Okla. Stat. tit. 12A § 1-9-607

Current through Laws 2024, c. 453.

Section 1-9-607 - Collection and enforcement by secured party

(a) 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 Section 1-9-315 of this title;

(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 paragraph (1) of subsection (a) of Section 1-9-104 of this title, 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 paragraph (2) or (3) of subsection (a) Section 1-9-104 of this title, may instruct the bank to pay the balance of the deposit account to or for the benefit of the secured party.

(b) If necessary to enable a secured party to exercise under paragraph (3) of subsection (a) of this section 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) 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) A secured party may deduct from the collections made pursuant to subsection (c) of this section reasonable expenses of collection and enforcement, including reasonable attorney fees and legal expenses incurred by the secured party.

(e) This section does not determine whether an account debtor, bank, or other person obligated on collateral owes a duty to a secured party.

Okla. Stat. tit. 12A, § 1-9-607

Amended by Laws 2015 , c. 374, s. 16, eff. 11/1/2015.

Added by Laws 2000 , SB 1519, c. 371, § 114, eff. 7/1/2001.

Oklahoma Code Comment

Sections 9-607 and 9-608 carry forward the rules found in former section 9-502 , but they are broader in scope, and they also elaborate on those rules and provide answers for questions that arose under former section 9-502 . For example, as Official Comment 5 explicitly points out, a junior secured party may collect and enforce its security interest even if that security interest is subordinate to a conflicting security interest in the same right to payment. See also Official Comment 5 to revised section 9-608 . Former Oklahoma law could be read to the contrary. See Consolidated Equipment Sales, Inc. v. First Bank & Trust Co., 627 P.2d 432 (Okla. 1981); First National Bank and Trust Co. of Norman v. Security National Bank and Trust Co., 676 P.2d 837 (Okla. 1984).

Another example concerns a mortgage note or other obligation secured by real estate as collateral where the secured party has not become the assignee of record of the mortgage. See revised sections 9-203(g) and 9-308(e) . Revised section 9-607(b) allows the secured party (in order to foreclose the mortgage non-judicially under 46 Okla. Stat. Chapters 1-5) to record in the office in which a record of the mortgage is recorded a copy of the security agreement and an affidavit of default. See also revised section 9-619 . Of course, any filing should include what is necessary for the real estate records, such as a legal description.

A third example are the rules in revised section 9-608(a)(3) concerning non-cash proceeds. To illustrate, suppose an enforcing secured party receives a promissory note from an account debtor who is unable to pay in return for extending the due date. The secured party may credit the debtor with the principal amount of the note or may credit the debtor as the note is paid, depending on what is commercially reasonable.

Prior cases under former section 9-502 remain good law. See, e.g., F.D.I.C. v. Hulsey, 792 F. Supp. 729 (W.D. Okla. 1992), aff'd in part, rev'd in part, 22 F.3d 1472 (10th Cir. 1994); In re Hammond, 31 B.R. 517 (Bankr. W.D. Okla. 1983); and Frontier Federal Sav. & Loan v. Commercial Bank, 806 P.2d 1140 (Okla. App. 1990).