptance, held a security interest in the collateral perfected by compliance
with a statute, regulation, or treaty described in RCW 62A.9A‑311(a).
(b)
Proposal to be sent to secondary obligor in partial satisfaction. A
secured party that desires to accept collateral in partial satisfaction of the
obligation it secures shall send its proposal to any secondary obligor in
addition to the persons described in subsection (a) of this section.
NEW
SECTION. Sec. 9A‑622.
EFFECT OF ACCEPTANCE OF COLLATERAL. (a) Effect of acceptance. A
secured party's acceptance of collateral in full or partial satisfaction of the
obligation it secures:
(1)
Discharges the obligation to the extent consented to by the debtor;
(2)
Transfers to the secured party all of a debtor's rights in the collateral;
(3)
Discharges the security interest or agricultural lien that is the subject of
the debtor's consent and any subordinate security interest or other subordinate
lien; and
(4)
Terminates any other subordinate interest.
(b)
Discharge of subordinate interest notwithstanding noncompliance. A
subordinate interest is discharged or terminated under subsection (a) of this
section, even if the secured party fails to comply with this Article.
NEW
SECTION. Sec. 9A‑623. RIGHT
TO REDEEM COLLATERAL. (a) Persons that may redeem. A debtor, any
secondary obligor, or any other secured party or lienholder may redeem
collateral.
(b)
Requirements for redemption. To redeem collateral, a person shall
tender:
(1)
Fulfillment of all obligations secured by the collateral; and
(2)
The reasonable expenses and attorneys' fees described in RCW 62A.9A‑615(a)(1).
(c)
When redemption may occur. A redemption may occur at any time before a
secured party:
(1)
Has collected collateral under RCW 62A.9A‑607;
(2)
Has disposed of collateral or entered into a contract for its disposition under
RCW 62A.9A‑610; or
(3)
Has accepted collateral in full or partial satisfaction of the obligation it
secures under RCW 62A.9A‑622.
NEW
SECTION. Sec. 9A‑624.
WAIVER. (a) Waiver of disposition notification. A debtor may waive the
right to notification of disposition of collateral under RCW 62A.9A‑611
only by an agreement to that effect entered into and authenticated after
default.
(b)
Waiver of mandatory disposition. A debtor may waive the right to
require disposition of collateral under RCW 62A.9A‑620(e) only by an
agreement to that effect entered into and authenticated after default.
(c)
Waiver of redemption right. Except in a consumer-goods transaction, a
debtor or secondary obligor may waive the right to redeem collateral under RCW
62A.9A‑623 only by an agreement to that effect entered into and
authenticated after default.
NEW
SECTION. Sec. 9A‑625.
REMEDIES FOR SECURED PARTY'S FAILURE TO COMPLY WITH ARTICLE. (a) Judicial
orders concerning noncompliance. If it is established that a secured party
is not proceeding in accordance with this Article, a court may order or restrain
collection, enforcement, or disposition of collateral on appropriate terms and
conditions.
(b)
Damages for noncompliance. Subject to subsections (c), (d), and (f) of
this section, a person is liable for damages in the amount of any loss caused by
a failure to comply with this Article or by filing a false statement under RCW
62A.9A-607(b) or 62A.9A-619. Loss caused by a failure to comply with a request
under RCW 62A.9A‑210 may include loss resulting from the debtor's
inability to obtain, or increased costs of, alternative financing.
(c)
Persons entitled to recover damages; statutory damages in consumer-goods
transaction. Except as otherwise provided in RCW 62A.9A‑628:
(1)
A person that, at the time of the failure, was a debtor, was an obligor, or
held a security interest in or other lien on the collateral may recover damages
under subsection (b) of this section for its loss; and
(2)
If the collateral is consumer goods, a person that was a debtor or a secondary
obligor at the time a secured party failed to comply with this part may recover
for that failure in any event an amount not less than the credit service charge
plus ten percent of the principal amount of the obligation or the time-price
differential plus ten percent of the cash price.
(d)
Recovery when deficiency eliminated or reduced. A debtor whose
deficiency is eliminated under RCW 62A.9A‑626 may recover damages for the
loss of any surplus. However, a debtor or secondary obligor whose deficiency
is eliminated or reduced under RCW 62A.9A‑626 may not otherwise recover
under subsection (b) of this section for noncompliance with the provisions of
this part relating to collection, enforcement, disposition, or acceptance.
(e)
Statutory damages: Noncompliance with specified provisions. In addition
to any damages recoverable under subsection (b) of this section, the debtor,
consumer obligor, or person named as a debtor in a filed record, as applicable,
may recover five hundred dollars in each case from a person that:
(1)
Fails to comply with RCW 62A.9A‑208;
(2)
Fails to comply with RCW 62A.9A‑209;
(3)
Files a record that the person is not entitled to file under RCW 62A.9A‑509(a);
(4)
Fails to cause the secured party of record to file or send a termination
statement as required by RCW 62A.9A‑513 (a) or (c) within twenty days
after the secured party receives an authenticated demand from a debtor;
(5)
Fails to comply with RCW 62A.9A‑616(b)(1) and whose failure is part of a
pattern, or consistent with a practice, of noncompliance; or
(6)
Fails to comply with RCW 62A.9A‑616(b)(2).
(f)
Statutory damages: Noncompliance with RCW 62A.9A‑210. A debtor
or consumer obligor may recover damages under subsection (b) of this section
and, in addition, five hundred dollars in each case from a person that, without
reasonable cause, fails to comply with a request under RCW 62A.9A‑210. A
recipient of a request under RCW 62A.9A‑210 which never claimed an
interest in the collateral or obligations that are the subject of a request
under RCW 62A.9A‑210 has a reasonable excuse for failure to comply with
the request within the meaning of this subsection.
(g)
Limitation of security interest: Noncompliance with RCW 62A.9A‑210.
If a secured party fails to comply with a request regarding a list of
collateral or a statement of account under RCW 62A.9A‑210, the secured
party may claim a security interest only as shown in the statement included in
the request as against a person that is reasonably misled by the failure.
NEW
SECTION. Sec. 9A‑626.
ACTION IN WHICH DEFICIENCY OR SURPLUS IS IN ISSUE. (a) Applicable rules if
amount of deficiency or surplus in issue. In an action arising from a
transaction in which the amount of a deficiency or surplus is in issue, the
following rules apply:
(1)
A secured party need not prove compliance with the provisions of this part
relating to collection, enforcement, disposition, or acceptance unless the
debtor or a secondary obligor places the secured party's compliance in issue.
(2)
If the secured party's compliance is placed in issue, the secured party has the
burden of establishing that the collection, enforcement, disposition, or
acceptance was conducted in accordance with this part.
(3)
Except as otherwise provided in RCW 62A.9A‑628, if a secured party fails
to prove that the collection, enforcement, disposition, or acceptance was
conducted in accordance with the provisions of this part relating to
collection, enforcement, disposition, or acceptance, the liability of a debtor
or a secondary obligor for a deficiency is limited to an amount by which the
sum of the secured obligation, expenses, and attorneys' fees exceeds the
greater of:
(A)
The proceeds of the collection, enforcement, disposition, or acceptance; or
(B)
The amount of proceeds that would have been realized had the noncomplying
secured party proceeded in accordance with the provisions of this part relating
to collection, enforcement, disposition, or acceptance.
(4)
For purposes of (3)(B) of this subsection, the amount of proceeds that would
have been realized is equal to the sum of the secured obligation, expenses, and
attorneys' fees unless the secured party proves that the amount is less than
that sum.
(b)
[Reserved]
NEW
SECTION. Sec. 9A‑627.
DETERMINATION OF WHETHER CONDUCT WAS COMMERCIALLY REASONABLE. (a) Greater
amount obtainable under other circumstances; no preclusion of commercial
reasonableness. The fact that a greater amount could have been obtained by
a collection, enforcement, disposition, or acceptance at a different time or in
a different method from that selected by the secured party is not of itself
sufficient to preclude the secured party from establishing that the collection,
enforcement, disposition, or acceptance was made in a commercially reasonable
manner.
(b)
Dispositions that are commercially reasonable. A disposition of
collateral is made in a commercially reasonable manner if the disposition is
made:
(1)
In the usual manner on any recognized market;
(2)
At the price current in any recognized market at the time of the disposition;
or
(3)
Otherwise in conformity with reasonable commercial practices among dealers in
the type of property that was the subject of the disposition.
(c)
Approval by court or on behalf of creditors. A collection, enforcement,
disposition, or acceptance is commercially reasonable if it has been approved:
(1)
In a judicial proceeding;
(2)
By a bona fide creditors' committee;
(3)
By a representative of creditors; or
(4)
By an assignee for the benefit of creditors.
(d)
Approval under subsection (c) of this section not necessary; absence of
approval has no effect. Approval under subsection (c) of this section need
not be obtained, and lack of approval does not mean that the collection, enforcement,
disposition, or acceptance is not commercially reasonable.
NEW
SECTION. Sec. 9A‑628.
NONLIABILITY AND LIMITATION ON LIABILITY OF SECURED PARTY; LIABILITY OF
SECONDARY OBLIGOR. (a) Limitation of liability to debtor or obligor.
Unless a secured party knows that a person is a debtor or obligor, knows the
identity of the person, and knows how to communicate with the person:
(1)
The secured party is not liable to the person, or to a secured party or
lienholder that has filed a financing statement against the person, for failure
to comply with this Article; and
(2)
The secured party's failure to comply with this Article does not affect the
liability of the person for a deficiency.
(b)
Limitation of liability to debtor, obligor, another secured party, or
lienholder. A secured party is not liable because of its status as secured
party:
(1)
To a person that is a debtor or obligor, unless the secured party knows:
(A)
That the person is a debtor or obligor;
(B)
The identity of the person; and
(C)
How to communicate with the person; or
(2)
To a secured party or lienholder that has filed a financing statement against a
person, unless the secured party knows:
(A)
That the person is a debtor; and
(B)
The identity of the person.
(c)
Limitation of liability if reasonable belief that transaction not a
consumer-goods transaction or consumer transaction. A secured party is not
liable to any person, and a person's liability for a deficiency is not
affected, because of any act or omission arising out of the secured party's
reasonable belief that a transaction is not a consumer-goods transaction or a
consumer transaction or that goods are not consumer goods, if the secured
party's belief is based on its reasonable reliance on:
(1)
A debtor's representation concerning the purpose for which collateral was to be
used, acquired, or held; or
(2)
An obligor's representation concerning the purpose for which a secured
obligation was incurred.
(d)
Limitation of liability for statutory damages. A secured party is not
liable to any person under RCW 62A.9A‑625(c)(2) for its failure to comply
with RCW 62A.9A‑616.
(e)
Limitation of multiple liability for statutory damages. A secured party
is not liable under RCW 62A.9A‑625(c)(2) more than once with respect to
any one secured obligation.
PART
7
TRANSITION
NEW
SECTION. Sec. 9A‑701.
EFFECTIVE DATE. This act takes effect July 1, 2001.
NEW
SECTION. Sec. 9A‑702.
SAVINGS CLAUSE. (a) Preeffective-date transactions or liens. Except as
otherwise provided in this section, this act applies to a transaction or lien
within its scope, even if the transaction or lien was entered into or created
before this act takes effect.
(b)
Continuing validity. Except as otherwise provided in subsection (c) of
this section and RCW 62A.9A‑703 through 62A.9A‑708:
(1)
Transactions and liens that were not governed by Article 62A.9 RCW, were
validly entered into or created before this act takes effect, and would be
subject to this act if they had been entered into or created after this act
takes effect, and the rights, duties, and interests flowing from those
transactions and liens remain valid after this act takes effect; and
(2)
The transactions and liens may be terminated, completed, consummated, and
enforced as required or permitted by this act or by the law that otherwise
would apply if this act had not taken effect.
(c)
Preeffective-date proceedings. This act does not affect an action,
case, or proceeding commenced before this act takes effect.
NEW
SECTION. Sec. 9A‑703.
SECURITY INTEREST PERFECTED BEFORE EFFECTIVE DATE. (a) Continuing priority
over lien creditor: Perfection requirements satisfied. A security
interest that is enforceable immediately before this act takes effect and would
have priority over the rights of a person that becomes a lien creditor at that
time is a perfected security interest under this act if, when this act takes
effect, the applicable requirements for enforceability and perfection under
this act are satisfied without further action.
(b)
Continuing priority over lien creditor: Perfection requirements not
satisfied. Except as otherwise provided in RCW 62A.9A‑705, if, immediately
before this act takes effect, a security interest is enforceable and would have
priority over the rights of a person that becomes a lien creditor at that time,
but the applicable requirements for enforceability or perfection under this act
are not satisfied when this act takes effect, the security interest:
(1)
Is a perfected security interest for one year after this act takes effect;
(2)
Remains enforceable thereafter only if the security interest becomes
enforceable under RCW 62A.9A‑203 before the year expires; and
(3)
Remains perfected thereafter only if the applicable requirements for perfection
under this act are satisfied before the year expires.
NEW
SECTION. Sec. 9A‑704.
SECURITY INTEREST UNPERFECTED BEFORE EFFECTIVE DATE. A security interest that
is enforceable immediately before this act takes effect but which would be
subordinate to the rights of a person that becomes a lien creditor at that
time:
(1)
Remains an enforceable security interest for one year after this act takes
effect;
(2)
Remains enforceable thereafter if the security interest becomes enforceable
under RCW 62A.9A‑203 when this act takes effect or within one year
thereafter; and
(3)
Becomes perfected:
(A)
Without further action, when this act takes effect if the applicable
requirements for perfection under this act are satisfied before or at that
time; or
(B)
When the applicable requirements for perfection are satisfied if the
requirements are satisfied after that time.
NEW
SECTION. Sec. 9A‑705.
EFFECTIVENESS OF ACTION TAKEN BEFORE EFFECTIVE DATE. (a) Preeffective-date
action; one-year perfection period unless reperfected. If action, other
than the filing of a financing statement, is taken before this act takes effect
and the action would have resulted in priority of a security interest over the
rights of a person that becomes a lien creditor had the security interest
become enforceable before this act takes effect, the action is effective to
perfect a security interest that attaches under this act within one year after
this act takes effect. An attached security interest becomes unperfected one
year after this act takes effect unless the security interest becomes a
perfected security interest under this act before the expiration of that
period.
(b)
Preeffective-date filing. The filing of a financing statement before
this act takes effect is effective to perfect a security interest to the extent
the filing would satisfy the applicable requirements for perfection under this
act.
(c)
Preeffective-date filing in jurisdiction formerly governing perfection.
This act does not render ineffective an effective financing statement that,
before this act takes effect, is filed and satisfies the applicable
requirements for perfection under the law of the jurisdiction governing
perfection as provided in RCW 62A.9A‑103. However, except as otherwise
provided in subsections (d) and (e) of this section and RCW 62A.9A‑706,
the financing statement ceases to be effective at the earlier of:
(1)
The time the financing statement would have ceased to be effective under the law
of the jurisdiction in which it is filed; or
(2)
June 30, 2006.
(d)
Continuation statement. The filing of a continuation statement after
this act takes effect does not continue the effectiveness of the financing
statement filed before this act takes effect. However, upon the timely filing
of a continuation statement after this act takes effect and in accordance with
the law of the jurisdiction governing perfection as provided in Part 3, the
effectiveness of a financing statement filed in the same office in that
jurisdiction before this act takes effect continues for the period provided by
the law of that jurisdiction.
(e)
Application of subsection (c)(2) of this section to transmitting utility
financing statement. Subsection (c)(2) of this section applies to a
financing statement that, before this act takes effect, is filed against a
transmitting utility and satisfies the applicable requirements for perfection
under the law of the jurisdiction governing perfection as provided in RCW
62A.9A‑103 only to the extent that Part 3 provides that the law of a
jurisdiction other than the jurisdiction in which the financing statement is
filed governs perfection of a security interest in collateral covered by the
financing statement.
(f)
Application of Part 5. A financing statement that includes a financing
statement filed before this act takes effect and a continuation statement filed
after this act takes effect is effective only to the extent that it satisfies
the requirements of Part 5 for an initial financing statement.
NEW
SECTION. Sec. 9A‑706. WHEN
INITIAL FINANCING STATEMENT SUFFICES TO CONTINUE EFFECTIVENESS OF FINANCING
STATEMENT. (a) Initial financing statement in lieu of continuation
statement. The filing of an initial financing statement in the office
specified in RCW 62A.9A‑501 continues the effectiveness of a financing
statement filed before this act takes effect if:
(1)
The filing of an initial financing statement in that office would be effective
to perfect a security interest under this act;
(2)
The preeffective-date financing statement was filed in an office in another
state or another office in this state; and
(3)
The initial financing statement satisfies subsection (c) of this section.
(b)
Period of continued effectiveness. The filing of an initial financing
statement under subsection (a) of this section continues the effectiveness of
the preeffective-date financing statement:
(1)
If the initial financing statement is filed before this act takes effect, for
the period provided in RCW 62A.9‑403 with respect to a financing
statement; and
(2)
If the initial financing statement is filed after this act takes effect, for
the period provided in RCW 62A.9A‑515 with respect to an initial
financing statement.
(c)
Requirements for initial financing statement under subsection (a) of this
section. To be effective for purposes of subsection (a) of this section,
an initial financing statement must:
(1)
Satisfy the requirements of Part 5 for an initial financing statement;
(2)
Identify the preeffective-date financing statement by indicating the office in
which the financing statement was filed and providing the dates of filing and
file numbers, if any, of the financing statement and of the most recent continuation
statement filed with respect to the financing statement; and
(3)
Indicate that the preeffective-date financing statement remains effective.
NEW
SECTION. Sec. 9A‑707.
PERSONS ENTITLED TO FILE INITIAL FINANCING STATEMENT OR CONTINUATION
STATEMENT. A person may file an initial financing statement or a continuation
statement under this part if:
(1)
The secured party of record authorizes the filing; and
(2)
The filing is necessary under this part:
(A)
To continue the effectiveness of a financing statement filed before this act
takes effect; or
(B)
To perfect or continue the perfection of a security interest.
NEW
SECTION. Sec. 9A‑708.
PRIORITY. (a) Law governing priority. This act determines the priority
of conflicting claims to collateral. However, if the relative priorities of
the claims were established before this act takes effect, Article 62A.9 RCW
determines priority.
(b)
Priority if security interest becomes enforceable under RCW 62A.9A‑203.
For purposes of RCW 62A.9A‑322(a), the priority of a security interest
that becomes enforceable under RCW 62A.9A‑203 dates from the time this
act takes effect if the security interest is perfected under this act by the
filing of a financing statement before this act takes effect which would not
have been effective to perfect the security interest under Article 62A.9 RCW.
This subsection does not apply to conflicting security interests each of which
is perfected by the filing of such a financing statement.
PART
8
AMENDATORY
SECTIONS
Sec.
9A‑801. RCW
62A.1-105 and 1997 c 56 s 19 are each amended to read as follows:
TERRITORIAL
APPLICATION OF THE TITLE; PARTIES' POWER TO CHOOSE APPLICABLE LAW. (1) Except
as provided hereafter in this section, when a transaction bears a reasonable
relation to this state and also to another state or nation the parties may
agree that the law either of this state or of such other state or nation shall
govern their rights and duties. Failing such agreement this Title applies to
transactions bearing an appropriate relation to this state.
(2)
Where one of the following provisions of this Title specifies the applicable
law, that provision governs and a contrary agreement is effective only to the
extent permitted by the law (including the conflict of laws rules) so
specified:
Rights
of creditors against sold goods. RCW 62A.2-402.
Applicability
of the Article on Leases. RCW 62A.2A-105 and 62A.2A-106.
Applicability
of the Article on Bank Deposits and Collections. RCW 62A.4-102.
Governing
law in the Article on Funds Transfers. RCW 62A.4A‑507.
((Applicability
of the Article on)) Letters of Credit. RCW 62A.5-116.
Applicability
of the Article on Investment Securities. RCW 62A.8-110.
((Perfection
provisions of the Article on Secured Transactions. RCW 62A.9‑103.)) Law
governing perfection, the effect of perfection or nonperfection, and the
priority of security interests. RCW 62A.9A‑301 through 62A.9A‑307.
Sec.
9A‑802. RCW
62A.1-201 and 1996 c 77 s 1 are each amended to read as follows:
GENERAL
DEFINITIONS. Subject to additional definitions contained in the subsequent
Articles of this Title which are applicable to specific Articles or Parts
thereof, and unless the context otherwise requires, in this Title:
(1)
"Action" in the sense of a judicial proceeding includes recoupment,
counterclaim, set-off, suit in equity and any other proceedings in which rights
are determined.
(2)
"Aggrieved party" means a party entitled to resort to a remedy.
(3)
"Agreement" means the bargain of the parties in fact as found in
their language or by implication from other circumstances including course of
dealing or usage of trade or course of performance as provided in this Title
(RCW 62A.1-205, RCW 62A.2-208, and RCW 62A.2A-207). Whether an agreement has
legal consequences is determined by the provisions of this Title, if
applicable; otherwise by the law of contracts (RCW 62A.1-103). (Compare "Contract".)
(4)
"Bank" means any person engaged in the business of banking.
(5)
"Bearer" means the person in possession of an instrument, document of
title, or certificated security payable to bearer or indorsed in blank.
(6)
"Bill of lading" means a document evidencing the receipt of goods for
shipment issued by a person engaged in the business of transporting or
forwarding goods, and includes an airbill. "Airbill" means a
document serving for air transportation as a bill of lading does for marine or
rail transportation, and includes an air consignment note or air waybill.
(7)
"Branch" includes a separately incorporated foreign branch of a bank.
(8)
"Burden of establishing" a fact means the burden of persuading the
triers of fact that the existence of the fact is more probable than its
non-existence.
(9)
"Buyer in ordinary course of business" means a person ((who)) that
buys goods in good faith ((and)), without knowledge that the
sale ((to him or her is in violation of)) violates the ((ownership))
rights ((or security interest)) of ((a third party)) another
person in the goods ((buys)), and in the ordinary
course from a person, other than a pawnbroker, in the business of
selling goods of that kind ((but does not include a pawnbroker)). ((All
persons who sell minerals or the like (including oil and gas) at wellhead or
minehead shall be deemed to be persons)) A person buys goods in the
ordinary course if the sale to the person comports with the usual or customary
practices in the kind of business in which the seller is engaged or with the
seller's own usual or customary practices. A person that sells oil, gas, or
other minerals at the wellhead or minehead is a person in the business of
selling goods of that kind. (("Buying")) A buyer in
ordinary course of business may ((be)) buy for cash ((or)),
by exchange of other property, or on secured or unsecured credit,
and ((includes receiving)) may acquire goods or documents of
title under a pre-existing contract for sale ((but does not include a
transfer in bulk or as security for or in total or partial satisfaction of a
money debt)). Only a buyer that takes possession of the goods or has a
right to recover the goods from the seller under Article 62A.2 RCW may be a
buyer in ordinary course of business. A person that acquires goods in a
transfer in bulk or as security for or in total or partial satisfaction of a
money debt is not a buyer in ordinary course of business.
(10)
"Conspicuous": A term or clause is conspicuous when it is so written
that a reasonable person against whom it is to operate ought to have noticed
it. A printed heading in capitals (as: NON-NEGOTIABLE BILL OF LADING) is
conspicuous. Language in the body of a form is "conspicuous" if it
is in larger or other contrasting type or color. But in a telegram any stated
term is "conspicuous". Whether a term or clause is
"conspicuous" or not is for decision by the court.
(11)
"Contract" means the total legal obligation which results from the
parties' agreement as affected by this Title and any other applicable rules of
law. (Compare "Agreement".)
(12)
"Creditor" includes a general creditor, a secured creditor, a lien
creditor and any representative of creditors, including an assignee for the
benefit of creditors, a trustee in bankruptcy, a receiver in equity and an
executor or administrator of an insolvent debtor's or assignor's estate.
(13)
"Defendant" includes a person in the position of defendant in a
cross-action or counterclaim.
(14)
"Delivery" with respect to instruments, documents of title, chattel
paper, or certificated securities means voluntary transfer of possession.
(15)
"Document of title" includes bill of lading, dock warrant, dock
receipt, warehouse receipt or order for the delivery of goods, and also any
other document which in the regular course of business or financing is treated
as adequately evidencing that the person in possession of it is entitled to
receive, hold and dispose of the document and the goods it covers. To be a
document of title a document must purport to be issued by or addressed to a
bailee and purport to cover goods in the bailee's possession which are either
identified or are fungible portions of an identified mass.
(16)
"Fault" means wrongful act, omission or breach.
(17)
"Fungible" with respect to goods or securities means goods or
securities of which any unit is, by nature or usage of trade, the equivalent of
any other like unit. Goods which are not fungible shall be deemed fungible for
the purposes of this Title to the extent that under a particular agreement or
document unlike units are treated as equivalents.
(18)
"Genuine" means free of forgery or counterfeiting.
(19)
"Good faith" means honesty in fact in the conduct or transaction
concerned.
(20)
"Holder" with respect to a negotiable instrument, means the person in
possession if the instrument is payable to bearer or, in the case of an
instrument payable to an identified person, if the identified person is in
possession. "Holder" with respect to a document of title means the
person in possession if the goods are deliverable to bearer or to the order of
the person in possession.
(21)
To "honor" is to pay or to accept and pay, or where a credit so
engages to purchase or discount a draft complying with the terms of the credit.
(22)
"Insolvency proceedings" includes any assignment for the benefit of
creditors or other proceedings intended to liquidate or rehabilitate the estate
of the person involved.
(23)
A person is "insolvent" who either has ceased to pay his or her debts
in the ordinary course of business or cannot pay his or her debts as they
become due or is insolvent within the meaning of the federal bankruptcy law.
(24)
"Money" means a medium of exchange authorized or adopted by a
domestic or foreign government and includes a monetary unit of account
established by an intergovernmental organization or by agreement between two or
more nations.
(25)
A person has "notice" of a fact when
(a)
he or she has actual knowledge of it; or
(b)
he or she has received a notice or notification of it; or
(c)
from all the facts and circumstances known to him or her at the time in
question he or she has reason to know that it exists.
A
person "knows" or has "knowledge" of a fact when he or she
has actual knowledge of it. "Discover" or "learn" or a
word or phrase of similar import refers to knowledge rather than to reason to
know. The time and circumstances under which a notice or notification may
cease to be effective are not determined by this Title.
(26)
A person "notifies" or "gives" a notice or notification to
another by taking such steps as may be reasonably required to inform the other
in ordinary course whether or not such other actually comes to know of it. A
person "receives" a notice or notification when
(a)
it comes to his or her attention; or
(b)
it is duly delivered at the place of business through which the contract was
made or at any other place held out by him or her as the place for receipt of
such communications.
(27)
Notice, knowledge or a notice or notification received by an organization is
effective for a particular transaction from the time when it is brought to the
attention of the individual conducting that transaction, and in any event from
the time when it would have been brought to his or her attention if the
organization had exercised due diligence. An organization exercises due
diligence if it maintains reasonable routines for communicating significant
information to the person conducting the transaction and there is reasonable
compliance with the routines. Due diligence does not require an individual
acting for the organization to communicate information unless such
communication is part of his or her regular duties or unless he or she has
reason to know of the transaction and that the transaction would be materially
affected by the information.
(28)
"Organization" includes a corporation, government or governmental
subdivision or agency, business trust, estate, trust, partnership or
association, two or more persons having a joint or common interest, or any
other legal or commercial entity.
(29)
"Party", as distinct from "third party", means a person who
has engaged in a transaction or made an agreement within this Title.
(30)
"Person" includes an individual or an organization (See RCW
62A.1-102).
(31)
"Presumption" or "presumed" means that the trier of fact
must find the existence of the fact presumed unless and until evidence is
introduced which would support a finding of its nonexistence.
(32)
"Purchase" includes taking by sale, discount, negotiation, mortgage,
pledge, lien, security interest, issue or re-issue, gift or any other
voluntary transaction creating an interest in property.
(33)
"Purchaser" means a person who takes by purchase.
(34)
"Remedy" means any remedial right to which an aggrieved party is
entitled with or without resort to a tribunal.
(35)
"Representative" includes an agent, an officer of a corporation or
association, and a trustee, executor or administrator of an estate, or any
other person empowered to act for another.
(36)
"Rights" includes remedies.
(37)
"Security interest" means an interest in personal property or
fixtures which secures payment or performance of an obligation, except for
lease-purchase agreements under chapter 63.19 RCW. ((The retention or
reservation of title by a seller of goods notwithstanding shipment or delivery
to the buyer (RCW 62A.2‑401) is limited in effect to a reservation of a
"security interest".)) The term also includes any interest of a consignor
and a buyer of accounts ((or)), chattel paper ((which)),
a payment intangible, or a promissory note in a transaction that is subject
to Article 9. The special property interest of a buyer of goods on
identification of such goods to a contract for sale under RCW 62A.2-401 is not
a "security interest", but a buyer may also acquire a "security
interest" by complying with Article 9. ((Unless a consignment is
intended as security, reservation of title thereunder is not a "security
interest" but a consignment in any event is subject to the provisions on
consignment sales (RCW 62A.2-326).)) Except as otherwise provided in
RCW 62A.2-505, the right of a seller or lessor of goods under Article 2 or 2A
to retain or acquire possession of the goods is not a "security
interest," but a seller or lessor may also acquire a "security
interest" by complying with Article 9. The retention or reservation of
title by a seller of goods notwithstanding shipment or delivery to the buyer
(RCW 62A.2-401) is limited in effect to a reservation of a "security
interest."
Whether
a transaction creates a lease or security interest is determined by the facts
of each case. However, a transaction creates a security interest if the
consideration the lessee is to pay the lessor for the right to possession and
use of the goods is an obligation for the term of the lease not subject to
termination by the lessee, and:
(a)
The original term of the lease is equal to or greater than the remaining
economic life of the goods;
(b)
The lessee is bound to renew the lease for the remaining economic life of the
goods or is bound to become the owner of the goods;
(c)
The lessee has an option to renew the lease for the remaining economic life of
the goods for no additional consideration or nominal additional consideration
upon compliance with the lease agreement; or
(d)
The lessee has an option to become the owner of the goods for no additional
consideration or nominal additional consideration upon compliance with the
lease agreement.
A
transaction does not create a security interest merely because it provides
that:
(a)
The present value of the consideration the lessee is obligated to pay the
lessor for the right to possession and use of the goods is substantially equal
to or is greater than the fair market value of the goods at the time the lease
is entered into;
(b)
The lessee assumes risk of loss of the goods, or agrees to pay taxes,
insurance, filing, recording, or registration fees, or service or maintenance
costs with respect to the goods;
(c)
The lessee has an option to renew the lease or to become the owner of the
goods;
(d)
The lessee has an option to renew the lease for a fixed rent that is equal to
or greater than the reasonably predictable fair market rent for the use of the
goods for the term of the renewal at the time the option is to be performed;
(e)
The lessee has an option to become the owner of the goods for a fixed price
that is equal to or greater than the reasonably predictable fair market value
of the goods at the time the option is to be performed; or
(f)
The amount of rental payments may or will be increased or decreased by
reference to the amount realized by the lessor upon sale or disposition of the
goods.
For
purposes of this subsection (37):
(a)
Additional consideration is not nominal if (i) when the option to renew the
lease is granted to the lessee the rent is stated to be the fair market rent
for the use of the goods for the term of the renewal determined at the time the
option is to be performed, or (ii) when the option to become the owner of the
goods is granted to the lessee the price is stated to be the fair market value
of the goods determined at the time the option is to be performed. Additional
consideration is nominal if it is less than the lessee's reasonably predictable
cost of performing under the lease agreement if the option is not exercised;
(b)
"Reasonably predictable" and "remaining economic life of the
goods" are to be determined with reference to the facts and circumstances
at the time the transaction is entered into; and
(c)
"Present value" means the amount as of a date certain of one or more
sums payable in the future, discounted to the date certain. The discount is
determined by the interest rate specified by the parties if the rate is not
manifestly unreasonable at the time the transaction is entered into; otherwise,
the discount is determined by a commercially reasonable rate that takes into
account the facts and circumstances of each case at the time the transaction was
entered into.
(38)
"Send" in connection with any writing or notice means to deposit in
the mail or deliver for transmission by any other usual means of communication
with postage or cost of transmission provided for and properly addressed and in
the case of an instrument to an address specified thereon or otherwise agreed,
or if there be none to any address reasonable under the circumstances. The
receipt of any writing or notice within the time at which it would have arrived
if properly sent has the effect of a proper sending.
(39)
"Signed" includes any symbol executed or adopted by a party with
present intention to authenticate a writing.
(40)
"Surety" includes guarantor.
(41)
"Telegram" includes a message transmitted by radio, teletype, cable,
any mechanical method of transmission, or the like.
(42)
"Term" means that portion of an agreement which relates to a
particular matter.
(43)
"Unauthorized" signature means one made without actual, implied or
apparent authority and includes a forgery.
(44)
"Value". Except as otherwise provided with respect to negotiable
instruments and bank collections (RCW 62A.3-303, RCW 62A.4-210, and RCW
62A.4-211) a person gives "value" for rights if he or she acquires
them
(a)
in return for a binding commitment to extend credit or for the extension of
immediately available credit whether or not drawn upon and whether or not a
charge-back is provided for in the event of difficulties in collection; or
(b)
as security for or in total or partial satisfaction of a preexisting claim; or
(c)
by accepting delivery pursuant to a pre-existing contract for purchase; or
(d)
generally, in return for any consideration sufficient to support a simple
contract.
(45)
"Warehouse receipt" means a receipt issued by a person engaged in the
business of storing goods for hire.
(46)
"Written" or "writing" includes printing, typewriting or
any other intentional reduction to tangible form.
Sec.
9A‑803. RCW
62A.2-103 and 1965 ex.s. c 157 s 2-103 are each amended to read as follows:
DEFINITIONS
AND INDEX OF DEFINITIONS. (1) In this Article unless the context otherwise
requires
(a)
"Buyer" means a person who buys or contracts to buy goods.
(b)
"Good faith" in the case of a merchant means honesty in fact and the
observance of reasonable commercial standards of fair dealing in the trade.
(c)
"Receipt" of goods means taking physical possession of them.
(d)
"Seller" means a person who sells or contracts to sell goods.
(2)
Other definitions applying to this Article or to specified Parts thereof, and
the sections in which they appear are:
"Acceptance." RCW
62A.2-606.
"Banker's
credit." RCW 62A.2-325.
"Between
merchants." RCW 62A.2-104.
"Cancellation." RCW
62A.2-106(4).
"Commercial
unit." RCW 62A.2-105.
"Confirmed
credit." RCW 62A.2-325.
"Conforming
to contract." RCW 62A.2-106.
"Contract
for sale." RCW 62A.2-106.
"Cover." RCW
62A.2-712.
"Entrusting." RCW
62A.2-403.
"Financing
agency." RCW 62A.2-104.
"Future
goods." RCW 62A.2-105.
"Goods." RCW
62A.2-105.
"Identification." RCW
62A.2-501.
"Installment
contract." RCW 62A.2-612.
"Letter
of credit." RCW 62A.2-325.
"Lot." RCW
62A.2-105.
"Merchant." RCW
62A.2-104.
"Overseas." RCW
62A.2-323.
"Person
in position of seller." RCW 62A.2-707.
"Present
sale." RCW 62A.2-106.
"Sale." RCW
62A.2-106.
"Sale
on approval." RCW 62A.2-326.
"Sale
or return." RCW 62A.2-326.
"Termination." RCW
62A.2-106.
(3)
The following definitions in other Articles apply to this Article:
"Check." RCW
62A.3-104.
"Consignee." RCW
62A.7-102.
"Consignor." RCW
62A.7-102.
"Consumer
goods." RCW ((62A.9‑109)) 62A.9A‑102.
"Dishonor." RCW
((62A.3-507)) 62A.3-502.
"Draft." RCW
62A.3-104.
(4)
In addition Article 1 contains general definitions and principles of
construction and interpretation applicable throughout this Article.
Sec.
9A‑804. RCW
62A.2-210 and 1965 ex.s. c 157 s 2-210 are each amended to read as follows:
DELEGATION
OF PERFORMANCE; ASSIGNMENT OF RIGHTS. (1) A party may perform his duty through
a delegate unless otherwise agreed or unless the other party has a substantial
interest in having his original promisor perform or control the acts required
by the contract. No delegation of performance relieves the party delegating of
any duty to perform or any liability for breach.
(2)
Except as otherwise provided in RCW 62A.9A‑406, unless otherwise
agreed, all rights of either seller or buyer can be assigned except
where the assignment would materially change the duty of the other party, or
increase materially the burden or risk imposed on him by his contract, or
impair materially his chance of obtaining return performance. A right to
damages for breach of the whole contract or a right arising out of the
assignor's due performance of his entire obligation can be assigned despite
agreement otherwise.
(3)
The creation, attachment, perfection, or enforcement of a security interest
in the seller's interest under a contract is not a transfer that materially
changes the duty of or increases materially the burden or risk imposed on the
buyer or impairs materially the buyer's chance of obtaining return performance
within the purview of subsection (2) of this section unless, and then only to
the extent that, enforcement actually results in a delegation of material
performance of the seller. Even in that event, the creation, attachment,
perfection, and enforcement of the security interest remain effective, but (i)
the seller is liable to the buyer for damages caused by the delegation to the
extent that the damages could not reasonably be prevented by the buyer, and
(ii) a court having jurisdiction may grant other appropriate relief, including
cancellation of the contract for sale or an injunction against enforcement of
the security interest or consummation of the enforcement.
(4)
Unless the circumstances indicate the contrary a prohibition of assignment of
"the contract" is to be construed as barring only the delegation to
the assignee of the assignor's performance.
(((4)))
(5) An assignment of "the contract" or of "all my rights
under the contract" or an assignment in similar general terms is an
assignment of rights and unless the language or the circumstances (as in an
assignment for security) indicate the contrary, it is a delegation of
performance of the duties of the assignor and its acceptance by the assignee
constitutes a promise by him to perform those duties. This promise is
enforceable by either the assignor or the other party to the original contract.
(((5)))
(6) The other party may treat any assignment which delegates performance
as creating reasonable grounds for insecurity and may without prejudice to his
rights against the assignor demand assurances from the assignee (RCW
62A.2-609).
(7)
Notwithstanding subsections (2) and (3) of this section, an assignment that
would be a breach but for the provisions of RCW 62A.9A‑406 may create
reasonable grounds for insecurity with respect to the due performance of the
assignor (RCW 62A.2‑609).
Sec.
9A‑805. RCW
62A.2-326 and 1965 ex.s. c 157 s 2-326 are each amended to read as follows:
SALE
ON APPROVAL AND SALE OR RETURN; ((CONSIGNMENT SALES AND)) RIGHTS OF
CREDITORS. (1) Unless otherwise agreed, if delivered goods may be returned by
the buyer even though they conform to the contract, the transaction is
(a)
a "sale on approval" if the goods are delivered primarily for use,
and
(b)
a "sale or return" if the goods are delivered primarily for resale.
(2)
((Except as provided in subsection (3),)) Goods held on approval
are not subject to the claims of the buyer's creditors until acceptance; goods
held on sale or return are subject to such claims while in the buyer's
possession.
(3)
((Where goods are delivered to a person for sale and such person maintains a
place of business at which he deals in goods of the kind involved, under a name
other than the name of the person making delivery, then with respect to claims
of creditors of the person conducting the business the goods are deemed to be
on sale or return. The provisions of this subsection are applicable even
though an agreement purports to reserve title to the person making delivery
until payment or resale or uses such words as "on consignment" or
"on memorandum". However, this subsection is not applicable if the
person making delivery
(a)
complies with an applicable law providing for a consignor's interest or the
like to be evidenced by a sign, or
(b)
establishes that the person conducting the business is generally known by his
creditors to be substantially engaged in selling the goods of others, or
(c)
complies with the filing provisions of the Article on Secured Transactions
(Article 9).
(4))) Any
"or return" term of a contract for sale is to be treated as a
separate contract for sale within the statute of frauds section of this Article
(RCW 62A.2-201) and as contradicting the sale aspect of the contract within the
provisions of this Article on parol or extrinsic evidence (RCW 62A.2-202).
Sec.
9A‑806. RCW
62A.2-502 and 1965 ex.s. c 157 s 2-502 are each amended to read as follows:
BUYER'S
RIGHT TO GOODS ON SELLER'S INSOLVENCY. (1) Subject to subsections (2) and
(3) of this section and even though the goods have not been shipped a buyer
who has paid a part or all of the price of goods in which he has a special
property under the provisions of the immediately preceding section may on
making and keeping good a tender of any unpaid portion of their price recover
them from the seller if:
(a)
In the case of goods bought for personal, family, or household purposes, the
seller repudiates or fails to deliver as required by the contract; or
(b)
In all cases, the seller becomes insolvent within ten days after receipt of
the first installment on their price.
(2)
The buyer's right to recover the goods under subsection (1)(a) of this
section vests upon acquisition of a special property, even if the seller had
not then repudiated or failed to deliver.
(3)
If the identification creating his special property has been made by the buyer
he acquires the right to recover the goods only if they conform to the contract
for sale.
Sec.
9A‑807. RCW
62A.2-716 and 1965 ex.s. c 157 s 2-716 are each amended to read as follows:
BUYER'S
RIGHT TO SPECIFIC PERFORMANCE OR REPLEVIN. (1) Specific performance may be
decreed where the goods are unique or in other proper circumstances.
(2)
The decree for specific performance may include such terms and conditions as to
payment of the price, damages, or other relief as the court may deem just.
(3) The buyer has a right of replevin for goods identified to the
contract if after reasonable effort he is unable to effect cover for such goods
or the circumstances reasonably indicate that such effort will be unavailing or
if the goods have been shipped under reservation and satisfaction of the
security interest in them has been made or tendered. In the case of goods
bought for personal, family, or household purposes, the buyer's right of
replevin vests upon acquisition of a special property, even if the seller had
not then repudiated or failed to deliver.
Sec.
9A‑808. RCW
62A.2A-103 and 1993 c 230 s 2A-103 are each amended to read as follows:
DEFINITIONS
AND INDEX OF DEFINITIONS. (1) In this Article unless the context otherwise
requires:
(a)
"Buyer in ordinary course of business" means a person who in good
faith and without knowledge that the sale to him or her is in violation of the
ownership rights or security interest or leasehold interest of a third party in
the goods buys in ordinary course from a person in the business of selling
goods of that kind but does not include a pawnbroker. "Buying" may
be for cash, or by exchange of other property, or on secured or unsecured
credit, and includes receiving goods or documents of title under a preexisting
contract for sale but does not include a transfer in bulk or as security for or
in total or partial satisfaction of a money debt.
(b)
"Cancellation" occurs when either party puts an end to the lease
contract for default by the other party.
(c)
"Commercial unit" means such a unit of goods as by commercial usage
is a single whole for purposes of lease and division of which materially
impairs its character or value on the market or in use. A commercial unit may
be a single article, as a machine, or a set of articles, as a suite of furniture
or a line of machinery, or a quantity, as a gross or carload, or any other unit
treated in use or in the relevant market as a single whole.
(d)
"Conforming" goods or performance under a lease contract means goods
or performance that are in accordance with the obligations under the lease
contract.
(e)
"Consumer lease" means a lease that a lessor regularly engaged in the
business of leasing or selling makes to a lessee who is an individual who takes
under the lease primarily for a personal, family, or household purpose, if the
total payments to be made under the lease contract, excluding payments for
options to renew or buy, do not exceed twenty-five thousand dollars.
(f)
"Fault" means wrongful act, omission, breach, or default.
(g)
"Finance lease" means a lease with respect to which:
(i)
The lessor does not select, manufacture, or supply the goods;
(ii)
The lessor acquires the goods or the right to possession and use of the goods
in connection with the lease; and
(iii)
Only in the case of a consumer lease, either:
(A)
The lessee receives a copy of the contract by which the lessor acquired the
goods or the right to possession and use of the goods before signing the lease
contract;
(B)
The lessee's approval of the contract by which the lessor acquired the goods or
the right to possession and use of the goods is a condition to effectiveness of
the lease contract; or
(C)
The lessee, before signing the lease contract, receives an accurate and
complete statement designating the promises and warranties, and any disclaimers
of warranties, limitations or modifications of remedies, or liquidated damages,
including those of a third party, such as the manufacturer of the goods,
provided to the lessor by the person supplying the goods in connection with or
as part of the contract by which the lessor acquired the goods or the right to
possession and use of the goods.
(h)
"Goods" means all things that are movable at the time of
identification to the lease contract, or are fixtures (RCW 62A.2A-309), but the
term does not include money, documents, instruments, accounts, chattel paper,
general intangibles, or minerals or the like, including oil and gas, before
extraction. The term also includes the unborn young of animals.
(i)
"Installment lease contract" means a lease contract that authorizes
or requires the delivery of goods in separate lots to be separately accepted,
even though the lease contract contains a clause "each delivery is a
separate lease" or its equivalent.
(j)
"Lease" means a transfer of the right to possession and use of goods
for a term in return for consideration, but a sale, including a sale on
approval or a sale or return, or retention or creation of a security interest
is not a lease. Unless the context clearly indicates otherwise, the term
includes a sublease.
(k)
"Lease agreement" means the bargain, with respect to the lease, of
the lessor and the lessee in fact as found in their language or by implication
from other circumstances including course of dealing or usage of trade or
course of performance as provided in this Article. Unless the context clearly
indicates otherwise, the term includes a sublease agreement.
(l)
"Lease contract" means the total legal obligation that results from
the lease agreement as affected by this Article and any other applicable rules
of law. Unless the context clearly indicates otherwise, the term includes a
sublease contract.
(m)
"Leasehold interest" means the interest of the lessor or the lessee
under a lease contract.
(n)
"Lessee" means a person who acquires the right to possession and use
of goods under a lease. Unless the context clearly indicates otherwise, the
term includes a sublessee.
(o)
"Lessee in ordinary course of business" means a person who in good
faith and without knowledge that the lease to him or her is in violation of the
ownership rights or security interest or leasehold interest of a third party in
the goods, leases in ordinary course from a person in the business of selling
or leasing goods of that kind, but does not include a pawnbroker.
"Leasing" may be for cash, or by exchange of other property, or on
secured or unsecured credit and includes receiving goods or documents of title
under a preexisting lease contract but does not include a transfer in bulk or as
security for or in total or partial satisfaction of a money debt.
(p)
"Lessor" means a person who transfers the right to possession and use
of goods under a lease. Unless the context clearly indicates otherwise, the
term includes a sublessor.
(q)
"Lessor's residual interest" means the lessor's interest in the goods
after expiration, termination, or cancellation of the lease contract.
(r)
"Lien" means a charge against or interest in goods to secure payment
of a debt or performance of an obligation, but the term does not include a
security interest.
(s)
"Lot" means a parcel or a single article that is the subject matter
of a separate lease or delivery, whether or not it is sufficient to perform the
lease contract.
(t)
"Merchant lessee" means a lessee that is a merchant with respect to
goods of the kind subject to the lease.
(u)
"Present value" means the amount as of a date certain of one or more
sums payable in the future, discounted to the date certain. The discount is
determined by the interest rate specified by the parties if the rate was not
manifestly unreasonable at the time the transaction was entered into;
otherwise, the discount is determined by a commercially reasonable rate that
takes into account the facts and circumstances of each case at the time the
transaction was entered into.
(v)
"Purchase" includes taking by sale, lease, mortgage, security
interest, pledge, gift, or any other voluntary transaction creating an interest
in goods.
(w)
"Sublease" means a lease of goods the right to possession and use of
which was acquired by the lessor as a lessee under an existing lease.
(x)
"Supplier" means a person from whom a lessor buys or leases goods to
be leased under a finance lease.
(y)
"Supply contract" means a contract under which a lessor buys or
leases goods to be leased.
(z)
"Termination" occurs when either party pursuant to a power created by
agreement or law puts an end to the lease contract otherwise than for default.
(2)
Other definitions applying to this Article or to specified Parts thereof, and
the sections in which they appear are:
"Accessions." RCW
62A.2A-310(1).
"Construction
mortgage." RCW 62A.2A-309(1)(d).
"Encumbrance." RCW
62A.2A-309(1)(e).
"Fixtures." RCW
62A.2A-309(1)(a).
"Fixture
filing." RCW 62A.2A-309(1)(b).
"Purchase
money lease." RCW 62A.2A-309(1)(c).
(3)
The following definitions in other Articles apply to this Article:
"Account." RCW
((62A.9‑106)) 62A.9A‑102(a)(2).
"Between
merchants." RCW 62A.2-104(3).
"Buyer." RCW
62A.2-103(1)(a).
"Chattel
paper." RCW ((62A.9‑105(1)(b))) 62A.9A‑102(a)(11).
"Consumer
goods." RCW ((62A.9‑109(1))) 62A.9A‑102(a)(23).
"Document." RCW
((62A.9‑105(1)(f))) 62A.9A‑102(a)(30).
"Entrusting." RCW
62A.2-403(3).
"General
intangible((s))." RCW ((62A.9‑106)) 62A.9A-102(a)(42).
"Good
faith." RCW 62A.2-103(1)(b).
"Instrument." RCW
((62A.9‑105(1)(i))) 62A.9A‑102(a)(47).
"Merchant." RCW
62A.2-104(1).
"Mortgage." RCW
((62A.9‑105(1)(j))) 62A.9A‑102(a)(55).
"Pursuant
to commitment." RCW ((62A.9‑105(1)(k))) 62A.9A‑102(a)(68).
"Receipt." RCW
62A.2-103(1)(c).
"Sale." RCW
62A.2-106(1).
"Sale
on approval." RCW 62A.2-326.
"Sale
or return." RCW 62A.2-326.
"Seller." RCW
62A.2-103(1)(d).
(4) In addition, Article 62A.1 RCW contains general definitions
and principles of construction and interpretation applicable throughout this
Article.
Sec. 9A‑809. RCW
62A.2A-303 and 1993 c 230 s 2A-303 are each amended to read as follows:
ALIENABILITY
OF PARTY'S INTEREST UNDER LEASE CONTRACT OR OF LESSOR'S RESIDUAL INTEREST IN
GOODS; DELEGATION OF PERFORMANCE; TRANSFER OF RIGHTS. (1) As used in this
section, "creation of a security interest" includes the sale of a
lease contract that is subject to Article 9, Secured Transactions, by reason of
RCW ((62A.9‑102(1)(b))) 62A.9A‑109(a)(3).
(2)
Except as provided in subsection((s)) (3) of this section and (((4)
of this section)) RCW 62A.9A‑407, a provision in a lease
agreement which (a) prohibits the voluntary or involuntary transfer, including
a transfer by sale, sublease, creation or enforcement of a security interest,
or attachment, levy, or other judicial process, of an interest of a party under
the lease contract or of the lessor's residual interest in the goods, or (b)
makes such a transfer an event of default, gives rise to the rights and
remedies provided in subsection (((5))) (4) of this section, but
a transfer that is prohibited or is an event of default under the lease
agreement is otherwise effective.
(3)
((A provision in a lease agreement which (a) prohibits the creation or
enforcement of a security interest in an interest of a party under the lease
contract or in the lessor's residual interest in the goods, or (b) makes such a
transfer an event of default, is not enforceable unless, and then only to the
extent that, there is an actual transfer by the lessee of the lessee's right of
possession or use of the goods in violation of the provision or an actual
delegation of a material performance of either party to the lease contract in
violation of the provision. Neither the granting nor the enforcement of a
security interest in (i) the lessor's interest under the lease contract or (ii)
the lessor's residual interest in the goods is a transfer that materially
impairs the prospect of obtaining return performance by, materially changes the
duty of, or materially increases the burden or risk imposed on, the lessee
within the purview of subsection (5) of this section unless, and then only to the
extent that, there is an actual delegation of a material performance of the
lessor.
(4))) A
provision in a lease agreement which (i) prohibits a transfer of a right to
damages for default with respect to the whole lease contract or of a right to
payment arising out of the transferor's due performance of the transferor's
entire obligation, or (ii) makes such a transfer an event of default, is not
enforceable, and such a transfer is not a transfer that materially impairs the
prospect of obtaining return performance by, materially changes the duty of, or
materially increases the burden or risk imposed on, the other party to the
lease contract within the purview of subsection (((5))) (4) of
this section.
(((5)))
(4) Subject to subsection((s)) (3) of this section and (((4)
of this section)) RCW 62A.9A‑407:
(a)
If a transfer is made which is made an event of default under a lease
agreement, the party to the lease contract not making the transfer, unless that
party waives the default or otherwise agrees, has the rights and remedies
described in RCW 62A.2A-501(2);
(b)
If subsection (((5))) (4)(a) of this section is not applicable
and if a transfer is made that (i) is prohibited under a lease agreement or
(ii) materially impairs the prospect of obtaining return performance by,
materially changes the duty of, or materially increases the burden or risk
imposed on, the other party to the lease contract, unless the party not making
the transfer agrees at any time to the transfer in the lease contract or
otherwise, then, except as limited by contract, (A) the transferor is liable to
the party not making the transfer for damages caused by the transfer to the
extent that the damages could not reasonably be prevented by the party not
making the transfer and (B) a court having jurisdiction may grant other
appropriate relief, including cancellation of the lease contract or an
injunction against the transfer.
(((6)))
(5) A transfer of "the lease" or of "all my rights under
the lease," or a transfer in similar general terms, is a transfer of
rights and, unless the language or the circumstances, as in a transfer for
security, indicate the contrary, the transfer is a delegation of duties by the
transferor to the transferee. Acceptance by the transferee constitutes a
promise by the transferee to perform those duties. The promise is enforceable
by either the transferor or the other party to the lease contract.
(((7)))
(6) Unless otherwise agreed by the lessor and the lessee, a delegation
of performance does not relieve the transferor as against the other party of
any duty to perform or of any liability for default.
(((8))) (7) In a consumer lease, to prohibit the
transfer of an interest of a party under the lease contract or to make a
transfer an event of default, the language must be specific, by a writing, and
conspicuous.
Sec. 9A‑810. RCW
62A.2A-307 and 1993 c 230 s 2A-307 are each amended to read as follows:
PRIORITY
OF LIENS ARISING BY ATTACHMENT OR LEVY ON, SECURITY INTERESTS IN, AND OTHER
CLAIMS TO GOODS. (1) Except as otherwise provided in RCW 62A.2A-306, a
creditor of a lessee takes subject to the lease contract.
(2)
Except as otherwise provided in subsection((s)) (3) ((and (4)))
of this section and in RCW 62A.2A-306 and 62A.2A-308, a creditor of a lessor
takes subject to the lease contract unless((:
(a))) the
creditor holds a lien that attached to the goods before the lease contract
became enforceable((;
(b)
The creditor holds a security interest in the goods and the lessee did not give
value and receive delivery of the goods without knowledge of the security
interest; or
(c)
The creditor holds a security interest in the goods which was perfected (RCW
62A.9‑303) before the lease contract became enforceable)).
(3)
((A lessee in the ordinary course of business takes the leasehold interest
free of a security interest in the goods created by the lessor even though the
security interest is perfected (RCW 62A.9‑303) and the lessee knows of
its existence.
(4) A lessee other than a lessee in the ordinary course of
business takes the leasehold interest free of a security interest to the extent
that it secures future advances made after the secured party acquires knowledge
of the lease or more than forty-five days after the lease contract becomes
enforceable, whichever first occurs, unless the future advances are made
pursuant to a commitment entered into without knowledge of the lease and before
the expiration of the forty-five day period.)) Except
as otherwise provided in RCW 62A.9A‑317, 62A.9A‑321, and 62A.9A‑323,
a lessee takes a leasehold interest subject to a security interest held by a
creditor of the lessor.
Sec.
9A‑811. RCW
62A.2A-309 and 1993 c 230 s 2A-309 are each amended to read as follows:
LESSOR'S AND LESSEE'S RIGHTS WHEN GOODS BECOME FIXTURES. (1) In
this section:
(a)
Goods are "fixtures" when they become so related to particular real
estate that an interest in them arises under real estate law;
(b)
A "fixture filing" is the filing, in the office where a record of
a mortgage on the real estate would be filed or recorded, of a financing
statement covering goods that are or are to become fixtures and conforming to
the requirements of RCW ((62A.9‑402(5))) 62A.9A‑502 (a)
and (b);
(c)
A lease is a "purchase money lease" unless the lessee has possession
or use of the goods or the right to possession or use of the goods before the lease
agreement is enforceable;
(d)
A mortgage is a "construction mortgage" to the extent it secures an
obligation incurred for the construction of an improvement on land including
the acquisition cost of the land, if the recorded writing so indicates; and
(e)
"Encumbrance" includes real estate mortgages and other liens on real
estate and all other rights in real estate that are not ownership interests.
(2)
Under this Article a lease may be of goods that are fixtures or may continue in
goods that become fixtures, but no lease exists under this Article of ordinary
building materials incorporated into an improvement on land.
(3)
This Article does not prevent creation of a lease of fixtures pursuant to real
estate law.
(4)
The perfected interest of a lessor of fixtures has priority over a conflicting
interest of an encumbrancer or owner of the real estate if:
(a)
The lease is a purchase money lease, the conflicting interest of the
encumbrancer or owner arises before the goods become fixtures, the interest of
the lessor is perfected by a fixture filing before the goods become fixtures or
within twenty days thereafter, and the lessee has an interest of record in the
real estate or is in possession of the real estate; or
(b)
The interest of the lessor is perfected by a fixture filing before the interest
of the encumbrancer or owner is of record, the lessor's interest has priority
over any conflicting interest of a predecessor in title of the encumbrancer or
owner, and the lessee has an interest of record in the real estate or is in
possession of the real estate.
(5)
The interest of a lessor of fixtures, whether or not perfected, has priority
over the conflicting interest of an encumbrancer or owner of the real estate
if:
(a)
The fixtures are readily removable factory or office machines, readily
removable equipment that is not primarily used or leased for use in the
operation of the real estate, or readily removable replacements of domestic
appliances that are goods subject to a consumer lease, and before the goods
become fixtures the lease contract is enforceable; or
(b)
The conflicting interest is a lien on the real estate obtained by legal or
equitable proceedings after the lease contract is enforceable; or
(c)
The encumbrancer or owner has consented in writing to the lease or has
disclaimed an interest in the goods as fixtures; or
(d)
The lessee has a right to remove the goods as against the encumbrancer or
owner. If the lessee's right to remove terminates, the priority of the
interest of the lessor continues for a reasonable time.
(6)
Notwithstanding subsection (4)(a) of this section but otherwise subject to
subsections (4) and (5) of this section, the interest of a lessor of fixtures,
including the lessor's residual interest, is subordinate to the conflicting
interest of an encumbrancer of the real estate under a construction mortgage
recorded before the goods become fixtures if the goods become fixtures before
the completion of the construction. To the extent given to refinance a
construction mortgage, the conflicting interest of an encumbrancer of the real
estate under a mortgage has this priority to the same extent as the
encumbrancer of the real estate under the construction mortgage.
(7)
In cases not within the preceding subsections, priority between the interest of
a lessor of fixtures, including the lessor's residual interest, and the
conflicting interest of an encumbrancer or owner of the real estate who is not
the lessee is determined by the priority rules governing conflicting interests
in real estate.
(8)
If the interest of a lessor of fixtures, including the lessor's residual
interest, has priority over all conflicting interests of all owners and
encumbrancers of the real estate, the lessor or the lessee may (a) on default,
expiration, termination, or cancellation of the lease agreement but subject to
the lease agreement and this Article, or (b) if necessary to enforce other
rights and remedies of the lessor or lessee under this Article, remove the
goods from the real estate, free and clear of all conflicting interests of all
owners and encumbrancers of the real estate, but the lessor or lessee must
reimburse any encumbrancer or owner of the real estate who is not the lessee
and who has not otherwise agreed for the cost of repair of any physical injury,
but not for any diminution in value of the real estate caused by the absence of
the goods removed or by any necessity of replacing them. A person entitled to
reimbursement may refuse permission to remove until the party seeking removal
gives adequate security for the performance of this obligation.
(9)
Even though the lease agreement does not create a security interest, the
interest of a lessor of fixtures, including the lessor's residual interest, is
perfected by filing a financing statement as a fixture filing for leased goods
that are or are to become fixtures in accordance with the relevant provisions
of the Article on Secured Transactions, Article ((62A.9)) 62A.9A
RCW.
Sec.
9A-812. RCW
62A.2A-310 and 1993 c 230 s 2A-310 are each amended to read as follows:
LESSOR'S
AND LESSEE'S RIGHTS WHEN GOODS BECOME ACCESSIONS. (1) Goods are
"accessions" when they are installed in or affixed to other goods.
(2)
The interest of a lessor or a lessee under a lease contract entered into before
the goods became accessions is superior to all interests in the whole except as
stated in subsection (4) of this section.
(3)
The interest of a lessor or a lessee under a lease contract entered into at the
time or after the goods became accessions is superior to all subsequently
acquired interests in the whole except as stated in subsection (4) of this
section but is subordinate to interests in the whole existing at the time the
lease contract was made unless the holders of such interests in the whole have
in writing consented to the lease, or disclaimed an interest in the goods as
part of the whole, or the accession is leased under tariff No. 74 for
residential conversion burners leased by a natural gas utility.
(4)
Unless the accession is leased under tariff No. 74 for residential conversion
burners leased by a natural gas utility, the interest of a lessor or a lessee
under a lease contract described in subsection (2) or (3) of this section is
subordinate to the interest of:
(a)
A buyer in the ordinary course of business or a lessee in the ordinary course
of business of any interest in the whole acquired after the goods became
accessions; ((or))
(b)
A creditor with a security interest in the whole perfected before the lease
contract was made to the extent that the creditor makes subsequent advances
without knowledge of the lease contract; or
(c)
A creditor with a security interest in the whole which is perfected by
compliance with the requirements of a certificate-of-title statute under RCW
62A.9A-311(b).
(5) When under subsections (2) or (3) and (4) of this section a
lessor or a lessee of accessions holds an interest that is superior to all
interests in the whole, the lessor or the lessee may (a) on default,
expiration, termination, or cancellation of the lease contract by the other
party but subject to the provisions of the lease contract and this Article, or
(b) if necessary to enforce his or her other rights and remedies under this
Article, remove the goods from the whole, free and clear of all interests in
the whole, but he or she must reimburse any holder of an interest in the whole
who is not the lessee and who has not otherwise agreed for the cost of repair
of any physical injury but not for any diminution in value of the whole caused
by the absence of the goods removed or by any necessity for replacing them. A
person entitled to reimbursement may refuse permission to remove until the
party seeking removal gives adequate security for the performance of this
obligation.
Sec.
9A‑813. RCW
62A.4-210 and 1993 c 229 s 97 are each amended to read as follows:
SECURITY
INTEREST OF COLLECTING BANK IN ITEMS, ACCOMPANYING DOCUMENTS AND PROCEEDS. (a)
A collecting bank has a security interest in an item and any accompanying
documents or the proceeds of either:
(1)
In case of an item deposited in an account, to the extent to which credit given
for the item has been withdrawn or applied;
(2)
In case of an item for which it has given credit available for withdrawal as of
right, to the extent of the credit given whether or not the credit is drawn
upon or there is a right of charge-back; or
(3)
If it makes an advance on or against the item.
(b)
If credit given for several items received at one time or pursuant to a single
agreement is withdrawn or applied in part, the security interest remains upon
all the items, any accompanying documents or the proceeds of either. For the
purpose of this section, credits first given are first withdrawn.
(c)
Receipt by a collecting bank of a final settlement for an item is a realization
on its security interest in the item, accompanying documents, and proceeds. So
long as the bank does not receive final settlement for the item or give up
possession of the item or accompanying documents for purposes other than
collection, the security interest continues to that extent and is subject to
Article 9, but:
(1)
No security agreement is necessary to make the security interest enforceable (((subsection
(1) of RCW 62A.9‑203))) RCW 62A.9A‑203(b)(3)(A);
(2)
No filing is required to perfect the security interest; and
(3)
The security interest has priority over conflicting perfected security
interests in the item, accompanying documents, or proceeds.
Sec.
9A‑814. RCW
62A.7-503 and 1965 ex.s. c 157 s 7-503 are each amended to read as
follows:
DOCUMENT
OF TITLE TO GOODS DEFEATED IN CERTAIN CASES. (1) A document of title confers
no right in goods against a person who before issuance of the document had a
legal interest or a perfected security interest in them and who neither
(a)
delivered or entrusted them or any document of title covering them to the
bailor or his nominee with actual or apparent authority to ship, store or sell
or with power to obtain delivery under this Article (RCW 62A.7-403) or with
power of disposition under this Title (RCW 62A.2-403 and RCW ((62A.9‑307))
62A.9A‑320) or other statute or rule of law; nor
(b)
acquiesced in the procurement by the bailor or his nominee of any document of
title.
(2)
Title to goods based upon an unaccepted delivery order is subject to the rights
of anyone to whom a negotiable warehouse receipt or bill of lading covering the
goods has been duly negotiated. Such a title may be defeated under the next
section to the same extent as the rights of the issuer or a transferee from the
issuer.
(3) Title to goods based upon a bill of lading issued to a freight
forwarder is subject to the rights of anyone to whom a bill issued by the
freight forwarder is duly negotiated; but delivery by the carrier in accordance
with Part 4 of this Article pursuant to its own bill of lading discharges the
carrier's obligation to deliver.
Sec. 9A‑815. RCW
62A.8-103 and 1995 c 48 s 3 are each amended to read as follows:
RULES
FOR DETERMINING WHETHER CERTAIN OBLIGATIONS AND INTERESTS ARE SECURITIES OR
FINANCIAL ASSETS. (1) A share or similar equity interest issued by a
corporation, business trust, joint stock company, or similar entity is a
security.
(2)
An "investment company security" is a security. "Investment
company security" means a share or similar equity interest issued by an
entity that is registered as an investment company under the federal investment
company laws, an interest in a unit investment trust that is so registered, or
a face-amount certificate issued by a face-amount certificate company that is
so registered. Investment company security does not include an insurance
policy or endowment policy or annuity contract issued by an insurance company.
(3)
An interest in a partnership or limited liability company is not a security
unless it is dealt in or traded on securities exchanges or in securities
markets, its terms expressly provide that it is a security governed by this
Article, or it is an investment company security. However, an interest in a
partnership or limited liability company is a financial asset if it is held in
a securities account.
(4)
A writing that is a security certificate is governed by this Article and not by
Article 3, even though it also meets the requirements of that Article.
However, a negotiable instrument governed by Article 3 is a financial asset if
it is held in a securities account.
(5)
An option or similar obligation issued by a clearing corporation to its
participants is not a security, but is a financial asset.
(6) A commodity contract, as defined in RCW ((62A.9‑115))
62A.9A‑102(a)(15), is not a security or a financial asset.
Sec.
9A‑816. RCW
62A.8-106 and 1995 c 48 s 6 are each amended to read as follows:
CONTROL.
(1) A purchaser has "control" of a certificated security in bearer
form if the certificated security is delivered to the purchaser.
(2)
A purchaser has "control" of a certificated security in registered
form if the certificated security is delivered to the purchaser, and:
(a)
The certificate is indorsed to the purchaser or in blank by an effective
indorsement; or
(b)
The certificate is registered in the name of the purchaser, upon original issue
or registration of transfer by the issuer.
(3)
A purchaser has "control" of an uncertificated security if:
(a)
The uncertificated security is delivered to the purchaser; or
(b)
The issuer has agreed that it will comply with instructions originated by the
purchaser without further consent by the registered owner.
(4)
A purchaser has "control" of a security entitlement if:
(a)
The purchaser becomes the entitlement holder; ((or))
(b)
The securities intermediary has agreed that it will comply with entitlement
orders originated by the purchaser without further consent by the entitlement
holder; or
(c)
Another person has control of the security entitlement on behalf of the purchaser
or, having previously acquired control of the security entitlement,
acknowledges that it has control on behalf of the purchaser.
(5)
If an interest in a security entitlement is granted by the entitlement holder
to the entitlement holder's own securities intermediary, the securities
intermediary has control.
(6)
A purchaser who has satisfied the requirements of subsection (3)(((b)))
or (4)(((b))) of this section has control even if the registered owner
in the case of subsection (3)(((b))) of this section or the entitlement
holder in the case of subsection (4)(((b))) of this section retains the
right to make substitutions for the uncertificated security or security
entitlement, to originate instructions or entitlement orders to the issuer or
securities intermediary, or otherwise to deal with the uncertificated security
or security entitlement.
(7) An issuer or a securities intermediary may not enter into an
agreement of the kind described in subsection (3)(b) or (4)(b) of this section
without the consent of the registered owner or entitlement holder, but an
issuer or a securities intermediary is not required to enter into such an
agreement even though the registered owner or entitlement holder so directs.
An issuer or securities intermediary that has entered into such an agreement is
not required to confirm the existence of the agreement to another party unless
requested to do so by the registered owner or entitlement holder.
Sec.
9A‑817. RCW
62A.8-110 and 1995 c 48 s 10 are each amended to read as follows:
APPLICABILITY;
CHOICE OF LAW. (1) The local law of the issuer's jurisdiction, as specified in
subsection (4) of this section, governs:
(a)
The validity of a security;
(b)
The rights and duties of the issuer with respect to registration of transfer;
(c)
The effectiveness of registration of transfer by the issuer;
(d)
Whether the issuer owes any duties to an adverse claimant to a security; and
(e)
Whether an adverse claim can be asserted against a person to whom transfer of a
certificated or uncertificated security is registered or a person who obtains
control of an uncertificated security.
(2)
The local law of the securities intermediary's jurisdiction, as specified in
subsection (5) of this section, governs:
(a)
Acquisition of a security entitlement from the securities intermediary;
(b)
The rights and duties of the securities intermediary and entitlement holder
arising out of a security entitlement;
(c)
Whether the securities intermediary owes any duties to an adverse claimant to a
security entitlement; and
(d)
Whether an adverse claim can be asserted against a person who acquires a
security entitlement from the securities intermediary or a person who purchases
a security entitlement or interest therein from an entitlement holder.
(3)
The local law of the jurisdiction in which a security certificate is located at
the time of delivery governs whether an adverse claim can be asserted against a
person to whom the security certificate is delivered.
(4)
"Issuer's jurisdiction" means the jurisdiction under which the issuer
of the security is organized or, if permitted by the law of that jurisdiction,
the law of another jurisdiction specified by the issuer. An issuer organized
under the law of this state may specify the law of another jurisdiction as the
law governing the matters specified in subsection (1) (b) through (e) of this
section.
(5)
The following rules determine a "securities intermediary's
jurisdiction" for purposes of this section:
(a)
If an agreement between the securities intermediary and its entitlement holder
((specifies that it is governed by the law of a particular jurisdiction))
governing the securities account expressly provides that a particular
jurisdiction is the securities intermediary's jurisdiction for purposes of this
part, this Article, or this act, that jurisdiction is the securities
intermediary's jurisdiction.
(b)
If (5)(a) of this section does not apply and an agreement between the
securities intermediary and its entitlement holder governing the securities
account expressly provides that the agreement is governed by the law of a
particular jurisdiction, that jurisdiction is the securities intermediary's
jurisdiction.
(c)
If neither (5)(a) nor (b) of this section applies, and an agreement
between the securities intermediary and its entitlement holder ((does not
specify the governing law as provided in (a) of this subsection, but)) governing
the securities account expressly ((specifies)) provides that
the securities account is maintained at an office in a particular jurisdiction,
that jurisdiction is the securities intermediary's jurisdiction.
(((c)))
(d) If ((an agreement between the securities intermediary and its
entitlement holder does not specify a jurisdiction as provided in (a) or (b) of
this subsection)) (5)(a), (b), and (c) of this section do not apply,
the securities intermediary's jurisdiction is the jurisdiction in which ((is
located)) the office identified in an account statement as the office
serving the entitlement holder's account is located.
(((d)))
(e) If ((an agreement between the securities intermediary and its
entitlement holder does not specify a jurisdiction as provided in (a) or (b) of
this subsection and an account statement does not identify an office serving the
entitlement holder's account as provided in (c) of this subsection)) (a),
(b), (c), and (d) of this subsection do not apply, the securities
intermediary's jurisdiction is the jurisdiction in which ((is located))
the chief executive office of the securities intermediary is located.
(6) A securities intermediary's jurisdiction is not determined by
the physical location of certificates representing financial assets, or by the
jurisdiction in which is organized the issuer of the financial asset with
respect to which an entitlement holder has a security entitlement, or by the
location of facilities for data processing or other recordkeeping concerning
the account.
Sec.
9A‑818. RCW
62A.8-301 and 1995 c 48 s 27 are each amended to read as follows:
DELIVERY.
(1) Delivery of a certificated security to a purchaser occurs when:
(a)
The purchaser acquires possession of the security certificate;
(b)
Another person, other than a securities intermediary, either acquires
possession of the security certificate on behalf of the purchaser or, having
previously acquired possession of the certificate, acknowledges that it holds
for the purchaser; or
(c)
A securities intermediary acting on behalf of the purchaser acquires possession
of the security certificate, only if the certificate is in registered form and
((has been)) is (i) registered in the name of the purchaser, (ii)
payable to the order of the purchaser, or (iii) specially indorsed to the
purchaser by an effective indorsement and has not been indorsed to the
securities intermediary or in blank.
(2)
Delivery of an uncertificated security to a purchaser occurs when:
(a)
The issuer registers the purchaser as the registered owner, upon original issue
or registration of transfer; or
(b) Another person, other than a securities intermediary, either
becomes the registered owner of the uncertificated security on behalf of the
purchaser or, having previously become the registered owner, acknowledges that
it holds for the purchaser.
Sec.
9A‑819. RCW
62A.8-302 and 1995 c 48 s 28 are each amended to read as follows:
RIGHTS
OF PURCHASER. (1) Except as otherwise provided in subsections (2) and (3) of
this section, ((upon delivery)) a purchaser of a certificated or
uncertificated security ((to a purchaser, the purchaser)) acquires all
rights in the security that the transferor had or had power to transfer.
(2)
A purchaser of a limited interest acquires rights only to the extent of the
interest purchased.
(3) A purchaser of a certificated security who as a previous
holder had notice of an adverse claim does not improve its position by taking
from a protected purchaser.
Sec. 9A‑820. RCW
62A.8-510 and 1995 c 48 s 50 are each amended to read as follows:
RIGHTS
OF PURCHASER OF SECURITY ENTITLEMENT FROM ENTITLEMENT HOLDER. (1) In a case
not covered by the priority rules in Article 9 or the rules stated in
subsection (3) of this section, an action based on an adverse claim to a
financial asset or security entitlement, whether framed in conversion,
replevin, constructive trust, equitable lien, or other theory, may not be asserted
against a person who purchases a security entitlement, or an interest therein,
from an entitlement holder if the purchaser gives value, does not have notice
of the adverse claim, and obtains control.
(2)
If an adverse claim could not have been asserted against an entitlement holder
under RCW 62A.8-502, the adverse claim cannot be asserted against a person who
purchases a security entitlement, or an interest therein, from the entitlement
holder.
(3)
In a case not covered by the priority rules in Article 9, a purchaser for value
of a security entitlement, or an interest therein, who obtains control has
priority over a purchaser of a security entitlement, or an interest therein,
who does not obtain control. Except as otherwise provided in subsection (4)
of this section, purchasers who have control rank ((equally, except that
a)) according to priority in time of:
(a)
The purchaser's becoming the person for whom the securities account, in which
the security entitlement is carried, is maintained, if the purchaser obtained
control under RCW 62A.8‑106(d)(1);
(b)
The securities intermediary's agreement to comply with the purchaser's
entitlement orders with respect to security entitlements carried or to be
carried in the securities account in which the security entitlement is carried,
if the purchaser obtained control under RCW 62A.8‑106(d)(2); or
(c)
If the purchaser obtained control through another person under RCW 62A.8‑106(d)(3),
the time on which priority would be based under this subsection if the other
person were the secured party.
(4)
A securities intermediary as purchaser has priority over a conflicting
purchaser who has control unless otherwise agreed by the securities
intermediary.
Sec.
9A-821. RCW
9.38.020 and 1909 c 249 s 369 are each amended to read as follows:
FALSE
REPRESENTATION CONCERNING TITLE. Every person who shall maliciously or
fraudulently execute or file for record any instrument, or put forward any
claim, by which the right or title of another to any real or personal
property is, or purports to be transferred, encumbered or clouded, shall be
guilty of a gross misdemeanor.
Sec.
9A-822. RCW
46.12.095 and 1998 c 203 s 10 are each amended to read as follows:
REQUIREMENTS
FOR PERFECTING SECURITY INTEREST. A security interest in a vehicle other than
one held as inventory by a manufacturer or a dealer and for which a certificate
of ownership is required is perfected only by compliance with the requirements
of RCW 46.12.103 under the circumstances provided for therein or by compliance
with the requirements of this section:
(1)
A security interest is perfected by the department's receipt of: (a) The
existing certificate, if any, and (b) an application for a certificate of
ownership containing the name and address of the secured party, and (c) tender
of the required fee.
(2)
((It)) A security interest is perfected as of the time of its
creation((: (a) If the papers and fee referred to in subsection (1) of this
section are received by this department within twenty calendar days of the day
on which the security agreement was created; or (b))) if the secured
party's name and address appear on the outstanding certificate of ownership;
otherwise, as of the date on which the department has received the papers and
fee required in subsection (1) of this section.
(3)
If a vehicle is subject to a security interest when brought into this state,
perfection of the security interest is determined by the law of the
jurisdiction where the vehicle was when the security interest was attached,
subject to the following:
(a)
If the security interest was perfected under the law of the jurisdiction where
the vehicle was when the security interest was attached, the following rules
apply:
(b)
If the name of the secured party is shown on the existing certificate of
ownership issued by that jurisdiction, the security interest continues
perfected in this state. The name of the secured party shall be shown on the
certificate of ownership issued for the vehicle by this state. The security
interest continues perfected in this state upon the issuance of such ownership
certificate.
(c) If the security interest was not perfected under the law of
the jurisdiction where the vehicle was when the security interest was attached,
it may be perfected in this state; in that case, perfection dates from the time
of perfection in this state.
Sec.
9A-823. RCW
46.12.103 and 1998 c 203 s 12 are each amended to read as follows:
TRANSITIONAL
OWNERSHIP RECORD. (1) The purpose of a transitional ownership record is to
enable a security interest in a motor vehicle to be perfected in a timely
manner when the certificate of ownership is not available at the time the
security interest is created, and to provide for timely notification to
security interest holders under chapter 46.55 RCW.
(2)
A transitional ownership record is only acceptable as an ownership record for
vehicles currently stored on the department's computer system and if the
certificate of ownership or other authorized proof of ownership for the motor
vehicle((:
(a))) is
not in the possession of the selling vehicle dealer or new security interest
holder at the time the transitional ownership record is submitted to the
department((; and
(b)
To the best of the knowledge of the selling dealer or new security interest
holder, the certificate of ownership will not be received for submission to the
department within twenty calendar days of the date of sale of the vehicle, or
if no sale is involved, within twenty calendar days of the date the security
agreement or contract is executed)).
(3)
A person shall submit the transitional ownership record to the department or to
any of its agents or subagents. Agents and subagents shall immediately
electronically transmit the transitional ownership records to the department.
A transitional ownership document processed and recorded by an agent or
subagent may be subject to fees as specified in RCW 46.01.140 (4)(a) or (5)(b).
(4)
"Transitional ownership record" means a record containing all of the
following information:
(a)
The date of sale;
(b)
The name and address of each owner of the vehicle;
(c)
The name and address of each security interest holder;
(d)
If there are multiple security interest holders, the priorities of interest if
the security interest holders do not jointly hold a single security interest;
(e)
The vehicle identification number, the license plate number, if any, the year,
make, and model of the vehicle;
(f)
The name of the selling dealer or security interest holder who is submitting
the transitional ownership record; and
(g)
The transferee's driver's license number, if available.
(5)
The report of sale form prescribed or approved by the department under RCW
46.12.101 may be used by a vehicle dealer as the transitional ownership record.
(6)
((Notwithstanding RCW 46.12.095 (1) and (2),)) Compliance with
the requirements of this section shall result in perfection of a security
interest in the vehicle as of the ((time)) date the ((security
interest was created)) department receives the transitional ownership
record and any fee required under subsection (3) of this section. ((Upon))
Within ten days of receipt of the certificate of ownership for the
vehicle, or ((upon receipt)) of written confirmation that only an
electronic record of ownership exists or that the certificate of ownership has
been lost or destroyed, the selling dealer or new security interest holder
shall promptly submit the same to the department together with an application
for a new certificate of ownership containing the name and address of the
secured party and tender the required fee as provided in RCW 46.12.095(1). In
the event a secured party fails to submit an application within the ten-day
time period provided in this subsection (6), its security interest shall become
unperfected, unless the security interest is perfected otherwise.
Sec.
9A-824. RCW
60.11.010 and 1991 c 286 s 1 are each amended to read as follows:
DEFINITIONS.
As used in this chapter, the following terms have the meanings indicated unless
the context clearly requires otherwise.
(1)
"Crop" means all products of the soil either growing or cropped, cut,
or gathered which require annual planting, harvesting, or cultivating. A crop includes
orchard crops, but does not include vegetation produced by the powers of
nature alone, nursery stock, or vegetation intended as a permanent enhancement
of the land itself.
(2)
"Handler" means a person((:)) who prepares an orchard
crop for market for the account of, or as agent for, the producer of the orchard
crop, which preparation includes, but is not limited to, receiving, storing,
packing, marketing, selling, or delivering the orchard crop; and who takes
delivery of the orchard crop from the producer of the orchard
crop or from another handler. "Handler" does not include a person
who solely transports the orchard crop from the producer or another
handler to another person.
(3)
"Landlord" means a person who leases or subleases to a tenant real
property upon which crops are growing or will be grown.
(4)
"Orchard crop" means cherries, peaches, nectarines, plums or prunes,
pears, apricots, and apples.
(5)
"Secured party" and "security interest" have the same
meaning as used in the Uniform Commercial Code, Title 62A RCW.
(6)
"Supplier" includes, but is not limited to, a person who furnishes
seed, furnishes and/or applies commercial fertilizer, pesticide, fungicide,
weed killer, or herbicide, including spraying and dusting, upon the land of the
grower or landowner, or furnishes any work or labor upon the land of the grower
or landowner including tilling, preparing for the growing of crops, sowing,
planting, cultivating, cutting, digging, picking, pulling, or otherwise harvesting
any crop grown thereon, or in gathering, securing, or housing any crop grown
thereon, or in threshing any grain or hauling to any warehouse any crop ((or)),
including grain, grown thereon.
(7)
"Lien debtor" means the person who is obligated or owes payment or
other performance. If the lien debtor and the owner of the ((collateral))
property encumbered by the crop lien or security interest are not the
same person, "lien debtor" means the owner of the ((collateral))
property encumbered by the crop lien or security interest.
(8)
"Lien holder" means a person who, by statute, has acquired a lien on
the property of the lien debtor, or such person's successor in interest.
Sec.
9A-825. RCW
60.11.020 and 1991 c 286 s 2 are each amended to read as follows:
PERSONS
ENTITLED TO CROP LIENS‑-PROPERTY SUBJECT TO LIEN. (1) A landlord whose
lease or other agreement with the tenant provides for cash rental payment shall
have a lien upon all crops grown upon the demised land in which the landlord
has an interest for payment of no more than one year's rent ((due or
to)), where the last or only payment of such one year's rent is due or
will become due within six months following ((harvest)) the last
day of harvest of the crops encumbered by the crop lien. A landlord with a
crop share agreement has an interest in the growing crop which shall not be
encumbered by crop liens except as provided in subsections (2) and (3) of this
section.
(2)
A supplier shall have a lien upon all crops for which the supplies are used or
applied ((to secure)) for payment of the purchase price of the
supplies and/or services performed: PROVIDED, That the landlord's interest in
the crop shall only be subject to the lien for the amount obligated to be paid
by the landlord if prior written consent of the landlord is obtained or if the
landlord has agreed in writing with the tenant to pay or be responsible for a
portion of the supplies and/or services provided by the lien holder.
(3)
A handler shall have a lien on all orchard crops delivered by the lien debtor
or another handler to the handler and on all proceeds of the orchard crops for payment
of: (a) All customary charges for the ordinary and necessary handling of
the orchard crop, including but not limited to charges for transporting,
receiving, inspecting, materials and supplies furnished, washing, waxing,
sorting, packing, storing, promoting, marketing, selling, advertising,
insuring, or otherwise handling the lien debtor's orchard crop; and (b)
reasonable cooperative per unit retainages, and for all governmental or
quasi-governmental assessments imposed by statute, ordinance, or government
regulation. Charges shall not include direct or indirect advances or
extensions of credit to (([a])) a lien debtor.
Sec.
9A-826. RCW
60.11.030 and 1991 c 286 s 3 are each amended to read as follows:
ATTACHMENT
AND EFFECTIVENESS OF LIEN ON CROPS AND PROCEEDS‑-FILING. (1) Upon ((filing,))
the later of both: (a) Execution of the lease or other agreement, or
commencement of delivery of such supplies, and/or of provision of such services
giving rise to the crop lien; and (b) filing a financing statement as required
by RCW 62A.9A-310 and subsection (3) of this section, the crop liens
described in RCW 60.11.020 (1) and (2) shall become effective and attach
to the subject crop for all sums then and thereafter due and owing the
lien holder ((and)) under this chapter, and those liens shall
continue in all identifiable cash proceeds of the crop.
(2)
Upon the delivery of an orchard crop by the lien debtor((,)) or
another handler to a handler without the necessity of filing, ((the lien
for charges as set forth)) the crop lien described in RCW
60.11.020(3) shall become effective and attach to and be perfected in
the delivered orchard crop ((and shall continue in both the crop and))
for all sums then and thereafter due and owing the lien holder under this
chapter, and the lien shall continue and be perfected in all proceeds of
the orchard crop. Upon filing a financing statement as required by
RCW 62A.9A-310 and subsection (3) of this section, an effective crop lien
described in RCW 60.11.020(3) that has attached to the delivered orchard crop
shall be perfected.
(3)
Except as provided in RCW 60.11.040(4) with respect to the lien of a landlord,
and except for the lien of a handler on orchard crops as provided in RCW
60.11.020(3), the lien holder must file the required financing statement during
the period after the commencement of delivery of such supplies and/or of
provision of such services, but before the completion of the harvest of the
crops for which the lien is claimed, or in the case of a lien for furnishing
work or labor, before the end of the fortieth day after the cessation of the
work or labor for which the lien is claimed. If the lien holder under the crop
liens described in RCW 60.11.020 (1) or (2) is to be allowed costs,
disbursements, and attorneys' fees, the lien holder must also mail a copy of
such financing statement to the last known address of the debtor by certified
mail, return receipt requested, within ten days after filing the financing
statement.
Sec.
9A-827. RCW
60.11.040 and 1991 c 286 s 4 are each amended to read as follows:
STATEMENT
OF LIEN‑-FILING‑-CONTENTS‑-DURATION. (1) ((Except as
provided in subsection (4) of this section with respect to the lien of a
landlord, and except for the lien of a handler as provided in RCW 60.11.020(3),
any lien holder must after the commencement of delivery of such supplies and/or
of provision of such services, but before the completion of the harvest of the
crops for which the lien is claimed, or in the case of a lien for furnishing
work or labor within twenty days after the cessation of the work or labor for
which the lien is claimed: (a) File a statement evidencing the lien with the
department of licensing; and (b) if the lien holder is to be allowed costs,
disbursements, and attorneys' fees, mail a copy of such statement to the last
known address of the debtor by certified mail, return receipt requested, within
ten days.)) Within fourteen days of receipt of a written request from
the lien debtor, or other person who provides the lien holder authorization
from the lien debtor for such statement, the lien holder shall provide that
person a statement described in subsection (2) of this section. Failure timely
to provide the statement shall cause the lien holder to be liable to the person
requesting for the attorneys' fees and costs incurred by that person to obtain
the statement, together with damages incurred by that person due to the failure
of the lien holder to provide the statement, including in the case of the lien
debtor any loss resulting from the lien debtor's inability to obtain financing,
or the increased costs thereof.
(2)
The statement shall be in writing, ((signed)) authenticated by
the claimant, and shall contain in substance the following information:
(a)
The name and address of the claimant;
(b)
The name and address of the debtor;
(c)
The date of commencement of performance for which the lien is claimed;
(d)
A description of the labor services, materials, or supplies furnished;
(e)
A description of the crop and its location to be charged with the lien
sufficient for identification; and
(f)
The signature of the claimant.
(3)
The ((department of licensing may by rule prescribe standard filing forms,
fees, and uniform procedures for filing with, and obtaining information from,
filing officers, including provisions for filing crop liens together with
financing statements filed pursuant to RCW 62A.9‑401 so that one request
will reveal all filed crop liens and security interests.
(4)
Any landlord claiming a lien under this chapter for rent shall file a statement
evidencing the lien)) statement need not be
filed with the department of licensing.
(4)
A lien for rent claimed by a landlord pursuant to this chapter shall be
effective during the term of the lease for a period of up to five years. A financing
statement for a landlord lien covering a lease term longer than five years
may be ((refiled)) continued in accordance with RCW ((60.11.050(5)))
62A.9A-515(d). A landlord who has a right to a share of the crop may
place suppliers on notice by filing ((evidence of such interest)) a
financing statement in the same manner as provided for filing a financing
statement for a landlord's lien.
Sec.
9A-828. RCW
60.11.050 and 1991 c 286 s 5 are each amended to read as follows:
PRIORITIES
OF LIENS AND SECURITY INTERESTS. (1) Except as provided in subsections (2),
(3), (4), and (5) of this section, conflicting liens and security interests in
crops and their proceeds shall rank in accordance with the time of filing.
(2)
The lien created in RCW 60.11.020(2) in favor of any person who furnishes any
work or labor upon the land of the grower or landowner shall be preferred and
prior to any other lien or security interest upon the crops to which they
attach including the liens described in subsections (3), (4), and (5) of this
section.
(3)
The lien created in RCW 60.11.020(3) in favor of handlers is preferred and
prior to a lien or security interest described in subsection (4) or (5) of this
section and to any other lien or security interest upon the orchard
crops to which they attach except the liens in favor of a person who furnishes
work or labor upon the land of the grower or landlord. Whenever more than one
handler holds a handler's lien created by RCW 60.11.020(3) in the same orchard
crop, unless the affected parties otherwise agree in writing, the later of the
liens to attach has priority over all previously attached handlers' liens created
by RCW 60.11.020(3).
(4)
A lien or security interest in crops otherwise entitled to priority pursuant to
subsection (1) of this section shall be subordinate to a later ((filed))
perfected lien or security interest incurred to produce the crop to the
extent that obligations secured by such earlier ((filed)) perfected
security interest or lien were not incurred to produce such crops.
(5)
A lien or security interest in crops otherwise entitled to priority pursuant to
subsection (1) of this section shall be subordinate to a properly ((filed))
perfected landlord's lien. ((A landlord's lien shall retain its
priority if refiled within six months prior to its expiration.))
Sec.
9A-829. RCW
60.11.060 and 1991 c 33 s 4 are each amended to read as follows:
FORECLOSURE AND ENFORCEMENT OF CROP LIEN. Any lien ((subject
to)) created by this chapter((, excluded by RCW 62A.9‑104
from the provisions of the Uniform Commercial Code, Title 62A RCW,)) may be
foreclosed or enforced by: (1) An action in the district court having
jurisdiction in the district in which the real property on which the crop in
question was grown is situated in accordance with RCW 60.11.070, if the value
of the claim does not exceed the jurisdictional limit of the district court
provided in RCW 3.66.020; or (2) an action in the superior court having
jurisdiction in the county in which the real property on which the crop in
question was grown is situated in accordance with RCW 60.11.070, if the value
of the claim exceeds the jurisdictional limit of the district court provided in
RCW 3.66.020; or (3) summary procedure as provided in RCW 60.11.080; or (4)
procedures in Part 6 of Article 9A of the Uniform Commercial Code.
Sec.
9A-830. RCW
60.11.070 and 1986 c 242 s 7 are each amended to read as follows:
JUDICIAL
FORECLOSURE. The lien holder may proceed upon his or her lien; and if there is
a separate obligation in writing to pay the same, secured by the lien, he or
she may bring suit upon such separate promise. When he or she proceeds on the
promise, if there is a specific agreement therein contained, for the payment of
a certain sum or there is a separate obligation for the sum in addition to a
decree of sale of lien property, judgment shall be rendered for the amount due
upon the promise or other instrument, the payment of which is thereby secured;
the decree shall direct the sale of the lien property and if the proceeds of
the sale are insufficient under the execution, the sheriff is authorized to
levy upon and sell other property of the lien debtor, not exempt from
execution, for the sum remaining unsatisfied. In a judicial foreclosure,
the court shall allow reasonable attorneys' fees and disbursements for
establishing a lien.
Sec.
9A-831. RCW
60.11.100 and 1986 c 242 s 10 are each amended to read as follows:
REDEMPTION.
((At any time before the lien holder has disposed of collateral or entered
into a contract for its disposition under RCW 60.11.060, the lien debtor or any
other secured party may redeem the collateral by tendering fulfillment of all
obligations secured by the collateral as well as the expenses reasonably
incurred by the lien holder in holding and preparing the collateral for
disposition and in arranging for the sale and his or her reasonable attorneys'
fees and legal expenses.)) The right of the lien debtor and others to
redeem collateral shall be as provided in RCW 62A.9A-623.
Sec.
9A-832. RCW
60.11.120 and 1986 c 242 s 12 are each amended to read as follows:
"COMMERCIALLY
REASONABLE." ((The fact that a better price could have been obtained
by a sale at a different time or in a different method from that selected by
the lien holder is not in itself sufficient to establish that the sale was not
made in a commercially reasonable manner. If the lien holder either sells the
collateral in the usual manner in any recognized market therefor or if he or
she sells at the price current in such market at the time of the sale or if he
or she has otherwise sold in conformity with reasonable commercial practices
among dealers in the type of property sold he or she has sold in a commercially
reasonable manner. A disposition which has been approved in any judicial
proceeding or by any bona fide creditors' committee or representative of
creditors shall conclusively be deemed to be commercially reasonable, but this
does not mean that approval must be obtained in any case nor does it mean that
any disposition not so approved is not commercially reasonable.))
For
purposes of this chapter, "commercially reasonable" has the
meaning given and shall be construed in a manner consistent with ((this
section)) RCW 62A.9A-627.
Sec.
9A-833. RCW
60.11.130 and 1986 c 242 s 13 are each amended to read as follows:
LIMITATION
OF ACTION TO FORECLOSE. Judicial foreclosure or summary procedure as provided
in RCW 60.11.060 shall be brought within twenty-four calendar months after
filing the ((claim)) financing statement for the lien,
except: (1) In the case of a landlord lien which shall be twenty-four
calendar months from the date of default on the lease, and (2) in the case
of a handler's lien on a given orchard crop which shall be twenty-four calendar
months from the date of default on payment of the charges described in RCW
60.11.020(3) attributable to that orchard crop. Upon expiration of such
time, the claimed lien shall expire. ((In a judicial foreclosure, the court
shall allow reasonable attorneys' fees and disbursement for establishing a
lien.))
Sec.
9A-834. RCW
60.11.140 and 1991 c 286 s 6 are each amended to read as follows:
TERMINATION
STATEMENT. (((1))) Whenever the total amount of the lien has been fully
paid and as otherwise provided in RCW 62A.9A-513 (c) and (d), within twenty
days following receipt of an authenticated demand following such full payment
of the lien, the lien holder filing a lien shall((, within fifteen days
following receipt of full payment, file its lien)) send to the lien
debtor or file with the department of licensing a termination statement ((with
the department of licensing)) for the financing statement. Failure
to file a ((lien)) termination statement by the lien holder or the
assignee of the lien holder shall cause the lien holder or its assignee to be
liable to the debtor for the attorneys' fees and costs incurred by the debtor
to have the lien terminated together with damages incurred by the debtor due to
the failure of the lien holder to terminate the lien.
(((2)
There shall be no charge by the department of licensing for entering the lien
termination statement and indexing the same and returning a copy of the lien
termination statement stamped as "filed" with the filing date
thereon.
(3)
The department of licensing may enter the lien termination statement on
microfilm or other photographic record and destroy all originals of the lien
and lien satisfaction filed with him or her.))
NEW
SECTION. Sec. 9A-835. A
new section is added to chapter 60.11 RCW, to be codified as RCW 60.11.904, to
read as follows:
TRANSITION
RULE FOR EXISTING FILINGS. All statements filed with the department of
licensing under this chapter prior to July 1, 2001, shall satisfy the
requirements of RCW 62A.9A-310 and 60.11.030 for filing a financing statement
for up to five years from the date they were originally filed if and so long as
they are found and reported in a search of financing statements performed by
the department of licensing.
Sec.
9A-836. RCW
65.20.030 and 1989 c 343 s 3 are each amended to read as follows:
CLARIFICATION
OF TYPE OF PROPERTY AND PERFECTION OF SECURITY INTERESTS. When a manufactured
home is sold or transferred on or after March 1, 1990, and when all ownership
in the manufactured home is transferred through the sale or other transfer of
the manufactured home to new owners, the manufactured home shall be real
property when the new owners eliminate the title pursuant to this chapter. The
manufactured home shall not be real property in any form, including fixture
law, unless the title is eliminated under this chapter. Where any person who
owned a used manufactured home on March 1, 1990, continues to own the
manufactured home on or after March 1, 1990, the interests and rights of
owners, secured parties, lienholders, and others in the manufactured home shall
be based on the law prior to March 1, 1990, except where the owner voluntarily
eliminates the title to the manufactured home by complying with this chapter.
If the title to the manufactured home is eliminated under this chapter, the
manufactured home shall be treated the same as a site-built structure and
ownership shall be based on ownership of the real property through real
property law. If the title to the manufactured home has not been eliminated
under this chapter, ownership shall be based on chapter 46.12 RCW.
For
purposes of perfecting and realizing upon security interests, manufactured homes
shall always be treated as follows: (1) If the title has not been eliminated
under this chapter, security interests in the manufactured home shall be
perfected only under chapter 62A.9A RCW in the case of a manufactured home
held as inventory by a manufacturer or dealer or chapter 46.12 RCW in
all other cases, and the lien shall be treated as securing personal
property for purposes of realizing upon the security interest((. If the
manufactured home is attached to land owned by the homeowner and the secured
party seeks to remove the home pursuant to a contract, the secured party is
liable for damage to the land to the extent the secured party would be liable
if the manufactured home was a fixture under chapter 62A.9 RCW)); or (2) if
the title has been eliminated under this chapter, a separate security interest
in the manufactured home shall not exist, and the manufactured home shall only
be secured as part of the real property through a mortgage, deed of trust, or
real estate contract.
PART
9
REPEALER;
LEGISLATIVE DIRECTIVE
NEW
SECTION. Sec. 9A‑901. The
following acts or parts of acts are each repealed:
(1) RCW 62A.9‑101 (Short
title) and 1965 ex.s. c 157 s 9-101;
(2) RCW 62A.9‑102
(Policy and subject matter of Article) and 1981 c 41 s 6 & 1965 ex.s. c 157
s 9-102;
(3) RCW 62A.9‑103
(Perfection of security interest in multiple state transactions) and 1997 c 56
s 21, 1995 c 48 s 58, 1986 c 35 s 45, 1981 c 41 s 7, & 1965 ex.s. c 157 s
9-103;
(4) RCW 62A.9‑104
(Transactions excluded from Article) and 1997 c 56 s 22, 1985 c 412 s 11, 1983
c 305 s 75, 1981 c 41 s 8, & 1965 ex.s. c 157 s 9-104;
(5) RCW 62A.9‑105
(Definitions and index of definitions) and 1997 c 56 s 23, 1995 c 48 s 59, 1986
c 35 s 46, 1981 c 41 s 9, & 1965 ex.s. c 157 s 9-105;
(6) RCW 62A.9‑106
(Definitions: "Account"; "general intangibles") and 1997 c
56 s 24, 1995 c 48 s 60, 1981 c 41 s 10, & 1965 ex.s. c 157 s 9-106;
(7) RCW 62A.9‑107
(Definitions: "Purchase money security interest") and 1965 ex.s. c
157 s 9-107;
(8) RCW 62A.9‑108 (When
after-acquired collateral not security for antecedent debt) and 1965 ex.s. c
157 s 9-108;
(9) RCW 62A.9‑109
(Classification of goods; "consumer goods"; "equipment";
"farm products"; "inventory") and 1965 ex.s. c 157 s 9-109;
(10) RCW 62A.9‑110
(Sufficiency of description) and 1965 ex.s. c 157 s 9-110;
(11) RCW 62A.9‑112 (Where
collateral is not owned by debtor) and 1965 ex.s. c 157 s 9-112;
(12) RCW 62A.9‑113
(Security interests arising under Article on sales or leases) and 1993 c 230 s
2A-603 & 1965 ex.s. c 157 s 9-113;
(13) RCW 62A.9‑114
(Consignment) and 1981 c 41 s 11;
(14) RCW 62A.9‑115
(Investment property) and 1995 c 48 s 61;
(15) RCW 62A.9‑116
(Security interest arising in purchase or delivery of financial asset) and 1995
c 48 s 62;
(16) RCW 62A.9‑201
(General validity of security agreement) and 1965 ex.s. c 157 s 9-201;
(17) RCW 62A.9‑202 (Title
to collateral immaterial) and 1965 ex.s. c 157 s 9-202;
(18) RCW 62A.9‑203
(Attachment and enforceability of security interest; proceeds; formal
requisites) and 1996 c 77 s 4, 1995 c 48 s 63, 1986 c 35 s 47, 1985 c 412 s 12,
1982 c 186 s 1, 1981 c 41 s 12, & 1965 ex.s. c 157 s 9-203;
(19) RCW 62A.9‑204
(After-acquired property; future advances; livestock or meat products) and 1986
c 178 s 16, 1981 c 41 s 13, 1974 ex.s. c 102 s 1, & 1965 ex.s. c 157 s
9-204;
(20) RCW 62A.9‑205 (Use
or disposition of collateral without accounting permissible) and 1981 c 41 s 14
& 1965 ex.s. c 157 s 9-205;
(21) RCW 62A.9‑206
(Agreement not to assert defenses against assignee; modification of sales
warranties where security agreement exists) and 1996 c 77 s 5 & 1965 ex.s.
c 157 s 9-206;
(22) RCW 62A.9‑207
(Rights and duties when collateral is in secured party's possession) and 1965
ex.s. c 157 s 9-207;
(23) RCW 62A.9‑208
(Request for statement of account or list of collateral) and 1965 ex.s. c 157 s
9-208;
(24) RCW 62A.9‑301
(Persons who take priority over unperfected security interests; rights of
"lien creditor") and 1995 c 48 s 64, 1982 c 186 s 2, 1981 c 41 s 15,
& 1965 ex.s. c 157 s 9-301;
(25) RCW 62A.9‑302 (When
filing is required to perfect security interest; security interests to which
filing provisions of this Article do not apply) and 1996 c 77 s 6 & 1995 c
48 s 65;
(26) RCW 62A.9‑303 (When
security interest is perfected; continuity of perfection) and 1965 ex.s. c 157
s 9-303;
(27) RCW 62A.9‑304
(Perfection of security interest in instruments, documents, and goods covered
by documents; perfection by permissive filing; temporary perfection without filing
or transfer of possession) and 1997 c 56 s 25, 1995 c 48 s 66, 1986 c 35 s 49,
1981 c 41 s 17, & 1965 ex.s. c 157 s 9-304;
(28) RCW 62A.9‑305 (When
possession by secured party perfects security interest without filing) and 1997
c 56 s 26, 1995 c 48 s 67, 1986 c 35 s 50, 1981 c 41 s 18, & 1965 ex.s. c
157 s 9-305;
(29) RCW 62A.9‑306
("Proceeds"; secured party's rights on disposition of collateral) and
1995 c 48 s 68, 1981 c 41 s 19, & 1965 ex.s. c 157 s 9-306;
(30) RCW 62A.9‑307
(Protection of buyers of goods) and 1987 c 393 s 15, 1985 c 412 s 13, 1981 c 41
s 20, & 1965 ex.s. c 157 s 9-307;
(31) RCW 62A.9‑308
(Purchase of chattel paper and instruments) and 1981 c 41 s 21 & 1965 ex.s.
c 157 s 9-308;
(32) RCW 62A.9‑309
(Protection of purchasers of instruments, documents, and securities) and 1995 c
48 s 69, 1986 c 35 s 51, & 1965 ex.s. c 157 s 9-309;
(33) RCW 62A.9‑310
(Priority of certain liens arising by operation of law) and 1991 c 286 s 7,
1986 c 242 s 16, 1985 c 412 s 10, 1983 c 305 s 76, & 1965 ex.s. c 157 s
9-310;
(34) RCW 62A.9‑311
(Alienability of debtor's rights: Judicial process) and 1965 ex.s. c 157 s
9-311;
(35) RCW 62A.9‑312
(Priorities among conflicting security interests in the same collateral) and
1996 c 77 s 7, 1995 c 48 s 70, 1989 c 251 s 1, 1986 c 35 s 52, 1982 c 186 s 3,
1981 c 41 s 22, & 1965 ex.s. c 157 s 9-312;
(36) RCW 62A.9‑313
(Priority of security interests in fixtures) and 1982 c 186 s 4, 1981 c 41 s
23, & 1965 ex.s. c 157 s 9-313;
(37) RCW 62A.9‑314
(Accessions) and 1965 ex.s. c 157 s 9-314;
(38) RCW 62A.9‑315
(Priority when goods are commingled or processed) and 1965 ex.s. c 157 s 9-315;
(39) RCW 62A.9‑316
(Priority subject to subordination) and 1965 ex.s. c 157 s 9-316;
(40) RCW 62A.9‑317
(Secured party not obligated on contract of debtor) and 1965 ex.s. c 157 s
9-317;
(41) RCW 62A.9‑318
(Defenses against assignee; modification of contract after notification of
assignment; term prohibiting assignment ineffective; identification and proof
of assignment) and 1981 c 41 s 24 & 1965 ex.s. c 157 s 9-318;
(42) RCW 62A.9‑401 (Place
of filing; erroneous filing; removal of collateral) and 1981 c 41 s 25, 1979 c
158 s 211, 1977 ex.s. c 117 s 7, & 1965 ex.s. c 157 s 9-401;
(43) RCW 62A.9‑402
(Formal requisites of financing statement; amendments; mortgage as financing
statement) and 1989 c 251 s 2, 1982 c 186 s 5, 1981 c 41 s 26, & 1965 ex.s.
c 157 s 9-402;
(44) RCW 62A.9‑403 (What
constitutes filing; duration of filing; effect of lapsed filing; duties of
filing officer) and 1987 c 189 s 2, 1982 c 186 s 6, 1981 c 41 s 27, 1979 c 158
s 212, 1977 ex.s. c 117 s 8, 1967 c 114 s 5, & 1965 ex.s. c 157 s 9-403;
(45) RCW 62A.9‑404
(Termination statement) and 1982 c 186 s 7, 1981 c 41 s 28, 1979 c 158 s 213,
1977 ex.s. c 117 s 9, 1967 c 114 s 6, & 1965 ex.s. c 157 s 9-404;
(46) RCW 62A.9‑405
(Assignment of security interest; duties of filing officer) and 1987 c 189 s 3,
1982 c 186 s 8, 1981 c 41 s 29, 1979 c 158 s 214, 1977 ex.s. c 117 s 10, 1967 c
114 s 7, & 1965 ex.s. c 157 s 9-405;
(47) RCW 62A.9‑406
(Release of collateral; duties of filing officer) and 1987 c 189 s 4, 1982 c
186 s 9, 1981 c 41 s 30, 1979 c 158 s 215, 1977 ex.s. c 117 s 11, 1967 c 114 s
9, & 1965 ex.s. c 157 s 9-406;
(48) RCW 62A.9‑407
(Information from filing officer) and 1987 c 189 s 5, 1982 c 186 s 10, 1981 c
41 s 31, 1967 c 114 s 10, & 1965 ex.s. c 157 s 9-407;
(49) RCW 62A.9‑408
(Financing statements covering consigned or leased goods) and 1981 c 41 s 32;
(50) RCW 62A.9‑409
(Standard filing forms, fees, and uniform procedures; acceptance for filing of
financial statements on and after June 12, 1967; laws governing; fees) and 1993
c 51 s 1, 1987 c 189 s 6, 1979 c 158 s 216, 1977 ex.s. c 117 s 12, & 1967 c
114 s 12;
(51) RCW 62A.9‑420
(Presigning of security agreements and financing statements; prefiling of
financing statements) and 1967 c 114 s 11;
(52) RCW 62A.9‑501 (Default;
procedure when security agreement covers both real and personal property) and
1997 c 138 s 1, 1981 c 41 s 34, & 1965 ex.s. c 157 s 9-501;
(53) RCW 62A.9‑502
(Collection rights of secured party) and 1981 c 41 s 35 & 1965 ex.s. c 157
s 9-502;
(54) RCW 62A.9‑503
(Secured party's right to take possession after default) and 1965 ex.s. c 157 s
9-503;
(55) RCW 62A.9‑504
(Secured party's right to dispose of collateral after default; effect of
disposition) and 1981 c 41 s 36 & 1965 ex.s. c 157 s 9-504;
(56) RCW 62A.9‑505
(Compulsory disposition of collateral; acceptance of the collateral as
discharge of obligation) and 1981 c 41 s 37 & 1965 ex.s. c 157 s 9-505;
(57) RCW 62A.9‑506
(Debtor's right to redeem collateral) and 1965 ex.s. c 157 s 9-506; and
(58) RCW 62A.9‑507
(Secured party's liability for failure to comply with this part) and 1965 ex.s.
c 157 s 9-507.
NEW SECTION. Sec. 902.
Sections 9A‑101 through 9A‑708 of this act constitute a new Article
in Title 62A RCW.
