(a) The fact that a greater amount could have been obtained by a collection, enforcement, disposition, or acceptance at a different time or in a different method from that selected by the secured party is not of itself sufficient to preclude the secured party from establishing that the collection, enforcement, disposition, or acceptance was made in a commercially reasonable manner.
(b) A disposition of collateral is made in a commercially reasonable manner if the disposition is made:
(1) In the usual manner on any recognized market;
(2) At the price current in any recognized market at the time of the disposition; or
(3) Otherwise in conformity with reasonable commercial practices among dealers in the type of property that was the subject of the disposition.
(c) A collection, enforcement, disposition, or acceptance is commercially reasonable if it has been approved:
(1) In a judicial proceeding;
(2) By a bona fide creditors' committee;
(3) By a representative of creditors; or
(4) By an assignee for the benefit of creditors.
(d) Approval under subsection (c) of this section need not be obtained, and lack of approval does not mean that the collection, enforcement, disposition, or acceptance is not commercially reasonable.
Source: L. 2001: Entire article R&RE, p. 1420, � 1, effective July 1.
Editor's note: This section is similar to former � 4-9-507 (2) as it existed prior to 2001.
4-9-628. Nonliability and limitation on liability of secured party - liability of secondary obligor. (a) Subject to subsection (f) of this section, unless a secured party knows that a person is a debtor or obligor, knows the identity of the person, and knows how to communicate with the person:
(1) The secured party is not liable to the person, or to a secured party or lienholder that has filed a financing statement against the person, for failure to comply with this article; and
(2) The secured party's failure to comply with this article does not affect the liability of the person for a deficiency.
(b) Subject to subsection (f) of this section, a secured party is not liable because of its status as secured party:
(1) To a person that is a debtor or obligor, unless the secured party knows:
(A) That the person is a debtor or obligor;
(B) The identity of the person; and
(C) How to communicate with the person; or
(2) To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:
(A) That the person is a debtor; and
(B) The identity of the person.
(c) A secured party is not liable to any person, and a person's liability for a deficiency is not affected, because of any act or omission arising out of the secured party's reasonable belief that a transaction is not a consumer-goods transaction or a consumer transaction or that goods are not consumer goods, if the secured party's belief is based on its reasonable reliance on:
(1) A record authenticated by the debtor concerning the purpose for which collateral was to be used, acquired, or held, or indicating that collateral is not a consumer deposit account; or
(2) A record authenticated by the obligor concerning the purpose for which a secured obligation was incurred.
(d) (1) A secured party is not liable under section 4-9-625 (c)(2) for its failure to comply with section 4-9-616.
(2) Repealed.
(e) A secured party is not liable under section 4-9-625 (c)(2) more than once with respect to any one secured obligation.
(f) Subsections (a) and (b) of this section do not apply to limit the liability of a secured party to a person if, at the time the secured party obtains control of collateral that is a controllable account, controllable electronic record, or controllable payment intangible or at the time the security interest attaches to the collateral, whichever is later:
(1) The person is a debtor or obligor; and
(2) The secured party knows that the information in subsection (b)(1)(A), (b)(1)(B), or (b)(1)(C) of this section relating to the person is not provided by the collateral, a record attached to or logically associated with the collateral, or the system in which the collateral is recorded.
Source: L. 2001: Entire article R&RE, p. 1421, � 1, effective July 1. L. 2002: (d)(2) repealed, p. 939, � 9, effective August 7. L. 2023: IP(a) and IP(b) amended and (f) added, (SB 23-090), ch. 136, p. 568, � 88, effective August 7.
Editor's note - Colorado legislative change: Colorado substituted the phrase A record authenticated by the debtor for the phrase A debtor's representation and added the phrase or indicating that collateral is not a consumer deposit account in subsection (c)(1), substituted the phrase A record authenticated by the obligor for the phrase An obligor's representation in subsection (c)(2), and did not adopt subsection (d) of the uniform act. The uniform act's subsection (e) states: A secured party is not liable under section 4-9-625(c)(2) more than once with respect to any one secured obligation.
4-9-629. Secured party's liability when taking possession after default - legislative declaration - fund. (a) The general assembly recognizes that, in the past, certain debtors may have been disadvantaged by the actions of repossessors and that such debtors were then unable to obtain just redress for their losses in the courts, especially in cases in which the creditor who initiated the action by employing or contracting with the repossessor was shielded from liability because the repossessor was categorized by the courts as an independent contractor. The general assembly wishes to ensure that the repossessor is bonded or that the secured party or assignee is held responsible at law as a principal under the general principles of agency law for the actions of a repossessor who is acting at the behest of the creditor in the event that no bond has been posted.
(b) A secured party or such party's assignee who wishes to contract with a person to recover or take possession of collateral upon default, including a motor vehicle repossessed pursuant to section 42-6-146, C.R.S., shall contract to recover or take possession of collateral only with a person who is bonded for property damage to or conversion of such collateral in the amount of at least fifty thousand dollars. Such bond shall be filed with and drawn in favor of the attorney general of the state of Colorado for use of the people of the state of Colorado, and shall be revocable only with the written consent of the attorney general pursuant to rules promulgated by the office of the attorney general. The office of the attorney general may charge a fee to be paid by the person filing such bond in order to cover the direct and indirect costs incurred by such office in fulfilling its duties under the provisions of this section.
(c) A secured party or secured party's assignee who employs or contracts with a person who has not complied with the requirements specified in subsection (b) of this section shall be liable as principal for the actions of any person the secured party or assignee employs or contracts with to recover or take possession of the collateral after default as provided in section 4-9-609 in the same manner as if such person were the agent of the secured party or assignee, whether or not such person has been or may be deemed to be acting as an independent contractor in law.
(d) A repossessor shall not engage in repossessing, recovering, or removing collateral or personal property on behalf of a secured creditor or assignee without first disclosing to such secured creditor or assignee whether such repossessor is bonded pursuant to this article. Any person who fails to disclose or misrepresents to a secured party such person's bonded status or fails to file such bond with the attorney general shall be in violation of the Colorado Consumer Protection Act, article 1 of title 6, C.R.S., and shall be subject to remedies or penalties or both pursuant to said article.
(e) Any person who knowingly falsifies a repossessor bond application or misrepresents information contained therein commits a class 2 misdemeanor and shall be punished as provided in section 18-1.3-501.
(f) All moneys collected by the attorney general pursuant to this section shall be transmitted to the state treasurer, who shall credit the same to the general fund.
(g) Notwithstanding any provision by contract or common law, in exercising its rights after default, a secured party or lessor taking possession of a motor vehicle may not disable or render unusable any computer program or other similar device embedded in the motor vehicle if immediate injury to any person or property is a reasonably foreseeable consequence of such action. Any secured party or lessor who disables or renders unusable such a computer program or other similar device in such circumstances shall be liable in accordance with applicable rules of law to any person who sustains an injury to person or property as a reasonably foreseeable result of the secured party's or lessor's action.
Source: L. 2001: Entire article R&RE, p. 1422, � 1, effective July 1. L. 2002: (g) added, p. 939, � 10, effective August 7; (e) amended, p. 1465, � 10, effective October 1. L. 2021: (e) amended, (SB 21-271), ch. 462, p. 3133, � 53, effective March 1, 2022.
Editor's note - Colorado legislative change: Colorado added this section.
Cross references: For the legislative declaration contained in the 2002 act amending subsection (e), see section 1 of chapter 318, Session Laws of Colorado 2002.