Colorado § 4-9-109 - Scope.

§ 4-9-109. Scope.

(a) Except as otherwise provided in subsections (c), (d), and (e) of this section, this article applies to:

(1) A transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract;

(2) An agricultural lien;

(3) A sale of accounts, chattel paper, payment intangibles, or promissory notes;

(4) A consignment;

(5) A security interest arising under section 4-2-401, 4-2-505, 4-2-711 (3), or 4-2.5-508 (5), as provided in section 4-9-110; and

(6) A security interest arising under section 4-4-210 or 4-5-117.5.

(b) The application of this article to a security interest in a secured obligation is not affected by the fact that the obligation is itself secured by a transaction or interest to which this article does not apply.

(c) This article does not apply to the extent that:

(1) A statute, regulation, or treaty of the United States preempts this article;

(2) A statute of this state governs or a constitutional provision provides authority for the creation, perfection, priority, or enforcement of tax liens;

(3) A statute of another state, a foreign country, or a governmental unit of another state or a foreign country, other than a statute generally applicable to security interests, expressly governs creation, perfection, priority, or enforcement of a security interest created by the state, country, or governmental unit; or

(4) The rights of a transferee beneficiary or nominated person under a letter of credit are independent and superior under section 4-5-114.

(d) This article does not apply to:

(1) A landlord's lien, other than an agricultural lien;

(2) A lien, other than an agricultural lien, given by statute or other rule of law for services or materials, but section 4-9-333 applies with respect to priority of the lien;

(3) An assignment of a claim for wages, salary, or other compensation of an employee;

(4) A sale of accounts, chattel paper, payment intangibles, or promissory notes as part of a sale of the business out of which they arose;

(5) An assignment of accounts, chattel paper, payment intangibles, or promissory notes which is for the purpose of collection only;

(6) An assignment of a right to payment under a contract to an assignee that is also obligated to perform under the contract;

(7) An assignment of a single account, payment intangible, or promissory note to an assignee in full or partial satisfaction of a preexisting indebtedness;

(8) A transfer of an interest in or an assignment of a claim under a policy of insurance, other than an assignment by or to a health-care provider of a health-care-insurance receivable and any subsequent assignment of the right to payment, but sections 4-9-315 and 4-9-322 apply with respect to proceeds and priorities in proceeds;

(9) An assignment of a right represented by a judgment, other than a judgment taken on a right to payment that was collateral;

(10) A right of recoupment or set-off, but:

(A) Section 4-9-340 applies with respect to the effectiveness of rights of recoupment or set-off against deposit accounts; and

(B) Section 4-9-404 applies with respect to defenses or claims of an account debtor;

(11) The creation or transfer of an interest in or lien on real property, including a lease or rents thereunder, except to the extent that provision is made for:

(A) Liens on real property in sections 4-9-203 and 4-9-308;

(B) Fixtures in section 4-9-334;

(C) Fixture filings in sections 4-9-501, 4-9-502, 4-9-512, 4-9-516, and 4-9-519; and

(D) Security agreements covering personal and real property in section 4-9-604;

(12) An assignment of a claim arising in tort, other than a commercial tort claim, but sections 4-9-315 and 4-9-322 apply with respect to proceeds and priorities in proceeds;

(13) An assignment of a consumer deposit account in any transaction, but sections 4-9-315 and 4-9-322 apply with respect to proceeds and priorities in proceeds;

(13.5) An assignment of a deposit account in transactions where the principal or the maximum line of credit on a revolving loan account do not exceed one hundred thousand dollars, but sections 4-9-315 and 4-9-322 apply with respect to proceeds and priorities in proceeds. A "revolving loan account" means an arrangement between a creditor and a debtor whereby the lender may permit the debtor, from time to time, to purchase or lease on credit or to obtain loans from the creditor.

(14) An assignment of an individual retirement account as defined in 26 U.S.C. sec. 408; or

(15) An assignment of any plan as defined in 26 U.S.C. sec. 401.

(e) The creation, perfection, priority, and enforcement of a security interest, lien, or pledge created by this state or a governmental unit of this state shall be governed by section 11-57-208 (2), C.R.S., and this article shall not apply to such a security interest, lien, or pledge regardless of whether, pursuant to section 11-57-204 (1), C.R.S., the state or such governmental unit elected to apply part 2 of article 57 of title 11, C.R.S., to such a security interest, lien, or pledge.

Source: L. 2001: Entire article R&RE, p. 1331, § 1, effective July 1.

Editor's note: (1) The provisions of this section are similar to former §§ 4-9-102 and 4-9-104 as they existed prior to 2001.

(2) Colorado legislative change: Colorado added subsection (e) to the list of exceptions in subsection (a) and added a new subsection (e). In subsection (c)(2), Colorado did not adopt the word "expressly" before the word "governs", added the phrase "or a constitutional provision provides authority for", and substituted the phrase "tax liens" for the phrase "a security interest created by this State or a governmental unit of this State". Colorado added new paragraphs (13.5), (14), and (15) to subsection (d).

ANNOTATION

Law reviews. For comment on Ware v. Barr appearing below, see 25 Rocky Mt. L. Rev. 98 (1952). For comment on Exch. Nat'l Bank v. Hough appearing below, see 31 Rocky Mt. L. Rev. 232 (1959). For note, "Filing Under the Uniform Commercial Code Act 9", see 38 U. Colo. L. Rev. 598 (1966). For comment on Rosenthal v. Whitehead appearing below, see 39 U. Colo. L. Rev. 167 (1966). For note, "The Landlord's Lien in Colorado Practice and Under the Bankruptcy Act", see 40 U. Colo. L. Rev. 402 (1968). For article, "The Rights of Landlords in Tenants' Personal Property", see 57 Den. L.J. 685 (1980). For article, "Commercial Law", see 59 Den. L.J. 227 (1982). For article, "Secured Transactions -- Part I: Attachment, Perfection and Priorities", see 11 Colo. Law. 2939 (1982). For article, "Setoff and Security Interests In Deposit Accounts", see 17 Colo. Law. 2108 (1988). For article, "Mastering the Maze of Secured Transactions -- Part 1", see 21 Colo. Law. 2329 (1992).

Annotator's note. Since § 4-9-109 is similar to §§ 4-9-102 and 4-9-104 as they existed prior to the 2001 repeal and reenactment of this article, relevant cases construing those provisions have been included in the annotations to this section.

The law pertaining to the assignment of contract rights is set forth in this section. Farmers Acceptance Corp. v. DeLozier, 178 Colo. 291, 496 P.2d 1016 (1972).

A court cannot through ancillary proceedings place a judgment creditor in a better or more favorable position than he would be in if levy were made upon the property. Hilst v. Bennett, 175 Colo. 78, 485 P.2d 880 (1971).

A court cannot require posting of bond. In ancillary proceedings in aid of execution on a judgment there is no jurisdiction in the courts to require a creditor to post a bond to secure payment of the judgment. Hilst v. Bennett, 175 Colo. 78, 485 P.2d 880 (1971).

For cases which construe provisions prior to U.C.C. concerning chattel mortgages, see Machette v. Wanless, 1 Colo. 225 (1870); Machette v. Wanless, 2 Colo. 169 (1873); Chapin v. Whitsett, 3 Colo. 315 (1877); Crane v. Chandler, 5 Colo. 21 (1879); George v. Tufts, 5 Colo. 162 (1879); Horner v. Stout, 5 Colo. 166 (1879); Cook v. Mann, 6 Colo. 21 (1881); Tabor v. Sampson, 7 Colo. 426, 4 P. 45 (1884); Wilcox v. Jackson, 7 Colo. 521, 4 P. 966 (1884); Frank v. Denver & R.G. Ry., 23 F. 123 (D. Colo. 1885); Wilson v. Voight, 9 Colo. 614, 13 P. 726 (1886); Brasher v. Christophe, 10 Colo. 284, 15 P. 403 (1887); Gerow v. Castello, 11 Colo. 560, 19 P. 505 (1888); Atchison v. Graham, 14 Colo. 217, 23 P. 876 (1890); Harbison v. Tufts, 1 Colo. App. 140, 27 P. 1014 (1891); Newman v. People ex rel. McHenry, 4 Colo. App. 46, 34 P. 1006 (1893); Foster v. Cramer, 19 Colo. 405, 35 P. 747 (1894); Colo. Sav. Bank v. Metro. Theater Co., 20 Colo. 313, 36 P. 902 (1894); Jones v. Clark, 20 Colo. 353, 38 P. 371 (1894); Roberts v. Johnson, 5 Colo. App. 406, 39 P. 596 (1895); Citizens' Coal & Coke Co. v. Stanley, 6 Colo. App. 181, 40 P. 693 (1895); Bank v. Hastings, 7 Colo. App. 129, 42 P. 691 (1895); Edinger v. Grace, 8 Colo. App. 21, 44 P. 855 (1896); Mumford v. Harris, 8 Colo. App. 51, 44 P. 772 (1896); Stanley v. Citizens' Coal & Coke Co., 24 Colo. 103, 49 P. 35 (1897); Burchinell v. Gorsline, 11 Colo. App. 22, 52 P. 413 (1898); Crocker v. Burns, 13 Colo. App. 54, 56 P. 199 (1899); Nichols v. Chittenden, 14 Colo. App. 49, 59 P. 954 (1899); First Congregational Church v. Grand Rapids Sch. Furn. Co., 15 Colo. App. 46, 60 P. 948 (1900); McGovney v. Gwillin, 16 Colo. App. 284, 65 P. 346 (1901); Morse v. Morrison, 16 Colo. App. 449, 66 P. 169 (1901); Clark v. Bright, 30 Colo. 199, 69 P. 506 (1902); Richardson v. Longmont Supply Ditch Co., 19 Colo. App. 483, 76 P. 546 (1904); Fischback v. Garrison Milling & Elevator Co., 20 Colo. App. 448, 79 P. 749 (1905); Cassell v. Deisher, 39 Colo. 367, 89 P. 773 (1907); Klug v. Munce, 40 Colo. 276, 90 P. 603 (1907); Street v. Sederburg, 41 Colo. 128, 92 P. 29 (1907); Hurt v. Hubbard, 41 Colo. 505, 92 P. 908 (1907); Simonson v. McHenry, 41 Colo. 508, 92 P. 906 (1907); Sigel-Campion Live Stock Comm'n Co. v. Holly, 44 Colo. 580, 101 P. 68 (1908); Fischbach v. Garrison Milling & Elevator Co., 46 Colo. 29, 102 P. 895 (1909); Bradford v. Roberts, 46 Colo. 330, 104 P. 391 (1909); Babbitt v. Bent County Bank, 50 Colo. 258, 108 P. 1003 (1911); Owen v. Owens, 51 Colo. 93, 117 P. 134 (1911); Stumpff v. People, 51 Colo. 202, 117 P. 134 (1911); Ferris v. Chambers, 51 Colo. 368, 117 P. 994 (1911); Meador v. Cullison, 52 Colo. 172, 120 P. 145 (1911); Puzzle Mining & Reduction Co. v. Morse Bros. Mach. & Supply Co., 24 Colo. App. 74, 131 P. 791 (1913); Ellison v. Tuckerman, 24 Colo. App. 322, 134 P. 163 (1913); Booth v. Central Sav. Bank, 58 Colo. 519, 146 P. 240 (1915); Stitt v. Spengel House Furnishing Co., 58 Colo. 559, 146 P. 770 (1915); Sorrells v. Sigel-Campion Live Stock Comm'n Co., 27 Colo. App. 154, 148 P. 279 (1915); Thompson v. Rowe, 27 Colo. App. 361, 149 P. 849 (1915); Brown v. People, 61 Colo. 27, 155 P. 332 (1916); First Nat'l Bank v. Felter, 65 Colo. 370, 176 P. 496 (1918); Beatrice Creamery Co. v. Sylvester, 65 Colo. 569, 174 P. 154 (1919); J. D. Best & Co. v. Wolf Co., 67 Colo. 42, 185 P. 371 (1919); Strauss v. Austgen, 67 Colo. 207, 184 P. 299 (1919); Cobb v. Int'l State Bank, 67 Colo. 488, 186 P. 529 (1919); Cobb v. Aiello, 67 Colo. 533, 186 P. 531 (1919); Lampman v. Lamping, 70 Colo. 167, 199 P. 418 (1921); Littell v. Brayton Motor & Accessory Co., 70 Colo. 286, 201 P. 34 (1921); Lowdermilk v. People, 70 Colo. 459, 202 P. 118 (1921); Lewin v. Telluride Iron Works Co., 272 F. 590 (8th Cir. 1921); Turnbull v. Cole, 70 Colo. 364, 201 P. 887 (1922); Downer v. Bermingham, 71 Colo. 245, 205 P. 948 (1922); Metro. State Bank v. Wright, 72 Colo. 106, 209 P. 804 (1922); Russell v. First Nat'l Bank, 72 Colo. 312, 211 P. 372 (1922); Broadhead v. Farmers' State Bank, 72 Colo. 430, 211 P. 376 (1922); Sowards v. Jones, 75 Colo. 25, 223 P. 747 (1924); Hawkes v. First Nat'l Bank, 75 Colo. 47, 224 P. 224 (1924); Bogdon v. Fort, 75 Colo. 231, 225 P. 247 (1924); Anglo-American Mill Co. v. First Nat'l Bank, 76 Colo. 57, 230 P. 118 (1924); Welty v. Burks, 76 Colo. 365 231 P. 660 (1924); Rhodes v. Harmon, 76 Colo. 565, 231 P. 222 (1925); First Nat'l Bank v. O'Connell, 77 Colo. 275, 236 P. 1002 (1925); Walker v. Mathis, 78 Colo. 384, 242 P. 68 (1925); Radetsky v. Gramm-Bernstein Motor Truck Co., 4 F.2d 965 (8th Cir. 1925); Burroughs Adding Mach. Co. v. Bogdon, 9 F.2d 54 (8th Cir. 1925); First State Bank v. Fox, 10 F.2d 116 (8th Cir. 1925); Conrad v. Nat'l Bank, 78 Colo. 485, 242 P. 676 (1926); Wilder v. Colo. Motor Fin. Co., 79 Colo. 97, 244 P. 596 (1926); Lamon v. Harada, 80 Colo. 89, 249 P. 267 (1926); Broadbent v. McFerson 80 Colo. 264, 250 P. 852 (1926); Rocky Mt. Seed Co. v. McArthur, 85 Colo. 1, 272 P. 1117 (1928); Mosko v. Matthews, 87 Colo. 55, 284 P. 1021 (1930); McCormick v. First Nat'l Bank, 88 Colo. 599, 299 P. 7 (1931); Thimmig v. Segal, 89 Colo. 385, 3 P.2d 303 (1931); Illinois Bldg. Co. v. Patterson, 91 Colo. 391, 15 P.2d 699 (1932); Blackmer Furn. Co. v. Bingham, 92 Colo. 456, 21 P.2d 711 (1933); McMinn v. Harrison, 93 Colo. 5, 23 P.2d 944 (1933); McClain v. Saranac Mach. Co., 94 Colo. 145, 28 P.2d 1009 (1934); Conway v. Headquist, 95 Colo. 187, 34 P.2d 69 (1934); Tolland Co. v. First State Bank, 95 Colo. 321, 35 P.2d 867 (1934); Int'l Harvester Co. v. McFerson, 95 Colo. 482, 37 P.2d 390 (1934); Schreiber v. Colt, 80 F.2d 511 (10th Cir. 1935); Prather v. Auto Indus. Corp., 96 Colo. 516, 45 P.2d 628 (1935); Stokes v. Kirk, 97 Colo. 96, 47 P.2d 686 (1935); Thomas v. First Nat'l Bank, 97 Colo. 474, 51 P.2d 589 (1935); Fisher v. Norman Apts., 101 Colo. 173, 72 P.2d 1092 (1937); Stokes v. Kirk, 101 Colo. 591, 75 P.2d 1041 (1938); Paoli State Bank v. Barker, 108 Colo. 153, 113 P.2d 1004 (1941); Crosswhite v. People, 110 Colo. 584, 137 P.2d 399 (1943); Hofmann v. Lamb, 113 Colo. 585, 160 P.2d 995 (1945); Smith v. Greenberg, 121 Colo. 417, 218 P.2d 514 (1950); Denver Motor Fin. Co. v. Stevens, 128 Colo. 531, 265 P.2d 224 (1953); Central Fin. Corp. v. Calvert, 130 Colo. 519, 276 P.2d 990 (1954); In re Clements, 120 F. Supp. 224 (D. Colo. 1954); Rabtoay Gen. Tire Co. v. Colo. Kenworth Corp., 135 Colo. 110, 309 P.2d 616 (1957); Exch. Nat'l Bank v. Hough, 258 F.2d 785 (10th Cir. 1958); In re Maldonado, 171 F. Supp. 340 (D. Colo. 1959); Bank of Denver v. Legler, 142 Colo. 333, 350 P.2d 1059 (1960); Roylance v. Citizens Sav. Bank, 148 Colo. 423, 366 P.2d 557 (1961); Allan v. Diamond T Motor Car Co., 291 F.2d 115 (10th Cir. 1961); Rosenthal v. Whitehead, 159 Colo. 565, 413 P.2d 909 (1966); McCoy v. People, 165 Colo. 407, 439 P.2d 347 (1968); Am. Nat'l Bank v. First Nat'l Bank, 28 Colo. App. 486, 476 P.2d 304 (1970); Am. Nat'l Bank v. Etter, 28 Colo. App. 511, 476 P.2d 287 (1970); Am. Nat'l Bank v. Magor, 28 Colo. App. 522, 476 P.2d 267 (1970); Crepeau v. Renewal Guar. Corp., 29 Colo. App. 23, 478 P.2d 698 (1970) (decided under repealed §§ 21-1-1 et seq. and 21-2-1 et seq., C.R.S. 1963, §§ 20-1-1 et seq. and 20-2-1 et seq., CRS 53, CSA, C. 32, § 1 et seq., and laws antecedent to CSA, C. 32, § 1 et seq.).

For cases which construe provisions prior to U.C.C. concerning assignment of accounts receivable, see Ware v. Barr, 126 Colo. 311, 248 P.2d 1073 (1952); Rabtoay Gen. Tire Co. v. Colo. Kenworth Corp., 135 Colo. 110, 309 P.2d 616 (1957); In re Mile Hi Restaurants, Inc., 233 F. Supp. 936 (D. Colo. 1964); Rottman v. First Nat'l Bank, 401 F.2d 484 (10th Cir. 1969); Matson & Mulhausen Constr. Co. v. Boulevard Nat'l Bank, 28 Colo. App. 427, 475 P.2d 356 (1970); Crepeau v. Renewal Guar. Corp., 29 Colo. App. 23, 478 P.2d 698 (1970); McCormick v. Diamond Shamrock Corp., 175 Colo. 406, 487 P.2d 1333 (1971) (decided under repealed § 11-2-1 et seq., C.R.S. 1963, § 11-2-1 et seq., CRS 53, and CSA, C. 12A, § 1 et seq.).

Any transaction intended to create a security interest is subject to this article. Colo. Leasing Corp. v. Borquez, 738 P.2d 377 (Colo. App. 1986); Western Group Nurseries v. Pomeranz, 867 P.2d 12 (Colo. App. 1993).

A security interest may be created in numerous types of assets, including contract rights. Young v. Golden State Bank, 39 Colo. App. 45, 560 P.2d 855 (1977).

Right to reclaim is not a species of interest in goods which is the result of a transaction "intended to create a security interest" and is not created by contract as contemplated within the meaning of § 4-9-102. Guy Martin Buick, Inc. v. Colo. Springs Nat'l Bank, 184 Colo. 166, 519 P.2d 354 (1974).

Characterization of transaction as "lease" or "sale" is not controlling. Whether a transaction is characterized as a lease or sale is not controlling, but rather it is the intention of the parties to create a security interest which is controlling, that intention to be determined by the facts of each case. H.M.O. Sys. v. Choicecare Health Servs., Inc., 665 P.2d 635 (Colo. App. 1983).

"Lease" agreement being held is a contract of sale creating security interest. Colo. Leasing Corp. v. Borquez, 738 P.2d 377 (Colo. App. 1986).

Profits from motel business are personalty and not an interest in real property. In re M. Vickers, 110 B.R. 332 (Bankr. D. Colo. 1990).

Security interest in automobiles do not attach until title certificates are delivered to bank. After the purchaser of some automobiles delivered its check to the seller, but before the certificates of title were transferred to a bank as the purchaser's agent, the purchaser executed a security agreement with the bank, intending to create a security interest in the automobiles to secure repayment of the bank's financing loan, until the certificates of title were properly transferred to the purchaser's agent, no right, title, or interest was created in the purchaser which would enable it to legally convey or encumber the automobiles. Therefore, although the bank and purchaser fully intended that the security interest attach to the automobiles at the time the loan funds were deposited in the purchaser's account, the absence of any legal right, title, or interest by the purchaser in the automobiles prevented the bank's security interest from attaching prior to the time that the certificates of title were delivered. Guy Martin Buick, Inc. v. Colo. Springs Nat'l Bank, 184 Colo. 166, 519 P.2d 354 (1974).

Security interests in realty paper represent a personal property right to receive payment and are governed by the UCC. Citicorp v. Fremont Nat. Bank, 738 P.2d 29 (Colo. App. 1987).

A seller's right to receive payment by virtue of an installment land sale contract is a personal property right and is governed by this article. Citicorp v. Fremont Nat. Bank, 738 P.2d 29 (Colo. App. 1987).

This article applies to the attachment and perfection of a bank's security interest in note and deed of trust which were delivered pursuant to a loan agreement, even though the deed of trust secured an interest in real estate. Jackson Co. Fed. Savings v. Maduff Mortgage Corp., 608 F. Supp. 588 (D. Colo. 1985).

The governmental subdivision or agency exclusion of subsection (e) covers only transactions in which the government is a debtor/borrower. Bowlen v. Fed. Deposit Ins. Corp., 815 P.2d 1013 (Colo. App. 1991).

A leasehold, although enumerated in a security agreement, is not subject to the provisions of the UCC under subsection (j). Hilst v. Bennett, 175 Colo. 78, 485 P.2d 880 (1971).

This law does not apply to creation, etc., of interest in or lien on real estate. By its very terms the UCC does not apply to the creation or transfer of an interest in or lien on real estate. Fort Collins Prod. Credit Ass'n v. Carroll Dairy, 37 Colo. App. 536, 553 P.2d 95 (1976).

The right to proceeds from an installment land sale contract constitute a security interest to be governed by this article. Citicorp v. Fremont Nat. Bank, 738 P.2d 29 (Colo. App. 1987).

A perfected interest in property cannot be displaced by subsequent attorney's lien. This section provides a first lien to attorney on property of client, but lien is subject to security interest in client's property that was perfected prior to attorney's lien. Colo. Nat. Bank v. Zerobnick & Sander, 768 P.2d 1276 (Colo. App. 1989).

Applied in Welbourne Dev. Co. v. Affiliated Clearance Corp., 28 Colo. App. 313, 472 P.2d 684 (1970); Rocky Mt. Ass'n of Credit Mgt. v. Hessler Mfg. Co., 37 Colo. App. 551, 553 P.2d 840 (1976); Bd. of County Comm'rs v. Berkeley Vill., 40 Colo. App. 431, 580 P.2d 1251 (1978); James v. Ford Motor Credit Co., 638 F.2d 147 (10th Cir. 1980); Jackson v. Sec. Indus. Bank, 4 B.R. 293 (Bankr. D. Colo. 1980); Swofford v. Colo. Nat'l Bank, 628 P.2d 184 (Colo. App. 1981); Wiley v. Bank of Fountain Valley, 632 P.2d 282 (Colo. App. 1981); Young v. Golden State Bank, 632 P.2d 1053 (Colo. App. 1981); ITT Diversified Credit Corp. v. Couch, 669 P.2d 1355 (Colo. 1983).