Montana Code 30-9A-626. Action in which deficiency or surplus is in issue
30-9A-626. Action in which deficiency or surplus is in issue. (1) In an action arising from a transaction, other than a consumer transaction, in which the amount of a deficiency or surplus is in issue, the following rules apply:
Terms Used In Montana Code 30-9A-626
- Consumer transaction: means a transaction to the extent that:
(i)an individual incurs an obligation primarily for personal, family, or household purposes;
(ii)a security interest secures the obligation; and
(iii)the collateral is held or acquired primarily for personal, family, or household purposes. See Montana Code 30-9A-102
- Debtor: means :
(i)a person having a property interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor;
(ii)a seller of accounts, chattel paper, payment intangibles, or promissory notes; or
(iii)a consignee. See Montana Code 30-9A-102
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Obligor: means a person that, with respect to an obligation secured by a security interest in or an agricultural lien on the collateral:
(A)owes payment or other performance of the obligation;
(B)has provided property other than the collateral to secure payment or other performance of the obligation; or
(C)is otherwise accountable in whole or in part for payment or other performance of the obligation. See Montana Code 30-9A-102
- Person: includes a corporation or other entity as well as a natural person. See Montana Code 1-1-201
- Secondary obligor: means an obligor to the extent that:
(i)the obligor's obligation is secondary; or
(ii)the obligor has a right of recourse with respect to an obligation secured by collateral against the debtor, another obligor, or property of either. See Montana Code 30-9A-102
- Secured party: means :
(i)a person in whose favor a security interest is created or provided for under a security agreement, whether or not any obligation to be secured is outstanding;
(ii)a person that holds an agricultural lien;
(iii)a consignor;
(iv)a person to which accounts, chattel paper, payment intangibles, or promissory notes have been sold;
(v)a trustee, indenture trustee, agent, collateral agent, or other representative in whose favor a security interest or agricultural lien is created or provided for; or
(vi)a person that holds a security interest arising under 30-2-401, 30-2-505, 30-2-711(3), 30-2A-508(5), 30-4-208, or 30-5-118. See Montana Code 30-9A-102
(a)A secured party need not prove compliance with the provisions of this part relating to collection, enforcement, disposition, or acceptance unless the debtor or a secondary obligor places the secured party’s compliance in issue.
(b)If the secured party’s compliance is placed in issue, the secured party has the burden of establishing that the collection, enforcement, disposition, or acceptance was conducted in accordance with this part.
(c)Except as otherwise provided in 30-9A-628, if a secured party fails to prove that the collection, enforcement, disposition, or acceptance was conducted in accordance with the provisions of this part relating to collection, enforcement, disposition, or acceptance, the liability of a debtor or a secondary obligor for a deficiency is limited to an amount by which the sum of the secured obligation, expenses, and attorneys fees exceeds the greater of:
(i)the proceeds of the collection, enforcement, disposition, or acceptance; or
(ii)the amount of proceeds that would have been realized had the noncomplying secured party proceeded in accordance with the provisions of this part relating to collection, enforcement, disposition, or acceptance.
(d)For purposes of subsection (1)(c)(ii), the amount of proceeds that would have been realized is equal to the sum of the secured obligation, expenses, and attorneys fees unless the secured party proves that the amount is less than that sum.
(e)If a deficiency or surplus is calculated under 30-9A-615(6), the debtor or obligor has the burden of establishing that the amount of proceeds of the disposition is significantly below the range of prices that a complying disposition to a person other than the secured party, a person related to the secured party, or a secondary obligor would have brought.
(2)The limitation of the rules in subsection (1) to transactions other than consumer transactions is intended to leave to the court the determination of the proper rules in consumer transactions. The court may not infer from that limitation the nature of the proper rule in consumer transactions and may continue to apply established approaches.