CHAPTER 9. SECURED TRANSACTIONS
PART 1. GENERAL PROVISIONS
SUBPART 1. SHORT TITLE, DEFINITIONS, AND
GENERAL CONCEPTS
§9-101. Short title
This Chapter may be cited as Uniform Commercial Code -- Secured Transactions.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-102. Definitions and index of definitions
§9-103. Purchase-money security interest; application of payments; burden of establishing purchase-money security interest
(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. 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. 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. 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) [Reserved.]
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 1995, No. 884, §2, eff. Jan. 1, 1996; Acts 1999, No. 171, §3, eff. Jan. 1, 2000; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-104. Control of deposit account
§9-105. Control of electronic copy of record evidencing chattel paper
§9-106. Control of investment property
(a) Control under R.S. 10:8-106. A person has control of a certificated security, uncertificated security, or security entitlement as provided in R.S. 10:8-106.
(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.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 1991, No. 377, §4, eff. Jan. 1, 1992; Acts 1995, No. 884, §2, eff. Jan. 1, 1996; Acts 1999, No. 171, §3, eff. Jan. 1, 2000; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-107. 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 R.S. 10:5-114(c) or otherwise applicable law or practice.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-107.1. Control over life insurance policy
§9-107.2. Control conditioned on default
§9-107.3. Control of controllable electronic record, controllable account, or controllable payment intangible
§9-107.4. No requirement to acknowledge or confirm; no duties
§9-108. Sufficiency of description
(a) Sufficiency of description. Except as otherwise provided in Subsections (c), (d), and (e), a description of personal 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), 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), a type of collateral defined in this Title;
(4) quantity;
(5) computational or allocational formula or procedure; or
(6) except as otherwise provided in Subsection (c), 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.
(d) Investment property. Except as otherwise provided in Subsection (e), 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 this Title is an insufficient description of:
(1) a tort claim other than as a form of proceeds under R.S. 10:9-315;
(2) in a consumer transaction, consumer goods, a security entitlement, a securities account, or a commodity account;
(3) a life insurance policy;
(4) a judgment, other than as a form of proceeds under R.S. 10:9-315;
(5) a beneficial interest in a trust;
(6) an interest in an estate; or
(7) a collateral mortgage note.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-109. Scope
PART 2. EFFECTIVENESS OF SECURITY AGREEMENT;
ATTACHMENT OF SECURITY INTEREST; RIGHTS OF
PARTIES TO SECURITY AGREEMENT
SUBPART 1. EFFECTIVENESS AND ATTACHMENT
§9-201. General effectiveness of security agreement
(a) General effectiveness. Except as otherwise provided in this Title, 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 Chapter is subject to any applicable statute or regulation that establishes a different rule for consumers and any other statute or regulation that regulates the rates, charges, agreements, and practices for loans or other extensions of credit.
(c) Other applicable law controls. In case of conflict between this Chapter and a consumer protection statute or regulation described in Subsection (b), the consumer protection statute or regulation controls. Failure to comply with a statute or regulation described in Subsection (b) has only the effect the statute or regulation specifies.
(d) Further deference to other applicable law. This Chapter does not:
(1) validate any rate, charge, agreement, or practice that violates a statute or regulation described in Subsection (b); or
(2) extend the application of the statute or regulation to a transaction not otherwise subject to it.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 1995, No. 1201, §3, eff. June 29, 1995; Acts 1997, No. 1295, §2; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-202. 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 Chapter with regard to rights and obligations apply whether title to collateral is in the secured party or the debtor.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-203. Attachment and enforceability of security interest; proceeds; supporting obligations; formal requisites
§9-204. After-acquired property; future advances
§9-205. 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.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-206. 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) 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) secures the obligation to make payment for the delivery.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001.
SUBPART 2. RIGHTS AND DUTIES
§9-208. Additional duties of secured party having control of collateral
§9-209. Duties of secured party if account debtor has been notified of assignment
§9-210. Request for accounting; request regarding list of collateral or statement of account
§9-211. Repealed by Acts 2006, 1st Ex. Sess., No. 14, §2, eff. Feb. 23, 2006, and Acts 2006, 1st Ex. Sess., No. 21, §2, eff. April 1, 2006.
PART 3. PERFECTION AND PRIORITY
§9-302. 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.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 1991, No. 539, §3, eff. Jan. 1, 1992; Acts 1995, No. 884, §4, eff. Jan. 1, 1996; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-303. 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.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-304. Law governing perfection and priority of security interests in deposit accounts
§9-305. Law governing perfection and priority of security interests in investment property
§9-306. Law governing perfection and priority of security interests in letter-of-credit rights
(a) Governing law: issuer's or nominated person's jurisdiction. Subject to Subsection (c), 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 R.S. 10:5-116.
(c) When Section not applicable. This Section does not apply to a security interest that is perfected only under R.S. 10:9-308(d).
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1995, No. 884, §4, eff. Jan. 1, 1996; Acts 1995, No. 1201, §3, eff. June 29, 1995; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-306.1. Law governing perfection and priority of security interests in chattel paper
§9-306.2. Law governing perfection and priority of security interests in controllable accounts, controllable electronic records, and controllable payment intangibles
§9-307. Location of debtor
SUBPART 2. PERFECTION
§9-308. When security interest or agricultural lien is perfected; continuity of perfection
(a) Perfection of security interest. Except as otherwise provided in this Section and R.S. 10:9-309, a security interest is perfected if it has attached and all of the applicable requirements for perfection in R.S. 10:9-310 through 9-316 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 R.S. 10:9-309 or 9-310 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 Chapter and is later perfected by another method under this Chapter, without an intermediate period when it was unperfected.
(d) Supporting obligation. Perfection of a security interest in collateral also includes the rights to 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 includes the rights to a security interest, mortgage, or 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.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001; Acts 2010, No. 378, §3.
§9-309. 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 R.S. 10:9-501(a)(1) with respect to titled motor vehicles and R.S. 10:9-311(b) with respect to consumer goods that are subject to a statute or treaty described in R.S. 10:9-311(a) and R.S. 10:9-501(a)(3) with respect to a titled vessel or outboard motor;
(2) an assignment of accounts or payment intangibles which does not by itself or in conjunction with other assignments to the same assignee transfer a significant part of the assignor's outstanding accounts or payment intangibles;
(3) a sale of a payment intangible;
(4) a sale of a promissory note other than a collateral mortgage 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) [Reserved.]
(7) a security interest of a collecting bank arising under R.S. 10:4-210;
(8) a security interest of an issuer or nominated person arising under R.S. 10:5-118;
(9) a security interest arising in the delivery of a financial asset under R.S. 10:9-206(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) An agricultural lien in favor of an agricultural laborer upon crops and upon their proceeds to the extent subject to the agricultural lien.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1995, No. 884, §4, eff. Jan. 1, 1996; Acts 2001, No. 128, §1, eff. July 1, 2001; Acts 2004, No. 303, §2; Acts 2007, No. 319, §1, eff. July 1, 2008; Acts 2009, No. 508, §1, eff. Jan. 1, 2011; Acts 2010, No. 378, §3.
§9-310. When filing required to perfect security interest or agricultural lien; security interests and agricultural liens to which filing provisions do not apply
§9-311. Perfection of security interests in property subject to certain statutes, regulations, and treaties
§9-312. Perfection of security interests in chattel paper, controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, negotiable documents, goods covered by documents, instruments, investment property, letter-of-credit rights, money, life insurance policies, and collateral mortgage notes; perfection by permissive filing; temporary perfection without filing or transfer of possession
§9-313. When possession by or delivery to secured party perfects security interest without filing
§9-314. Perfection by control
§9-314.1. Perfection by possession and control of chattel paper
§9-315. Secured party's rights on disposition of collateral and in proceeds
(a) Disposition of collateral: continuation of security interest; proceeds. Except as otherwise provided in this Chapter:
(1) a security interest continues in collateral notwithstanding sale, lease, license, exchange, or other disposition thereof unless the secured party authorized the disposition free of the security interest;
(2) a security interest attaches to any identifiable proceeds of collateral; and
(3) a purchaser of collateral incurs no personal liability on account of an unauthorized transfer unless he has failed to act in good faith.
(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 R.S. 10:9-336; and
(2) if the proceeds are not goods, to the extent that the secured party identifies the proceeds by an acceptable method of tracing.
(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) 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) becomes unperfected at the later of:
(1) when the effectiveness of the filed financing statement lapses under R.S. 10:9-515 or is terminated under R.S. 10:9-513; or
(2) the twenty-first day after the security interest attaches to the proceeds.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001; Acts 2010, No. 378, §3.
§9-316. Continued perfection of security interest following change in governing law
SUBPART 3. PRIORITY
§9-318. 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 an ownership 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.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-319. Rights and title of consignee with respect to creditors and purchasers
(a) Consignee has consignor's rights. Except as otherwise provided in Subsection (b), 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, or purchaser of goods from, a consignee, while goods are in the consignee's possession, law other than this Chapter determines the rights and title of a consignee if, under this Part, a perfected security interest held by the consignor would have priority over the rights of the creditor or purchaser.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-320. Buyer of goods
(a) Buyer in ordinary course of business. Except as otherwise provided in Subsection (e), 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), 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) [Reserved.]
(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). To the extent that it affects the priority of a security interest over a buyer of goods under Subsection (b), the period of effectiveness of a filing made in the jurisdiction in which the seller is located is governed by R.S. 10:9-316(a) and (b).
(d) [Reserved.]
(e) Possessory security interest not affected. Subsections (a) and (b) do not affect a security interest in goods in the possession of the secured party under R.S. 10:9-313.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-321. Licensee of general intangible and lessee of goods in ordinary course of business
(a) "Licensee in the 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.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-322. 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 in the same collateral 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 in the same collateral.
(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 of Subsection (a)(1):
(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), a security interest in collateral which qualifies for priority over a conflicting security interest under R.S. 10:9-327, 9-328, 9-329, 9-329.1, 9-330, or 9-331 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) and except as otherwise provided in Subsection (f), 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). Subsection (d) 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). Subsections (a) through (e) are subject to all of the following:
(1) the other provisions of this Part;
(2) R.S. 10:4-210 with respect to a security interest of a collecting bank;
(3) R.S. 10:5-118 with respect to a security interest of an issuer or nominated person;
(4) [Reserved.]
(5) R.S. 9:5551 with respect to collateral mortgages.
(6) Repealed by Acts 2010, No. 378, §4.
(g) Priority of agricultural liens and security interests affecting crops. Agricultural liens and security interests affecting crops and their proceeds rank according to the following order of priority:
(1) Agricultural liens in favor of agricultural laborers, with equal rank among themselves.
(2) Perfected agricultural liens securing payment of rent due to a person that has leased real property on which the crops are growing or from which they were produced.
(3) Other perfected agricultural liens and perfected security interests, with priority among themselves as provided in this Section and Part.
(4) Unperfected agricultural liens securing payment of rent due to a person who has leased real property on which the crops are growing or from which they were produced.
(5) Other unperfected agricultural liens and unperfected security interests, with priority among themselves in the order in which they become effective or attach.
(h) Liens. A security interest has priority over a conflicting lien, other than an agricultural lien, in the same collateral except as otherwise provided in this Chapter or except to the extent the lien is created by a statute that expressly provides that the lien has priority over the security interest.
Acts 2001, No. 128, §1, eff. July 1, 2001; Acts 2010, No. 378, §§3, 4.
§9-323. Future advances
§9-324. Priority of purchase-money security interests
§9-325. Priority of security interests in transferred collateral
(a) Subordination of security interest in transferred collateral. Except as otherwise provided in Subsection (b), 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) subordination. Subsection (a) subordinates a security interest only if the security interest otherwise would have priority solely under R.S. 10:9-322(a) or 9-324.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-326. Priority of security interests created by new debtor
§9-326.1. Priority of security interest in controllable account, controllable electronic record, and controllable payment intangible
§9-327. 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 R.S. 10:9-104 has priority over a conflicting security interest held by a secured party that does not have control.
(2) Except as otherwise provided in Paragraphs (3) and (4), security interests perfected by control under R.S. 10:9-314 rank according to priority in time of obtaining control.
(3) Except as otherwise provided in Paragraph (4), 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 R.S. 10:9-104(a)(3) has priority over a security interest held by the bank with which the deposit account is maintained.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-328. 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 R.S. 10:9-106 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 Paragraphs (3) and (4), conflicting security interests held by secured parties each of which has control under R.S. 10:9-106 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 R.S. 10:8-106(d)(1), the secured party's becoming the person for which the securities account is maintained;
(ii) if the secured party obtained control under R.S. 10:8-106(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 R.S. 10:8-106(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 R.S. 10:9-106(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 R.S. 10:9-313(a) and not by control under R.S. 10:9-314 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 R.S. 10:9-106 rank equally.
(7) In all other cases, priority among conflicting security interests in investment property is governed by R.S. 10:9-322 and 9-323.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-329. 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 R.S. 10:9-107 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 R.S. 10:9-314 rank according to priority in time of obtaining control.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-329.1. Priority of security interest in a life insurance policy
The following rules govern priority among conflicting security interests in the same life insurance policy:
(1) A security interest held by an insurer has priority over a conflicting security interest held by another secured party.
(2) A secured party that has control over the life insurance policy has priority over a conflicting security interest held by a secured party without control.
(3) Except as otherwise provided in Paragraph (1), security interests perfected by control under R.S. 10:9-314 rank according to priority in time of obtaining control.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-330. Priority of purchaser of chattel paper or instrument
§9-331. Priority of rights of purchasers of controllable accounts, controllable electronic records, controllable payment intangibles, documents, instruments, and securities under other Chapters; priority of interests in financial assets and security entitlements and protection against assertion of claim under Chapters 8 and 12 of this Title
§9-332. Transfer of money; transfer of funds from deposit account
§9-333. Priority of certain liens arising by operation of law
(a) "Possessory lien." In this section, "possessory lien" means a lien other than 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 operation 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 unless the lien is created by a statute that expressly provides otherwise.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-334. Priority of security interests in fixtures and crops
§9-335. 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), 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 R.S. 10:9-311(b).
(e) Removal of accession after default. After default, subject to Part 6, a secured party may require the debtor to 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 requires the debtor to remove an accession from other goods under Subsection (e) shall promptly reimburse any holder of a security interest or 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.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-336. 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) is perfected.
(e) Priority of security interest. Except as otherwise provided in Subsection (f), the other provisions of this Part determine the priority of a security interest that attaches to the product or mass under Subsection (c).
(f) Conflicting security interests in product or mass. If more than one security interest attaches to the product or mass under Subsection (c), the following rules determine priority:
(1) A security interest that is perfected under Subsection (d) 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), the security interests rank equally in proportion to value of the collateral at the time it became commingled goods.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-337. 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 R.S. 10:9-311(b), after issuance of the certificate and without the conflicting secured party's knowledge of the security interest.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-338. 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 R.S. 10:9-516(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 tangible chattel paper, tangible documents, goods, instruments, or a security certificate, receives delivery of the collateral.
Acts 2001, No. 128, §1, eff. July 1, 2001; Acts 2009, No. 207, §5, eff. Jan. 1, 2010.
§9-339. Priority subject to subordination
This Chapter does not preclude subordination by agreement by a person entitled to priority.
Acts 2001, No. 128, §1, eff. July 1, 2001.
SUBPART 4. RIGHTS OF BANK
§9-340. Effectiveness of right of compensation, recoupment, or set-off against deposit account
(a) Exercise of compensation, recoupment, or set-off. Except as otherwise provided in Subsection (c), a bank with which a deposit account is maintained may exercise any right of compensation, recoupment, or set-off against a secured party that holds a security interest in the deposit account.
(b) Compensation, recoupment, or set-off not affected by security interest. Except as otherwise provided in Subsection (c), the application of this Chapter 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 R.S. 10:9-104(a)(3), if the set-off is based on a claim against the debtor.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-341. Bank's rights and duties with respect to deposit account
§9-342. Bank's right to refuse to enter into or disclose existence of control agreement
This Chapter does not require a bank to enter into an agreement of the kind described in R.S. 10:9-104(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.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-343. Control agreement not automatic subordination
An agreement of the kind specified in R.S. 10:9-104(a)(2) does not constitute a waiver or subordination of a security interest in favor of the bank unless it specifically so provides.
Acts 2001, No. 128, §1, eff. July 1, 2001.
SUBPART 5. RIGHTS OF LIFE INSURANCE COMPANIES
§9-344. Life insurance companies
(a) This Chapter does not require an insurer to enter into an acknowledgment of the kind described in R.S. 10:9-107.1(a)(2), even if its customer so requests or directs.
(b) If an insurer acknowledges the creation of a security interest in a life insurance policy issued by it, the insurer does not owe any duty to the secured party unless the insurer otherwise agrees or to the extent law other than this Chapter otherwise provides, and the insurer is not required to confirm the acknowledgment to another person unless requested to do so by its customer.
Acts 2001, No. 128, §1, eff. July 1, 2001.
PART 4. RIGHTS OF THIRD PARTIES
§9-401. Alienability of debtor's rights
(a) Other law governs alienability; exceptions. Except as otherwise provided in Subsection (b) and R.S. 10:9-406, 9-407, 9-408, and 9-409, whether a debtor's rights in collateral may be voluntarily or involuntarily transferred is governed by law other than this Chapter.
(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.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-402. 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.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 1991, No. 377, §4, eff. Jan. 1, 1992; Acts 1992, No. 646, §1, eff. July 2, 1992; Acts 1995, No. 1201, §3, eff. June 29, 1995; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-403. Agreement not to assert defenses against assignee
(a) "Value." In this Section, "value" has the meaning provided in R.S. 10:3-303(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 compensation, set-off, or recoupment of the type that may be asserted against a person entitled to enforce a negotiable instrument under R.S. 10:3-305(a).
(c) When Subsection (b) not applicable. Subsection (b) does not apply to defenses of a type that may be asserted against a holder in due course of a negotiable instrument under R.S. 10:3-305(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 Chapter 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 Chapter 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), this Section does not displace law other than this Chapter which gives effect to an agreement by an account debtor not to assert a claim or defense against an assignee.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1990, No. 1041, §2, eff. Dec. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 1991, No. 377, §4, eff. Jan. 1, 1992; Acts 1995, No. 1201, §3, eff. June 29, 1995; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-404. Rights acquired by assignee; claims and defenses against assignee
§9-405. 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).
(b) Applicability of Subsection (a). Subsection (a) 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 R.S. 10:9-406(a).
(c) Rule for individual under other law. This Section is subject to law other than this Chapter 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.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 1991, No. 377, §4, eff. Jan. 1, 1992. Amended by Acts 1993, No. 948, §3, eff. Jan. 1, 1994; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-406. 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
§9-407. 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), a term in a lease is ineffective to the extent that it:
(1) prohibits, restricts, or requires the consent of a party to the lease to the creation, attachment, perfection, or enforcement of a security interest in an interest of a party under the lease 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. A term described in Subsection (a)(2) 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 in violation of the term.
(c) [Reserved.]
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 1991, No. 377, §4, eff. Jan. 1, 1992; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-408. Restrictions on assignment of promissory notes, health-care-insurance receivables, and certain general intangibles ineffective
§9-409. 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 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 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). To the extent that a term in a letter of credit is ineffective under Subsection (a) but would be effective under law other than this Chapter 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.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001; Acts 2004, No. 303, §2.
§9-410. Relation to the Louisiana Trust Code
Nothing under this Chapter shall supersede the provisions of the Louisiana Trust Code that prohibit a beneficiary from alienating or encumbering a beneficial interest in the trust if the trust instrument so provides.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-411. Judgments and litigious rights
(a) Judicial mortgages. Law other than this Chapter governs the rights of third persons with respect to real property burdened by a judicial mortgage created by filing a judgment, including the effect of releases of the judicial mortgage by the mortgagee of record.
(b) Enforcement. After notification, the secured party has the rights established under R.S. 13:3864 through 13:3868.
(c) Litigious rights. Civil Code Article 2652 shall not apply to the creation of a security interest in a litigious right or to the foreclosure or other sale in enforcement thereof.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-412. Discharge of tortfeasor; notification and filing of assignment
PART 5. FILING
SUBPART 1. FILING OFFICE; CONTENTS AND
EFFECTIVENESS OF FINANCING STATEMENT
§9-501. Filing office
(a) Filing offices. If the local law of this state governs perfection of a security interest, the office in which to file a financing statement to perfect the security interest is:
(1) The Department of Public Safety and Corrections, office of motor vehicles, if the collateral is a titled motor vehicle not held as inventory for sale or lease.
(2) Repealed by Acts 2010, No. 378, §4, eff. Jan. 1, 2011.
(3) The Department of Wildlife and Fisheries, if the collateral is a titled vessel valued in excess of two thousand five hundred dollars and required to be numbered, or a titled outboard motor, and such vessel or motor is to be principally operated on the waters of this state, not held as inventory for sale or lease, and transferred for the first time on or after July 1, 2008.
(4) The clerk of court of any parish, in all other cases, including when the collateral is as-extracted collateral or goods that are to become fixtures and the financing statement is filed as a fixture filing.
(b) [Reserved.]
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1992, No. 235, §2, eff. Jan. 1, 1993; Acts 2001, No. 128, §1, eff. July 1, 2001; Acts 2004, No. 303, §2; Acts 2007, No. 319, §1, eff. July 1, 2008; Acts 2009, No. 508, §1, eff. Jan. 1, 2011; Acts 2010, No. 378, §§3, 4, eff. Jan. 1, 2011.
§9-502. Contents of financing statement; time of filing financing statement
(a) Sufficiency of financing statement. Subject to Subsection (b), 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. To be sufficient, a financing statement that covers as-extracted collateral or standing timber that constitutes goods, or that is filed as a fixture filing and covers goods that are to become fixtures, must satisfy Subsection (a) and also:
(1) indicate that it covers this type of collateral;
(2) [Reserved.]
(3) provide a description of the real property to which the collateral is related sufficient to cause the mortgage to be effective against third persons if the description were contained in a mortgage of real property filed for registry; and
(4) if the debtor does not have an interest of record in the real property, provide the name of a record owner.
(c) [Reserved.]
(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.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-503. Name of debtor and secured party
§9-504. 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 R.S. 10:9-108;
(2) an indication that the financing statement covers all assets or all personal property; or
(3) the year of manufacture, make, model, body style, and manufacturer's serial or other identification number, in the case of a titled motor vehicle not held as inventory for sale or lease.
(4) the hull identification number, vessel length, model year or year built, name of manufacturer or model, vessel type, propulsion type, and principal material of hull construction in the case of a titled vessel not held as inventory for sale or lease.
(5) Serial number, year manufactured, name of manufacturer or model, in the case of a titled outboard motor not held as inventory for sale or lease.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001; Acts 2007, No. 319, §1, eff. July 1, 2008; Acts 2009, No. 508, §1, eff. Jan. 1, 2011.
§9-505. 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 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 R.S. 10:9-311(a), using the terms "consignor", "consignee", "lessor", "lessee", "bailor", "bailee", "licensor", "licensee", "owner", "registered owner", "buyer", "seller", "lienholder", or words of similar import, instead of the terms "secured party" and "debtor".
(b) Effect of financing statement under Subsection (a). This Part applies to the filing of a financing statement under Subsection (a) and, as appropriate, to compliance that is equivalent to filing a financing statement under R.S. 10:9-311(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.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 1991, No. 377, §4, eff. Jan. 1, 1992; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-506. 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), a financing statement that fails sufficiently to provide the name of the debtor in accordance with R.S. 10:9-503(a) is seriously misleading.
(c) Financing statement not seriously misleading. If a search of the records of the office of the secretary of state or the Department of Public Safety and Corrections, office of motor vehicles, or of the records of the Department of Wildlife and Fisheries, as applicable, under the debtor's correct name, using that 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 R.S. 10:9-503(a), the name provided does not make the financing statement seriously misleading.
(d) "Debtor's correct name." For purposes of R.S. 10:9-508(b), the "debtor's correct name" in Subsection (c) means the correct name of the new debtor.
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001; Acts 2007, No. 319, §1, eff. July 1, 2008.
§9-507. Effect of certain events on effectiveness of financing statement
§9-508. 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) to be seriously misleading under R.S. 10:9-506:
(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 R.S. 10:9-203(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 R.S. 10:9-203(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 R.S. 10:9-507(a).
Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1990, No. 493, §1; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 1992, No. 235, §2, eff. Jan. 1, 1993; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-509. Persons entitled to file a record
§9-510. 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 R.S. 10:9-509.
(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 R.S. 10:9-515(d) is ineffective.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-511. 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 R.S. 10:9-514(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 R.S. 10:9-514(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.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-512. Amendment of financing statement
(a) Amendment of information in financing statement. Subject to R.S. 10:9-509, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or, subject to Subsection (e), otherwise amend the information provided in, a financing statement by filing an amendment in the filing office where the financing statement was originally filed, 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 in a filing office described in R.S. 10:9-501(a)(1), provides the information specified in R.S. 10:9-504.
(b) Period of effectiveness not affected. Except as otherwise provided in R.S. 10:9-515, 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.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-513. Termination statement
§9-514. Assignment of powers of secured party of record
(a) Assignment reflected on initial financing statement. 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. 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 where the financing statement was originally filed 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) [Reserved.]
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-514.1. Master assignments and master amendments
(a) Master assignment. A secured party of record may assign all of its rights under twenty or more financing statements filed in a parish by filing with the filing office where the financing statements were originally filed a statement of master assignment in the form prescribed by the secretary of state, setting forth:
(1) the initial financing statement to which each relates, by each file number;
(2) the name of the assignor; and
(3) the name and mailing address of the assignee.
(b) Master amendment. A secured party of record may amend to change its name and mailing address twenty or more financing statements filed in a parish by filing with the filing office where the financing statements were originally filed a statement of master amendment in the form prescribed by the secretary of state, setting forth:
(1) by each file number, the initial financing statement to which each relates;
(2) the name of the secured party;
(3) the information that is being amended.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-515. Duration and effectiveness of financing statement; effect of lapsed financing statement
§9-516. What constitutes filing; effectiveness of filing
§9-517. Effect of indexing errors
The failure of the filing office to transmit or the secretary of state to index a record correctly does not affect the effectiveness of the filed record.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-518. Claim concerning inaccurate or wrongfully filed record
SUBPART 2. DUTIES AND OPERATION OF FILING OFFICE
§9-519. 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.
(4) electronically transmit to the secretary of state information required by the rules of the secretary of state for indexing the record.
(b) [Reserved.]
(c) Indexing: general. The secretary of state shall maintain a master index of information transmitted to the secretary of state under Subsection (a)(4), and shall be entitled to such fees as provided under R.S. 10:9-525. Within two business days following receipt of such information, the secretary of state 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 standing timber that constitutes goods, the secretary of state shall index it under the names of the debtor and of each owner of record of the real property shown on the financing statement and transmitted to the secretary of state pursuant to Subsection (a)(4).
(e) [Reserved.]
(f) Retrieval and association capability. The secretary of state 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 secretary of state 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 R.S. 10:9-515 with respect to all secured parties of record.
(h) Timeliness of filing office performance. The filing office shall perform the acts required by Subsection (a) within two business days after the filing office receives the record in question.
(i) Inapplicability to Department of Public Safety and Corrections and Department of Wildlife and Fisheries. Subsections (a)(4) and (c) through (f) do not apply to the Department of Public Safety and Corrections, office of motor vehicles, or to the Department of Wildlife and Fisheries.
Acts 2001, No. 128, §1, eff. July 1, 2001; Acts 2007, No. 319, §1, eff. July 1, 2008.
§9-520. Acceptance and refusal to accept record
(a) Refusal to accept record. A filing office may refuse to accept a record for filing only for a reason set forth in R.S. 10:9-516(b).
(b) Notice of refusal. If a filing office refuses to accept a record for filing, it shall inform the person that presented the record the fact of and reason for the refusal within two business days after the filing office receives the record.
(c) When filed financing statement effective. A filed financing statement satisfying R.S. 10:9-502(a) and (b) is effective, even if the filing office is permitted to refuse to accept it for filing under Subsection (a). However, R.S. 10:9-338 applies to a filed financing statement providing information described in R.S. 10:9-516(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.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-521. 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 any form or format approved by the secretary of state, except for a reason set forth in R.S. 10:9-516(b):
(b) Amendment form. A filing officer that accepts written records may not refuse to accept a written record in any form approved by the secretary of state, except for a reason set forth in R.S. 10:9-516(b).
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-522. Maintenance and destruction of records
(a) Post-lapse maintenance and retrieval of information. The secretary of state and 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 R.S. 10:9-515 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 secretary of state and the filing office immediately may destroy any written record evidencing a financing statement. However, if the secretary of state or the filing office destroys a written record, it shall maintain another record of the financing statement which complies with Subsection (a).
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-523. Information from filing office; sale or license of records
§9-524. Delay by filing office
Delay by the secretary of state or 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 secretary of state or the filing office; and
(2) the secretary of state or the filing office exercises reasonable diligence under the circumstances.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-525. Fees
(a) Fees charged by filing offices. The following fees apply to filings and searches made under this Chapter, other than filings with the Department of Public Safety and Corrections, office of motor vehicles subject to Subsection (b):
SCHEDULE OF FEES
To Be
To Be
Retained by
Remitted to
The Filing
The Secretary
Officer
of State
(1) A $25 fee for an initial filing,
an amendment a continuation, an
assignment, or a debtor correction
$15
$10
(2) A $5 fee for each additional name
$ 3
$ 2
(3) A $5 additional fee for an initial
filing disclosing an assignment
$ 3
$ 2
(4) A $15 nonstandard form penalty
$15
$-0-
(plus $5 per page for each page in excess
of 10 pages)
$ 5
$-0-
(5) A $35 initial filing fee for as
extracted collateral or fixture filings
$25
$10
(6) A $200 initial filing fee for
transmitting utility filings
$183
$17
(7) A $35 initial filing fee for crops
and farm products
$30
$ 5
(8) A $5 fee per affected financing
statement for a master amendment or a
master assignment
$ 3
$ 2
(9) A $5 fee for a termination
(payable in advance)
$ 5
$-0-
(10) A $5 fee for each additional
name on a termination
$ 5
$-0-
(11) A $30 certificate fee (plus $1
for each listing more than ten)
$20
$10
(12) A $100 initial filing fee for
public finance transactions
$75
$25
(13) With respect to master assignments and master amendments subject to R.S. 10:9-514.1, a $5.00 fee for each of the financing statements to be assigned or amended.
(b) Fees charged by Department of Public Safety and Corrections. The following fees apply to filings made with the Department of Public Safety and Corrections, office of motor vehicles:
(1) A $15 fee for initial filing.
(2) A $15 fee for an amendment.
(c) Remittance to secretary of state. On or before the tenth day of each month, the filing office in R.S. 10:9-502(a)(2) shall remit to the secretary of state that portion of the aforementioned fee allocable to the secretary of state which was received by the filing office during the preceding month.
(d) Method of payment. Notwithstanding any other provision of law to the contrary, the secretary of state and all filing officers are hereby authorized to establish any method of payment for such fees, including but not limited to payment by charge account or credit card.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-526. Filing-office rules
(a) Adoption of filing-office rules. The secretary of state, the secretary of the Department of Public Safety and Corrections, and the secretary of the Department of Wildlife and Fisheries may adopt and publish rules to implement this Chapter. The filing-office rules must be:
(1) consistent with this Chapter; and
(2) adopted and published in accordance with the Administrative Procedure Act.
(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 secretary of state, so far as is consistent with the purposes, policies, and provisions of this Chapter, 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;
(3) take into consideration the rules and practices of, and the technology used by, filing offices in other jurisdictions that enact substantially this Part; and
(4) consult with the clerks of court of this state.
Acts 2001, No. 128, §1, eff. July 1, 2001; Acts 2007, No. 319, §1, eff. July 1, 2008; Acts 2008, No. 220, §3, eff. June 14, 2008.
§9-527. Notification by filing office of cyber incidents
PART 6. DEFAULT
§9-602. Waiver and variance of rights and duties
Except as otherwise provided in R.S. 10:9-624, to the extent that they give rights to a debtor or obligor 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) R.S. 10:9-207(b)(4)(C), which deals with use and operation of the collateral by the secured party;
(2) R.S. 10:9-210, which deals with requests for an accounting and requests concerning a list of collateral and statement of account;
(3) R.S. 10:9-607(c), which deals with collection and enforcement of collateral;
(4) R.S. 10:9-608(a) and 9-615(c) to the extent that they deal with application or payment of noncash proceeds of collection, enforcement, or disposition;
(5) R.S. 10:9-608(a) and 9-615(d) to the extent that they require accounting for or payment of surplus proceeds of collateral;
(6) R.S. 10:9-609 to the extent that it prohibits a secured party from taking possession of collateral;
(7) R.S. 10:9-610(b), 9-611, 9-613, and 9-614, which deal with disposition of collateral;
(8) R.S. 10:9-615(f), which deals with calculation of a deficiency or surplus when a disposition is made to the secured party, a person related to the secured party, or a secondary obligor;
(9) R.S. 10:9-616, which deals with explanation of the calculation of a surplus or deficiency;
(10) R.S. 10:9-620, 9-621, and 9-622, which deal with acceptance of collateral in satisfaction of obligation;
(11) R.S. 10:9-623, which deals with redemption of collateral;
(12) R.S. 10:9-624, which deals with permissible waivers; and
(13) R.S. 10:9-625 and 9-626, which deal with the secured party's liability for failure to comply with this Chapter.
Acts 1989, No. 135, §8, eff. Jan. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-603. 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 R.S. 10:9-602 if the standards are not manifestly unreasonable.
(b) [Reserved.]
Acts 1989, No. 135, §8, eff. Jan. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-604. Procedure if security agreement covers real property or fixtures
(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) [Reserved.]
(c) Removal of fixtures. Subject to the other provisions of this Part, if a secured party holding a security interest in fixtures has priority over all owners and encumbrancers of the real property, the secured party, after default, may exercise any of the rights the secured party has with respect to the fixtures consistent with this Part.
(d) Injury caused by removal. A secured party that removes or causes the removal of fixtures 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.
(e) Separate appraisal. A secured party may demand separate appraisal of the fixtures to fix its interest in the receipts of the sale thereof in any proceeding in which the real property is sold pursuant to execution upon it by a mortgagee or other encumbrancer.
Acts 1989, No. 135, §8, eff. Jan. 1, 1990; Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-605. Unknown debtor or secondary obligor
§9-606. 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.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-607. 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 R.S. 10:9-315;
(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 R.S. 10:9-104(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 R.S. 10:9-104(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) [Reserved.]
(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) reasonable expenses of collection and enforcement, including reasonable attorney's 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.
(f) Summary process. A secured party may proceed by summary process against the debtor to obtain any instrument, contract, receipt, or other document in order to exercise its rights under this Chapter or to obtain the endorsement of the debtor to any instrument or other document.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-608. Application of proceeds of collection or enforcement; liability for deficiency and right to surplus
§9-609. Secured party's right to take possession after default
(a) Possession. After default, a secured party may take possession of the collateral only:
(1) after the debtor's abandonment, or the debtor's surrender to the secured party, of the collateral;
(2) with the debtor's consent given after or in contemplation of default;
(3) pursuant to judicial process; or
(4) in those cases expressly provided by law other than this Chapter.
(b) [Reserved.]
(c) [Reserved.]
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-610. 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. A disclaimer or modification of warranties in a secured party's disposition of collateral is commercially reasonable.
(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, or if the secured party, or a person related to the secured party, is obligated by statute to purchase or repurchase the collateral from the debtor.
(d) Warranties on disposition. A sale, lease, license, or other disposition includes the warranties 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):
(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.
(2) [Reserved.]
(f) [Reserved.]
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-611. Notification before disposition of collateral
§9-612. Timeliness of notification before disposition of collateral
(a) Reasonable time is question of fact. Except as otherwise provided in Subsection (b) and (c), whether a notification is sent within a reasonable time is a question of fact.
(b) Ten-day period sufficient in non-consumer 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.
(c) Twenty-one-day period sufficient in consumer transaction. In a consumer transaction, a notification of disposition sent after default and twenty-one days or more before the earliest time of disposition set forth in the notification is sent within a reasonable time before the disposition.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-613. Contents and form of notification before disposition of collateral: general
§9-614. Contents and form of notification before disposition of collateral: consumer-goods transaction
§9-615. Application of proceeds of disposition; liability for deficiency and right to surplus
§9-616. Explanation of calculation of surplus or deficiency
§9-617. 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 subordinate lien.
(b) Rights of good-faith transferee. A transferee that acts in good faith takes free of the rights and interests as described in Subsection (a), even if the secured party fails to comply with the requirements of this Chapter or the requirements of any judicial proceeding.
(c) Rights of other transferee. If a transferee does not take free of the rights and interests as described in Subsection (a), 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 lien.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-618. 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):
(1) is not a disposition of collateral under R.S. 10:9-610; and
(2) relieves the secured party of further duties under this Chapter.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-619. Transfer of record or legal title
§9-620. Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral
§9-621. Notification of proposal to accept collateral
§9-622. 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 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), even if the secured party fails to comply with this Chapter.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-623. 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 attorney's fees described in R.S. 10:9-615(a)(1).
(c) When redemption may occur. A redemption may occur at any time before a secured party:
(1) has collected collateral under R.S. 10:9-607;
(2) has disposed of collateral or entered into a contract for its disposition under R.S. 10:9-610; or
(3) has accepted collateral in full or partial satisfaction of the obligation it secures under R.S. 10:9-622.
(d) Redemption in judicial proceeding. If collateral has been seized in a judicial proceeding, a redemption may occur at any time before the judicial sale. To redeem collateral in such circumstances, a person shall also tender the costs of the proceeding.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-624. Waiver
SUBPART 2. NONCOMPLIANCE WITH CHAPTER
§9-625. Remedies for secured party's failure to comply with Chapter
(a) Judicial orders concerning noncompliance. If it is established that a secured party is not proceeding in accordance with this Chapter, 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), a person is liable for actual damages in the amount of any loss caused by a failure to comply with this Chapter. Loss caused by a failure to comply may include loss resulting from the debtor's inability to obtain, or increased costs of, alternative financing. Punitive or exemplary damages may not be recovered under this Chapter.
(c) Persons entitled to recover damages. Except as otherwise provided in R.S. 10:9-628:
(1) a person that, at the time of the failure, was a debtor, was an obligor, or held a security interest in or lien on the collateral may recover actual damages individually but not in a representative capacity in a class action proceeding under Subsection (b) for its loss.
(2) [Reserved.]
(d) Recovery when deficiency eliminated or reduced. A debtor whose deficiency is eliminated under R.S. 10:9-626 may recover damages for the loss of any surplus. However, a debtor or secondary obligor whose deficiency is eliminated or reduced under R.S. 10:9-626 may not otherwise recover under Subsection (b) 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 actual damages recoverable under Subsection (b), 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 R.S. 10:9-208;
(2) fails to comply with R.S. 10:9-209;
(3) files a record that the person is not entitled to file under R.S. 10:9-509(a);
(4) fails to cause the secured party of record to file or send a termination statement as required by R.S. 10:9-513(a) within the time specified by R.S. 10:9-513(b)(2), or as required by R.S. 10:9-513(c);
(5) fails to comply with R.S. 10:9-616(b)(1) within the time specified by R.S. 10:9-616(b)(1)(B), or fails to comply with R.S. 10:9-620(h), and in either case whose failure is part of a pattern, or consistent with a practice, of noncompliance; or
(6) fails to comply with R.S. 10:9-616(b)(2).
(f) Statutory damages: noncompliance with R.S. 10:9-210. A debtor or consumer obligor may recover actual damages under Subsection (b) and, in addition, five hundred dollars in each case from a person that, without reasonable cause, fails to comply with a request under R.S. 10:9-210. A recipient of a request under R.S. 10:9-210 which never claimed an interest in the collateral or obligations that are the subject of a request under that Section has a reasonable excuse for failure to comply with the request within the meaning of this Subsection.
(g) Limitation of security interest: noncompliance with R.S. 10:9-210. If a secured party fails to comply with a request regarding a list of collateral or a statement of account under R.S. 10:9-210, the secured party may claim a security interest only as shown in the list or statement included in the request as against a person that is reasonably misled by the failure.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-626. 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, including a consumer 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 pleads the secured party's noncompliance in its petition, answer, or in connection with a motion for summary judgment.
(2) If the secured party's noncompliance is so pleaded, 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 R.S. 10:9-628, 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 attorney's 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 Paragraph (3)(B), in a consumer transaction the amount of proceeds that would have been realized is equal to the sum of the secured obligation, expenses, and attorney's fees unless the secured party proves that the amount is less than that sum.
(5) [Reserved.]
(b) [Reserved.]
(c) Deficiency Judgment Act inapplicable. The provisions of R.S. 13:4106 and 13:4107 do not apply to enforcement of a security interest or agricultural lien governed by this Chapter.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-627. 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) not necessary; absence of approval has no effect. Approval under Subsection (c) need not be obtained, and lack of approval does not mean that the collection, enforcement, disposition, or acceptance is not commercially reasonable.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-628. Nonliability and limitation on liability of secured party; liability of secondary obligor
SUBPART 3. JUDICIAL PROCEEDINGS
PART 7. TRANSITION
§9-701. Effective date
This Chapter takes effect on July 1, 2001.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-702. Savings clause
(a) Pre-effective-date transactions or liens. Except as otherwise provided in this Part, this Chapter applies to a transaction or lien within its scope, even if the transaction or lien was entered into or created before July 1, 2001.
(b) Continuing validity. Except as otherwise provided in Subsection (c) and R.S. 10:9-703 through 9-710;
(1) transactions and liens that were not governed by former Chapter 9, were validly entered into or created before July 1, 2001, and would be subject to this Chapter if they had been entered into or created on or after July 1, 2001, and the rights, duties, and interests flowing from those transactions and liens, remain valid on and after July 1, 2001; and
(2) the transactions and liens may be terminated, completed, consummated, and enforced as required or permitted by this Chapter or by the law that otherwise would apply if this Chapter had not taken effect, including law repealed by this Act.
(c) Pre-effective-date proceedings. This Chapter does not affect an action, case, or proceeding commenced before July 1, 2001.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-703. Security interest perfected before July 1, 2001
(a) Continuing priority over lien creditor: perfection requirements satisfied. A security interest that is enforceable immediately before July 1, 2001 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 Chapter if, on July 1, 2001, the applicable requirements for enforceability and perfection under this Chapter are satisfied without further action.
(b) Continuing priority over lien creditor: perfection requirements not satisfied. Except as otherwise provided in R.S. 10:9-705, if, immediately before July 1, 2001, 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 Chapter are not satisfied on July 1, 2001, the security interest:
(1) is a perfected security interest for one year after July 1, 2001;
(2) remains enforceable thereafter only if the security interest becomes enforceable under R.S. 10:9-203 before the year expires; and
(3) remains perfected thereafter only if the applicable requirements for perfection under this Chapter are satisfied before the year expires.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-704. Security interest unperfected before July 1, 2001
A security interest that is enforceable immediately before July 1, 2001 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 July 1, 2001;
(2) remains enforceable thereafter if the security interest becomes enforceable under R.S. 10:9-203 on July 1, 2001 or within one year thereafter; and
(3) becomes perfected:
(A) without further action, on July 1, 2001 if the applicable requirements for perfection under this Chapter 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.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-705. Effectiveness of action taken before July 1, 2001
(a) Pre-effective date action; one-year perfection period unless reperfected. If action other than the filing of a financing statement, is taken before July 1, 2001 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 July 1, 2001, the action is effective to perfect a security interest that attaches under this Chapter within one year after July 1, 2001. Except as otherwise provided in Subsection (g), an attached security interest becomes unperfected one year after July 1, 2001 unless the security interest becomes a perfected security interest under this Chapter before the expiration of that period.
(b) Pre-effective date filing. The filing of a financing statement before July 1, 2001 is effective to perfect a security interest to the extent the filing would satisfy the applicable requirements for perfection under this Chapter.
(c) Pre-effective date filing in jurisdiction formerly governing perfection. This Chapter does not render ineffective an effective pre-effective-date financing statement that, before July 1, 2001, is filed and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in R.S. 10:9-103 of former Chapter 9. However, except as otherwise provided in Subsections (d) and (e) and R.S. 10:9-706, the pre-effective date financing statement ceases to be effective at the earlier of:
(1) the time the pre-effective date 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 on or after July 1, 2001 does not continue the effectiveness of a pre-effective-date financing statement. However, upon the timely filing of a continuation statement on or after July 1, 2001 and in accordance with the law of the jurisdiction governing perfection as provided in Part 3, the effectiveness of a pre-effective-date financing statement filed in the same office in that jurisdiction continues for the period provided by the law of that jurisdiction.
(e) Application of Subsection (c)(2) to transmitting utility financing statement. Subsection (c)(2) applies to a financing statement that, before July 1, 2001, is filed against a transmitting utility and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in R.S. 10:9-103 of former Chapter 9 only to the extent that Part 3 provides that the law of a jurisdiction other than 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 pre-effective-date financing statement and a continuation statement filed on or after July 1, 2001 is effective only to the extent that it satisfies the requirements of Part 5 for an initial financing statement.
(g) Security interests under certain mortgages. If a security interest under R.S. 12:702, R.S. 12:704, R.S. 9:5357 through 5366.2, or R.S. 9:5367 through 5373 both immediately before January 1, 1990, was enforceable and would have had priority over the rights of a person that became a lien creditor at that time, and immediately before July 1, 2001, 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 Chapter are not satisfied on July 1, 2001, the security interest:
(1) is a perfected security interest until the earlier of the time the effect of recordation of the mortgage or chattel mortgage ceases or June 30, 2006;
(2) remains enforceable thereafter only if the security interest becomes enforceable under R.S. 10:9-203 before the expiration of the time specified in Subsection (g)(1); and
(3) remains perfected thereafter only if the applicable requirements for perfection under this Chapter are satisfied before the expiration of the time specified in Subsection (g)(1).
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-706. 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 R.S. 10:9-501 continues the effectiveness of a pre-effective-date financing statement if:
(1) the filing of an initial financing statement in that office would be effective to perfect a security interest under this Chapter;
(2) the pre-effective-date financing statement was filed in an office in another State; and
(3) the initial financing statement satisfies Subsection (c).
(b) Period of continued effectiveness. The filing of an initial financing statement under Subsection (a) continues the effectiveness of the pre-effective-date financing statement:
(1) if the initial financing statement is filed before July 1, 2001, for the period provided in R.S. 10:9-403 of former Chapter 9 with respect to a financing statement; and
(2) if the initial financing statement is filed on or after July 1, 2001, for the period provided in R.S. 10:9-515 with respect to an initial financing statement.
(c) Requirements for initial financing statement under Subsection (a). To be effective for purposes of Subsection (a), an initial financing statement must:
(1) satisfy the requirements of Part 5 for an initial financing statement;
(2) identify the pre-effective-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 pre-effective-date financing statement remains effective.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-707. Amendment of pre-effective date financing statement
(a) [Reserved.]
(b) Applicable law. On or after July 1, 2001, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or otherwise amend the information provided in, a pre-effective-date financing statement only in accordance with the law of the jurisdiction governing perfection as provided in Part 3. However, the effectiveness of a pre-effective-date financing statement also may be terminated in accordance with the law of the jurisdiction in which the financing statement is filed.
(c) Method of amending: general rule. Except as otherwise provided in Subsection (d), if the law of this State governs perfection of a security interest, the information in a pre-effective-date financing statement may be amended on or after July 1, 2001 only if:
(1) the pre-effective-date financing statement and an amendment are filed in the office specified in R.S. 10:9-501;
(2) an amendment is filed in the office specified in R.S. 10:9-501 concurrently with, or after the filing in that office of, an initial financing statement that satisfies R.S. 10:9-706(c); or
(3) an initial financing statement that provides the information as amended and satisfies R.S. 10:9-706(c) is filed in the office specified in R.S. 10:9-501.
(d) Method of amending: continuation. If the law of this State governs perfection of a security interest, the effectiveness of a pre-effective-date financing statement may be continued only under R.S. 10:9-705(d) and (f) or 9-706.
(e) Method of amending: additional termination rule. Whether or not the law of this State governs perfection of a security interest, the effectiveness of a pre-effective-date financing statement filed in this State may be terminated on or after July 1, 2001 by filing a termination statement in the office in which the pre-effective date financing statement is filed, unless an initial financing statement that satisfies R.S. 10:9-706(c) has been filed in the office specified by the law of the jurisdiction governing perfection as provided in Part 3 as the office in which to file a financing statement.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-708. 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 pre-effective-date financing statement; or
(B) to perfect or continue the perfection of a security interest.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-709. Priority
(a) Law governing priority. This Chapter and other law that remains effective after July 1, 2001 determine the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before July 1, 2001, former Chapter 9 and other law in effect prior to that date determine priority.
(b) Priority if security interest becomes enforceable under R.S. 10:9-203. For purposes of R.S. 10:9-322(a), the priority of a security interest that becomes enforceable under R.S. 10:9-203 of this Chapter dates from July 1, 2001 if the security interest is perfected under this Chapter by the filing of a financing statement before July 1, 2001 which would not have been effective to perfect the security interest under former Chapter 9. This Subsection does not apply to conflicting security interests each of which is perfected by the filing of such a financing statement.
Acts 2001, No. 128, §1, eff. July 1, 2001.
§9-710. Definitions; filing under repealed laws
(a) "Former Chapter 9." In this Part, "former Chapter 9" means Chapter 9 of Revised Statutes Title 10 that was in effect prior to July 1, 2001.
(b) "Pre-effective-date financing statement." In this Part, "pre-effective-date financing statement" means a financing statement filed before July 1, 2001. The term includes financing statements and continuation statements filed in the office specified in R.S. 10:9-501 under the former Louisiana Assignment of Accounts Receivable Act (R.S. 9:3101 et seq.) and former R.S. 9:5351 through 5366.2 and R.S. 9:5367 through 5373 (Louisiana chattel mortgage statutes).
(c) Continuation statements under former laws. Continuation statements described in Subsection (b) shall not be rendered ineffective by this Chapter, nor be found to fail to satisfy the applicable requirements for perfection under R.S. 10:9-705(c), for lack of signature by the debtor. Continuation statements described in Subsection (b) satisfying the applicable requirements for perfection under law other than former Chapter 9 in effect before July 1, 2001, are effective pre-effective date financing statements under R.S. 10:9-705(c).
Acts 2001, No. 128, §1, eff. July 1, 2001.
PART 8. EFFECTIVENESS
§9-801. Definition of "Act"; effective date
In this Part, "Act" means the Act that originated as House Bill No. 369 of the 2012 Regular Session of the Legislature1 which enacted this Part 8 and amended other provisions of law in other Parts of this Chapter. The Act takes effect on July 1, 2013.
Acts 2012, No. 450, §2, eff. July 1, 2013.
1Acts 2012, No. 450.
§9-802. Savings clause
(a) Pre-effective-date transactions or liens. Except as otherwise provided in this Part, the Act applies to a transaction or lien within its scope, even if the transaction or lien was entered into or created before the Act takes effect.
(b) Pre-effective-date proceedings. The Act does not affect an action, case, or proceeding commenced before the Act takes effect.
Acts 2012, No. 450, §2, eff. July 1, 2013.
§9-803. Security interest perfected before effective date
(a) Continuing perfection: perfection requirements satisfied. A security interest that is a perfected security interest immediately before the Act takes effect is a perfected security interest under Chapter 9 as amended by the Act if, when the Act takes effect, the applicable requirements for attachment and perfection under Chapter 9 as amended by the Act are satisfied without further action.
(b) Continuing perfection: perfection requirements not satisfied. Except as otherwise provided in R.S. 10:9-805, if, immediately before the Act takes effect, a security interest is a perfected security interest, but the applicable requirements for perfection under Chapter 9 as amended by the Act are not satisfied when the Act takes effect, the security interest remains perfected thereafter only if the applicable requirements for perfection under Chapter 9 as amended by the Act are satisfied within one year after the Act takes effect.
Acts 2012, No. 450, §2, eff. July 1, 2013.
§9-804. Security interest unperfected before effective date
A security interest that is an unperfected security interest immediately before the Act takes effect becomes a perfected security interest:
(1) without further action, when the Act takes effect if the applicable requirements for perfection under Chapter 9 as amended by the Act were satisfied before or at that time and remained satisfied at that time; or
(2) when the applicable requirements for perfection are satisfied if the requirements are satisfied after that time.
Acts 2012, No. 450, §2, eff. July 1, 2013.
§9-805. Effectiveness of action taken before effective date
(a) Pre-effective-date filing effective. The filing of a financing statement before the Act takes effect is effective to perfect a security interest to the extent the filing would satisfy the applicable requirements for perfection under Chapter 9 as amended by the Act.
(b) When pre-effective-date filing becomes ineffective. The Act does not render ineffective an effective financing statement that, before the Act takes effect, is filed, and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in Chapter 9 as it existed before amendment by the Act; however, except as otherwise provided in Subsections (c) and (d) of this Section and R.S. 10:9-806, the financing statement ceases to be effective:
(1) if the financing statement is filed in this state, at the time the financing statement would have ceased to be effective had the Act not taken effect; or
(2) if the financing statement is filed in another jurisdiction, at the earlier of:
(A) the time the financing statement would have ceased to be effective under the law of that jurisdiction; or
(B) June 30, 2018.
(c) Continuation statement. The filing of a continuation statement after the Act takes effect does not continue the effectiveness of a financing statement filed before the Act takes effect; however, upon the timely filing of a continuation statement after the Act takes effect and in accordance with the law of the jurisdiction governing perfection as provided in Chapter 9 as amended by the Act, the effectiveness of a financing statement filed in the same office in that jurisdiction before the Act takes effect continues for the period provided by the law of that jurisdiction.
(d) Application of Subparagraph (b)(2)(B) of this Section to transmitting utility financing statement. Subparagraph (b)(2)(B) of this Section applies to a financing statement that, before the 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 Chapter 9 as it existed before amendment by the Act, only to the extent that Chapter 9 as amended by the Act 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.
(e) Application of Part 5. A financing statement that includes a financing statement filed before the Act takes effect and a continuation statement filed after the Act takes effect is effective only to the extent that it satisfies the requirements of Part 5 as amended by the Act for an initial financing statement. A financing statement that indicates that the debtor is a decedent's estate indicates that the collateral is being administered by a personal representative within the meaning of R.S. 10:9-503(a)(2) as amended by the Act. A financing statement that indicates that the debtor is a trust or is a trustee acting with respect to property held in trust indicates that the collateral is held in a trust within the meaning of R.S. 10:9-503(a)(3) as amended by the Act.
Acts 2012, No. 450, §2, eff. July 1, 2013.
§9-806. 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 R.S. 10:9-501 continues the effectiveness of a financing statement filed before the Act takes effect if:
(1) the filing of an initial financing statement in that office would be effective to perfect a security interest under Chapter 9 as amended by the Act;
(2) the pre-effective-date financing statement was filed in an office in another 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 pre-effective-date financing statement:
(1) if the initial financing statement is filed before the Act takes effect, for the period provided in unamended R.S. 10:9-515 with respect to an initial financing statement, and
(2) if the initial financing statement is filed after the Act takes effect, for the period provided in R.S. 10:9-515 as amended by the Act 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 as amended by the Act for an initial financing statement;
(2) identify the pre-effective-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 pre-effective-date financing statement remains effective.
Acts 2012, No. 450, §2, eff. July 1, 2013.
§9-807. Amendment of pre-effective-date financing statement
(a) "Pre-effective-date financing statement". In this Section and in R.S. 10:9-806, "pre-effective-date financing statement" means a financing statement filed before the Act takes effect.
(b) Applicable law. After the Act takes effect, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or otherwise amend the information provided in, a pre-effective-date financing statement only in accordance with the law of the jurisdiction governing perfection as provided in Chapter 9 as amended by the Act; however, the effectiveness of a pre-effective-date financing statement also may be terminated in accordance with the law of the jurisdiction in which the financing statement is filed.
(c) Method of amending: general rule. Except as otherwise provided in Subsection (d) of this Section, if the law of this state governs perfection of a security interest, the information in a pre-effective-date financing statement may be amended after the Act takes effect only if:
(1) the pre-effective-date financing statement and an amendment are filed in the office specified in R.S. 10:9-501;
(2) an amendment is filed in the office specified in R.S. 10:9-512(a) concurrently with, or after the filing in that office of, an initial financing statement that satisfies R.S. 10:9-806(c); or
(3) an initial financing statement that provides the information as amended and satisfies R.S. 10:9-806(c) is filed in the office specified in R.S. 10:9-501.
(d) Method of amending: continuation. If the law of this state governs perfection of a security interest, the effectiveness of a pre-effective-date financing statement may be continued only under R.S. 10:9-805(c) and (e) or 9-806.
(e) Method of amending: additional termination rule. Whether or not the law of this state governs perfection of a security interest, the effectiveness of a pre-effective-date financing statement filed in this state may be terminated after the Act takes effect by filing a termination statement in the office in which the pre-effective-date financing statement is filed, unless an initial financing statement that satisfies R.S. 10:9-806(c) has been filed in the office specified by the law of the jurisdiction governing perfection as provided in Chapter 9 as amended by the Act as the office in which to file a financing statement.
Acts 2012, No. 450, §2, eff. July 1, 2013.
§9-808. Person 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 the Act takes effect; or
(B) to perfect or continue the perfection of a security interest.
Acts 2012, No. 450, §2, eff. July 1, 2013.
§9-809. Priority
Chapter 9 as amended by the Act determines the priority of conflicting claims to collateral; however, if the relative priorities of the claims were established before the Act takes effect, Chapter 9 as it existed before amendment determines priority.
Acts 2012, No. 450, §2, eff. July 1, 2013.