CO Code § 4-9-601 (2021)
2021 Colorado Code|Title 4 - Uniform Commercial Code|Article 9 - Secured Transactions|Part 6 - Default|§ 4-9-601. Rights After Default - Judicial Enforcement - Consignor or Buyer of Accounts, Chattel Paper, Payment Intangibles, or Promissory Notes

  After default, a secured party has the rights provided in this part 6 and, except as otherwise provided in section 4-9-602, those provided by agreement of the parties. A secured party:   May reduce a claim to judgment, foreclose, or otherwise enforce the claim, security interest, or agricultural lien by any available judicial procedure; and    If the collateral is documents, may proceed either as to the documents or as to the goods they cover.       A secured party in possession of collateral or control of collateral under section 4-7-106, 4-9-104, 4-9-105, 4-9-106, or 4-9-107 has the rights and duties provided in section 4-9-207.    The rights under subsections (a) and (b) of this section are cumulative and may be exercised simultaneously.    Except as otherwise provided in subsection (g) of this section and section 4-9-605, after default, a debtor and an obligor have the rights provided in this part 6 and by agreement of the parties.    If a secured party has reduced its claim to judgment, the lien of any levy that may be made upon the collateral by virtue of an execution based upon the judgment relates back to the earliest of:   The date of perfection of the security interest or agricultural lien in the collateral;    The date of filing a financing statement covering the collateral; or    Any date specified in a statute under which the agricultural lien was created.       A sale pursuant to an execution is a foreclosure of the security interest or agricultural lien by judicial procedure within the meaning of this section. A secured party may purchase at the sale and thereafter hold the collateral free of any other requirements of this article.    Except as otherwise provided in section 4-9-607 (c), this part 6 imposes no duties upon a secured party that is a consignor or is a buyer of accounts, chattel paper, payment intangibles, or promissory notes.    For purposes of this part 6, in taking possession of collateral by self-help, “breach of the peace” includes, but is not limited to, engaging in the following actions without the contemporaneous permission of the debtor:   Entering a locked or unlocked residence or residential garage;    Breaking, opening, or moving any lock, gate, or other barrier to enter enclosed real property; or    Using or threatening to use violent means.        History. Source: L. 2001: Entire article R&RE, p. 1397, § 1, effective July 1. L. 2006: (b) amended, p. 503, § 44, effective September 1.    Cross references:   For offenses relating to this title, see part 5 of article 5 of title 18.   Official Comments   Copyright by the American Law Institute and the National Conference of Commissioners on Uniform State Laws. Reproduced with the permission of the Permanent Editorial Board for the Uniform Commercial Code. All rights reserved. —   Editor's note:   The Official Comments to the Uniform Commercial Code are available only in the printed book form of Colorado Revised Statutes. As noted above, the Official Comments are subject to copyright by the American Law Institute and the National Conference of Commissioners on Uniform State Laws. At this time, Colorado has a license to reprint the Official Comments in the printed book form.   Editor's note:    The numbering and sequencing of C.R.S. subsections do not necessarily correspond with the numbering and sequencing of subsections in the uniform act.    This article was numbered as article 9 of chapter 155, C.R.S. 1963. The provisions of this article were repealed and reenacted in 2001, resulting in the addition, relocation, and elimination of sections as well as subject matter. For amendments to this article prior to 2001, consult the Colorado statutory research explanatory note and the table itemizing the replacement volumes and supplements to the original volume of C.R.S. 1973 beginning on page vii in the front of this volume. Former C.R.S. section numbers are shown in editor's notes following those sections that were relocated. For a detailed comparison of this article, see the comparative tables located in the back of the index.     Law reviews:   For article, “Lien and Security Interest Provision of AAPL Model Operating Agreement”, see 13 Colo. Law. 1216 ; for a discussion of a Tenth Circuit decision dealing with secured transactions, see 66 Den. U. L. Rev. 795 (1989); for article, “Mastering The Maze of Secured Transactions - Part 1”, see 21 Colo. Law. 2329 (1992); for article, “Remastering the Maze: Revisions to UCC Article 9 Filing Provisions”, see 25 Colo. Law. 3 (June 1996); for article, “Introducing Revised Article 9 of the Uniform Commercial Code”, see 30 Colo. Law. 9 (Sept. 2001); for article, “Perfecting Security Interests in Intellectual Property”, see 32 Colo. Law. 85 (April 2003).   Editor's note:    This section is similar to former § 4-9-501 as it existed prior to 2001.    Colorado legislative change: Colorado added subsection (h).     OFFICIAL COMMENT   1. Source. Former Section 9-501(1), (2), (5).   2. Enforcement: In General. The rights of a secured party to enforce its security interest in collateral after the debtor's default are an important feature of a secured transaction. (Note that the term “rights,” as defined in Section 1-201, includes “remedies.”) This Part provides those rights as well as certain limitations on their exercise for the protection of the defaulting debtor, other creditors, and other affected persons. However, subsections (a) and (d) make clear that the rights provided in this Part do not exclude other rights provided by agreement.   3. When Remedies Arise. Under subsection (a) the secured party's rights arise “[a]fter default.” As did former Section 9-501, this Article leaves to the agreement of the parties the circumstances giving rise to a default. This Article does not determine whether a secured party's post-default conduct can constitute a waiver of default in the face of an agreement stating that such conduct shall not constitute a waiver. Rather, it continues to leave to the parties' agreement, as supplemented by law other than this Article, the determination whether a default has occurred or has been waived. See Section 1-103.   4. Possession of Collateral; Section 9-207. After a secured party takes possession of collateral following a default, there is no longer any distinction between a security interest that before default was nonpossessory and a security interest that was possessory before default, as under a common-law pledge. This Part generally does not distinguish between the rights of a secured party with a nonpossessory security interest and those of a secured party with a possessory security interest. However, Section 9-207 addresses rights and duties with respect to collateral in a secured party's possession. Under subsection (b) of this section, Section 9-207 applies not only to possession before default but also to possession after default. Subsection (b) also has been conformed to Section 9-207, which, unlike former Section 9-207, applies to secured parties having control of collateral.   5. Cumulative Remedies. Former Section 9-501(1) provided that the secured party's remedies were cumulative, but it did not explicitly provide whether the remedies could be exercised simultaneously. Subsection (c) permits the simultaneous exercise of remedies if the secured party acts in good faith. The liability scheme of Subpart 2 affords redress to an aggrieved debtor or obligor. Moreover, permitting the simultaneous exercise of remedies under subsection (c) does not override any non-UCC law, including the law of tort and statutes regulating collection of debts, under which the simultaneous exercise of remedies in a particular case constitutes abusive behavior or harassment giving rise to liability.   6. Judicial Enforcement. Under subsection (a) a secured party may reduce its claim to judgment or foreclose its interest by any available procedure outside this Article under applicable law. Subsection (e) generally follows former Section 9-501(5). It makes clear that any judicial lien that the secured party may acquire against the collateral effectively is a continuation of the original security interest (if perfected) and not the acquisition of a new interest or a transfer of property on account of a preexisting obligation. Under former Section 9-501(5), the judicial lien was stated to relate back to the date of perfection of the security interest. Subsection (e), however, provides that the lien relates back to the earlier of the date of filing or the date of perfection. This provides a secured party who enforces a security interest by judicial process with the benefit of the “first-to-file-or-perfect” priority rule of Section 9-322(a)(1).   7. Agricultural Liens. Part 6 provides parallel treatment for the enforcement of agricultural liens and security interests. Because agricultural liens are statutory rather than consensual, this Article does draw a few distinctions between these liens and security interests. Under subsection (e), the statute creating an agricultural lien would govern whether and the date to which an execution lien relates back. Section 9-606 explains when a “default” occurs in the agricultural lien context.   8. Execution Sales. Subsection (f) also follows former Section 9-501(5). It makes clear that an execution sale is an appropriate method of foreclosure contemplated by this Part. However, the sale is governed by other law and not by this Article, and the limitations under Section 9-610 on the right of a secured party to purchase collateral do not apply.   9. Sales of Receivables; Consignments. Subsection (g) provides that, except as provided in Section 9-607(c), the duties imposed on secured parties do not apply to buyers of accounts, chattel paper, payment intangibles, or promissory notes. Although denominated “secured parties,” these buyers own the entire interest in the property sold and so may enforce their rights without regard to the seller (“debtor”) or the seller's creditors. Likewise, a true consignor may enforce its ownership interest under other law without regard to the duties that this Part imposes on secured parties. Note, however, that Section 9-615 governs cases in which a consignee's secured party (other than a consignor) is enforcing a security interest that is senior to the security interest (i.e., ownership interest) of a true consignor.   ANNOTATION   Law reviews. For article, “The Revolution in Consumer Credit Legislation”, see 45 Den. L.J. 679 (1968). For article, “Secured Transactions — Part I: Attachment, Perfection and Priorities”, see 11 Colo. Law. 2939 (1982). For article, “Secured Transactions — Part II: Default, Foreclosure and Bankruptcy”, see 12 Colo. Law. 13 (1983).   Annotator's note. Since § 4-9-601 is similar to § 4-9-501 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.   In an action to recover a deficiency judgment, the burden is upon the secured party to prove the amount of the deficiency. Cmty. Mgt. Ass'n of Colo. Springs, Inc. v. Tousley, 32 Colo. App. 33, 505 P.2d 1314 (1973).   A secured creditor need not “elect” his choice of remedies. He may pursue those methods of collection afforded under the code or through judicial processes otherwise available. Nor by effectuating the latter course of action does the creditor relinquish any rights obtained by virtue of his security interest. Bilar, Inc. v. Sherman, 40 Colo. App. 38, 572 P.2d 489 (1977).   Creditor is not required to make election of remedies, as rights and remedies of subsection (1) are cumulative. Wiley v. Bank of Fountain Valley, 632 P.2d 282 (Colo. App. 1981); Flexisystems, Inc. v. Am. Standards Testing Bureau, Inc., 847 P.2d 207 (Colo. App. 1992).   Creditor may proceed against real and personal property separately. Subsection (4) does not prohibit a creditor from proceeding against both real and personal property collateral simultaneously in separate proceedings. Wiley v. Bank of Fountain Valley, 632 P.2d 282 (Colo. App. 1981).   “Debtor” includes a guarantor and, as a debtor, the guarantor may not waive debtor's right to insist on a commercially reasonable disposition of collateral. May v. Women's Bank, N.A., 807 P.2d 1145 (Colo. 1991).   Section 4-9-504 is made inoperative by this section with respect to water stock foreclosed as a part of real estate security. Kinoshita v. North Denver Bank, 181 Colo. 183 , 508 P.2d 1264 (1973).   Possession of chattels subject to security agreement. Secured party should have been granted immediate possession of chattels which were subject to the security agreement where the memorandum of agreement between the parties provided for foreclosure under the uniform commercial code. Alexander Dawson, Inc. v. Sage Creek Canyon Co., 37 Colo. App. 339, 546 P.2d 969 (1976).   A secured creditor who does not have possession of his security need not be granted a hearing before seizure of his security under a prior tax lien. Antonoff v. City & County of Denver, 195 Colo. 227 , 577 P.2d 281 (1978).   Notice required under § 4-9-504 (3) may not be waived. United Bank v. Reed, 635 P.2d 922 (Colo. App. 1981).   Presumption that proceeds from sale without notice equal balance owing. Where there is no notice prior to sale of collateral, it is rebuttably presumed that the value of the collateral sold is equal to the balance owing on any notes. To rebut the presumption, the secured party has the burden of proving, by other evidence, the market value of the collateral and that, after application of that amount, there was a balance still owing on the notes. United Bank v. Reed, 635 P.2d 922 (Colo. App. 1981).   Applied in First Nat'l Bank v. Cillessen, 622 P.2d 598 (Colo. App. 1980); Hollemon v. Murray, 666 P.2d 1107 (Colo. App. 1982).