Bill Text: CA AB1549 | 2009-2010 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Judgment liens: priority.

Spectrum: Partisan Bill (Democrat 8-0)

Status: (Passed) 2009-08-06 - Chaptered by Secretary of State - Chapter 153, Statutes of 2009. [AB1549 Detail]

Download: California-2009-AB1549-Introduced.html

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BILL NUMBER: AB 1549	INTRODUCED
	BILL TEXT


INTRODUCED BY   Committee on Banking and Finance (Nava (Chair),
Evans, Fong, Fuentes, Mendoza, Ruskin, Swanson, and Torres)

                        MARCH 9, 2009

   An act to amend Sections 697.530 and 697.590 of the Code of Civil
Procedure, relating to judgment liens.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1549, as introduced, Committee on Banking and Finance. Judgment
liens: priority.
   Existing law provides that a judgment lien on personal property is
a lien on all interests in specified personal property, including
accounts receivable, chattel paper, equipment, farm products,
inventory, and negotiable documents of title, that are subject to
enforcement of a money judgment against the judgment debtor at the
time the lien is created if a security interest in the property could
be perfected by filing a financing statement at that time with the
Secretary of State, as specified.
   This bill would provide, with respect to those judgment liens on
specified personal property, that the judgment debtor or subject
property must be located in this state. The bill would exclude from
the operation of these provisions personal property that is
as-extracted collateral, as defined.
   Existing law provides that priority between a judgment lien on
personal property and a conflicting security interest in the same
personal property shall be determined according to priority in time
of filing or perfection.
   This bill would make agricultural liens on personal property also
subject to this provision in determining priority of conflicting
interests, except as provided.
   The bill would make other technical and nonsubstantive changes.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 697.530 of the Code of Civil Procedure is
amended to read:
   697.530.  (a) A judgment lien on personal property is a lien on
all interests in the  following  personal property
that are subject to enforcement of the money judgment against the
judgment debtor pursuant to Article 1 (commencing with Section
695.010) of Chapter 1 at the time  when  the lien is created
if  a   both of the following apply: 
    (1)     A  security interest in the
property could be perfected under the Commercial Code by filing a
financing statement at that time with the Secretary of State 
:   . 
    (2)     The personal property is, at that
time, any of the following:  
   (1) 
    (A)  Accounts receivable  , and the judgment debtor
is located in this state  . 
   (2) Chattel 
    (B)     Tangible chattel  paper  ,
as defined in paragraph (78) of subdivision (a) of Section 9102 of
the Commercial Code,   and the judgment debtor is located in
this state  . 
   (3)
    (C)  Equipment  , excluding as-extracted collateral
as defined in paragraph (6) of subdivision (a) of Section 9102 of the
Commercial Code, located within this state  . 
   (4) 
    (D)  Farm products  , excluding as-extracted
collateral as defined in paragraph (6) of subdivision (a)  
of Section 9102 of the Commercial Code,   located within
this state  . 
   (5) 
    (E)  Inventory  , excluding as-extracted collateral
as defined in paragraph (6) of subdivision (a) of Section 9102 of the
Commercial Code,   located within this state  .

   (6) 
    (F)  Negotiable documents of title  , excluding
as-extracted collateral as defined in paragraph (6) of subdivision
(a) of Section 9102 of the Commercial Code, located within this state
 .
   (b) If any interest in personal property on which a judgment lien
could be created under subdivision (a) is acquired after the judgment
lien was created, the judgment lien attaches to the interest at the
time it is acquired.
   (c) To the extent provided by Section 697.620, a judgment lien on
personal property continues on the proceeds received upon the sale,
collection, or other disposition of the property subject to the
judgment lien.
   (d) Notwithstanding any other provision of this section, the
judgment lien does not attach to:
   (1) A vehicle or vessel required to be registered with the
Department of Motor Vehicles or a mobilehome or commercial coach
required to be registered pursuant to the Health and Safety Code.
   (2) The inventory of a retail merchant held for sale except to the
extent that the inventory of the retail merchant consists of durable
goods having a unit retail value of at least five hundred dollars
($500). For the purposes of this paragraph, "retail merchant" does
not include  (A) a   either of the following:

    (A)     A  person whose sales for
resale exceeded 75 percent in dollar volume of the person's total
sales of all goods during the 12 months preceding the filing of the
notice of judgment lien on personal property  or (B) a
  . 
    (B)     A  cooperative association
organized pursuant to Chapter 1 (commencing with Section 54001) of
Division 20 of the Food and Agricultural Code (agricultural
cooperative associations) or Part 3 (commencing with Section 13200)
of Division 3 of Title 1 of the Corporations Code (Fish Marketing
Act).
   (e) If property subject to a lien under this article becomes a
fixture  (as   , as  defined in paragraph
(41) of subdivision (a) of Section 9102 of the Commercial 
Code)   Code  , the judgment lien on  such
  that  property is extinguished.
   (f) Notwithstanding the filing of a notice of judgment lien,
subject to the provisions of Chapter 6 (commencing with Section
708.010), a person obligated on an account receivable or chattel
paper is authorized to pay or compromise the amount without notice to
or consent of the judgment creditor unless and until there is a levy
pursuant to Chapter 3 (commencing with Section 699.010). 
   (g) For purposes of this section, whether a person is located in
this state is determined in accordance with Section 9307 of the
Commercial Code, except that the location of a registered
organization, as defined in paragraph (70) of subdivision (a) of
Section 9102 of the Commercial Code, that is organized under the law
of another state is determined without regard to subdivision (e) of
Section 9307 of the Commercial Code. 
  SEC. 2.  Section 697.590 of the Code of Civil Procedure is amended
to read:
   697.590.  (a) As used in this section:
   (1) "Filing" means:
   (A) With respect to a judgment lien on personal property, the
filing of a notice of judgment lien in the office of the Secretary of
State to create a judgment lien on personal property under this
article.
   (B) With respect to a security interest  or agricultural lien,
as defined in paragraph (5) of subdivision (a) of Section 9102 of
the Commercial Code  , the filing of a financing statement
pursuant to Division 9 (commencing with Section 9101) of the
Commercial Code.
   (2) "Perfection" means perfection of a security interest  or
agricultural lien  pursuant to Division 9 (commencing with
Section 9101) of the Commercial Code.
   (3) "Personal property" means:
   (A) With respect to a judgment lien on personal property, the
property to which a judgment lien has attached pursuant to this
article.
   (B) With respect to a security interest, the collateral subject to
a security interest pursuant to Division 9 (commencing with Section
9101) of the Commercial Code. 
   (C) With respect to an agricultural lien, the farm products
subject to an agricultural lien pursuant to Division 9 (commencing
with Section 9101) of the Commercial Code. 
   (4) "Purchase money security interest"  means "purchase
money security interest" as defined   has the same
meaning as used  in Section 9103 of the Commercial Code.
   (b) Except as provided in subdivisions (d)  and 
 ,  (e),  (g), and (h),  priority between a
judgment lien on personal property and a conflicting security
interest  or agricultural lien  in the same personal
property shall be determined according to this subdivision.
Conflicting interests rank according to priority in time of filing or
perfection. In the case of a judgment lien, priority dates from the
time filing is first made covering the personal property. In the case
of a security interest  or agricultural lien  , priority
dates from the  earlier of the  time a filing is first made
covering the personal property or the time the security interest 
or agricultural lien  is first perfected,  whichever is
earlier, provided that   if  there is no period
thereafter when there is neither filing nor perfection.
   (c) For the purposes of subdivision (b), a date of filing or
perfection as to personal property is also a date of filing or
perfection as to proceeds.
   (d) A purchase money security interest has priority over a
conflicting judgment lien on the same personal property or its
proceeds if the purchase money security interest is perfected at the
time the judgment debtor  (as   , as  a
debtor under the security  agreement)  
agreement,  receives possession of the personal property or
within 20 days thereafter.
   (e) If a purchase money security interest in inventory has
priority over a judgment lien pursuant to subdivision (d) and a
conflicting security interest has priority over the purchase money
security interest in the same inventory pursuant to Section 9324 of
the Commercial Code, the conflicting security interest also has
priority over the judgment lien on the inventory subject to the
purchase money security interest  ,  notwithstanding that
the conflicting security interest would not otherwise have priority
over the judgment lien.
   (f) A judgment lien that has attached to personal property  ,
 and that is also subordinate under subdivision (b) to a
security interest in the same personal property  , is
subordinate to the security interest only to the extent that the
security interest secures advances made before the judgment lien
attached or within 45 days thereafter or made without knowledge of
the judgment lien or pursuant to a commitment entered into without
knowledge of the judgment lien. For the purpose of this subdivision,
a secured party shall be deemed not to have knowledge of a judgment
lien on personal property until (1) the judgment creditor serves a
copy of the notice of judgment lien on the secured party personally
or by mail and (2) the secured party has knowledge of the judgment
lien on personal property, as "knowledge" is defined in Section 1201
of the Commercial Code. If service on the secured party is by mail,
it shall be sent to the secured party at the address shown in the
financing statement or security agreement. 
   (g) A perfected agricultural lien on personal property has
priority over a judgment lien on the same personal property if the
statute creating the agricultural lien so provides.  
   (h) A security interest in personal property perfected by the
filing of a financing statement under the law of another
jurisdiction, or perfected by another method pursuant to the law of
another jurisdiction, has priority over a judgment lien in the same
personal property.