Colorado § 4-9-316 - Continued perfection of security interest following change in governing law.

§ 4-9-316. Continued perfection of security interest following change in governing law.

(a) A security interest perfected pursuant to the law of the jurisdiction designated in section 4-9-301 (1), 4-9-305 (c), 4-9-306.5 (d), or 4-9-306.7 (b) 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) If a security interest described in subsection (a) of this section becomes perfected under the law of the other jurisdiction before the earliest time or event described in said 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) 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) Except as otherwise provided in subsection (e) of this section, a security interest in goods covered by a certificate of title which is perfected by any method under the law of another jurisdiction when the goods become covered by a certificate of title from this state remains perfected until the security interest would have become unperfected under the law of the other jurisdiction had the goods not become so covered.

(e) A security interest described in subsection (d) of this section 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 section 4-9-311 (b) or 4-9-313 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 this state; or

(2) The expiration of four months after the goods had become so covered.

(f) A security interest in chattel paper, controllable accounts, controllable electronic records, controllable payment intangibles, deposit accounts, letter-of-credit rights, or investment property which is perfected under the law of the chattel paper's jurisdiction, the controllable electronic record's jurisdiction, 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) If a security interest described in subsection (f) of this section becomes perfected under the law of the other jurisdiction before the earlier of the time or the end of the period described in said 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) 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 section 4-9-301 (1) or 4-9-305 (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 had the debtor not changed its location.

(2) If a security interest perfected by a financing statement that is effective under paragraph (1) of this subsection (h) 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 section 4-9-301 (1) or 4-9-305 (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) If a financing statement naming an original debtor is filed pursuant to the law of the jurisdiction designated in section 4-9-301 (1) or 4-9-305 (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 acquired by the new debtor before, and within four months after, the new debtor becomes bound under section 4-9-203 (d) if the financing statement would have been effective to perfect a security interest in the collateral had the collateral been acquired by the original debtor.

(2) A security interest that is perfected by the financing statement and that 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 section 4-9-301 (1) or 4-9-305 (c) or the expiration of the four-month period remains perfected thereafter. A security interest that is perfected by the financing statement but that 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.

Source: L. 2001: Entire article R&RE, p. 1354, § 1, effective July 1. L. 2012: (h) and (i) added, (HB 12-1262), ch. 170, p. 598, § 5, effective July 1, 2013. L. 2023: IP(a) and IP(f) amended, (SB 23-090), ch. 136, p. 554, § 61, effective August 7.

Editor's note: This section is similar to former § 4-9-103 as it existed prior to 2001.

ANNOTATION

Law reviews. For article, "Buyer-Secured Party Conflicts Under Section 9-307(1) of the Uniform Commercial Code", see 46 U. Colo. L. Rev. 333 (1974-75).

Annotator's note. Since § 4-9-316 is similar to § 4-9-103 as it existed prior to the 2001 repeal and reenactment of this article, relevant cases construing that provision have been included in the annotations to this section.

The validity of foreign security interests in personal property is governed by this section except to the extent that motor vehicle titles are governed by § 42-6-131, and the usage of the broad term "motor vehicle titles" indicates the legislative intent that whenever the question as to title to a motor vehicle arises with regard to a foreign security interest, the question is to be answered by application of § 42-6-131 and is precluded from the application of the provisions of § 4-9-103(3). Doenges-Glass, Inc. v. Gen. Motors Acceptance Corp., 175 Colo. 518, 488 P.2d 879 (1971).

Code as enacted in New York determined validity and perfection of security interest. Where seller's only office is located in New York, and assignee of seller's accounts receivable is a New York corporation, the requirements of the uniform commercial code as enacted by New York determines the validity and perfection of assignee's security interest in accounts receivable. Barocas v. Bohemia Import Co., 33 Colo. App. 263, 518 P.2d 850 (1974).

The right to collect annual campground membership dues is a right to payment for services rendered, which is an ordinary commercial account receivable. If the security interest is in accounts, the law of the jurisdiction in which the debtor is located governs the perfection and the effect of perfection or nonperfection of the security interest. Therefore, since the debtor was located at its place of business in Florida, Florida was the proper jurisdiction in which to file in order to perfect a security interest in the collateral, making the location of the collateral in Colorado irrelevant. Capitran Inc. v. Great W. Bank, 872 P.2d 1370 (Colo. App. 1994).

Farm combine which was type used by custom crop cutting in multi-state operations is mobile equipment within the meaning of § 4-9-103 (3)(a). Golden Plains Credit Union v. Konkel, 759 P.2d 788 (Colo. App. 1988), aff'd in part, rev'd in part, 778 P.2d 660 (Colo. 1989).

The provisions of this section and § 4-9-401 (1) are not mutually exclusive and, if equipment meets the requirements of both statutory provisions, it must be considered to fall into both categories. Golden Plains Credit Union v. Konkel, 759 P.2d 788 (Colo. App. 1988), aff'd in part, rev'd in part, 778 P.2d 660 (Colo. 1989).