Chapter 409

409.610 Annotation The burden of proving that a private sale was commercially reasonable is on the seller. Proof that the sale was made at the wholesale price does not establish reasonableness. Vic Hansen & Sons, Inc. v. Crowley, 57 Wis. 2d 106, 203 N.W.2d 728 (1973).

409.610 Annotation The primary focus of commercial reasonableness is not the proceeds from a sale, but procedures employed for the sale. Appleton State Bank v. Van Dyke Ford, Inc. 90 Wis. 2d 200, 279 N.W.2d 443 (1979).

409.610 Annotation The conduct of a debtor may be taken into account in determining the commercial reasonableness of a sale. First National Bank of Kenosha v. Hinrichs, 90 Wis. 2d 214, 279 N.W.2d 449 (1979).

409.610 Annotation A secured creditor can retain a debtor’s collateral while seeking an independent action for a money judgment. Dorman v. Morris, 185 Wis. 2d 845, 519 N.W.2d 685 (Ct. App. 1994).

409.610 Note NOTE: The above annotated materials cite to the pre-2001 Wis. Act 10 version of ch. 409.

409.611 409.611 Notification before disposition of collateral.

409.611(1) (1) Notification date. In this section, “notification date” means the earlier of the date on which:

409.611(1)(a) (a) A secured party sends to the debtor and any secondary obligor an authenticated notification of disposition; or

409.611(1)(b) (b) The debtor and any secondary obligor waive the right to notification.

409.611(2) (2) Notification of disposition required. Except as otherwise provided in sub. (4), a secured party that disposes of collateral under s. 409.610 shall send to the persons specified in sub. (3) a reasonable, authenticated notification of disposition.

409.611(3) (3) Persons to be notified. To comply with sub. (2), the secured party shall send an authenticated notification of disposition to:

409.611(3)(a) (a) The debtor;

409.611(3)(b) (b) Any secondary obligor; and

409.611(3)(c) (c) If the collateral is other than consumer goods:

409.611(3)(c)1. 1. Any other person from which the secured party has received, before the notification date, an authenticated notification of a claim of an interest in the collateral;

409.611(3)(c)2. 2. Any other secured party or lienholder that, 10 days before the notification date, held a security interest in or other lien on the collateral perfected by the filing of a financing statement that:

409.611(3)(c)2.a. a. Identified the collateral;

409.611(3)(c)2.b. b. Was indexed under the debtor’s name as of that date; and

409.611(3)(c)2.c. c. Was filed in the office in which to file a financing statement against the debtor covering the collateral as of that date; and

409.611(3)(c)3. 3. Any other secured party that, 10 days before the notification date, held a security interest in the collateral perfected by compliance with a statute, regulation, or treaty described in s. 409.311 (1).

409.611(4) (4) Subsection (2) inapplicable: perishable collateral; recognized market. Subsection (2) does not apply if the collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market.

409.611(5) (5) Compliance with sub. (3) (c) 2. A secured party complies with the requirement for notification prescribed by sub. (3) (c) 2. if:

409.611(5)(a) (a) Not later than 20 days or earlier than 30 days before the notification date, the secured party requests, in a commercially reasonable manner, information concerning financing statements indexed under the debtor’s name in the office indicated in sub. (3) (c) 2.; and

409.611(5)(b) (b) Before the notification date, the secured party:

409.611(5)(b)1. 1. Did not receive a response to the request for information; or

409.611(5)(b)2. 2. Received a response to the request for information and sent an authenticated notification of disposition to each secured party or other lienholder named in that response whose financing statement covered the collateral.

409.611 History History: 2001 a. 10.

409.612 409.612 Timeliness of notification before disposition of collateral.

409.612(1) (1) Reasonable time is question of fact. Except as otherwise provided in sub. (2), whether a notification is sent within a reasonable time is a question of fact.

409.612(2) (2) Ten-day period sufficient in nonconsumer transaction. In a transaction other than a consumer transaction, a notification of disposition sent after default and 10 days or more before the earliest time of disposition set forth in the notification is sent within a reasonable time before the disposition.

409.612 History History: 2001 a. 10.

409.613 409.613 Contents and form of notification before disposition of collateral: general. Except in a consumer-goods transaction, the following rules apply:

409.613(1) (1) Notification: when sufficient. The contents of a notification of disposition are sufficient if the notification:

409.613(1)(a) (a) Describes the debtor and the secured party;

409.613(1)(b) (b) Describes the collateral that is the subject of the intended disposition;

409.613(1)(c) (c) States the method of intended disposition;

409.613(1)(d) (d) States that the debtor is entitled to an accounting of the unpaid indebtedness and states the charge, if any, for an accounting; and

409.613(1)(e) (e) States the time and place of a public disposition or the time after which any other disposition is to be made.

409.613(2) (2) Notification: question of fact. Whether the contents of a notification that lacks any of the information specified in sub. (1) are nevertheless sufficient is a question of fact.

409.613(3) (3) Notification: other information or minor errors. The contents of a notification providing substantially the information specified in sub. (1) are sufficient, even if the notification includes:

409.613(3)(a) (a) Information not specified by sub. (1); or

409.613(3)(b) (b) Minor errors that are not seriously misleading.

409.613(4) (4) Substantial compliance. A particular phrasing of the notification is not required.

409.613(5) (5) Notification: form sufficient. The following form of notification and the form appearing in s. 409.614 (3), when completed, each provide sufficient information:

NOTIFICATION OF DISPOSITION OF COLLATERAL

To: .... [Name of debtor, obligor, or other person to which the notification is sent]

From: .... [Name, address, and telephone number of secured party]

Name of Debtor(s): .... [Include only if debtor(s) are not an addressee]

[For a public disposition]:

We will sell [or lease or license, as applicable] the .... [describe collateral] [to the highest qualified bidder] in public as follows:

Day and Date: ....

Time: ....

Place: ....

[For a private disposition]:

We will sell [or lease or license, as applicable] the .... [describe collateral] privately sometime after .... [day and date].

You are entitled to an accounting of the unpaid indebtedness secured by the property that we intend to sell [or lease or license, as applicable] [for a charge of $ .... ]. You may request an accounting by calling us at .... [telephone number].

409.613 History History: 2001 a. 10.

409.614 409.614 Contents and form of notification before disposition of collateral: consumer-goods transaction. In a consumer-goods transaction, the following rules apply:

409.614(1) (1) Notification of disposition. A notification of disposition must provide the following information:

409.614(1)(a) (a) The information specified in s. 409.613 (1);

409.614(1)(b) (b) A description of any liability for a deficiency of the person to which the notification is sent;

409.614(1)(c) (c) A telephone number from which the amount that must be paid to the secured party to redeem the collateral under s. 409.623 is available; and

409.614(1)(d) (d) A telephone number or mailing address from which additional information concerning the disposition and the obligation secured is available.

409.614(2) (2) Substantial compliance. A particular phrasing of the notification is not required.

409.614(3) (3) Notification: form sufficient. The following form of notification, when completed, provides sufficient information:

[Name and address of secured party] ....

[Date] ....

NOTICE OF OUR PLAN TO SELL PROPERTY

.... [Name and address of any obligor who is also a debtor]

Subject: .... [Identification of transaction]

We have your .... [describe collateral], because you broke promises in our agreement.

[For a public disposition]:

We will sell .... [describe collateral] at public sale. A sale could include a lease or license. The sale will be held as follows:

Date: ....

Time: ....

Place: ....

You may attend the sale and bring bidders if you want.

[For a private disposition]:

We will sell .... [describe collateral] at private sale sometime after .... [date]. A sale could include a lease or license.

The money that we get from the sale (after paying our costs) will reduce the amount you owe. If we get less money than you owe, you .... [will or will not, as applicable] still owe us the difference. If we get more money than you owe, you will get the extra money, unless we must pay it to someone else.

You can get the property back at any time before we sell it by paying us the full amount you owe (not just the past-due payments), including our expenses. To learn the exact amount you must pay, call us at .... [telephone number].

If you want us to explain to you in writing how we have figured the amount that you owe us, you may call us at .... [telephone number] [or write us at .... [secured party’s address]] and request a written explanation. [We will charge you $.... for the explanation if we sent you another written explanation of the amount you owe us within the last 6 months.]

If you need more information about the sale, call us at .... [telephone number]] [or write us at .... [secured party’s address]].

We are sending this notice to the following other people who have an interest in .... [describe collateral] or who owe money under your agreement:

.... [Names of all other debtors and obligors, if any]

[End of Form]

409.614(4) (4) Notification: other information. A notification in the form of sub. (3) is sufficient, even if additional information appears at the end of the form.

409.614(5) (5) Notification: errors. A notification in the form of sub. (3) is sufficient, even if it includes errors in information not required by sub. (1), unless the error is misleading with respect to rights arising under this chapter.

409.614(6) (6) Notification: not in form. If a notification under this section is not in the form of sub. (3), law other than this chapter determines the effect of including information not required by sub. (1).