Bill Text: VA SB51 | 2012 | Regular Session | Engrossed
Bill Title: Uniform Commercial Code; secured transactions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2012-03-07 - Governor: Acts of Assembly Chapter text (CHAP0155) [SB51 Detail]
Download: Virginia-2012-SB51-Engrossed.html
|
12101064D
Be it enacted by the General Assembly of Virginia: 1. That §§4.1-212, 8.2A-103, 8.9A-102, 8.9A-105, 8.9A-307, 8.9A-311, 8.9A-316, 8.9A-317, 8.9A-326, 8.9A-406, 8.9A-408, 8.9A-502, 8.9A-503, 8.9A-507, 8.9A-515, 8.9A-516, 8.9A-518, 8.9A-526, 8.9A-527, and 8.9A-607 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding a section numbered 8.9A-521.1 and by adding in Title 8.9A a part numbered 8, consisting of sections numbered 8.9A-801 through 8.9A-809, as follows: §4.1-212. Permits required in certain instances. A. The Board may grant the following permits which shall authorize: 1. Wine and beer salesmen representing any out-of-state wholesaler engaged in the sale of wine and beer, or either, to sell or solicit the sale of wine or beer, or both in the Commonwealth. 2. Any person having any interest in the manufacture, distribution or sale of spirits or other alcoholic beverages to solicit any mixed beverage licensee, his agent, employee or any person connected with the licensee in any capacity in his licensed business to sell or offer for sale such spirits or alcoholic beverages. 3. Any person to keep upon his premises alcoholic beverages which he is not authorized by any license to sell and which shall be used for culinary purposes only. 4. Any person to transport lawfully purchased alcoholic beverages within, into or through the Commonwealth, except that no permit shall be required for any person shipping or transporting into the Commonwealth a reasonable quantity of alcoholic beverages when such person is relocating his place of residence to the Commonwealth in accordance with §4.1-310. 5. Any person to keep, store or possess any still or distilling apparatus. 6. The release of alcoholic beverages not under United State s custom bonds or internal revenue bonds stored in Board approved warehouses for delivery to the Board or to persons entitled to receive them within or outside of the Commonwealth. 7. The release of alcoholic beverages from United States customs bonded warehouses for delivery to the Board or to licensees and other persons enumerated in subsection B of §4.1-131. 8. The release of alcoholic beverages from United States internal revenue bonded warehouses for delivery in accordance with subsection C of §4.1-132. 9. A secured party or any trustee, curator, committee, conservator, receiver or other fiduciary appointed or qualified in any court proceeding, to continue to operate under the licenses previously issued to any deceased or other person licensed to sell alcoholic beverages for such period as the Board deems appropriate. 10. The one-time sale of lawfully acquired alcoholic beverages
belonging to any person, or which may be a part of such person's estate,
including a judicial sale, estate sale, sale to enforce a judgment lien or
liquidation sale to satisfy indebtedness secured by a security interest in
alcoholic beverages, by a sheriff, personal representative, receiver or other
officer acting under authority of a court having jurisdiction in the
Commonwealth, or by any secured party as defined in subdivision (a) 11. Any person who purchases at a foreclosure, secured creditor's or judicial auction sale the premises or property of a person licensed by the Board and who has become lawfully entitled to the possession of the licensed premises to continue to operate the establishment to the same extent as a person holding such licenses for a period not to exceed 60 days or for such longer period as determined by the Board. Such permit shall be temporary and shall confer the privileges of any licenses held by the previous owner to the extent determined by the Board. Such temporary permit may be issued in advance, conditioned on the above requirements. 12. The sale of wine and beer in kegs by any person licensed to sell wine or beer, or both, at retail for off-premises consumption. 13. The storage of lawfully acquired alcoholic beverages not under customs bond or internal revenue bond in warehouses located in the Commonwealth. 14. The storage of wine by a licensed winery or farm winery under internal revenue bond in warehouses located in the Commonwealth. 15. Any person to conduct tastings in accordance with § 4.1-201.1, provided that such person has filed an application for a permit in which the applicant represents (i) that he or she is under contract to conduct such tastings on behalf of the alcoholic beverage manufacturer or wholesaler named in the application; (ii) that such contract grants to the applicant the authority to act as the authorized representative of such manufacturer or wholesaler; and (iii) that such contract contains an acknowledgment that the manufacturer or wholesaler named in the application may be held liable for any violation of §4.1-201.1 by its authorized representative. A permit issued pursuant to this subdivision shall be valid for at least one year, unless sooner suspended or revoked by the Board in accordance with §4.1-229. 16. Any person who, through contract, lease, concession, license, management or similar agreement (hereinafter referred to as the contract), becomes lawfully entitled to the use and control of the premises of a person licensed by the Board to continue to operate the establishment to the same extent as a person holding such licenses, provided such person has made application to the Board for a license at the same premises. The permit shall (i) confer the privileges of any licenses held by the previous owner to the extent determined by the Board and (ii) be valid for a period of 120 days or for such longer period as may be necessary as determined by the Board pending the completion of the processing of the permittee's license application. No permit shall be issued without the written consent of the previous licensee. No permit shall be issued under the provisions of this subdivision if the previous licensee owes any state or local taxes, or has any pending charges for violation of this title or any Board regulation, unless the permittee agrees to assume the liability of the previous licensee for the taxes or any penalty for the pending charges. An application for a permit may be filed prior to the effective date of the contract, in which case the permit when issued shall become effective on the effective date of the contract. Upon the effective date of the permit, (a) the permittee shall be responsible for compliance with the provisions of this title and any Board regulation and (b) the previous licensee shall not be held liable for any violation of this title or any Board regulation committed by, or any errors or omissions of, the permittee. B. Nothing in subdivision 9, 10, or 11 shall authorize any brewery, winery or affiliate or a subsidiary thereof which has supplied financing to a wholesale licensee to manage and operate the wholesale licensee in the event of a default, except to the extent authorized by subdivision B 3 a of §4.1-216. §8.2A-103. Definitions and index of definitions. (1) In this title unless the context otherwise requires: (a) "Buyer in ordinary course of business" means a person who in good faith and without knowledge that the sale to him or her is in violation of the ownership rights or security interest or leasehold interest of a third party in the goods, buys in ordinary course from a person in the business of selling goods of that kind but does not include a pawnbroker. "Buying" may be for cash or by exchange of other property or on secured or unsecured credit and includes acquiring goods or documents of title under a preexisting contract for sale but does not include a transfer in bulk or as security for or in total or partial satisfaction of a money debt. (b) "Cancellation" occurs when either party puts an end to the lease contract for default by the other party. (c) "Commercial unit" means such a unit of goods as by commercial usage is a single whole for purposes of lease and division of which materially impairs its character or value on the market or in use. A commercial unit may be a single article, as a machine, or a set of articles, as a suite of furniture or a line of machinery, or a quantity, as a gross or carload, or any other unit treated in use or in the relevant market as a single whole. (d) "Conforming" goods or performance under a lease contract means goods or performance that are in accordance with the obligations under the lease contract. (e) "Consumer lease" means a lease that a lessor regularly engaged in the business of leasing or selling makes to a lessee who is an individual and who takes under the lease primarily for a personal, family, or household purpose. (f) "Fault" means wrongful act, omission, breach, or default. (g) "Finance lease" means a lease with respect to which: (i) The lessor does not select, manufacture, or supply the goods; (ii) The lessor acquires the goods or the right to possession and use of the goods in connection with the lease; and (iii) One of the following occurs: (A) The lessee receives a copy of the contract by which the lessor acquired the goods or the right to possession and use of the goods before signing the lease contract; (B) The lessee's approval of the contract by which the lessor acquired the goods or the right to possession and use of the goods is a condition to effectiveness of the lease contract; (C) The lessee, before signing the lease contract, receives an accurate and complete statement designating the promises and warranties, and any disclaimers of warranties, limitations or modifications of remedies, or liquidated damages, including those of a third party, such as the manufacturer of the goods, provided to the lessor by the person supplying the goods in connection with or as part of the contract by which the lessor acquired the goods or the right to possession and use of the goods; or (D) If the lease is not a consumer lease, the lessor, before the lessee signs the lease contract, informs the lessee in writing (a) of the identity of the person supplying the goods to the lessor, unless the lessee has selected that person and directed the lessor to acquire the goods or the right to possession and use of the goods from that person, (b) that the lessee is entitled under this title to the promises and warranties, including those of any third party, provided to the lessor by the person supplying the goods in connection with or as part of the contract by which the lessor acquired the goods or the right to possession and use of the goods, and (c) that the lessee may communicate with the person supplying the goods to the lessor and receive an accurate and complete statement of those promises and warranties, including any disclaimers and limitations of them or of remedies. (h) "Goods" means all things that are movable at the time of identification to the lease contract, or are fixtures (§8.2A-309), but the term does not include money, documents, instruments, accounts, chattel paper, general intangibles, or minerals or the like, including oil and gas, before extraction. The term also includes the unborn young of animals. (i) "Installment lease contract" means a lease contract that authorizes or requires the delivery of goods in separate lots to be separately accepted, even though the lease contract contains a clause "each delivery is a separate lease" or its equivalent. (j) "Lease" means a transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease. Unless the context clearly indicates otherwise, the term includes a sublease. (k) "Lease agreement" means the bargain, with respect to the lease, of the lessor and the lessee in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance as provided in this title. Unless the context clearly indicates otherwise, the term includes a sublease agreement. (l) "Lease contract" means the total legal obligation that results from the lease agreement as affected by this title and any other applicable rules of law. Unless the context clearly indicates otherwise, the term includes a sublease contract. (m) "Leasehold interest" means the interest of the lessor or the lessee under a lease contract. (n) "Lessee" means a person who acquires the right to possession and use of goods under a lease. Unless the context clearly indicates otherwise, the term includes a sublessee. (o) "Lessee in ordinary course of business" means a person who in good faith and without knowledge that the lease to him or her is in violation of the ownership rights or security interest or leasehold interest of a third party in the goods leases in ordinary course from a person in the business of selling or leasing goods of that kind but does not include a pawnbroker. "Leasing" may be for cash or by exchange of other property or on secured or unsecured credit and includes acquiring goods or documents of title under a preexisting lease contract but does not include a transfer in bulk or as security for or in total or partial satisfaction of a money debt. (p) "Lessor" means a person who transfers the right to possession and use of goods under a lease. Unless the context clearly indicates otherwise, the term includes a sublessor. (q) "Lessor's residual interest" means the lessor's interest in the goods after expiration, termination, or cancellation of the lease contract. (r) "Lien" means a charge against or interest in goods to secure payment of a debt or performance of an obligation, but the term does not include a security interest. (s) "Lot" means a parcel or a single article that is the subject matter of a separate lease or delivery, whether or not it is sufficient to perform the lease contract. (t) "Merchant lessee" means a lessee that is a merchant with respect to goods of the kind subject to the lease. (u) "Present value" means the amount as of a date certain of one or more sums payable in the future, discounted to the date certain. The discount is determined by the interest rate specified by the parties if the rate was not manifestly unreasonable at the time the transaction was entered into; otherwise, the discount is determined by a commercially reasonable rate that takes into account the facts and circumstances of each case at the time the transaction was entered into. (v) "Purchase" includes taking by sale, lease, mortgage, security interest, pledge, gift, or any other voluntary transaction creating an interest in goods. (w) "Sublease" means a lease of goods the right to possession and use of which was acquired by the lessor as a lessee under an existing lease. (x) "Supplier" means a person from whom a lessor buys or leases goods to be leased under a finance lease. (y) "Supply contract" means a contract under which a lessor buys or leases goods to be leased. (z) "Termination" occurs when either party pursuant to a power created by agreement or law puts an end to the lease contract otherwise than for default. (2) Other definitions applying to this title and the sections in which they appear are: "Accessions" §8.2A-310 (1). "Construction mortgage" §8.2A-309 (1) (d). "Encumbrance" §8.2A-309 (1) (e). "Fixtures" §8.2A-309 (1) (a). "Fixture filing" §8.2A-309 (1) (b). "Purchase money lease" §8.2A-309 (1) (c). (3) The following definitions in other titles apply to this title: "Account" §8.9A-102 (a) (2). "Between merchants" §8.2-104 (3). "Buyer" §8.2-103 (1) (a). "Chattel paper" §8.9A-102 (a) (11). "Consumer goods" §8.9A-102 (a) (23). "Document" §8.9A-102 (a) (30). "Entrusting" §8.2-403 (3). "General intangible" §8.9A-102 (a) (42). "Good faith" §8.2-103 (1) (b). "Instrument" §8.9A-102 (a) (47). "Merchant" §8.2-104 (1). "Mortgage" §8.9A-102 (a) (55). "Pursuant to commitment" "Receipt" §8.2-103 (1) (c). "Sale" §8.2-106 (1). "Sale on approval" §8.2-326. "Sale or return" §8.2-326. "Seller" §8.2-103 (1) (d). (4) In addition, Title 8.1A contains general definitions and principles of construction and interpretation applicable throughout this title. §8.9A-102. Definitions and index of definitions. (a) Title 8.9A definitions. In this title: (1) "Accession" means goods that are physically united with other goods in such a manner that the identity of the original goods is not lost. (2) "Account," except as used in "account for," means a right to payment of a monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) health-care-insurance receivables. The term does not include (i) rights to payment evidenced by chattel paper or an instrument, (ii) commercial tort claims, (iii) deposit accounts, (iv) investment property, (v) letter-of-credit rights or letters of credit, or (vi) rights to payment for money or funds advanced or sold, other than rights arising out of the use of a credit or charge card or information contained on or for use with the card. (3) "Account debtor" means a person obligated on an account, chattel paper, or general intangible. The term does not include persons obligated to pay a negotiable instrument, even if the instrument constitutes part of chattel paper. (4) "Accounting," except as used in "accounting for," means a record: (A) authenticated by a secured party; (B) indicating the aggregate unpaid secured obligations as of a date not more than 35 days earlier or 35 days later than the date of the record; and (C) identifying the components of the obligations in reasonable detail. (5) "Agricultural lien" means an interest, other than a security interest, in farm products: (A) which secures payment or performance of an obligation for: (i) goods or services furnished in connection with a debtor's farming operation; or (ii) rent on real property leased by a debtor in connection with its farming operation; (B) which is created by statute in favor of a person that: (i) in the ordinary course of its business furnished goods or services to a debtor in connection with a debtor's farming operation; or (ii) leased real property to a debtor in connection with the debtor's farming operation; and (C) whose effectiveness does not depend on the person's possession of the personal property. (6) "As-extracted collateral" means: (A) oil, gas, or other minerals that are subject to a security interest that: (i) is created by a debtor having an interest in the minerals before extraction; and (ii) attaches to the minerals as extracted; or (B) accounts arising out of the sale at the wellhead or minehead of oil, gas, or other minerals in which the debtor had an interest before extraction. (7) "Authenticate" means: (A) to sign; or (B) (8) "Bank" means an organization that is engaged in the business of banking. The term includes savings banks, savings and loan associations, credit unions, and trust companies. (9) "Cash proceeds" means proceeds that are money, checks, deposit accounts, or the like. (10) "Certificate of title" means a certificate of title with respect to which a statute provides for the security interest in question to be indicated on the certificate as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the collateral. The term includes another record maintained as an alternative to a certificate of title by the governmental unit that issues certificates of title if a statute permits the security interest in question to be indicated on the record as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the collateral. (11) "Chattel paper" means a record or records that evidence both a monetary obligation and a security interest in specific goods, a security interest in specific goods and software used in the goods, a security interest in specific goods and license of software used in the goods, a lease of specific goods, or a lease of specific goods and license of software used in the goods. In this paragraph, "monetary obligation" means a monetary obligation secured by the goods or owed under a lease of the goods and includes a monetary obligation with respect to software used in the goods. The term does not include (i) charters or other contracts involving the use or hire of a vessel or (ii) records that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card. If a transaction is evidenced by records that include an instrument or series of instruments, the group of records taken together constitutes chattel paper. (12) "Collateral" means the property subject to a security interest or agricultural lien. The term includes: (A) proceeds to which a security interest attaches; (B) accounts, chattel paper, payment intangibles, and promissory notes that have been sold; and (C) goods that are the subject of a consignment. (13) "Commercial tort claim" means a claim arising in tort with respect to which: (A) the claimant is an organization; or (B) the claimant is an individual and the claim: (i) arose in the course of the claimant's business or profession; and (ii) does not include damages arising out of personal injury to or the death of an individual. (14) "Commodity account" means an account maintained by a commodity intermediary in which a commodity contract is carried for a commodity customer. (15) "Commodity contract" means a commodity futures contract, an option on a commodity futures contract, a commodity option, or another contract if the contract or option is: (A) traded on or subject to the rules of a board of trade that has been designated as a contract market for such a contract pursuant to federal commodities laws; or (B) traded on a foreign commodity board of trade, exchange, or market, and is carried on the books of a commodity intermediary for a commodity customer. (16) "Commodity customer" means a person for which a commodity intermediary carries a commodity contract on its books. (17) "Commodity intermediary" means a person that: (A) is registered as a futures commission merchant under federal commodities law; or (B) in the ordinary course of its business provides clearance or settlement services for a board of trade that has been designated as a contract market pursuant to federal commodities law. (18) "Communicate" means: (A) to send a written or other tangible record; (B) to transmit a record by any means agreed upon by the persons sending and receiving the record; or (C) in the case of transmission of a record to or by a filing office, to transmit a record by any means prescribed by filing-office rule. (19) "Consignee" means a merchant to which goods are delivered in a consignment. (20) "Consignment" means a transaction, regardless of its form, in which a person delivers goods to a merchant for the purpose of sale and: (A) the merchant: (i) deals in goods of that kind under a name other than the name of the person making delivery; (ii) is not an auctioneer; and (iii) is not generally known by its creditors to be substantially engaged in selling the goods of others; (B) with respect to each delivery, the aggregate value of the goods is $1,000 or more at the time of delivery; (C) the goods are not consumer goods immediately before delivery; and (D) the transaction does not create a security interest that secures an obligation. (21) "Consignor" means a person that delivers goods to a consignee in a consignment. (22) "Consumer debtor" means a debtor in a consumer transaction. (23) "Consumer goods" means goods that are used or bought for use primarily for personal, family, or household purposes. (24) "Consumer-goods transaction" means a consumer transaction in which: (A) an individual incurs an obligation primarily for personal, family, or household purposes; and (B) a security interest in consumer goods secures the obligation. (25) "Consumer obligor" means an obligor who is an individual and who incurred the obligation as part of a transaction entered into primarily for personal, family, or household purposes. (26) "Consumer transaction" means a transaction in which (i) an individual incurs an obligation primarily for personal, family, or household purposes, (ii) a security interest secures the obligation, and (iii) the collateral is held or acquired primarily for personal, family, or household purposes. The term includes consumer-goods transactions. (27) "Continuation statement" means an amendment of a financing statement which: (A) identifies, by its file number, the initial financing statement to which it relates; and (B) indicates that it is a continuation statement for, or that it is filed to continue the effectiveness of, the identified financing statement. (28) "Debtor" means: (A) a person having an interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor; (B) a seller of accounts, chattel paper, payment intangibles, or promissory notes; or (C) a consignee. (29) "Deposit account" means a demand, time, savings, passbook, or similar account maintained with a bank. The term does not include investment property or accounts evidenced by an instrument. (30) "Document" means a document of title or a receipt of the type described in subdivision (2) of §8.7-201. (31) "Electronic chattel paper" means chattel paper evidenced by a record or records consisting of information stored in an electronic medium. (32) "Encumbrance" means a right, other than an ownership interest, in real property. The term includes mortgages and other liens on real property. (33) "Equipment" means goods other than inventory, farm products, or consumer goods. (34) "Farm products" means goods, other than standing timber, with respect to which the debtor is engaged in a farming operation and which are: (A) crops grown, growing, or to be grown, including: (i) crops produced on trees, vines, and bushes; and (ii) aquatic goods produced in aquacultural operations; (B) livestock, born or unborn, including aquatic goods produced in aquacultural operations; (C) supplies used or produced in a farming operation; or (D) products of crops or livestock in their unmanufactured states. (35) "Farming operation" means raising, cultivating, propagating, fattening, grazing, or any other farming, livestock, or aquacultural operation. (36) "File number" means the number assigned to an initial financing statement pursuant to subsection (a) of §8.9A-519. (37) "Filing office" means an office designated in § 8.9A-501 as the place to file a financing statement. (38) "Filing-office rule" means a rule adopted pursuant to §8.9A-526. (39) "Financing statement" means a record or records composed of an initial financing statement and any filed record relating to the initial financing statement. (40) "Fixture filing" means the filing of a financing statement covering goods that are or are to become fixtures and satisfying subsections (a) and (b) of §8.9A-502. The term includes the filing of a financing statement covering goods of a transmitting utility which are or are to become fixtures. (41) "Fixtures" means goods that have become so related to particular real property that an interest in them arises under real property law. (42) "General intangible" means any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter-of-credit rights, letters of credit, money, and oil, gas, or other minerals before extraction. The term includes payment intangibles and software. (43) "Good faith" means honesty in fact and the observance of reasonable commercial standards of fair dealing. (44) "Goods" means all things that are movable when a security interest attaches. The term includes (i) fixtures, (ii) standing timber that is to be cut and removed under a conveyance or contract for sale, (iii) the unborn young of animals, (iv) crops grown, growing, or to be grown, even if the crops are produced on trees, vines, or bushes, and (v) manufactured homes. The term also includes a computer program embedded in goods and any supporting information provided in connection with a transaction relating to the program if (i) the program is associated with the goods in such a manner that it customarily is considered part of the goods or (ii) by becoming the owner of the goods, a person acquires a right to use the program in connection with the goods. The term does not include a computer program embedded in goods that consist solely of the medium in which the program is embedded. The term also does not include accounts, chattel paper, commercial tort claims, deposit accounts, documents, general intangibles, instruments, investment property, letter-of-credit rights, letters of credit, money, or oil, gas, or other minerals before extraction. (45) "Governmental unit" means a subdivision, agency, department, county, parish, municipality, or other unit of the government of the United States, a State, or a foreign country. The term includes an organization having a separate corporate existence if the organization is eligible to issue debt on which interest is exempt from income taxation under the laws of the United States. (46) "Health-care-insurance receivable" means an interest in or claim under a policy of insurance which is a right to payment of a monetary obligation for health-care goods or services provided. (47) "Instrument" means a negotiable instrument or any other writing that evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease, and is of a type that in ordinary course of business is transferred by delivery with any necessary endorsement or assignment. The term does not include (i) investment property, (ii) letters of credit, or (iii) writings that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card. (48) "Inventory" means goods, other than farm products, which: (A) are leased by a person as lessor; (B) are held by a person for sale or lease or to be furnished under a contract of service; (C) are furnished by a person under a contract of service; or (D) consist of raw materials, work in process, or materials used or consumed in a business. (49) "Investment property" means a security, whether certificated or uncertificated, security entitlement, securities account, commodity contract, or commodity account. (50) "Jurisdiction of organization," with respect to a registered organization, means the jurisdiction under whose law the organization is [ formed or ] organized. (51) "Letter-of-credit right" means a right to payment or performance under a letter of credit, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance. The term does not include the right of a beneficiary to demand payment or performance under a letter of credit. (52) "Lien creditor" means: (A) a creditor that has acquired a lien on the property involved by attachment, levy, or the like; (B) an assignee for benefit of creditors from the time of assignment; (C) a trustee in bankruptcy from the date of the filing of the petition; or (D) a receiver in equity from the time of appointment. (53) "Manufactured home" means a structure, transportable in one or more sections, which, in the traveling mode, is eight body feet or more in width or 40 body feet or more in length, or, when erected on site, is 320 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems contained therein. The term includes any structure that meets all of the requirements of this paragraph except the size requirements and with respect to which the manufacturer voluntarily files a certification required by the United States Secretary of Housing and Urban Development and complies with the standards established under Title 42 of the United States Code. (54) "Manufactured-home transaction" means a secured transaction: (A) that creates a purchase-money security interest in a manufactured home, other than a manufactured home held as inventory; or (B) in which a manufactured home, other than a manufactured home held as inventory, is the primary collateral. (55) "Mortgage" means a consensual interest in real property, including fixtures, which secures payment or performance of an obligation. (56) "New debtor" means a person that becomes bound as debtor under subsection (d) of §8.9A-203 by a security agreement previously entered into by another person. (57) "New value" means (i) money, (ii) money's worth in property, services, or new credit, or (iii) release by a transferee of an interest in property previously transferred to the transferee. The term does not include an obligation substituted for another obligation. (58) "Noncash proceeds" means proceeds other than cash proceeds. (59) "Obligor" means a person that, with respect to an obligation secured by a security interest in or an agricultural lien on the collateral, (i) owes payment or other performance of the obligation, (ii) has provided property other than the collateral to secure payment or other performance of the obligation, or (iii) is otherwise accountable in whole or in part for payment or other performance of the obligation. The term does not include issuers or nominated persons under a letter of credit. (60) "Original debtor," except as used in subsection (c) of §8.9A-310, means a person that, as debtor, entered into a security agreement to which a new debtor has become bound under subsection (d) of § 8.9A-203. (61) "Payment intangible" means a general intangible under which the account debtor's principal obligation is a monetary obligation. (62) "Person related to," with respect to an individual, means: (A) the spouse of the individual; (B) a brother, brother-in-law, sister, or sister-in-law of the individual; (C) an ancestor or lineal descendant of the individual or the individual's spouse; or (D) any other relative, by blood or marriage, of the individual or the individual's spouse who shares the same home with the individual. (63) "Person related to," with respect to an organization, means: (A) a person directly or indirectly controlling, controlled by, or under common control with the organization; (B) an officer or director of, or a person performing similar functions with respect to, the organization; (C) an officer or director of, or a person performing similar functions with respect to, a person described in subparagraph (A); (D) the spouse of an individual described in subparagraph (A), (B), or (C); or (E) an individual who is related by blood or marriage to an individual described in subparagraph (A), (B), (C), or (D) and shares the same home with the individual. (64) "Proceeds," except as used in subsection (b) of §8.9A-609, means the following property: (A) whatever is acquired upon the sale, lease, license, exchange, or other disposition of collateral; (B) whatever is collected on, or distributed on account of, collateral; (C) rights arising out of collateral; (D) to the extent of the value of collateral, claims arising out of the loss, nonconformity, or interference with the use of, defects or infringement of rights in, or damage to, the collateral; or (E) to the extent of the value of collateral and to the extent payable to the debtor or the secured party, insurance payable by reason of the loss or nonconformity of, defects or infringement of rights in, or damage to, the collateral. (65) "Promissory note" means an instrument that evidences a promise to pay a monetary obligation, does not evidence an order to pay, and does not contain an acknowledgment by a bank that the bank has received for deposit a sum of money or funds. (66) "Proposal" means a record authenticated by a secured party which includes the terms on which the secured party is willing to accept collateral in full or partial satisfaction of the obligation it secures pursuant to §§8.9A-620, 8.9A-621, and 8.9A-622. (67) "Public-finance transaction" means a secured transaction in connection with which: (A) debt securities are issued; (B) all or a portion of the securities issued have an initial stated maturity of at least 20 years; and (C) the debtor, obligor, secured party, account debtor or other person obligated on collateral, assignor or assignee of a secured obligation, or assignor or assignee of a security interest is a state or a governmental unit of a state. (68) "Public organic record" means a record that is available to the public for inspection and that is: (A) a record consisting of the record initially filed with or issued by a state or the United States to form or organize an organization and any record filed with or issued by the state or the United States which amends or restates the initial record; (B) an organic record of a business trust consisting of the record initially filed with a state and any record filed with the state which amends or restates the initial record, if a statute of the state governing business trusts requires that the record be filed with the state; or (C) a record consisting of legislation enacted by the legislature of a state or the Congress of the United States which forms or organizes an organization, any record amending the legislation, and any record filed with or issued by the state or the United States which amends or restates the name of the organization. (69) "Pursuant to commitment," with respect to an advance made or other value given by a secured party, means pursuant to the secured party's obligation, whether or not a subsequent event of default or other event not within the secured party's control has relieved or may relieve the secured party from its obligation.
(A) the obligor's obligation is secondary; or (B) the obligor has a right of recourse with respect to an obligation secured by collateral against the debtor, another obligor, or property of either.
(A) a person in whose favor a security interest is created or provided for under a security agreement, whether or not any obligation to be secured is outstanding; (B) a person that holds an agricultural lien; (C) a consignor; (D) a person to which accounts, chattel paper, payment intangibles, or promissory notes have been sold; (E) a trustee, indenture trustee, agent, collateral agent, or other representative in whose favor a security interest or agricultural lien is created or provided for; or (F) a person that holds a security interest arising under §§ 8.2-401, 8.2-505, 8.2-711 (3), 8.2A-508 (5), 8.4-210, or §8.5A-118.
(A) to deposit in the mail, deliver for transmission, or transmit by any other usual means of communication, with postage or cost of transmission provided for, addressed to any address reasonable under the circumstances; or (B) to cause the record or notification to be received within the time that it would have been received if properly sent under subparagraph (A).
(A) identifies, by its file number, the initial financing statement to which it relates; and (B) indicates either that it is a termination statement or that the identified financing statement is no longer effective.
(A) operating a railroad, subway, street railway, or trolley bus; (B) transmitting communications electrically, electromagnetically, or by light; (C) transmitting goods by pipeline or sewer; or (D) transmitting or producing and transmitting electricity, steam, gas, or water. (b) Definitions in other titles. The following definitions in other titles apply to this title: "Applicant" §8.5A-102. "Beneficiary" §8.5A-102. "Broker" §8.8A-102. "Certificated security" §8.8A-102. "Check" §8.3A-104. "Clearing corporation" §8.8A-102. "Contract for sale" §8.2-106. "Control" §8.7-106. "Customer" §8.4-104. "Entitlement holder" §8.8A-102. "Financial asset" §8.8A-102. "Holder in due course" §8.3A-302. "Issuer" (with respect to a letter of credit or letter-of-credit right) §8.5A-102. "Issuer" (with respect to a security) §8.8A-201. "Issuer" (with respect to documents of title) § 8.7-102. "Lease" §8.2A-103. "Lease agreement" §8.2A-103. "Lease contract" §8.2A-103. "Leasehold interest" §8.2A-103. "Lessee" §8.2A-103. "Lessee in ordinary course of business" §8.2A-103. "Lessor" §8.2A-103. "Lessor's residual interest" §8.2A-103. "Letter of credit" §8.5A-102. "Merchant" §8.2-104. "Negotiable instrument" §8.3A-104. "Nominated person" §8.5A-102. "Note" §8.3A-104. "Proceeds of a letter of credit" §8.5A-114. "Prove" §8.3A-103. "Sale" §8.2-106. "Securities account" §8.8A-501. "Securities intermediary" §8.8A-102. "Security" §8.8A-102. "Security certificate" §8.8A-102. "Security entitlement" §8.8A-102. "Uncertificated security" §8.8A-102. (c) Title 8.1A definitions and principles. Title 8.1A contains general definitions and principles of construction and interpretation applicable throughout this title. §8.9A-105. Control of electronic chattel paper. (a) General rule: control of electronic chattel paper. A secured party has control of electronic chattel paper if a system employed for evidencing the transfer of interest in the chattel paper reliably establishes the secured party as the person to which the chattel paper was assigned. (b) Specific facts giving control. A system satisfies subsection (a), and a secured party has control of electronic chattel paper, if the record or records comprising the chattel paper are created, stored, and assigned in such a manner that: (1) a single authoritative copy of the record or records exists which is unique, identifiable and, except as otherwise provided in paragraphs (4), (5), and (6), unalterable; (2) the authoritative copy identifies the secured party as the assignee of the record or records; (3) the authoritative copy is communicated to and maintained by the secured party or its designated custodian; (4) copies or (5) each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy; and (6) any §8.9A-307. Location of debtor. (a) "Place of business." In this section, "place of business" means a place where a debtor conducts its affairs. (b) Debtor's location; general rules. Except as otherwise provided in this section, the following rules determine a debtor's location: (1) A debtor who is an individual is located at the individual's principal residence. (2) A debtor that is an organization and has only one place of business is located at its place of business. (3) A debtor that is an organization and has more than one place of business is located at its chief executive office. (c) Limitation of applicability of subsection (b). Subsection (b) applies only if a debtor's residence, place of business, or chief executive office, as applicable, is located in a jurisdiction whose law generally requires information concerning the existence of a nonpossessory security interest to be made generally available in a filing, recording, or registration system as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the collateral. If subsection (b) does not apply, the debtor is located in the District of Columbia. (d) Continuation of location; cessation of existence, etc. A person that ceases to exist, have a residence, or have a place of business continues to be located in the jurisdiction specified by subsections (b) and (c). (e) Location of registered organization organized under state law. A registered organization that is organized under the law of a state is located in that state. (f) Location of registered organization organized under federal law; bank branches and agencies. Except as otherwise provided in subsection (i), a registered organization that is organized under the law of the United States and a branch or agency of a bank that is not organized under the law of the United States or a state are located: (1) in the state that the law of the United States designates, if the law designates a state of location; (2) in the state that the registered organization, branch, or agency designates, if the law of the United States authorizes the registered organization, branch, or agency to designate its state of location, including by designating its main office, home office, or other comparable office; or (3) in the District of Columbia, if neither paragraph (1) nor paragraph (2) applies. (g) Continuation of location; change in status of registered organization. A registered organization continues to be located in the jurisdiction specified by subsection (e) or (f) notwithstanding: (1) the suspension, revocation, forfeiture, or lapse of the registered organization's status as such in its jurisdiction of organization; or (2) the dissolution, winding up, or cancellation of the existence of the registered organization. (h) Location of United States. The United States is located in the District of Columbia. (i) Location of foreign bank branch or agency if licensed in only one state. A branch or agency of a bank that is not organized under the law of the United States or a state is located in the state in which the branch or agency is licensed, if all branches and agencies of the bank are licensed in only one state. (j) Location of foreign air carrier. A foreign air carrier under the Federal Aviation Act of 1958, as amended, is located at the designated office of the agent upon which service of process may be made on behalf of the carrier. (k) Applies only to this part. This section applies only for purposes of this part. §8.9A-311. Perfection of security interests in property subject to certain statutes, regulations, and treaties. (a) Security interest subject to other law. Except as otherwise provided in subsection (d), the filing of a financing statement is not necessary or effective to perfect a security interest in property subject to: (1) a statute, regulation, or treaty of the United States whose requirements for a security interest's obtaining priority over the rights of a lien creditor with respect to the property preempt §8.9A-310 (a); (2) a (3) a (b) Compliance with other law. Compliance with the requirements of a statute, regulation, or treaty described in subsection (a) for obtaining priority over the rights of a lien creditor is equivalent to the filing of a financing statement under this title. Except as otherwise provided in subsection (d) and §§8.9A-313 and 8.9A-316 (d) and (e) for goods covered by a certificate of title, a security interest in property subject to a statute, regulation, or treaty described in subsection (a) may be perfected only by compliance with those requirements, and a security interest so perfected remains perfected notwithstanding a change in the use or transfer of possession of the collateral. (c) Duration and renewal of perfection. Except as otherwise provided in subsection (d) and §8.9A-316 (d) and (e), duration and renewal of perfection of a security interest perfected by compliance with the requirements prescribed by a statute, regulation, or treaty described in subsection (a) are governed by the statute, regulation, or treaty. In other respects, the security interest is subject to this title. (d) Inapplicability to certain inventory. During any period in which collateral subject to a statute specified in subsection (a) (2) is inventory held for sale or lease by a person or leased by that person as lessor and that person is in the business of selling goods of that kind, this section does not apply to a security interest in that collateral created by that person. §8.9A-316. Effect of change in governing law. (a) General rule; effect on perfection of change in governing law. A security interest perfected pursuant to the law of the jurisdiction designated in §8.9A-301 (1) or §8.9A-305 (c) remains perfected until the earliest of: (1) the time perfection would have ceased under the law of that jurisdiction; (2) the expiration of four months after a change of the debtor's location to another jurisdiction; or (3) the expiration of one year after a transfer of collateral to a person that thereby becomes a debtor and is located in another jurisdiction. (b) Security interest perfected or unperfected under law of new jurisdiction. If a security interest described in subsection (a) becomes perfected under the law of the other jurisdiction before the earliest time or event described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earliest time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value. (c) Possessory security interest in collateral moved to new jurisdiction. A possessory security interest in collateral, other than goods covered by a certificate of title and as-extracted collateral consisting of goods, remains continuously perfected if: (1) the collateral is located in one jurisdiction and subject to a security interest perfected under the law of that jurisdiction; (2) thereafter the collateral is brought into another jurisdiction; and (3) upon entry into the other jurisdiction, the security interest is perfected under the law of the other jurisdiction. (d) Goods covered by certificate of title from (e) When subsection (d) security interest becomes unperfected against purchasers. A security interest described in subsection (d) becomes unperfected as against a purchaser of the goods for value and is deemed never to have been perfected as against a purchaser of the goods for value if the applicable requirements for perfection under §8.9A-311 (b) or §8.9A-313 are not satisfied before the earlier of: (1) the time the security interest would have become
unperfected under the law of the other jurisdiction had the goods not become
covered by a certificate of title from (2) the expiration of four months after the goods had become so covered. (f) Change in jurisdiction of bank, issuer, nominated person, securities intermediary, or commodity intermediary. A security interest in deposit accounts, letter-of-credit rights, or investment property which is perfected under the law of the bank's jurisdiction, the issuer's jurisdiction, a nominated person's jurisdiction, the securities intermediary's jurisdiction, or the commodity intermediary's jurisdiction, as applicable, remains perfected until the earlier of: (1) the time the security interest would have become unperfected under the law of that jurisdiction; or (2) the expiration of four months after a change of the applicable jurisdiction to another jurisdiction. (g) Subsection (f) security interest perfected or unperfected under law of new jurisdiction. If a security interest described in subsection (f) becomes perfected under the law of the other jurisdiction before the earlier of the time or the end of the period described in that subsection, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earlier of that time or the end of that period, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value. (h) Effect on filed financing statement of change in governing law. The following rules apply to collateral to which a security interest attaches within four months after the debtor changes its location to another jurisdiction: (1) A financing statement filed before the change pursuant to the law of the jurisdiction designated in §8.9A-301 (1) or 8.9A-305 (c) is effective to perfect a security interest in the collateral if the financing statement would have been effective to perfect a security interest in the collateral if the debtor had not changed its location. (2) If a security interest perfected by a financing statement that is effective under paragraph (1) becomes perfected under the law of the other jurisdiction before the earlier of the time the financing statement would have become ineffective under the law of the jurisdiction designated in §8.9A-301 (1) or 8.9A-305 (c) or the expiration of the four-month period, it remains perfected thereafter. If the security interest does not become perfected under the law of the other jurisdiction before the earlier time or event, it becomes unperfected and is deemed never to have been perfected as against a purchaser of the collateral for value. (i) Effect of change in governing law on financing statement filed against original debtor. If a financing statement naming an original debtor is filed pursuant to the law of the jurisdiction designated in §8.9A-301 (1) or 8.9A-305 (c) and the new debtor is located in another jurisdiction, the following rules apply: (1) The financing statement is effective to perfect a security interest in collateral in which the new debtor has or acquires rights before or within four months after the new debtor becomes bound under § 8.9A-203 (d), if the financing statement would have been effective to perfect a security interest in the collateral if the collateral had been acquired by the original debtor. (2) A security interest that is perfected by the financing
statement and which becomes perfected under the law of the other jurisdiction
before the earlier of the expiration of the four-month period or the time the
financing statement would have become ineffective under the law of the
jurisdiction designated in §8.9A-301 (1) or 8.9A-305 (c) remains perfected
thereafter. A security interest that is perfected by the financing statement
but which does not become perfected under the law of the other jurisdiction
before the earlier time or event becomes unperfected and is deemed never to
have been perfected as against a purchaser of the collateral for value. §8.9A-317. Interests that take priority over or take free of security interest or agricultural lien. (a) Conflicting security interests and rights of lien creditors. A security interest or agricultural lien is subordinate to the rights of: (1) a person entitled to priority under §8.9A-322; and (2) except as otherwise provided in subsection (e), a person that becomes a lien creditor before the earlier of the time: (A) the security interest or agricultural lien is perfected; or (B) one of the conditions specified in subdivision (b) (3) of §8.9A-203 is met and a financing statement covering the collateral is filed. (b) Buyers that receive delivery. Except as otherwise provided
in subsection (e), a buyer, other than a secured party, of tangible chattel
paper, tangible documents, goods, instruments, or a certificated
security (c) Lessees that receive delivery. Except as otherwise provided in subsection (e), a lessee of goods takes free of a security interest or agricultural lien if the lessee gives value and receives delivery of the collateral without knowledge of the security interest or agricultural lien and before it is perfected. (d) Licensees and buyers of certain collateral. A licensee of
a general intangible or a buyer, other than a secured party, of (e) Purchase-money security interest. Except as otherwise provided in §§8.9A-320 and 8.9A-321, if a person files a financing statement with respect to a purchase-money security interest before or within twenty days after the debtor receives delivery of the collateral, the security interest takes priority over the rights of a buyer, lessee, or lien creditor which arise between the time the security interest attaches and the time of filing. §8.9A-326. Priority of security interests created by new debtor. (a) Subordination of security interest created by new debtor.
Subject to subsection (b), a security interest that is created by a new
debtor (b) Priority under other provisions; multiple original
debtors. The other provisions of this part determine the priority among
conflicting security interests in the same collateral perfected by filed
financing statements §8.9A-406. Discharge of account debtor; notification of assignment; identification and proof of assignment; restrictions on assignment of accounts, chattel paper, payment intangibles, and promissory notes ineffective. (a) Discharge of account debtor; effect of notification. Subject to subsections (b) through (i), an account debtor on an account, chattel paper, or a payment intangible may discharge its obligation by paying the assignor until, but not after, the account debtor receives a notification, authenticated by the assignor or the assignee, that the amount due or to become due has been assigned and that payment is to be made to the assignee. After receipt of the notification, the account debtor may discharge its obligation by paying the assignee and may not discharge the obligation by paying the assignor. (b) When notification ineffective. Subject to subsection (h), notification is ineffective under subsection (a): (1) if it does not reasonably identify the rights assigned; (2) to the extent that an agreement between an account debtor and a seller of a payment intangible limits the account debtor's duty to pay a person other than the seller and the limitation is effective under law other than this title; or (3) at the option of an account debtor, if the notification notifies the account debtor to make less than the full amount of any installment or other periodic payment to the assignee, even if: (A) only a portion of the account, chattel paper, or payment intangible has been assigned to that assignee; (B) a portion has been assigned to another assignee; or (C) the account debtor knows that the assignment to that assignee is limited. (c) Proof of assignment. Subject to subsection (h), if requested by the account debtor, an assignee shall seasonably furnish reasonable proof that the assignment has been made. Unless the assignee complies, the account debtor may discharge its obligation by paying the assignor, even if the account debtor has received a notification under subsection (a). (d) Term restricting assignment generally ineffective. Except as otherwise provided in subsection (e) and §§8.2A-303 and 8.9A-407, and subject to subsection (h), a term in an agreement between an account debtor and an assignor or in a promissory note is ineffective to the extent that it: (1) prohibits, restricts, or requires the consent of the account debtor or person obligated on the promissory note to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in, the account, chattel paper, payment intangible, or promissory note; or (2) provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account, chattel paper, payment intangible, or promissory note. (e) Inapplicability of subsection (d) to certain sales. Subsection (d) does not apply to the sale of a payment intangible or promissory note, other than a sale pursuant to a disposition under §8.9A-610 or an acceptance of collateral under §8.9A-620. (f) Legal restrictions on assignment generally ineffective. Except as otherwise provided in §§8.2A-303 and 8.9A-407 and subject to subsections (h) and (i), a rule of law, statute, or regulation that prohibits, restricts, or requires the consent of a government, governmental body or official, or account debtor to the assignment or transfer of, or creation of a security interest in, an account or chattel paper is ineffective to the extent that the rule of law, statute, or regulation: (1) prohibits, restricts, or requires the consent of the government, governmental body or official, or account debtor to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in the account or chattel paper; or (2) provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the account or chattel paper. (g) Subsection (b) (3) not waivable. Subject to subsection (h), an account debtor may not waive or vary its option under subsection (b) (3). (h) Rule for individual under other law. This section is subject to law other than this title which establishes a different rule for an account debtor who is an individual and who incurred the obligation primarily for personal, family, or household purposes. (i) Inapplicability to health-care-insurance receivable. This section does not apply to an assignment of a health-care-insurance receivable. (j) Inapplicability of subsection (d) to certain transactions. Subsection (d) does not apply to: (1) a claim or right to receive compensation for injuries or sickness as described in 26 U.S.C. §104 (a) (1), as amended from time to time; or (2) a claim or right to receive benefits under a special needs trust as described in 42 U.S.C. §1396p (d) (4), as amended from time to time. (k) Inapplicability to partnership and limited liability company interests. This section does not apply to an interest in a partnership or limited liability company. (l) No inference regarding structured settlements. This section shall not be construed or interpreted to relieve or exempt any person or entity from any duties, obligations or rights imposed or provided by the Structured Settlement Protection Act (§59.1-475 et seq.), as amended from time to time. §8.9A-408. Restrictions on assignment of promissory notes, health-care-insurance receivables, and certain general intangibles ineffective. (a) Term restricting assignment generally ineffective. Except as otherwise provided in subsection (b), a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health-care-insurance receivable or a general intangible, including a contract, permit, license, or franchise, and which term prohibits, restricts, or requires the consent of the person obligated on the promissory note or the account debtor to, the assignment or transfer of, or creation, attachment, or perfection of a security interest in, the promissory note, health-care-insurance receivable, or general intangible, is ineffective to the extent that the term: (1) would impair the creation, attachment, or perfection of a security interest; or (2) provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the promissory note, health-care-insurance receivable, or general intangible. (b) Applicability of subsection (a) to sales of certain rights to payment. Subsection (a) applies to a security interest in a payment intangible or promissory note only if the security interest arises out of a sale of the payment intangible or promissory note, other than a sale pursuant to a disposition under §8.9A-610 or an acceptance of collateral under § 8.9A-620. (c) Legal restrictions on assignment generally ineffective. A rule of law, statute, or regulation that prohibits, restricts, or requires the consent of a government, governmental body or official, person obligated on a promissory note, or account debtor to the assignment or transfer of, or creation of a security interest in, a promissory note, health-care-insurance receivable, or general intangible, including a contract, permit, license, or franchise between an account debtor and a debtor, is ineffective to the extent that the rule of law, statute, or regulation: (1) would impair the creation, attachment, or perfection of a security interest; or (2) provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the promissory note, health-care-insurance receivable, or general intangible. (d) Limitation on ineffectiveness under subsections (a) and (c). To the extent that a term in a promissory note or in an agreement between an account debtor and a debtor which relates to a health-care-insurance receivable or general intangible or a rule of law, statute, or regulation described in subsection (c) would be effective under law other than this title but is ineffective under subsection (a) or (c), the creation, attachment, or perfection of a security interest in the promissory note, health-care-insurance receivable, or general intangible: (1) is not enforceable against the person obligated on the promissory note or the account debtor; (2) does not impose a duty or obligation on the person obligated on the promissory note or the account debtor; (3) does not require the person obligated on the promissory note or the account debtor to recognize the security interest, pay or render performance to the secured party, or accept payment or performance from the secured party; (4) does not entitle the secured party to use or assign the debtor's rights under the promissory note, health-care-insurance receivable, or general intangible, including any related information or materials furnished to the debtor in the transaction giving rise to the promissory note, health-care-insurance receivable, or general intangible; (5) does not entitle the secured party to use, assign, possess, or have access to any trade secrets or confidential information of the person obligated on the promissory note or the account debtor; and (6) does not entitle the secured party to enforce the security interest in the promissory note, health-care-insurance receivable, or general intangible. (e) Inapplicability of subsection (a) to certain payment intangibles. Subsection (a) does not apply to: (1) the sale of a claim or right to receive compensation for injuries or sickness as described in 26 U.S.C. §104 (a) (2), as amended from time to time, provided that no inference shall be drawn regarding the enforceability or nonenforceability under other law or any term in an agreement which prohibits, restricts, or requires consent to the sale of such claim or right described in 26 U.S.C. §104 (a) (2); (2) a claim or right to receive compensation for injuries or sickness as described in 26 U.S.C. §104 (a) (1), as amended from time to time; or (3) a claim or right to receive benefits under a special needs trust as described in 42 U.S.C. §1396p (d) (4), as amended from time to time. (f) Inapplicability of subsection (c) to certain payment intangibles. Subsection (c) does not apply to: (1) a claim or right to receive compensation for injuries or sickness as described in 26 U.S.C. §104 (a) (1) or (2), as amended from time to time; or (2) a claim or right to receive benefits under a special needs trust as described in 42 U.S.C. §1396p (d) (4), as amended from time to time. (g) Inapplicability to partnership and limited liability company interests. This section does not apply to an interest in a partnership or limited liability company. §8.9A-502. Contents of financing statement; record of mortgage as financing statement; time of filing financing statement. (a) Sufficiency of financing statement. Subject to subsection (b), a financing statement is sufficient only if it: (1) provides the name of the debtor; (2) provides the name of the secured party or a representative of the secured party; and (3) indicates the collateral covered by the financing statement. (b) Real-property-related financing statements. Except as otherwise provided in §8.9A-501 (b), to be sufficient, a financing statement that covers as-extracted collateral or timber to be cut, or which is filed as a fixture filing and covers goods that are or are to become fixtures, must satisfy subsection (a) and also: (1) indicate that it covers this type of collateral; (2) indicate that it is to be filed for record in the real property records; (3) provide a description of the real property to which the collateral is related sufficient to give constructive notice of a mortgage under the law of this state if the description were contained in a record of the mortgage of the real property; and (4) if the debtor does not have an interest of record in the real property, provide the name of a record owner. (c) Record of mortgage as financing statement. A record of a mortgage is effective, from the date of recording, as a financing statement filed as a fixture filing or as a financing statement covering as-extracted collateral or timber to be cut only if: (1) the record indicates the goods or accounts that it covers; (2) the goods are or are to become fixtures related to the real property described in the record or the collateral is related to the real property described in the record and is as-extracted collateral or timber to be cut; (3) the record satisfies the requirements for a financing statement in this section, but:
(B) the record sufficiently provides the name of a debtor who is an individual if it provides the individual name of the debtor or the surname and first personal name of the debtor, even if the debtor is an individual to whom §8.9A-503 (a) (4) applies; and (4) the record is duly recorded. (d) Filing before security agreement or attachment. A financing statement may be filed before a security agreement is made or a security interest otherwise attaches. §8.9A-503. Name of debtor and secured party. (a) Sufficiency of debtor's name. A financing statement sufficiently provides the name of the debtor: (1) except as otherwise provided in paragraph (3), if
the debtor is a registered organization or the collateral is held in a trust
that is a registered organization, only if the financing statement provides
the name (2) subject to subsection (f), if the (3) if the (A) provides, as the name (i) if the organic (ii) if the organic record of the trust does not specify a name for the trust, the name of the settlor or testator; and (B) (i) if the name is provided in accordance with subparagraph (A) (i), indicates that the collateral is held in trust; or (ii) if the name is provided in accordance with subparagraph (A) (ii), provides additional information sufficient to distinguish the trust from other trusts having one or more of the same settlors or the same testator and indicates that the collateral is held in a trust, unless the additional information so indicates; (4) (5) if the debtor is an individual to whom paragraph (4) does not apply, only if it provides the individual name of the debtor or the surname and first personal name of the debtor; and
(A) if the debtor has a name, only if it provides the (B) if the debtor does not have a name, only if it provides the names of the partners, members, associates, or other persons comprising the debtor, in a manner that each name provided would be sufficient if the person named were the debtor. (b) Additional debtor-related information. A financing statement that provides the name of the debtor in accordance with subsection (a) is not rendered ineffective by the absence of: (1) a trade name or other name of the debtor; or (2) unless required under subsection (a) ( (c) Debtor's trade name insufficient. A financing statement that provides only the debtor's trade name does not sufficiently provide the name of the debtor. (d) Representative capacity. Failure to indicate the representative capacity of a secured party or representative of a secured party does not affect the sufficiency of a financing statement. (e) Multiple debtors and secured parties. A financing statement may provide the name of more than one debtor and the name of more than one secured party. (f)
(g) Multiple driver's licenses. If the Commonwealth has issued to an individual more than one driver's license or identification card of a kind described in subsection (a) (4), the one that was issued most recently is the one to which subsection (a) (4) refers. (h) Definition. In this section, the "name of the settlor or testator" means: (1) if the settlor is a registered organization, the name of the registered organization indicated on the public organic record filed with or issued or enacted by the registered organization's jurisdiction of organization; or (2) in other cases, the name of the settlor or testator indicated in the trust's organic record. §8.9A-507. Effect of certain events on effectiveness of financing statement. (a) Disposition. A filed financing statement remains effective with respect to collateral that is sold, exchanged, leased, licensed, or otherwise disposed of and in which a security interest or agricultural lien continues, even if the secured party knows of or consents to the disposition. (b) Information becoming seriously misleading. Except as otherwise provided in subsection (c) and §8.9A-508, a financing statement is not rendered ineffective if, after the financing statement is filed, the information provided in the financing statement becomes seriously misleading under §8.9A-506. (c) Change in debtor's name. If (1) the financing statement is effective to perfect a security
interest in collateral acquired by the debtor before, or within four months
after, the (2) the financing statement is not effective to perfect a
security interest in collateral acquired by the debtor more than four months
after the §8.9A-515. Duration and effectiveness of financing statement; effect of lapsed financing statement. (a) Five-year effectiveness. Except as otherwise provided in subsections (b), (e), (f), and (g), a filed financing statement is effective for a period of five years after the date of filing. (b) Public-finance or manufactured-home transaction. Except as otherwise provided in subsections (e), (f), and (g), an initial financing statement filed in connection with a public-finance transaction or manufactured-home transaction is effective for a period of thirty years after the date of filing if it indicates that it is filed in connection with a public-finance transaction or manufactured-home transaction. (c) Lapse and continuation of financing statement. The effectiveness of a filed financing statement lapses on the expiration of the period of its effectiveness unless before the lapse a continuation statement is filed pursuant to subsection (d). Upon lapse, a financing statement ceases to be effective and any security interest or agricultural lien that was perfected by the financing statement becomes unperfected, unless the security interest is perfected otherwise. If the security interest or agricultural lien becomes unperfected upon lapse, it is deemed never to have been perfected as against a purchaser of the collateral for value. (d) When continuation statement may be filed. A continuation statement may be filed only within six months before the expiration of the five-year period specified in subsection (a) or the thirty-year period specified in subsection (b), whichever is applicable. (e) Effect of filing continuation statement. Except as otherwise provided in §8.9A-510, upon timely filing of a continuation statement, the effectiveness of the initial financing statement continues for a period of five years commencing on the day on which the financing statement would have become ineffective in the absence of the filing. Upon the expiration of the five-year period, the financing statement lapses in the same manner as provided in subsection (c), unless, before the lapse, another continuation statement is filed pursuant to subsection (d). Succeeding continuation statements may be filed in the same manner to continue the effectiveness of the initial financing statement. (f) Transmitting utility financing statement. If a debtor is a transmitting utility and a filed initial financing statement so indicates, the financing statement is effective until a termination statement is filed. (g) Record of mortgage as financing statement. A record of a mortgage that is effective as a financing statement filed as a fixture filing under §8.9A-502 (c) remains effective as a financing statement filed as a fixture filing until the mortgage is released or satisfied of record or its effectiveness otherwise terminates as to the real property. §8.9A-516. What constitutes filing; effectiveness of filing. (a) What constitutes filing. Except as otherwise provided in subsection (b), communication of a record to a filing office and tender of the filing fee or acceptance of the record by the filing office constitutes filing. (b) Refusal to accept record; filing does not occur. Filing does not occur with respect to a record that a filing office refuses to accept because: (1) the record is not communicated by a method or medium of communication authorized by the filing office; (2) an amount equal to or greater than the applicable filing fee is not tendered; (3) the filing office is unable to index the record because: (A) in the case of an initial financing statement, the record does not provide a name for the debtor; (B) in the case of an amendment or (i) does not identify the initial financing statement as required by §8.9A-512 or §8.9A-518, as applicable; (ii) identifies an initial financing statement whose effectiveness has lapsed under §8.9A-515; or (iii) in the case of a record filed or recorded in the filing office described in §8.9A-501 (a) (1), does not provide the name and mailing address of the debtor; (C) in the case of an initial financing statement that
provides the name of a debtor identified as an individual or an amendment that
provides a name of a debtor identified as an individual which was not
previously provided in the financing statement to which the record relates, the
record does not identify the debtor's (D) in the case of a record filed or recorded in the filing office described in §8.9A-501 (a) (1), the record does not provide a sufficient description of the real property to which it relates; (4) in the case of an initial financing statement or an amendment that adds a secured party of record, the record does not provide a name and mailing address for the secured party of record; (5) in the case of an initial financing statement or an amendment that provides a name of a debtor which was not previously provided in the financing statement to which the amendment relates, the record does not: (A) provide a mailing address for the debtor; or (B) indicate whether the name provided as the name of the debtor
is the name of an individual or an organization;
(6) in the case of an assignment reflected in an initial financing statement under §8.9A-514 (a) or an amendment filed under §8.9A-514 (b), the record does not provide a name and mailing address for the assignee; or (7) in the case of a continuation statement, the record is not filed within the six-month period prescribed by §8.9A-515 (d). (c) Rules applicable to subsection (b). For purposes of subsection (b): (1) a record does not provide information if the filing office is unable to read or decipher the information; and (2) a record that does not indicate that it is an amendment or identify an initial financing statement to which it relates, as required by §§ 8.9A-512, 8.9A-514, or §8.9A-518, is an initial financing statement. (d) Refusal to accept record; record effective as filed record. A record that is communicated to the filing office with tender of the filing fee, but which the filing office refuses to accept for a reason other than one set forth in subsection (b), is effective as a filed record except as against a purchaser of the collateral which gives value in reasonable reliance upon the absence of the record from the files. §8.9A-518. Claim concerning inaccurate or wrongfully filed record. (a) (b) (1) identify the record to which it relates by the file number assigned to the initial financing statement to which the record relates; (2) indicate that it is (3) provide the basis for the person's belief that the record is inaccurate and indicate the manner in which the person believes the record should be amended to cure any inaccuracy or provide the basis for the person's belief that the record was wrongfully filed. (c) Statement by secured party of record. A person may file in the filing office an information statement with respect to a record filed there if the person is a secured party of record with respect to the financing statement to which the record relates and believes that the person that filed the record was not entitled to do so under §8.9A-509 (d). (d) Contents of statement under subsection (c). An information statement under subsection (c) must: (1) identify the record to which it relates by the file number assigned to the initial financing statement to which the record relates; (2) indicate that it is an information statement; and (3) provide the basis for the person's belief that the person that filed the record was not entitled to do so under §8.9A-509 (d). (e) Record not affected by §8.9A-521.1. Format of statements and records. A filing office that accepts written records may not refuse to accept a written initial financing statement, an amendment to a financing statement, or other written record in a form and format promulgated by the State Corporation Commission except for a reason set forth in §8.9A-516 (b). §8.9A-526. Promulgation of rules. (a) The State Corporation Commission shall promulgate and make available to the public such rules as it deems necessary to implement this title. Such rules shall be promulgated in accordance with applicable law. (b) When adopting such rules and establishing filing office
practices, the Commission shall make an effort to keep such rules and practices
in harmony with the rules and practices of other jurisdictions which enact
substantially similar legislation and, to the extent feasible, to keep the
technology it uses compatible with the technology used by such other
jurisdictions. To this end, the Commission shall consult with such other
jurisdictions, and take into account the most recent version of any Model Rules
proposed by the International Association of §8.9A-527. Duty to report. The State Corporation Commission may report annually to the Governor and General Assembly on the operation of the filing office. The report may contain a statement of the extent to which: (1) the filing-office rules are not in harmony with the rules of filing offices in other jurisdictions that enact substantially this part and the reasons for these variations; and (2) the filing-office rules are not in harmony with the most
recent version of the Model Rules promulgated by the International Association
of §8.9A-607. Collection and enforcement by secured party. (a) Collection and enforcement generally. If so agreed, and in any event after default, a secured party: (1) may notify an account debtor or other person obligated on collateral to make payment or otherwise render performance to or for the benefit of the secured party; (2) may take any proceeds to which the secured party is entitled under §8.9A-315; (3) may enforce the obligations of an account debtor or other person obligated on collateral and exercise the rights of the debtor with respect to the obligation of the account debtor or other person obligated on collateral to make payment or otherwise render performance to the debtor, and with respect to any property that secures the obligations of the account debtor or other person obligated on the collateral; (4) if it holds a security interest in a deposit account perfected by control under §8.9A-104 (a) (1), may apply the balance of the deposit account to the obligation secured by the deposit account; and (5) if it holds a security interest in a deposit account perfected by control under §8.9A-104 (a) (2) or (3), may instruct the bank to pay the balance of the deposit account to or for the benefit of the secured party. (b) Nonjudicial enforcement of mortgage. If necessary to enable a secured party to exercise under subsection (a) (3) the right of a debtor to enforce a mortgage nonjudicially, the secured party may record in the office in which a record of the mortgage is recorded: (1) a copy of the security agreement that creates or provides for a security interest in the obligation secured by the mortgage; and (2) the secured party's sworn affidavit in recordable form stating that: (A) a default has occurred with respect to the obligation secured by the mortgage; and (B) the secured party is entitled to enforce the mortgage nonjudicially. (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. §8.9A-801. Effective date of amendments. (a) In this part, "2013 amendments" means the amendments to this title that are enacted by the act of the 2012 Session of the General Assembly that enacted this Part 8. (b) The 2013 amendments are effective July 1, 2013. §8.9A-802. Savings clause. (a) Pre-effective-date transactions or liens. Except as otherwise provided in this part, the 2013 amendments apply to a transaction or lien within its scope, even if the transaction or lien was entered into or created before July 1, 2013. (b) Pre-effective-date proceedings. The 2013 amendments do not affect an action, case, or proceeding commenced before July 1, 2013. §8.9A-803. Security interest perfected before July 1, 2013. (a) Continuing perfection: perfection requirements satisfied. A security interest that is a perfected security interest immediately before July 1, 2013, is a perfected security interest under this title as amended by the 2013 amendments if, on July 1, 2013, the applicable requirements for attachment and perfection under this title, as amended by the 2013 amendments, are satisfied without further action. (b) Continuing perfection: perfection requirements not satisfied. Except as otherwise provided in §8.9A-805, if, immediately before July 1, 2013, a security interest is a perfected security interest, but the applicable requirements for perfection under this title, as amended by the 2013 amendments, are not satisfied on July 1, 2013, the security interest remains perfected thereafter only if the applicable requirements for perfection under this title, as amended by the 2013 amendments, are satisfied within one year after July 1, 2013. §8.9A-804. Security interest unperfected before July 1, 2013. A security interest that is an unperfected security interest immediately before July 1, 2013, becomes a perfected security interest: (1) without further action, on July 1, 2013, if the applicable requirements for perfection under this title, as amended by the 2013 amendments, are satisfied before or at that time; or (2) when the applicable requirements for perfection are satisfied if the requirements are satisfied after that time. §8.9A-805. Effectiveness of action taken before July 1, 2013. (a) Pre-effective-date filing effective. The filing of a financing statement before July 1, 2013, is effective to perfect a security interest to the extent the filing would satisfy the applicable requirements for perfection under this title, as amended by the 2013 amendments. (b) When pre-effective-date filing becomes ineffective. The 2013 amendments do not render ineffective an effective financing statement that, before July 1, 2013, is filed and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in this title, as it existed before the 2013 amendments. However, except as otherwise provided in subsections (c) and (d) and §8.9A-806, the financing statement ceases to be effective: (1) if the financing statement is filed in the Commonwealth, at the time the financing statement would have ceased to be effective had the 2013 amendments 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 on or after July 1, 2013, does not continue the effectiveness of the financing statement filed before July 1, 2013. However, upon the timely filing of a continuation statement on or after July 1, 2013, and in accordance with the law of the jurisdiction governing perfection as provided in this title, as amended by the 2013 amendments, the effectiveness of a financing statement filed in the same office in that jurisdiction before July 1, 2013, continues for the period provided by the law of that jurisdiction. (d) Application of subsection (b) (2) (B) to transmitting utility financing statement. Subsection (b) (2) (B) applies to a financing statement that, before July 1, 2013, is filed against a transmitting utility and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in this title, as it existed before the 2013 amendments, only to the extent that this title, as amended by the 2013 amendments, 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 (§8.9A-501 et seq.). A financing statement that includes a financing statement filed before July 1, 2013, and a continuation statement filed on or after July 1, 2013, is effective only to the extent that it satisfies the requirements of Part 5, as amended by the 2013 amendments, 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 § 8.9A-503 (a) (2), as amended by the 2013 amendments. A financing statement that indicates that the debtor is a trust or is a trustee acting with respect to a property held in trust indicates that the collateral is held in a trust within the meaning of §8.9A-503 (a) (3), as amended by the 2013 amendments. §8.9A-806. When initial financing statement suffices to continue effectiveness of financing statement. (a) Initial financing statement in lieu of continuation statement. The filing statement of an initial financing statement in the office specified in §8.9A-501 continues the effectiveness of a financing statement filed before the 2013 amendments take effect if: (1) the filing of an initial financing statement in that office would be effective to perfect a security interest under this title, as amended by the 2013 amendments; (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, 2013, for the period provided in §8.9A-515 as §8.9A-515 was in effect on June 30, 2013, with respect to an initial financing statement; and (2) if the initial financing statement is filed on or after July 1, 2013, for the period provided in §8.9A-515, as amended by the 2013 amendments, 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 (§8.9A-501 et seq.), as amended by the 2013 amendments, 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. §8.9A-807. Amendment of pre-effective-date financing statement. (a) "Pre-effective-date financing statement." In this section, "pre-effective-date financing statement" means a financing statement filed before July 1, 2013. (b) Applicable law. On and after July 1, 2013, 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 this title, as amended by the 2013 amendments. 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 the Commonwealth governs perfection of a security interest, the information in a pre-effective-date financing statement may be amended on and after July 1, 2013, only if: (1) the pre-effective-date financing statement and an amendment are filed in the office specified in §8.9A-501; (2) an amendment is filed in the office specified in § 8.9A-501 concurrently with, or after the filing in that office of, an initial financing statement that satisfies §8.9A-806 (c); or (3) an initial financing statement that provides the information as amended and satisfies §8.9A-806 (c) is filed in the office specified in §8.9A-501. (d) Method of amending: continuation. If the law of the Commonwealth governs perfection of a security interest, the effectiveness of a financing statement filed before July 1, 2013, may be continued only under §8.9A-805 (c) or (e) and §8.9A-806. (e) Method of amending: additional termination rule. Whether or not the law of the Commonwealth governs perfection of a security interest, the effectiveness of a financing statement filed before July 1, 2013, in the Commonwealth may be terminated on or after July 1, 2013, 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 § 8.9A-806 (c) has been filed in the office specified by the law of the jurisdiction governing perfection as provided in this title, as amended by the 2013 amendments, as the office in which to file a financing statement. §8.9-808. 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 July 1, 2013; or (B) to perfect or continue the perfection of a security interest. §8.9A-809. Priority. The 2013 amendments determine the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before July 1, 2013, this title, as it was in effect on June 30, 2013, determines priority. 2. That §8.9A-521 of the Code of Virginia is repealed. 3. That the provisions of this act shall become effective on July 1, 2013. |
