CO Code § 4-9-609 (2021)
2021 Colorado Code|Title 4 - Uniform Commercial Code|Article 9 - Secured Transactions|Part 6 - Default|§ 4-9-609. Secured Party's Right to Take Possession After Default

  After default, a secured party:   May take possession of the collateral; and    Without removal, may render equipment unusable and dispose of collateral on a debtor's premises under section 4-9-610.       A secured party may proceed under subsection (a) of this section:   Pursuant to judicial process; or    Without judicial process, if it proceeds without breach of the peace.       If so agreed, and in any event after default, a secured party may require the debtor to assemble the collateral and make it available to the secured party at a place to be designated by the secured party which is reasonably convenient to both parties.    If the collateral is a manufactured home or trailer coach, as defined in section 42-1-102 (106), C.R.S., and is used and occupied by the debtor as a place of residence, the secured party may take possession of the collateral pursuant to this section without judicial process only if there is clear and convincing evidence that the debtor has vacated or abandoned the collateral or the debtor voluntarily surrenders the collateral to the secured party.    In exercising its rights under paragraph (2) of subsection (a) of this section with respect to collateral, a secured party may not disable or render unusable any computer program or other similar device embedded in the collateral if immediate injury to any person or property is a reasonably foreseeable consequence of such action. Any secured party who disables or renders unusable such a computer program or other similar device in such circumstances shall be liable in accordance with applicable rules of law to any person who sustains an injury to person or property as a reasonably foreseeable result of the secured party's action.     History. Source: L. 2001: Entire article R&RE, p. 1403, § 1, effective July 1.    Editor's note:    This section is similar to former § 4-9-503 as it existed prior to 2001.    Colorado legislative change: Colorado added subsections (d) and (e).     OFFICIAL COMMENT   1. Source. Former Section 9-503.   2. Secured Party's Right to Possession. This section follows former Section 9-503 and earlier uniform legislation. It provides that the secured party is entitled to take possession of collateral after default.   3. Judicial Process; Breach of Peace. Subsection (b) permits a secured party to proceed under this section without judicial process if it does so “without breach of the peace.” Although former Section 9-503 placed the same condition on a secured party's right to take possession of collateral, subsection (b) extends the condition to the right provided in subsection (a)(2) as well. Like former Section 9-503, this section does not define or explain the conduct that will constitute a breach of the peace, leaving that matter for continuing development by the courts. In considering whether a secured party has engaged in a breach of the peace, however, courts should hold the secured party responsible for the actions of others taken on the secured party's behalf, including independent contractors engaged by the secured party to take possession of collateral.   This section does not authorize a secured party who repossesses without judicial process to utilize the assistance of a law-enforcement officer. A number of cases have held that a repossessing secured party's use of a law-enforcement officer without benefit of judicial process constituted a failure to comply with former Section 9-503.   4. Damages for Breach of Peace. Concerning damages that may be recovered based on a secured party's breach of the peace in connection with taking possession of collateral, see Section 9-625, Comment 3.   5. Multiple Secured Parties. More than one secured party may be entitled to take possession of collateral under this section. Conflicting rights to possession among secured parties are resolved by the priority rules of this Article. Thus, a senior secured party is entitled to possession as against a junior claimant. Non-UCC law governs whether a junior secured party in possession of collateral is liable to the senior in conversion. Normally, a junior who refuses to relinquish possession of collateral upon the demand of a secured party having a superior possessory right to the collateral would be liable in conversion.   6. Secured Party's Right to Disable and Dispose of Equipment on Debtor's Premises. In the case of some collateral, such as heavy equipment, the physical removal from the debtor's plant and the storage of the collateral pending disposition may be impractical or unduly expensive. This section follows former Section 9-503 by providing that, in lieu of removal, the secured party may render equipment unusable or may dispose of collateral on the debtor's premises. Unlike former Section 9-503, however, this section explicitly conditions these rights on the debtor's default. Of course, this section does not validate unreasonable action by a secured party. Under Section 9-610, all aspects of a disposition must be commercially reasonable.   7. Debtor's Agreement to Assemble Collateral. This section follows former Section 9-503 also by validating a debtor's agreement to assemble collateral and make it available to a secured party at a place that the secured party designates. Similar to the treatment of agreements to permit collection prior to default under Section 9-607 and former 9-502, however, this section validates these agreements whether or not they are conditioned on the debtor's default. For example, a debtor might agree to make available to a secured party, from time to time, any instruments or negotiable documents that the debtor receives on account of collateral. A court should not infer from this section's validation that a debtor's agreement to assemble and make available collateral would not be enforceable under other applicable law.   8. Agreed Standards. Subject to the limitation imposed by Section 9-603(b), this section's provisions concerning agreements to assemble and make available collateral and a secured party's right to disable equipment and dispose of collateral on a debtor's premises are likely topics for agreement on standards as contemplated by Section 9-603.   ANNOTATION   Annotator's note. Since § 4-9-609 is similar to § 4-9-503 as it existed prior to the 2001 repeal and reenactment of this article, relevant cases construing that provision have been included in the annotations to this section.   Law reviews. For comment discussing 14th amendment “state action” ramifications and constitutionality of self-help repossessions under the U.C.C., see 44 U. Colo. L. Rev. 389 . For comment discussing whether repossession by a secured creditor pursuant to statutory and contractual provisions constitutes state action, see 50 Den. L.J. 261 (1973). For article, "Buyer-Secured Party Conflicts Under Section 9-307(1) of the Uniform Commercial Code", see 46 U. Colo. L. Rev. 333 (1974-75). For article, “Secured Transactions — Part II: Default, Foreclosure and Bankruptcy”, see 12 Colo. Law. 13 (1983). For article, “A Review of Agricultural Law: Hard Times and Hard Choices”, see 15 Colo. Law. 629 (1986). For article, “The Colorado Farm Homestead Protection Act”, see 15 Colo. Law 1642 (1986). For article, “Agricultural Lending in a Troubled Economy”, see 16 Colo. Law. 1773 (1987). For article, “The Agricultural Credit Act of 1987”, see 17 Colo. Law. 611 (1988).   As applied to facts of case section not unconstitutional. Where the secured creditor gave the debtor every opportunity to avoid default, and only after the debtor refused to make any effort to pay and he was informed by the creditor that the creditor had no choice but to repossess, did the creditor resort to repossession, as applied to these facts, this section is not unconstitutional for violating due process. John Deere Co. v. Catalano, 186 Colo. 101 , 525 P.2d 1153 (1974).   Authorization of self-help repossessions is not enough to sufficiently involve the state in the acts of repossessors for their acts to be action “under color of” state law. Kirksey v. Theilig, 351 F. Supp. 727 (D. Colo. 1972 ).   Article 9 does not determine location of title after default. People ex rel. VanMeveren v. District Court, 619 P.2d 494 (Colo. 1980).   Traditional state rule allows repossession of security. In Colorado, as elsewhere, the state's traditional rule has been to allow the secured creditor to repossess the security if the contract so provides and the repossession does not “breach the peace”. John Deere Co. v. Catalano, 186 Colo. 101 , 525 P.2d 1153 (1974).   Right to possession is not limited by this section to the creditor whose security interest has the higher priority. Western Nat'l Bank v. ABC Drilling Co., 42 Colo. App. 407, 599 P.2d 942 (1979).   Section adds nothing if parties previously agree on such remedy. While the enactment of this section provides for self-help repossession in absence of contrary contract provisions, it adds nothing to the situation where the parties have previously agreed on such a remedy and the procedure is carried out without significant state help. John Deere Co. v. Catalano, 186 Colo. 101 , 525 P.2d 1153 (1974).   No right to jury trial before repossession. Although C.R.C.P. 38 provides that a party is entitled to a jury trial upon demand in an action for the recovery of specific real or personal property, the rule is not intended to extend to actions involving the repossession of collateral by a secured party. Western Nat'l Bank v. ABC Drilling Co., 42 Colo. App. 407, 599 P.2d 942 (1979).   In event of default, voluntary delivery of collateral to creditor constitutes a repossession and does not remove the matter from the UCC. Tajalli v. Gharibi, 758 P.2d 190 (Colo. App. 1988).   Applied in First Nat'l Bank v. District Court, 653 P.2d 1123 (Colo. 1982); Layne v. Fort Carson Nat'l Bank, 655 P.2d 856 (Colo. App. 1982); Wynn v. Adams County Bank, 761 P.2d 234 (Colo. App. 1988).