BILL NUMBER: AB 2051 CHAPTERED 07/24/00 CHAPTER 188 FILED WITH SECRETARY OF STATE JULY 24, 2000 APPROVED BY GOVERNOR JULY 21, 2000 PASSED THE ASSEMBLY JULY 6, 2000 PASSED THE SENATE JUNE 29, 2000 AMENDED IN SENATE JUNE 27, 2000 AMENDED IN SENATE JUNE 15, 2000 AMENDED IN SENATE MAY 25, 2000 AMENDED IN ASSEMBLY MARCH 30, 2000 INTRODUCED BY Assembly Member Robert Pacheco FEBRUARY 22, 2000 An act to amend Section 9614 of the Commercial Code, relating to secured transactions. LEGISLATIVE COUNSEL'S DIGEST AB 2051, Robert Pacheco. Commercial law: secured transactions. Existing commercial law governs security interests in personal property and fixtures, as well as certain sales of accounts, contract rights, and chattel paper. Existing law on and after July 1, 2001, provides, as to secured transactions, that upon default a secured party may sell, lease, license, or otherwise dispose of collateral if specified requirements are met, including providing an authenticated notification of disposition to designated individuals. Existing law on and after July 1, 2001, requires that a notification of disposition sent after default in a consumer-goods transaction contain specified information. This bill would enact additional provisions relating to the disposal of collateral by a public sale if the collateral is a motor vehicle. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 9614 of the Commercial Code is amended to read: 9614. In a consumer-goods transaction, the following rules apply: (1) A notification of disposition must provide all of the following information: (A) The information specified in subdivision (1) of Section 9613. (B) A description of any liability for a deficiency of the person to which the notification is sent. (C) A telephone number from which the amount that must be paid to the secured party to redeem the collateral under Section 9623 is available. (D) A telephone number or mailing address from which additional information concerning the disposition and the obligation secured is available. (2) A particular phrasing of the notification is not required. (3) The following form of notification, when completed, provides sufficient information: _____________________________________________________________________ Name and address of secured party) ______________________________________ (Date) NOTICE OF OUR PLAN TO SELL PROPERTY _____________________________________________________________________ (Name and address of any obligor who is also a debtor) Subject: ____________________________________________________________ (Identification of Transaction) We have your ___________________________, because you broke promises (describe collateral) in our agreement. (For a public disposition:) We will sell ______________________________, at public sale. A sale (describe collateral) could include a lease or license. The sale will be held as follows: Date: ________________________________ Time: ________________________________ Place: _______________________________ You may attend the sale and bring bidders if you want. (For a public disposition pursuant to Section 9614(7)(A) or (7) (B)): We will sell _______________________________________________ (describe type of motor vehicle) beginning on _______________________________________________ (date) by offering it for retail sale or lease to the general public through (select the applicable provision:) (A) Name of dealer ______________________________________________ Address of dealer ___________________________________________ You may inspect the motor vehicle and encourage people to purchase or lease it. (or) (B) Advertising it for sale to the general public to be purchased from ________________________________________________________ (name of secured creditor) at __________________________________________________________ (address where vehicle is to be sold) You may inspect the motor vehicle and encourage people to purchase or lease it. (For a private disposition:) We will sell _____________________________ at private sale sometime (describe collateral) after ___________________________________. (date) A sale could include a lease or license. The money that we get from the sale (after paying our costs) will reduce the amount you owe. If we get less money than you owe, you _________________________________________ still owe us the (will or will not, as applicable) difference. If we get more money than you owe, you will get the extra money, unless we must pay it to someone else. You can get the property back at any time before we sell it by paying us the full amount you owe (not just the past due payments), including our expenses. To learn the exact amount you must pay, call us at _______________________________________________. (telephone number) If you want us to explain to you in writing how we have figured the amount that you owe us, you may call us at ______________________ (or write us at __________________________) (telephone number) (secured party's address) and request a written explanation. (We will charge you $ ____ for the explanation if we sent you another written explanation of the amount you owe us within the last six months.) If you need more information about the sale call us at _____________________ (or write us at __________________________). (telephone number) (secured party's address) We are sending this notice to the following other people who have an interest in _________________________ or who owe money under (describe collateral) your agreement: _____________________________________________________ (Names of all other debtors and obligors, if any) (4) A notification in the form of subdivision (3) is sufficient, even if additional information appears at the end of the form. (5) A notification in the form of subdivision (3) is sufficient, even if it includes errors in information not required by subdivision (1), unless the error is misleading with respect to rights arising under this division. (6) If a notification under this section is not in the form of subdivision (3), law other than this division determines the effect of including information not required by subdivision (1). (7) If the collateral is a motor vehicle, a public disposition includes, but is not limited to, the following defined categories: (A) Retail disposition by a retail seller of motor vehicles who offers the collateral for sale or lease to the general public in the same manner as goods that the seller disposes of on the seller's own behalf. (B) Retail disposition made subsequent to advertising in a publication with a recognized ability to attract retail motor vehicle buyers and lessees and in a manner designed to reach the retail buying and leasing public for vehicles of that type and condition. (8) For dispositions under subparagraphs (A) and (B) of paragraph (7), the secured creditor shall ensure that the consumer has reasonable access to the motor vehicle in question in order to be able to exercise the right to inspect the motor vehicle. (9) Nothing in this section shall be construed to alter or disturb any right to inspect a consumer good prior to sale under existing law. SEC. 2. Nothing in this act shall be construed to alter or disturb the holding in Bank of America v. Lallana (1998) 19 Cal.4th 203. This act does not define "public" and "private" sales and dispositions in general, but describes a limited subset of "public" sales and dispositions when the consumer goods collateral is a motor vehicle and provides a specific form of notice solely for those sales. Nothing in this act shall be construed to alter or disturb any applicable requirements contained in the Rees-Levering Automobile Sales Finance Act (Chapter 2B (commencing with Section 2981) of Title 14 of Part 4 of Division 3 of the Civil Code.