Okla. Stat. tit. 12A § 1-9-611
Okla. Stat. tit. 12A, § 1-9-611
Oklahoma Code Comment
New section 9-611 expands the requirements of old section 9-504(3) . Under new section 9-611, a secured party is required to send a reasonable authenticated notice of disposition of the collateral, as was required under old section 9- 504, except as to the obligation that under old section 9-504 the secured party was only required to send notice to the debtor. Under old section 9-105 the term "debtor" was defined as the person who owed payment or performance of the obligation secured, and, where the debtor and the owner of the collateral were not the same, the term "debtor" also included the owner of the collateral. In addition, because of case law from other jurisdictions and a probable interpretation of Oklahoma law pertaining to guarantors, 15 Okla. Stat. section 321, et. seq., and sureties, 15 Okla. Stat. section 371, et. seq., notice should also be given to guarantors and sureties. If the guarantor or surety proves that the failure to give notice impaired or injured the remedies of the guarantor or surety or lessened the security or otherwise prejudiced the guarantor or surety (15 Okla. Stat. section 338 pertaining to guarantors and 15 Okla. Stat. section 377 pertaining to sureties), the guarantor or surety is exonerated. The same clearly applies under revised Article 9 and new section 9-611, which unlike old section 9-504 , requires that an authenticated notice be sent not only to a debtor but to any secondary obligor which would include guarantors and sureties. Under new section 9-102 , the term "debtor" is defined as a person who has a property interest, other than a security interest or lien, in the collateral whether or not the person is an obligor. The terms "secondary obligor" are also defined under new section 9-102 , as an obligor any portion of whose obligation is secondary. The term "obligor" is defined under new section 9-102 , as a person who owes, or has provided property other than the collateral to secure or is otherwise accountable for, payment or performance of the obligation secured by the security interest in the collateral.
Under new section 9-611 the secured party is not obligated to send notice to the party who owes the debt to the secured party unless that person also has an interest in the collateral. Under old section 9-504 , notice was required to be sent to the obligor regardless whether the obligor (debtor) owned, or had a property interest in, the collateral.
Under old section 9-504(3) , in commercial cases the secured party was required to send notice to any secured party and any subordinated lien holder from whom the secured party had received notice of a claim of interest in the collateral, if the secured party received notification from the other secured party prior to the sending of the notice to the debtor or before the debtor's renunciation of rights. The earlier of such dates is defined in new section 9-611(a) as the notification date, and, the same basic provisions of old section 9-504(3) are found in new section 9-611 . The obligation, however, of the secured party to send notice is expanded in new section 9-611 . The secured party must not only send the notice to other secured parties who gave the secured party authenticated notice of a claim or interest, but also must send the notice to any other person who gave the secured party an authenticated notice of a claim or interest in the collateral.
The secured party also is required to send an authenticated notice to any other secured party whether or not notification is sent by such other secured party, if ten or more days before the notification date the other secured party (including an agricultural lien holder) properly perfected its security interest by filing a financing statement in the proper office, identifying the collateral and indexed under the debtor's name (not the obligor's name). A secured party is also required, ten days before the notification date, to send notice to any secured party who perfected by complying with new section 9- 311(a) which would include, in Oklahoma, any interest perfected by notation on a certificate of title, e.g., vehicles and the like.
Under old section 9-504(3) a secured party was required to give reasonable notice of the time and place of public sale or time after which a private or other intended disposition would occur. The same requirement is found in new section 9-611, except the requirement is for an authenticated notice. An authenticated notice is not necessarily a written notice. See new section 9- 102(a)(4) . New section 9-611 does not state who must authenticate the notice. Presumably the notice must be authenticated by the secured party or someone acting on the secured party's behalf. Although new section 9-611 requires only a reasonable authenticated notification, when read in conjunction with new section 9-613 the notice requirement under new Article 9 is essentially the same as old section 9-504(3) , except for the requirement of authentication. This revision imposes the new requirement of authentication but also contemplates that the notice might be given in a record other than a writing.
Old section 9-504(3) , did not state whether the notice had to be actually received; it simply required that reasonable notification of the time and place of disposition be sent. The Oklahoma Supreme Court, however, in dictum in Cate v. Archon Oil Company, Inc., 695 P.2d 1352 (Okla. 1985), held that the notice must be received by the debtor. In new section 9-611 the secured party is only required to send the notice to the debtor or any secondary obligor. "Send" is carefully defined at revised section 9-102(a)(74) . There is no requirement that the notice be received, and therefore the dictum in Cate is rejected.
The purpose of the notice of the intended disposition of collateral under old section 9-504 was to enable the debtor to protect its interest in the collateral by refinancing or otherwise paying the debt, or by finding potential purchasers of the collateral, and to be present at the sale in order to bid on the collateral or have others do so in order to prevent the sale of the collateral for less than its true value. First National Bank and Trust Company of Enid v. Holston, 559 P.2d 440 (Okla 1976). The same purpose would apply under new section 9-611 .