House Bill 1083e1
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HB 1083, First Engrossed
1 A bill to be entitled
2 An act relating to the Uniform Commercial Code;
3 revising chapter 678, F.S.; revising part I,
4 relating to general matters; providing a short
5 title; providing definitions; providing rules
6 for determining whether certain obligations and
7 interests are securities or financial assets;
8 providing for acquisition of security or
9 financial assets or interests; providing for
10 notice of adverse claim; providing for control
11 of certain securities; providing for effect of
12 certain actions; providing for warranties in
13 direct holding; providing for warranties in
14 indirect holding; providing for applicability
15 of law; providing clearing corporation rules;
16 providing for creditor's legal process;
17 providing for inapplication of statute of
18 frauds; providing for evidentiary rules
19 concerning certificated securities; providing
20 for nonliability to adverse claimant under
21 certain circumstances; providing for securities
22 intermediary as purchaser for value; revising
23 part II, relating to issue and issuer;
24 providing a definition of issuer; providing for
25 issuer's responsibilities and defenses;
26 providing for notice; specifying staleness as
27 notice of defect or defense; providing effect
28 of issuer's restriction on transfer; providing
29 for effect of unauthorized signatures;
30 providing for completion or alteration of
31 security certificates; providing rights and
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HB 1083, First Engrossed
1 duties of issuer with respect to registered
2 owners; providing for effect of signature of
3 certain persons; providing for issuer's liens;
4 specifying conditions of overissue; revising
5 part III, relating to transfer of certificated
6 and uncertificated securities; providing for
7 delivery of certain securities; providing for
8 rights of purchaser; providing for protected
9 purchasers; providing for indorsement;
10 providing for certain instructions; providing
11 for effect of guaranteeing certain actions;
12 providing purchaser's right to certain
13 requisites; revising part IV, relating to
14 registration; providing duties of issuer to
15 register transfers; requiring certain assurance
16 of effectiveness of certain actions; providing
17 for demand that issuer not register transfer;
18 providing for liability for wrongful
19 registration; providing for replacement of
20 certain certificates; providing for obligation
21 to notify issuer of certain certificates;
22 providing for authenticating certain persons;
23 revising part V, relating to security
24 entitlements; providing for securities
25 accounts; providing for acquisition of security
26 entitlement from a securities intermediary;
27 providing for assertion of adverse claim
28 against entitlement holder; providing for
29 property interest of entitlement holder in
30 certain assets; providing duties of securities
31 intermediary; providing for certain rights of
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HB 1083, First Engrossed
1 purchaser of security entitlement; providing
2 priority among security interests and
3 entitlement holders; amending s. 679.103, F.S.;
4 providing for perfection of security interests
5 relating to investment property; amending s.
6 679.105, F.S.; conforming the section to
7 changes made by the act; redefining the term
8 "deposit account"; amending s. 679.106, F.S.,
9 to conform; creating s. 679.115, F.S.;
10 providing for perfection of security interests
11 in certain investment properties; providing
12 definitions; providing criteria; providing
13 procedures; creating s. 679.116, F.S.;
14 providing for perfection of security interests
15 arising in purchase or delivery of financial
16 interests; amending ss. 679.203, 679.301,
17 679.302, 679.303, 679.304, 679.305, 679.306,
18 679.309, and 679.312, F.S., to conform;
19 amending ss. 671.105, 671.206, 674.104, and
20 675.114, F.S., to conform; providing for
21 applicability; repealing ss. 610.011, 610.021,
22 610.031, 610.041, 610.051, 610.061, 610.071,
23 610.081, 610.091, 610.101, 610.111, and
24 671.304(2)(b), F.S., relating to the Uniform
25 Act for Simplification of Fiduciary Security
26 Transfers; repealing ss. 678.101, 678.102,
27 678.103, 678.104, 678.105, 678.106, 678.107,
28 678.108, 678.201, 678.202, 678.203, 678.204,
29 678.205, 678.206, 678.207, 678.208, 678.301,
30 678.302, 678.303, 678.304, 678.305, 678.306,
31 678.307, 678.308, 678.309, 678.310, 678.311,
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HB 1083, First Engrossed
1 678.312, 678.313, 678.314, 678.315, 678.316,
2 678.317, 678.318, 678.319, 678.320, 678.321,
3 678.401, 678.402, 678.403, 678.404, 678.405,
4 678.406, 678.407, and 678.408, F.S., relating
5 to investment securities under the Uniform
6 Commercial Code; revising provisions of chapter
7 680, F.S., relating to leases under the Uniform
8 Commercial Code; amending s. 680.1031, F.S.;
9 redefining the terms "consumer lease" and
10 "finance lease"; amending s. 680.1041, F.S.;
11 revising language with respect to other
12 statutes to which leases are subject; amending
13 s. 680.303, F.S.; revising language with
14 respect to the alienability of a party's
15 interest under a lease contract or of a
16 lessor's residual interest in goods; amending
17 s. 680.304, F.S.; revising language with
18 respect to the subsequent lease of goods by the
19 lessor; amending s. 680.307, F.S.; revising
20 language with respect to priority of liens
21 arising by attachment or levy on security
22 interests in and other claims to goods;
23 amending s. 680.309, F.S.; revising language
24 with respect to lessor's and lessee's rights
25 when goods become fixtures; creating s. 680.32,
26 F.S.; providing that nothing in chapter 680,
27 F.S., prevents subordination by agreement by
28 any person entitled to priority; amending s.
29 680.501, F.S.; revising language with respect
30 to the procedure governing default; amending s.
31 680.503, F.S.; revising language with respect
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HB 1083, First Engrossed
1 to modification or impairment of rights and
2 remedies; amending s. 680.507, F.S.; revising
3 language with respect to proof of market rent;
4 amending s. 680.508, F.S.; revising language
5 with respect to lessee's remedies; amending s.
6 680.516, F.S.; revising language with respect
7 to the effect of acceptance of goods, notice of
8 default, the burden of establishing default
9 after acceptance, and notice of claim or
10 litigation to persons answerable over; amending
11 s. 680.518, F.S.; revising language with
12 respect to cover and substitute goods; amending
13 s. 680.519, F.S.; revising language with
14 respect to lessee's damages for nondelivery,
15 repudiation, default, or breach of warranty in
16 regard to accepted goods; amending s. 680.523,
17 F.S.; revising language with respect to
18 lessor's remedies; amending s. 680.524, F.S.;
19 revising language with respect to lessor's
20 right to identify goods to lease contract;
21 amending s. 680.525, F.S.; revising language
22 with respect to lessor's right to possession of
23 goods; amending s. 680.527, F.S.; revising
24 language with respect to lessor's rights to
25 dispose of goods; amending s. 680.528, F.S.;
26 revising language with respect to lessor's
27 damages for nonacceptance or repudiation;
28 amending s. 680.529, F.S.; revising language
29 with respect to lessor's action for rent;
30 amending s. 680.532, F.S.; revising language
31 with respect to lessor recovery for loss of
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HB 1083, First Engrossed
1 residual interest; providing for the
2 application of the act; repealing s. 679.111,
3 F.S., relating to applicability of bulk
4 transfer laws; providing an effective date.
5
6 Be It Enacted by the Legislature of the State of Florida:
7
8 Section 1. Part I of chapter 678, Florida Statutes,
9 consisting of sections 678.1011, 678.1021, 678.1031, 678.1041,
10 678.1051, 678.1061, 678.1071, 678.1081, 678.1091, 678.1101,
11 678.1111, 678.1121, 678.1131, 678.1141, 678.1151, and
12 678.1161, Florida Statutes, is created to read:
13
14 PART 1
15
16 SHORT TITLE AND GENERAL MATTERS
17
18 678.1011 Short title.--Chapter 678 may be cited as
19 "Uniform Commercial Code--Investment Securities."
20 678.1021 Definitions.--
21 (1) In this chapter:
22 (a) "Adverse claim" means a claim that a claimant has
23 a property interest in a financial asset and that it is a
24 violation of the rights of the claimant for another person to
25 hold, transfer, or deal with the financial asset.
26 (b) "Bearer form," as applied to a certificated
27 security, means a form in which the security is payable to the
28 bearer of the security certificate according to its terms but
29 not by reason of an indorsement.
30
31
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HB 1083, First Engrossed
1 (c) "Broker" means a person defined as a broker or
2 dealer under the federal securities laws, but without
3 excluding a bank acting in that capacity.
4 (d) "Certificated security" means a security that is
5 represented by a certificate.
6 (e) "Clearing corporation" means:
7 1. A person that is registered as a "clearing agency"
8 under the federal securities laws;
9 2. A federal reserve bank; or
10 3. Any other person that provides clearance or
11 settlement services with respect to financial assets that
12 would require it to register as a clearing agency under the
13 federal securities laws but for an exclusion or exemption from
14 the registration requirement, if its activities as a clearing
15 corporation, including promulgation of rules, are subject to
16 regulation by a federal or state governmental authority.
17 (f) "Communicate" means to:
18 1. Send a signed writing; or
19 2. Transmit information by any mechanism agreed upon
20 by the persons transmitting and receiving the information.
21 (g) "Entitlement holder" means a person identified in
22 the records of a securities intermediary as the person having
23 a security entitlement against the securities intermediary. If
24 a person acquires a security entitlement by virtue of s.
25 678.5011(3)(b) or (c), that person is the entitlement holder.
26 (h) "Entitlement order" means a notification
27 communicated to a securities intermediary directing transfer
28 or redemption of a financial asset to which the entitlement
29 holder has a security entitlement.
30 (i) "Financial asset," except as otherwise provided in
31 s. 678.1031, means:
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HB 1083, First Engrossed
1 1. A security;
2 2. An obligation of a person or a share,
3 participation, or other interest in a person or in property or
4 an enterprise of a person, which is, or is of a type, dealt in
5 or traded on financial markets, or which is recognized in any
6 area in which it is issued or dealt in as a medium for
7 investment; or
8 3. Any property that is held by a securities
9 intermediary for another person in a securities account if the
10 securities intermediary has expressly agreed with the other
11 person that the property is to be treated as a financial asset
12 under this chapter. As context requires, the term means
13 either the interest itself or the means by which a person's
14 claim to it is evidenced, including a certificated or
15 uncertificated security, a security certificate, or a security
16 entitlement.
17 (j) "Good faith," for purposes of the obligation of
18 good faith in the performance or enforcement of contracts or
19 duties within this chapter, means honesty in fact and the
20 observance of reasonable commercial standards of fair dealing.
21 (k) "Indorsement" means a signature that alone or
22 accompanied by other words is made on a security certificate
23 in registered form or on a separate document for the purpose
24 of assigning, transferring, or redeeming the security or
25 granting a power to assign, transfer, or redeem it.
26 (l) "Instruction" means a notification communicated to
27 the issuer of an uncertificated security which directs that
28 the transfer of the security be registered or that the
29 security be redeemed.
30 (m) "Registered form," as applied to a certificated
31 security, means a form in which:
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HB 1083, First Engrossed
1 1. The security certificate specifies a person
2 entitled to the security.
3 2. A transfer of the security may be registered upon
4 books maintained for that purpose by or on behalf of the
5 issuer, or the security certificate so states.
6 (n) "Securities intermediary" means:
7 1. A clearing corporation; or
8 2. A person, including a bank or broker, that in the
9 ordinary course of its business maintains securities accounts
10 for others and is acting in that capacity.
11 (o) "Security," except as otherwise provided in
12 678.1031, means an obligation of an issuer or a share,
13 participation, or other interest in an issuer or in property
14 or an enterprise of an issuer:
15 1. Which is represented by a security certificate in
16 bearer or registered form, or the transfer of which may be
17 registered upon books maintained for that purpose by or on
18 behalf of the issuer.
19 2. Which is one of a class or series or by its terms
20 is divisible into a class or series of shares, participations,
21 interests, or obligations.
22 3. Which:
23 a. Is, or is of a type, dealt in or traded on
24 securities exchanges or securities markets; or
25 b. Is a medium for investment and by its terms
26 expressly provides that it is a security governed by this
27 chapter.
28 (p) "Security certificate" means a certificate
29 representing a security.
30
31
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HB 1083, First Engrossed
1 (q) "Security entitlement" means the rights and
2 property interest of an entitlement holder with respect to a
3 financial asset specified in Part V.
4 (r) "Uncertificated security" means a security that is
5 not represented by a certificate.
6 (2) Other definitions applying to this chapter and the
7 sections in which they appear are:
8 "Appropriate person," s. 678.1071
9 "Control," s. 678.1061
10 "Delivery," s. 678.3011
11 "Investment company security," s. 678.1031
12 "Issuer," s. 678.2011
13 "Overissue," s. 678.2101
14 "Protected purchaser," s. 678.3031
15 "Securities account," s. 678.5011
16 (3) In addition, chapter 671 contains general
17 definitions and principles of construction and interpretation
18 applicable throughout this chapter.
19 (4) The characterization of a person, business, or
20 transaction for purposes of this chapter does not determine
21 the characterization of the person, business, or transaction
22 for purposes of any other law, regulation, or rule.
23 678.1031 Rules for determining whether certain
24 obligations and interests are securities or financial
25 assets.--
26 (1) A share or similar equity interest issued by a
27 corporation, business trust, joint stock company, or similar
28 entity is a security.
29 (2) An "investment company security" is a security.
30 "Investment company security" means a share or similar equity
31 interest issued by an entity that is registered as an
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HB 1083, First Engrossed
1 investment company under the federal investment company laws,
2 an interest in a unit investment trust that is so registered,
3 or a face-amount certificate issued by a face-amount
4 certificate company that is so registered. Investment company
5 security does not include an insurance policy or endowment
6 policy or annuity contract issued by an insurance company.
7 (3) An interest in a partnership or limited liability
8 company is not a security unless it is dealt in or traded on
9 securities exchanges or in securities markets, its terms
10 expressly provide that it is a security governed by this
11 chapter, or it is an investment company security. However, an
12 interest in a partnership or limited liability company is a
13 financial asset if it is held in a securities account.
14 (4) A writing that is a security certificate is
15 governed by this chapter and not by chapter 673, even though
16 it also meets the requirements of that chapter. However, a
17 negotiable instrument governed by chapter 673 is a financial
18 asset if it is held in a securities account.
19 (5) An option or similar obligation issued by a
20 clearing corporation to its participants is not a security,
21 but is a financial asset.
22 (6) A commodity contract, as defined in s. 679.115, is
23 not a security or a financial asset.
24 678.1041 Acquisition of security or financial asset or
25 interest therein.--
26 (1) A person acquires a security or an interest
27 therein, under this chapter, if:
28 (a) The person is a purchaser to whom a security is
29 delivered pursuant to s. 678.3011; or
30 (b) The person acquires a security entitlement to the
31 security pursuant to s. 678.5011.
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HB 1083, First Engrossed
1 (2) A person acquires a financial asset, other than a
2 security, or an interest therein, under this chapter, if the
3 person acquires a security entitlement to the financial asset.
4 (3) A person who acquires a security entitlement to a
5 security or other financial asset has the rights specified in
6 Part 5, but is a purchaser of any security, security
7 entitlement, or other financial asset held by the securities
8 intermediary only to the extent provided in s. 678.5031.
9 (4) Unless the context shows that a different meaning
10 is intended, a person who is required by other law,
11 regulation, rule, or agreement to transfer, deliver, present,
12 surrender, exchange, or otherwise put in the possession of
13 another person a security or financial asset satisfies that
14 requirement by causing the other person to acquire an interest
15 in the security or financial asset pursuant to subsection (1)
16 or subsection (2).
17 678.1051 Notice of adverse claim.--
18 (1) A person has notice of an adverse claim if:
19 (a) The person knows of the adverse claim;
20 (b) The person is aware of facts sufficient to
21 indicate that there is a significant probability that the
22 adverse claim exists and deliberately avoids information that
23 would establish the existence of the adverse claim; or
24 (c) The person has a duty, imposed by statute or
25 regulation, to investigate whether an adverse claim exists,
26 and the investigation so required would establish the
27 existence of the adverse claim.
28 (2) Having knowledge that a financial asset or
29 interest therein is or has been transferred by a
30 representative imposes no duty of inquiry into the
31 rightfulness of a transaction and is not notice of an adverse
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HB 1083, First Engrossed
1 claim. However, a person who knows that a representative has
2 transferred a financial asset or interest therein in a
3 transaction that is, or whose proceeds are being used, for the
4 individual benefit of the representative or otherwise in
5 breach of duty has notice of an adverse claim.
6 (3) An act or event that creates a right to immediate
7 performance of the principal obligation represented by a
8 security certificate or sets a date on or after which the
9 certificate is to be presented or surrendered for redemption
10 or exchange does not itself constitute notice of an adverse
11 claim except in the case of a transfer more than:
12 (a) One year after a date set for presentment or
13 surrender for redemption or exchange; or
14 (b) Six months after a date set for payment of money
15 against presentation or surrender of the certificate, if money
16 was available for payment on that date.
17 (4) A purchaser of a certificated security has notice
18 of an adverse claim if the security certificate:
19 (a) Whether in bearer or registered form, has been
20 indorsed "for collection" or "for surrender" or for some other
21 purpose not involving transfer; or
22 (b) Is in bearer form and has on it an unambiguous
23 statement that it is the property of a person other than the
24 transferor, but the mere writing of a name on the certificate
25 is not such a statement.
26 (5) Filing of a financing statement under chapter 679
27 is not notice of an adverse claim to a financial asset.
28 678.1061 Control.--
29 (1) A purchaser has "control" of a certificated
30 security in bearer form if the certificated security is
31 delivered to the purchaser.
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HB 1083, First Engrossed
1 (2) A purchaser has "control" of a certificated
2 security in registered form if the certificated security is
3 delivered to the purchaser, and:
4 (a) The certificate is indorsed to the purchaser or in
5 blank by an effective indorsement; or
6 (b) The certificate is registered in the name of the
7 purchaser, upon original issue or registration of transfer by
8 the issuer.
9 (3) A purchaser has "control" of an uncertificated
10 security if:
11 (a) The uncertificated security is delivered to the
12 purchaser; or
13 (b) The issuer has agreed that it will comply with
14 instructions originated by the purchaser without further
15 consent by the registered owner.
16 (4) A purchaser has "control" of a security
17 entitlement if:
18 (a) The purchaser becomes the entitlement holder; or
19 (b) The securities intermediary has agreed that it
20 will comply with entitlement orders originated by the
21 purchaser without further consent by the entitlement holder.
22 (5) If an interest in a security entitlement is
23 granted by the entitlement holder to the entitlement holder's
24 own securities intermediary, the securities intermediary has
25 control.
26 (6) A purchaser who has satisfied the requirements of
27 paragraph (3)(b) or paragraph (4)(b) has control even if the
28 registered owner in the case of paragraph (3)(b) or the
29 entitlement holder in the case of paragraph (4)(b) retains the
30 right to make substitutions for the uncertificated security or
31 security entitlement, to originate instructions or entitlement
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HB 1083, First Engrossed
1 orders to the issuer or securities intermediary, or otherwise
2 to deal with the uncertificated security or security
3 entitlement.
4 (7) An issuer or a securities intermediary may not
5 enter into an agreement of the kind described in paragraph
6 (3)(b) or (4)(b) without the consent of the registered owner
7 or entitlement holder, but an issuer or a securities
8 intermediary is not required to enter into such an agreement
9 even though the registered owner or entitlement holder so
10 directs. An issuer or securities intermediary that has entered
11 into such an agreement is not required to confirm the
12 existence of the agreement to another party unless requested
13 to do so by the registered owner or entitlement holder.
14 678.1071 Whether indorsement, instruction, or
15 entitlement order is effective.--
16 (1) "Appropriate person" means:
17 (a) With respect to an indorsement, the person
18 specified by a security certificate or by an effective special
19 indorsement to be entitled to the security;
20 (b) With respect to an instruction, the registered
21 owner of an uncertificated security;
22 (c) With respect to an entitlement order, the
23 entitlement holder;
24 (d) If the person designated in paragraph (a),
25 paragraph (b), or paragraph (c) is deceased, the designated
26 person's successor taking under other law or the designated
27 person's personal representative acting for the estate of the
28 decedent; or
29 (e) If the person designated in paragraph (a),
30 paragraph (b), or paragraph (c) lacks capacity, the designated
31 person's guardian, conservator, or other similar
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HB 1083, First Engrossed
1 representative who has power under other law to transfer the
2 security or financial asset.
3 (2) An indorsement, instruction, or entitlement order
4 is effective if:
5 (a) It is made by the appropriate person;
6 (b) It is made by a person who has power under the law
7 of agency to transfer the security or financial asset on
8 behalf of the appropriate person, including, in the case of an
9 instruction or entitlement order, a person who has control
10 under s. 678.1061(3)(b) or (4)(b); or
11 (c) The appropriate person has ratified it or is
12 otherwise precluded from asserting its ineffectiveness.
13 (3) An indorsement, instruction, or entitlement order
14 made by a representative is effective even if:
15 (a) The representative has failed to comply with a
16 controlling instrument or with the law of the State having
17 jurisdiction of the representative relationship, including any
18 law requiring the representative to obtain court approval of
19 the transaction; or
20 (b) The representative's action in making the
21 indorsement, instruction, or entitlement order or using the
22 proceeds of the transaction is otherwise a breach of duty.
23 (4) If a security is registered in the name of or
24 specially indorsed to a person described as a representative,
25 or if a securities account is maintained in the name of a
26 person described as a representative, an indorsement,
27 instruction, or entitlement order made by the person is
28 effective even though the person is no longer serving in the
29 described capacity.
30 (5) Effectiveness of an indorsement, instruction, or
31 entitlement order is determined as of the date the
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HB 1083, First Engrossed
1 indorsement, instruction, or entitlement order is made, and an
2 indorsement, instruction, or entitlement order does not become
3 ineffective by reason of any later change of circumstances.
4 678.1081 Warranties in direct holding.--
5 (1) A person who transfers a certificated security to
6 a purchaser for value warrants to the purchaser, and an
7 indorser, if the transfer is by indorsement, warrants to any
8 subsequent purchaser, that:
9 (a) The certificate is genuine and has not been
10 materially altered.
11 (b) The transferor or indorser does not know of any
12 fact that might impair the validity of the security.
13 (c) There is no adverse claim to the security.
14 (d) The transfer does not violate any restriction on
15 transfer.
16 (e) If the transfer is by indorsement, the indorsement
17 is made by an appropriate person, or if the indorsement is by
18 an agent, the agent has actual authority to act on behalf of
19 the appropriate person.
20 (f) The transfer is otherwise effective and rightful.
21 (2) A person who originates an instruction for
22 registration of transfer of an uncertificated security to a
23 purchaser for value warrants to the purchaser that:
24 (a) The instruction is made by an appropriate person,
25 or if the instruction is by an agent, the agent has actual
26 authority to act on behalf of the appropriate person.
27 (b) The security is valid.
28 (c) There is no adverse claim to the security.
29 (d) At the time the instruction is presented to the
30 issuer:
31
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HB 1083, First Engrossed
1 1. The purchaser will be entitled to the registration
2 of transfer.
3 2. The transfer will be registered by the issuer free
4 from all liens, security interests, restrictions, and claims
5 other than those specified in the instruction.
6 3. The transfer will not violate any restriction on
7 transfer.
8 4. The requested transfer will otherwise be effective
9 and rightful.
10 (3) A person who transfers an uncertificated security
11 to a purchaser for value and does not originate an instruction
12 in connection with the transfer warrants that:
13 (a) The uncertificated security is valid.
14 (b) There is no adverse claim to the security.
15 (c) The transfer does not violate any restriction on
16 transfer.
17 (d) The transfer is otherwise effective and rightful.
18 (4) A person who indorses a security certificate
19 warrants to the issuer that:
20 (a) There is no adverse claim to the security.
21 (b) The indorsement is effective.
22 (5) A person who originates an instruction for
23 registration of transfer of an uncertificated security
24 warrants to the issuer that:
25 (a) The instruction is effective.
26 (b) At the time the instruction is presented to the
27 issuer the purchaser will be entitled to the registration of
28 transfer.
29 (6) A person who presents a certificated security for
30 registration of transfer or for payment or exchange warrants
31 to the issuer that the person is entitled to the registration,
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HB 1083, First Engrossed
1 payment, or exchange, but a purchaser for value and without
2 notice of adverse claims to whom transfer is registered
3 warrants only that the person has no knowledge of any
4 unauthorized signature in a necessary indorsement.
5 (7) If a person acts as agent of another in delivering
6 a certificated security to a purchaser, the identity of the
7 principal was known to the person to whom the certificate was
8 delivered, and the certificate delivered by the agent was
9 received by the agent from the principal or received by the
10 agent from another person at the direction of the principal,
11 the person delivering the security certificate warrants only
12 that the delivering person has authority to act for the
13 principal and does not know of any adverse claim to the
14 certificated security.
15 (8) A secured party who redelivers a security
16 certificate received, or after payment and on order of the
17 debtor delivers the security certificate to another person,
18 makes only the warranties of an agent under subsection (7).
19 (9) Except as otherwise provided in subsection (7), a
20 broker acting for a customer makes to the issuer and a
21 purchaser the warranties provided in subsections (1)-(6). A
22 broker that delivers a security certificate to its customer,
23 or causes its customer to be registered as the owner of an
24 uncertificated security, makes to the customer the warranties
25 provided in subsection (1) or subsection (2), and has the
26 rights and privileges of a purchaser under this section. The
27 warranties of and in favor of the broker acting as an agent
28 are in addition to applicable warranties given by and in favor
29 of the customer.
30 678.1091 Warranties in indirect holding.--
31
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HB 1083, First Engrossed
1 (1) A person who originates an entitlement order to a
2 securities intermediary warrants to the securities
3 intermediary that:
4 (a) The entitlement order is made by an appropriate
5 person, or if the entitlement order is by an agent, the agent
6 has actual authority to act on behalf of the appropriate
7 person.
8 (b) There is no adverse claim to the security
9 entitlement.
10 (2) A person who delivers a security certificate to a
11 securities intermediary for credit to a securities account or
12 originates an instruction with respect to an uncertificated
13 security directing that the uncertificated security be
14 credited to a securities account makes to the securities
15 intermediary the warranties specified in s. 678.1081(1) or
16 (2).
17 (3) If a securities intermediary delivers a security
18 certificate to its entitlement holder or causes its
19 entitlement holder to be registered as the owner of an
20 uncertificated security, the securities intermediary makes to
21 the entitlement holder the warranties specified in s.
22 678.1081(1) or (2).
23 678.1101 Applicability; choice of law.--
24 (1) The local law of the issuer's jurisdiction, as
25 specified in subsection (4), governs:
26 (a) The validity of a security.
27 (b) The rights and duties of the issuer with respect
28 to registration of transfer.
29 (c) The effectiveness of registration of transfer by
30 the issuer.
31
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HB 1083, First Engrossed
1 (d) Whether the issuer owes any duties to an adverse
2 claimant to a security.
3 (e) Whether an adverse claim can be asserted against a
4 person to whom transfer of a certificated or uncertificated
5 security is registered or a person who obtains control of an
6 uncertificated security.
7 (2) The local law of the securities intermediary's
8 jurisdiction, as specified in subsection (5), governs:
9 (a) Acquisition of a security entitlement from the
10 securities intermediary.
11 (b) The rights and duties of the securities
12 intermediary and entitlement holder arising out of a security
13 entitlement.
14 (c) Whether the securities intermediary owes any
15 duties to an adverse claimant to a security entitlement.
16 (d) Whether an adverse claim can be asserted against a
17 person who acquires a security entitlement from the securities
18 intermediary or a person who purchases a security entitlement
19 or interest therein from an entitlement holder.
20 (3) The local law of the jurisdiction in which a
21 security certificate is located at the time of delivery
22 governs whether an adverse claim can be asserted against a
23 person to whom the security certificate is delivered.
24 (4) "Issuer's jurisdiction" means the jurisdiction
25 under which the issuer of the security is organized or, if
26 permitted by the law of that jurisdiction, the law of another
27 jurisdiction specified by the issuer. An issuer organized
28 under the law of this State may specify the law of another
29 jurisdiction as the law governing the matters specified in
30 paragraphs (1)(b)-(e).
31
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HB 1083, First Engrossed
1 (5) The following rules determine a "securities
2 intermediary's jurisdiction" for purposes of this section:
3 (a) If an agreement between the securities
4 intermediary and its entitlement holder specifies that it is
5 governed by the law of a particular jurisdiction, that
6 jurisdiction is the securities intermediary's jurisdiction.
7 (b) If an agreement between the securities
8 intermediary and its entitlement holder does not specify the
9 governing law as provided in paragraph (a), but expressly
10 specifies that the securities account is maintained at an
11 office in a particular jurisdiction, that jurisdiction is the
12 securities intermediary's jurisdiction.
13 (c) If an agreement between the securities
14 intermediary and its entitlement holder does not specify a
15 jurisdiction as provided in paragraph (a) or paragraph (b),
16 the securities intermediary's jurisdiction is the jurisdiction
17 in which is located the office identified in an account
18 statement as the office serving the entitlement holder's
19 account.
20 (d) If an agreement between the securities
21 intermediary and its entitlement holder does not specify a
22 jurisdiction as provided in paragraph (a) or paragraph (b) and
23 an account statement does not identify an office serving the
24 entitlement holder's account as provided in paragraph (c), the
25 securities intermediary's jurisdiction is the jurisdiction in
26 which is located the chief executive office of the securities
27 intermediary.
28 (6) A securities intermediary's jurisdiction is not
29 determined by the physical location of certificates
30 representing financial assets, or by the jurisdiction in which
31 is organized the issuer of the financial asset with respect to
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HB 1083, First Engrossed
1 which an entitlement holder has a security entitlement, or by
2 the location of facilities for data processing or other record
3 keeping concerning the account.
4 678.1111 Clearing corporation rules.--A rule adopted
5 by a clearing corporation governing rights and obligations
6 among the clearing corporation and its participants in the
7 clearing corporation is effective even if the rule conflicts
8 with this chapter and affects another party who does not
9 consent to the rule.
10 678.1121 Creditor's legal process.--
11 (1) The interest of a debtor in a certificated
12 security may be reached by a creditor only by actual seizure
13 of the security certificate by the officer making the
14 attachment or levy, except as otherwise provided in subsection
15 (4). However, a certificated security for which the
16 certificate has been surrendered to the issuer may be reached
17 by a creditor by legal process upon the issuer.
18 (2) The interest of a debtor in an uncertificated
19 security may be reached by a creditor only by legal process
20 upon the issuer at its chief executive office in the United
21 States, except as otherwise provided in subsection (4).
22 (3) The interest of a debtor in a security entitlement
23 may be reached by a creditor only by legal process upon the
24 securities intermediary with whom the debtor's securities
25 account is maintained, except as otherwise provided in
26 subsection (4).
27 (4) The interest of a debtor in a certificated
28 security for which the certificate is in the possession of a
29 secured party, or in an uncertificated security registered in
30 the name of a secured party, or a security entitlement
31
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HB 1083, First Engrossed
1 maintained in the name of a secured party, may be reached by a
2 creditor by legal process upon the secured party.
3 (5) A creditor whose debtor is the owner of a
4 certificated security, uncertificated security, or security
5 entitlement is entitled to aid from a court of competent
6 jurisdiction, by injunction or otherwise, in reaching the
7 certificated security, uncertificated security, or security
8 entitlement or in satisfying the claim by means allowed at law
9 or in equity in regard to property that cannot readily be
10 reached by other legal process.
11 678.1131 Statute of frauds inapplicable.--A contract
12 or modification of a contract for the sale or purchase of a
13 security is enforceable whether or not there is a writing
14 signed or record authenticated by a party against whom
15 enforcement is sought, even if the contract or modification is
16 not capable of performance within one year of its making.
17 678.1141 Evidentiary rules concerning certificated
18 securities.--The following rules apply in an action on a
19 certificated security against the issuer:
20 (1) Unless specifically denied in the pleadings, each
21 signature on a security certificate or in a necessary
22 indorsement is admitted.
23 (2) If the effectiveness of a signature is put in
24 issue, the burden of establishing effectiveness is on the
25 party claiming under the signature, but the signature is
26 presumed to be genuine or authorized.
27 (3) If signatures on a security certificate are
28 admitted or established, production of the certificate
29 entitles a holder to recover on it unless the defendant
30 establishes a defense or a defect going to the validity of the
31 security.
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HB 1083, First Engrossed
1 (4) If it is shown that a defense or defect exists,
2 the plaintiff has the burden of establishing that the
3 plaintiff or some person under whom the plaintiff claims is a
4 person against whom the defense or defect cannot be asserted.
5 678.1151 Securities intermediary and others not liable
6 to adverse claimant.--A securities intermediary that has
7 transferred a financial asset pursuant to an effective
8 entitlement order, or a broker or other agent or bailee that
9 has dealt with a financial asset at the direction of its
10 customer or principal, is not liable to a person having an
11 adverse claim to the financial asset, unless the securities
12 intermediary, or broker or other agent or bailee:
13 (1) Took the action after it had been served with an
14 injunction, restraining order, or other legal process
15 enjoining it from doing so, issued by a court of competent
16 jurisdiction, and had a reasonable opportunity to act on the
17 injunction, restraining order, or other legal process; or
18 (2) Acted in collusion with the wrongdoer in violating
19 the rights of the adverse claimant; or
20 (3) In the case of a security certificate that has
21 been stolen, acted with notice of the adverse claim.
22 678.1161 Securities intermediary as purchaser for
23 value.--A securities intermediary that receives a financial
24 asset and establishes a security entitlement to the financial
25 asset in favor of an entitlement holder is a purchaser for
26 value of the financial asset. A securities intermediary that
27 acquires a security entitlement to a financial asset from
28 another securities intermediary acquires the security
29 entitlement for value if the securities intermediary acquiring
30 the security entitlement establishes a security entitlement to
31 the financial asset in favor of an entitlement holder.
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HB 1083, First Engrossed
1 Section 2. Part II of chapter 678, Florida Statutes,
2 consisting of sections 678.2011, 678.2021, 678.2031, 678.2041,
3 678.2051, 678.2061, 678.2071, 678.2081, 678.2091, and
4 678.2101, Florida Statutes, is created to read:
5
6 PART II
7
8 ISSUE AND ISSUER
9
10 678.2011 Issuer.--
11 (1) With respect to an obligation on or a defense to a
12 security, an "issuer" includes a person that:
13 (a) Places or authorizes the placing of its name on a
14 security certificate, other than as authenticating trustee,
15 registrar, transfer agent, or the like, to evidence a share,
16 participation, or other interest in its property or in an
17 enterprise, or to evidence its duty to perform an obligation
18 represented by the certificate;
19 (b) Creates a share, participation, or other interest
20 in its property or in an enterprise, or undertakes an
21 obligation, that is an uncertificated security;
22 (c) Directly or indirectly creates a fractional
23 interest in its rights or property, if the fractional interest
24 is represented by a security certificate; or
25 (d) Becomes responsible for, or in place of, another
26 person described as an issuer in this section.
27 (2) With respect to an obligation on or defense to a
28 security, a guarantor is an issuer to the extent of its
29 guaranty, whether or not its obligation is noted on a security
30 certificate.
31
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HB 1083, First Engrossed
1 (3) With respect to a registration of a transfer,
2 issuer means a person on whose behalf transfer books are
3 maintained.
4 678.2021 Issuer's responsibility and defenses; notice
5 of defect or defense.--
6 (1) Even against a purchaser for value and without
7 notice, the terms of a certificated security include terms
8 stated on the certificate and terms made part of the security
9 by reference on the certificate to another instrument,
10 indenture, or document or to a constitution, statute,
11 ordinance, rule, regulation, order, or the like, to the extent
12 the terms referred to do not conflict with terms stated on the
13 certificate. A reference under this subsection does not of
14 itself charge a purchaser for value with notice of a defect
15 going to the validity of the security, even if the certificate
16 expressly states that a person accepting it admits notice. The
17 terms of an uncertificated security include those stated in
18 any instrument, indenture, or document or in a constitution,
19 statute, ordinance, rule, regulation, order, or the like,
20 pursuant to which the security is issued.
21 (2) The following rules apply if an issuer asserts
22 that a security is not valid:
23 (a) A security other than one issued by a government
24 or governmental subdivision, agency, or instrumentality, even
25 though issued with a defect going to its validity, is valid in
26 the hands of a purchaser for value and without notice of the
27 particular defect unless the defect involves a violation of a
28 constitutional provision. In that case, the security is valid
29 in the hands of a purchaser for value and without notice of
30 the defect, other than one who takes by original issue.
31
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HB 1083, First Engrossed
1 (b) Paragraph (a) applies to an issuer that is a
2 government or governmental subdivision, agency, or
3 instrumentality only if there has been substantial compliance
4 with the legal requirements governing the issue or the issuer
5 has received a substantial consideration for the issue as a
6 whole or for the particular security and a stated purpose of
7 the issue is one for which the issuer has power to borrow
8 money or issue the security.
9 (3) Except as otherwise provided in s. 678.2051, lack
10 of genuineness of a certificated security is a complete
11 defense, even against a purchaser for value and without
12 notice.
13 (4) All other defenses of the issuer of a security,
14 including nondelivery and conditional delivery of a
15 certificated security, are ineffective against a purchaser for
16 value who has taken the certificated security without notice
17 of the particular defense.
18 (5) This section does not affect the right of a party
19 to cancel a contract for a security "when, as and if issued"
20 or "when distributed" in the event of a material change in the
21 character of the security that is the subject of the contract
22 or in the plan or arrangement pursuant to which the security
23 is to be issued or distributed.
24 (6) If a security is held by a securities intermediary
25 against whom an entitlement holder has a security entitlement
26 with respect to the security, the issuer may not assert any
27 defense that the issuer could not assert if the entitlement
28 holder held the security directly.
29 678.2031 Staleness as notice of defect or
30 defense.--After an act or event, other than a call that has
31 been revoked, creating a right to immediate performance of the
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HB 1083, First Engrossed
1 principal obligation represented by a certificated security or
2 setting a date on or after which the security is to be
3 presented or surrendered for redemption or exchange, a
4 purchaser is charged with notice of any defect in its issue or
5 defense of the issuer, if the act or event:
6 (1) Requires the payment of money, the delivery of a
7 certificated security, the registration of transfer of an
8 uncertificated security, or any of them on presentation or
9 surrender of the security certificate, the money or security
10 is available on the date set for payment or exchange, and the
11 purchaser takes the security more than one year after that
12 date; or
13 (2) Is not covered by paragraph (1) and the purchaser
14 takes the security more than two years after the date set for
15 surrender or presentation or the date on which performance
16 became due.
17 678.2041 Effect of issuer's restriction on
18 transfer.--A restriction on transfer of a security imposed by
19 the issuer, even if otherwise lawful, is ineffective against a
20 person without knowledge of the restriction unless:
21 (1) The security is certificated and the restriction
22 is noted conspicuously on the security certificate; or
23 (2) The security is uncertificated and the registered
24 owner has been notified of the restriction.
25 678.2051 Effect of unauthorized signature on security
26 certificate.--An unauthorized signature placed on a security
27 certificate before or in the course of issue is ineffective,
28 but the signature is effective in favor of a purchaser for
29 value of the certificated security if the purchaser is without
30 notice of the lack of authority and the signing has been done
31 by:
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HB 1083, First Engrossed
1 (1) An authenticating trustee, registrar, transfer
2 agent, or other person entrusted by the issuer with the
3 signing of the security certificate or of similar security
4 certificates, or the immediate preparation for signing of any
5 of them; or
6 (2) An employee of the issuer, or of any of the
7 persons listed in subsection (1), entrusted with responsible
8 handling of the security certificate.
9 678.2061 Completion or alteration of security
10 certificate.--
11 (1) If a security certificate contains the signatures
12 necessary to its issue or transfer but is incomplete in any
13 other respect:
14 (a) Any person may complete it by filling in the
15 blanks as authorized; and
16 (b) Even if the blanks are incorrectly filled in, the
17 security certificate as completed is enforceable by a
18 purchaser who took it for value and without notice of the
19 incorrectness.
20 (2) A complete security certificate that has been
21 improperly altered, even if fraudulently, remains enforceable,
22 but only according to its original terms.
23 678.2071 Rights and duties of issuer with respect to
24 registered owners.--
25 (1) Before due presentment for registration of
26 transfer of a certificated security in registered form or of
27 an instruction requesting registration of transfer of an
28 uncertificated security, the issuer or indenture trustee may
29 treat the registered owner as the person exclusively entitled
30 to vote, receive notifications, and otherwise exercise all the
31 rights and powers of an owner.
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HB 1083, First Engrossed
1 (2) This chapter does not affect the liability of the
2 registered owner of a security for a call, assessment, or the
3 like.
4 678.2081 Effect of signature of authenticating
5 trustee, registrar, or transfer agent.--
6 (1) A person signing a security certificate as
7 authenticating trustee, registrar, transfer agent, or the
8 like, warrants to a purchaser for value of the certificated
9 security, if the purchaser is without notice of a particular
10 defect, that:
11 (a) The certificate is genuine.
12 (b) The person's own participation in the issue of the
13 security is within the person's capacity and within the scope
14 of the authority received by the person from the issuer.
15 (c) The person has reasonable grounds to believe that
16 the certificated security is in the form and within the amount
17 the issuer is authorized to issue.
18 (2) Unless otherwise agreed, a person signing under
19 subsection (1) does not assume responsibility for the validity
20 of the security in other respects.
21 678.2091 Issuer's lien.--A lien in favor of an issuer
22 upon a certificated security is valid against a purchaser only
23 if the right of the issuer to the lien is noted conspicuously
24 on the security certificate.
25 678.2101 Overissue.--
26 (1) In this section, "overissue" means the issue of
27 securities in excess of the amount the issuer has corporate
28 power to issue, but an overissue does not occur if appropriate
29 action has cured the overissue.
30 (2) Except as otherwise provided in subsections (3)
31 and (4), the provisions of this chapter which validate a
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HB 1083, First Engrossed
1 security or compel its issue or reissue do not apply to the
2 extent that validation, issue, or reissue would result in
3 overissue.
4 (3) If an identical security not constituting an
5 overissue is reasonably available for purchase, a person
6 entitled to issue or validation may compel the issuer to
7 purchase the security and deliver it if certificated or
8 register its transfer if uncertificated, against surrender of
9 any security certificate the person holds.
10 (4) If a security is not reasonably available for
11 purchase, a person entitled to issue or validation may recover
12 from the issuer the price the person or the last purchaser for
13 value paid for it with interest from the date of the person's
14 demand.
15 Section 3. Part III of chapter 678, Florida Statutes,
16 consisting of sections 678.3011, 678.3021, 678.3031, 678.3041,
17 678.3051, 678.3061, and 678.3071, Florida Statutes, is created
18 to read:
19
20 PART III
21
22 TRANSFER OF CERTIFICATED
23 AND UNCERTIFICATED SECURITIES
24
25 678.3011 Delivery.--
26 (1) Delivery of a certificated security to a purchaser
27 occurs when:
28 (a) The purchaser acquires possession of the security
29 certificate;
30 (b) Another person, other than a securities
31 intermediary, either acquires possession of the security
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HB 1083, First Engrossed
1 certificate on behalf of the purchaser or, having previously
2 acquired possession of the certificate, acknowledges that it
3 holds for the purchaser; or
4 (c) A securities intermediary acting on behalf of the
5 purchaser acquires possession of the security certificate,
6 only if the certificate is in registered form and has been
7 specially indorsed to the purchaser by an effective
8 indorsement.
9 (2) Delivery of an uncertificated security to a
10 purchaser occurs when:
11 (a) The issuer registers the purchaser as the
12 registered owner, upon original issue or registration of
13 transfer; or
14 (b) Another person, other than a securities
15 intermediary, either becomes the registered owner of the
16 uncertificated security on behalf of the purchaser or, having
17 previously become the registered owner, acknowledges that it
18 holds for the purchaser.
19 678.3021 Rights of purchaser.--
20 (1) Except as otherwise provided in subsections (2)
21 and (3), upon delivery of a certificated or uncertificated
22 security to a purchaser, the purchaser acquires all rights in
23 the security that the transferor had or had power to transfer.
24 (2) A purchaser of a limited interest acquires rights
25 only to the extent of the interest purchased.
26 (3) A purchaser of a certificated security who as a
27 previous holder had notice of an adverse claim does not
28 improve its position by taking from a protected purchaser.
29 678.3031 Protected purchaser.--
30
31
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HB 1083, First Engrossed
1 (1) "Protected purchaser" means a purchaser of a
2 certificated or uncertificated security, or of an interest
3 therein, who:
4 (a) Gives value.
5 (b) Does not have notice of any adverse claim to the
6 security.
7 (c) Obtains control of the certificated or
8 uncertificated security.
9 (2) In addition to acquiring the rights of a
10 purchaser, a protected purchaser also acquires its interest in
11 the security free of any adverse claim.
12 678.3041 Indorsement.--
13 (1) An indorsement may be in blank or special. An
14 indorsement in blank includes an indorsement to bearer. A
15 special indorsement specifies to whom a security is to be
16 transferred or who has power to transfer it. A holder may
17 convert a blank indorsement to a special indorsement.
18 (2) An indorsement purporting to be only of part of a
19 security certificate representing units intended by the issuer
20 to be separately transferable is effective to the extent of
21 the indorsement.
22 (3) An indorsement, whether special or in blank, does
23 not constitute a transfer until delivery of the certificate on
24 which it appears or, if the indorsement is on a separate
25 document, until delivery of both the document and the
26 certificate.
27 (4) If a security certificate in registered form has
28 been delivered to a purchaser without a necessary indorsement,
29 the purchaser may become a protected purchaser only when the
30 indorsement is supplied. However, against a transferor, a
31 transfer is complete upon delivery and the purchaser has a
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HB 1083, First Engrossed
1 specifically enforceable right to have any necessary
2 indorsement supplied.
3 (5) An indorsement of a security certificate in bearer
4 form may give notice of an adverse claim to the certificate,
5 but it does not otherwise affect a right to registration that
6 the holder possesses.
7 (6) Unless otherwise agreed, a person making an
8 indorsement assumes only the obligations provided in s.
9 678.1081 and not an obligation that the security will be
10 honored by the issuer.
11 678.3051 Instruction.--
12 (1) If an instruction has been originated by an
13 appropriate person but is incomplete in any other respect, any
14 person may complete it as authorized and the issuer may rely
15 on it as completed, even though it has been completed
16 incorrectly.
17 (2) Unless otherwise agreed, a person initiating an
18 instruction assumes only the obligations imposed by s.
19 678.1081 and not an obligation that the security will be
20 honored by the issuer.
21 678.3061 Effect of guaranteeing signature,
22 indorsement, or instruction.--
23 (1) A person who guarantees a signature of an indorser
24 of a security certificate warrants that at the time of
25 signing:
26 (a) The signature was genuine.
27 (b) The signer was an appropriate person to indorse,
28 or if the signature is by an agent, the agent had actual
29 authority to act on behalf of the appropriate person.
30 (c) The signer had legal capacity to sign.
31
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HB 1083, First Engrossed
1 (2) A person who guarantees a signature of the
2 originator of an instruction warrants that at the time of
3 signing:
4 (a) The signature was genuine.
5 (b) The signer was an appropriate person to originate
6 the instruction, or if the signature is by an agent, the agent
7 had actual authority to act on behalf of the appropriate
8 person, if the person specified in the instruction as the
9 registered owner was, in fact, the registered owner, as to
10 which fact the signature guarantor does not make a warranty.
11 (c) The signer had legal capacity to sign.
12 (3) A person who specially guarantees the signature of
13 an originator of an instruction makes the warranties of a
14 signature guarantor under subsection (2) and also warrants
15 that at the time the instruction is presented to the issuer:
16 (a) The person specified in the instruction as the
17 registered owner of the uncertificated security will be the
18 registered owner.
19 (b) The transfer of the uncertificated security
20 requested in the instruction will be registered by the issuer
21 free from all liens, security interests, restrictions, and
22 claims other than those specified in the instruction.
23 (4) A guarantor under subsections (1) and (2) or a
24 special guarantor under subsection (3) does not otherwise
25 warrant the rightfulness of the transfer.
26 (5) A person who guarantees an indorsement of a
27 security certificate makes the warranties of a signature
28 guarantor under subsection (1) and also warrants the
29 rightfulness of the transfer in all respects.
30 (6) A person who guarantees an instruction requesting
31 the transfer of an uncertificated security makes the
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HB 1083, First Engrossed
1 warranties of a special signature guarantor under subsection
2 (3) and also warrants the rightfulness of the transfer in all
3 respects.
4 (7) An issuer may not require a special guaranty of
5 signature, a guaranty of indorsement, or a guaranty of
6 instruction as a condition to registration of transfer.
7 (8) The warranties under this section are made to a
8 person taking or dealing with the security in reliance on the
9 guaranty, and the guarantor is liable to the person for loss
10 resulting from their breach. An indorser or originator of an
11 instruction whose signature, indorsement, or instruction has
12 been guaranteed is liable to a guarantor for any loss suffered
13 by the guarantor as a result of breach of the warranties of
14 the guarantor.
15 678.3071 Purchaser's right to requisites for
16 registration of transfer.--Unless otherwise agreed, the
17 transferor of a security on due demand shall supply the
18 purchaser with proof of authority to transfer or with any
19 other requisite necessary to obtain registration of the
20 transfer of the security, but if the transfer is not for
21 value, a transferor need not comply unless the purchaser pays
22 the necessary expenses. If the transferor fails within a
23 reasonable time to comply with the demand, the purchaser may
24 reject or rescind the transfer.
25 Section 4. Part IV of chapter 678, Florida Statutes,
26 consisting of sections 678.4011, 678.4021, 678.4031, 678.4041,
27 678.4051, 678.4061, and 678.4071, Florida Statutes, is created
28 to read:
29
30 PART IV
31
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HB 1083, First Engrossed
1 REGISTRATION
2
3 678.4011 Duty of issuer to register transfer.--
4 (1) If a certificated security in registered form is
5 presented to an issuer with a request to register transfer or
6 an instruction is presented to an issuer with a request to
7 register transfer of an uncertificated security, the issuer
8 shall register the transfer as requested if:
9 (a) Under the terms of the security the person seeking
10 registration of transfer is eligible to have the security
11 registered in its name.
12 (b) The indorsement or instruction is made by the
13 appropriate person or by an agent who has actual authority to
14 act on behalf of the appropriate person.
15 (c) Reasonable assurance is given that the indorsement
16 or instruction is genuine and authorized (s. 678.4021).
17 (d) Any applicable law relating to the collection of
18 taxes has been complied with.
19 (e) The transfer does not violate any restriction on
20 transfer imposed by the issuer in accordance with s. 678.2041.
21 (f) A demand that the issuer not register transfer has
22 not become effective under s. 678.4031, or the issuer has
23 complied with s. 678.4031(2) but no legal process or indemnity
24 bond is obtained as provided in s. 678.4031(4).
25 (g) The transfer is in fact rightful or is to a
26 protected purchaser.
27 (h) If an issuer is under a duty to register a
28 transfer of a security, the issuer is liable to a person
29 presenting a certificated security or an instruction for
30 registration or to the person's principal for loss resulting
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1 from unreasonable delay in registration or failure or refusal
2 to register the transfer.
3 678.4021 Assurance that indorsement or instruction is
4 effective.--
5 (1) An issuer may require the following assurance that
6 each necessary indorsement or each instruction is genuine and
7 authorized:
8 (a) In all cases, a guaranty of the signature of the
9 person making an indorsement or originating an instruction
10 including, in the case of an instruction, reasonable assurance
11 of identity.
12 (b) If the indorsement is made or the instruction is
13 originated by an agent, appropriate assurance of actual
14 authority to sign.
15 (c) If the indorsement is made or the instruction is
16 originated by a fiduciary pursuant to s. 678.1071(1)(d) or
17 (1)(e), appropriate evidence of appointment or incumbency.
18 (d) If there is more than one fiduciary, reasonable
19 assurance that all who are required to sign have done so.
20 (e) If the indorsement is made or the instruction is
21 originated by a person not covered by another provision of
22 this subsection, assurance appropriate to the case
23 corresponding as nearly as may be to the provisions of this
24 subsection.
25 (2) An issuer may elect to require reasonable
26 assurance beyond that specified in this section.
27 (3) In this section:
28 (a) "Guaranty of the signature" means a guaranty
29 signed by or on behalf of a person reasonably believed by the
30 issuer to be responsible. An issuer may adopt standards with
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1 respect to responsibility if they are not manifestly
2 unreasonable.
3 (b) "Appropriate evidence of appointment or
4 incumbency" means:
5 1. In the case of a fiduciary appointed or qualified
6 by a court, a certificate issued by or under the direction or
7 supervision of the court or an officer thereof and dated
8 within 60 days before the date of presentation for transfer;
9 or
10 2. In any other case, a copy of a document showing the
11 appointment or a certificate issued by or on behalf of a
12 person reasonably believed by an issuer to be responsible or,
13 in the absence of that document or certificate, other evidence
14 the issuer reasonably considers appropriate.
15 678.4031 Demand that issuer not register transfer.--
16 (1) A person who is an appropriate person to make an
17 indorsement or originate an instruction may demand that the
18 issuer not register transfer of a security by communicating to
19 the issuer a notification that identifies the registered owner
20 and the issue of which the security is a part and provides an
21 address for communications directed to the person making the
22 demand. The demand is effective only if it is received by the
23 issuer at a time and in a manner affording the issuer
24 reasonable opportunity to act on it.
25 (2) If a certificated security in registered form is
26 presented to an issuer with a request to register transfer or
27 an instruction is presented to an issuer with a request to
28 register transfer of an uncertificated security after a demand
29 that the issuer not register transfer has become effective,
30 the issuer shall promptly communicate to the person who
31 initiated the demand at the address provided in the demand and
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1 to the person who presented the security for registration of
2 transfer or initiated the instruction requesting registration
3 of transfer a notification stating that:
4 (a) The certificated security has been presented for
5 registration of transfer or the instruction for registration
6 of transfer of the uncertificated security has been received.
7 (b) A demand that the issuer not register transfer had
8 previously been received.
9 (c) The issuer will withhold registration of transfer
10 for a period of time stated in the notification in order to
11 provide the person who initiated the demand an opportunity to
12 obtain legal process or an indemnity bond.
13 (3) The period described in paragraph (2)(c) may not
14 exceed 30 days after the date of communication of the
15 notification. A shorter period may be specified by the issuer
16 if it is not manifestly unreasonable.
17 (4) An issuer is not liable to a person who initiated
18 a demand that the issuer not register transfer for any loss
19 the person suffers as a result of registration of a transfer
20 pursuant to an effective indorsement or instruction if the
21 person who initiated the demand does not, within the time
22 stated in the issuer's communication, either:
23 (a) Obtain an appropriate restraining order,
24 injunction, or other process from a court of competent
25 jurisdiction enjoining the issuer from registering the
26 transfer; or
27 (b) File with the issuer an indemnity bond, sufficient
28 in the issuer's judgment to protect the issuer and any
29 transfer agent, registrar, or other agent of the issuer
30 involved from any loss it or they may suffer by refusing to
31 register the transfer.
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1 (5) This section does not relieve an issuer from
2 liability for registering transfer pursuant to an indorsement
3 or instruction that was not effective.
4 678.4041 Wrongful registration.--
5 (1) Except as otherwise provided in s. 678.4061, an
6 issuer is liable for wrongful registration of transfer if the
7 issuer has registered a transfer of a security to a person not
8 entitled to it, and the transfer was registered:
9 (a) Pursuant to an ineffective indorsement or
10 instruction;
11 (b) After a demand that the issuer not register
12 transfer became effective under s. 678.4031(1) and the issuer
13 did not comply with s. 678.4031(2);
14 (c) After the issuer had been served with an
15 injunction, restraining order, or other legal process
16 enjoining it from registering the transfer, issued by a court
17 of competent jurisdiction, and the issuer had a reasonable
18 opportunity to act on the injunction, restraining order, or
19 other legal process; or
20 (d) By an issuer acting in collusion with the
21 wrongdoer.
22 (2) An issuer that is liable for wrongful registration
23 of transfer under subsection (1) on demand shall provide the
24 person entitled to the security with a like certificated or
25 uncertificated security, and any payments or distributions
26 that the person did not receive as a result of the wrongful
27 registration. If an overissue would result, the issuer's
28 liability to provide the person with a like security is
29 governed by s. 678.2101.
30 (3) Except as otherwise provided in subsection (1) or
31 in a law relating to the collection of taxes, an issuer is not
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1 liable to an owner or other person suffering loss as a result
2 of the registration of a transfer of a security if
3 registration was made pursuant to an effective indorsement or
4 instruction.
5 678.4051 Replacement of lost, destroyed, or wrongfully
6 taken security certificate.--
7 (1) If an owner of a certificated security, whether in
8 registered or bearer form, claims that the certificate has
9 been lost, destroyed, or wrongfully taken, the issuer shall
10 issue a new certificate if the owner:
11 (a) So requests before the issuer has notice that the
12 certificate has been acquired by a protected purchaser.
13 (b) Files with the issuer a sufficient indemnity bond.
14 (c) Satisfies other reasonable requirements imposed by
15 the issuer.
16 (2) If, after the issue of a new security certificate,
17 a protected purchaser of the original certificate presents it
18 for registration of transfer, the issuer shall register the
19 transfer unless an overissue would result. In that case, the
20 issuer's liability is governed by s. 678.2101. In addition to
21 any rights on the indemnity bond, an issuer may recover the
22 new certificate from a person to whom it was issued or any
23 person taking under that person, except a protected purchaser.
24 678.4061 Obligation to notify issuer of lost,
25 destroyed, or wrongfully taken security certificate.--If a
26 security certificate has been lost, apparently destroyed, or
27 wrongfully taken, and the owner fails to notify the issuer of
28 that fact within a reasonable time after the owner has notice
29 of it and the issuer registers a transfer of the security
30 before receiving notification, the owner may not assert
31 against the issuer a claim for registering the transfer under
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1 s. 678.4041 or a claim to a new security certificate under s.
2 678.4051.
3 678.4071 Authenticating trustee, transfer agent, and
4 registrar.--A person acting as authenticating trustee,
5 transfer agent, registrar, or other agent for an issuer in the
6 registration of a transfer of its securities, in the issue of
7 new security certificates or uncertificated securities, or in
8 the cancellation of surrendered security certificates has the
9 same obligation to the holder or owner of a certificated or
10 uncertificated security with regard to the particular
11 functions performed as the issuer has in regard to those
12 functions.
13 Section 5. Part V of chapter 678, Florida Statutes,
14 consisting of sections 678.5011, 678.5021, 678.5031, 678.5041,
15 678.5051, 678.5061, 678.5071, 678.5081, 678.5091, 678.5101,
16 and 678.5111, Florida Statutes, is created to read:
17
18 PART V
19
20 SECURITY ENTITLEMENTS
21
22 678.5011 Securities account; acquisition of security
23 entitlement from securities intermediary.--
24 (1) "Securities account" means an account to which a
25 financial asset is or may be credited in accordance with an
26 agreement under which the person maintaining the account
27 undertakes to treat the person for whom the account is
28 maintained as entitled to exercise the rights that comprise
29 the financial asset.
30
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1 (2) Except as otherwise provided in subsections (4)
2 and (5), a person acquires a security entitlement if a
3 securities intermediary:
4 (a) Indicates by book entry that a financial asset has
5 been credited to the person's securities account;
6 (b) Receives a financial asset from the person or
7 acquires a financial asset for the person and, in either case,
8 accepts it for credit to the person's securities account; or
9 (c) Becomes obligated under other law, regulation, or
10 rule to credit a financial asset to the person's securities
11 account.
12 (3) If a condition of subsection (2) has been met, a
13 person has a security entitlement even though the securities
14 intermediary does not itself hold the financial asset.
15 (4) If a securities intermediary holds a financial
16 asset for another person, and the financial asset is
17 registered in the name of, payable to the order of, or
18 specially indorsed to the other person, and has not been
19 indorsed to the securities intermediary or in blank, the other
20 person is treated as holding the financial asset directly
21 rather than as having a security entitlement with respect to
22 the financial asset.
23 (5) Issuance of a security is not establishment of a
24 security entitlement.
25 678.5021 Assertion of adverse claim against
26 entitlement holder.--An action based on an adverse claim to a
27 financial asset, whether framed in conversion, replevin,
28 constructive trust, equitable lien, or other theory, may not
29 be asserted against a person who acquires a security
30 entitlement under s. 678.5011 for value and without notice of
31 the adverse claim.
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1 678.5031 Property interest of entitlement holder in
2 financial asset held by securities intermediary.--
3 (1) To the extent necessary for a securities
4 intermediary to satisfy all security entitlements with respect
5 to a particular financial asset, all interests in that
6 financial asset held by the securities intermediary are held
7 by the securities intermediary for the entitlement holders,
8 are not property of the securities intermediary, and are not
9 subject to claims of creditors of the securities intermediary,
10 except as otherwise provided in 678.5111.
11 (2) An entitlement holder's property interest with
12 respect to a particular financial asset under subsection (1)
13 is a pro rata property interest in all interests in that
14 financial asset held by the securities intermediary, without
15 regard to the time the entitlement holder acquired the
16 security entitlement or the time the securities intermediary
17 acquired the interest in that financial asset.
18 (3) An entitlement holder's property interest with
19 respect to a particular financial asset under subsection (a)
20 may be enforced against the securities intermediary only by
21 exercise of the entitlement holder's rights under ss.
22 678.5051-678.5081.
23 (4) An entitlement holder's property interest with
24 respect to a particular financial asset under subsection (1)
25 may be enforced against a purchaser of the financial asset or
26 interest therein only if:
27 (a) Insolvency proceedings have been initiated by or
28 against the securities intermediary.
29 (b) The securities intermediary does not have
30 sufficient interests in the financial asset to satisfy the
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1 security entitlements of all of its entitlement holders to
2 that financial asset.
3 (c) The securities intermediary violated its
4 obligations under s. 678.5041 by transferring the financial
5 asset or interest therein to the purchaser.
6 (d) The purchaser is not protected under subsection
7 (5). The trustee or other liquidator, acting on behalf of all
8 entitlement holders having security entitlements with respect
9 to a particular financial asset, may recover the financial
10 asset, or interest therein, from the purchaser. If the trustee
11 or other liquidator elects not to pursue that right, an
12 entitlement holder whose security entitlement remains
13 unsatisfied has the right to recover its interest in the
14 financial asset from the purchaser.
15 (5) An action based on the entitlement holder's
16 property interest with respect to a particular financial asset
17 under subsection (1), whether framed in conversion, replevin,
18 constructive trust, equitable lien, or other theory, may not
19 be asserted against any purchaser of a financial asset or
20 interest therein who gives value, obtains control, and does
21 not act in collusion with the securities intermediary in
22 violating the securities intermediary's obligations under s.
23 678.5041.
24 678.5041 Duty of securities intermediary to maintain
25 financial asset.--
26 (1) A securities intermediary shall promptly obtain
27 and thereafter maintain a financial asset in a quantity
28 corresponding to the aggregate of all security entitlements it
29 has established in favor of its entitlement holders with
30 respect to that financial asset. The securities intermediary
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1 may maintain those financial assets directly or through one or
2 more other securities intermediaries.
3 (2) Except to the extent otherwise agreed by its
4 entitlement holder, a securities intermediary may not grant
5 any security interests in a financial asset it is obligated to
6 maintain pursuant to subsection (1).
7 (3) A securities intermediary satisfies the duty in
8 subsection (1) if:
9 (a) The securities intermediary acts with respect to
10 the duty as agreed upon by the entitlement holder and the
11 securities intermediary; or
12 (b) In the absence of agreement, the securities
13 intermediary exercises due care in accordance with reasonable
14 commercial standards to obtain and maintain the financial
15 asset.
16 (4) This section does not apply to a clearing
17 corporation that is itself the obligor of an option or similar
18 obligation to which its entitlement holders have security
19 entitlements.
20 678.5051 Duty of securities intermediary with respect
21 to payments and distributions.--
22 (1) A securities intermediary shall take action to
23 obtain a payment or distribution made by the issuer of a
24 financial asset. A securities intermediary satisfies the duty
25 if:
26 (a) The securities intermediary acts with respect to
27 the duty as agreed upon by the entitlement holder and the
28 securities intermediary; or
29 (b) In the absence of agreement, the securities
30 intermediary exercises due care in accordance with reasonable
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1 commercial standards to attempt to obtain the payment or
2 distribution.
3 (2) A securities intermediary is obligated to its
4 entitlement holder for a payment or distribution made by the
5 issuer of a financial asset if the payment or distribution is
6 received by the securities intermediary.
7 678.5061 Duty of securities intermediary to exercise
8 rights as directed by entitlement holder.--A securities
9 intermediary shall exercise rights with respect to a financial
10 asset if directed to do so by an entitlement holder. A
11 securities intermediary satisfies the duty if:
12 (1) The securities intermediary acts with respect to
13 the duty as agreed upon by the entitlement holder and the
14 securities intermediary; or
15 (2) In the absence of agreement, the securities
16 intermediary either places the entitlement holder in a
17 position to exercise the rights directly or exercises due care
18 in accordance with reasonable commercial standards to follow
19 the direction of the entitlement holder.
20 678.5071 Duty of securities intermediary to comply
21 with entitlement order.--
22 (1) A securities intermediary shall comply with an
23 entitlement order if the entitlement order is originated by
24 the appropriate person, the securities intermediary has had
25 reasonable opportunity to assure itself that the entitlement
26 order is genuine and authorized, and the securities
27 intermediary has had reasonable opportunity to comply with the
28 entitlement order. A securities intermediary satisfies the
29 duty if:
30
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1 (a) The securities intermediary acts with respect to
2 the duty as agreed upon by the entitlement holder and the
3 securities intermediary; or
4 (b) In the absence of agreement, the securities
5 intermediary exercises due care in accordance with reasonable
6 commercial standards to comply with the entitlement order.
7 (2) If a securities intermediary transfers a financial
8 asset pursuant to an ineffective entitlement order, the
9 securities intermediary shall reestablish a security
10 entitlement in favor of the person entitled to it, and pay or
11 credit any payments or distributions that the person did not
12 receive as a result of the wrongful transfer. If the
13 securities intermediary does not reestablish a security
14 entitlement, the securities intermediary is liable to the
15 entitlement holder for damages.
16 678.5081 Duty of securities intermediary to change
17 entitlement holder's position to other form of security
18 holding.--A securities intermediary shall act at the direction
19 of an entitlement holder to change a security entitlement into
20 another available form of holding for which the entitlement
21 holder is eligible, or to cause the financial asset to be
22 transferred to a securities account of the entitlement holder
23 with another securities intermediary. A securities
24 intermediary satisfies the duty if:
25 (1) The securities intermediary acts as agreed upon by
26 the entitlement holder and the securities intermediary; or
27 (2) In the absence of agreement, the securities
28 intermediary exercises due care in accordance with reasonable
29 commercial standards to follow the direction of the
30 entitlement holder.
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1 678.5091 Specification of duties of securities
2 intermediary by other statute or regulation; manner of
3 performance of duties of securities intermediary and exercise
4 of rights of entitlement holder.--
5 (1) If the substance of a duty imposed upon a
6 securities intermediary by ss. 678.5041-678.5081 is the
7 subject of other statute, regulation, or rule, compliance with
8 that statute, regulation, or rule satisfies the duty.
9 (2) To the extent that specific standards for the
10 performance of the duties of a securities intermediary or the
11 exercise of the rights of an entitlement holder are not
12 specified by other statute, regulation, or rule or by
13 agreement between the securities intermediary and entitlement
14 holder, the securities intermediary shall perform its duties
15 and the entitlement holder shall exercise its rights in a
16 commercially reasonable manner.
17 (3) The obligation of a securities intermediary to
18 perform the duties imposed by ss.678.5041-678.5081 is subject
19 to:
20 (a) Rights of the securities intermediary arising out
21 of a security interest under a security agreement with the
22 entitlement holder or otherwise.
23 (b) Rights of the securities intermediary under other
24 law, regulation, rule, or agreement to withhold performance of
25 its duties as a result of unfulfilled obligations of the
26 entitlement holder to the securities intermediary.
27 (4) Sections 678.5041-678.5081 do not require a
28 securities intermediary to take any action that is prohibited
29 by other statute, regulation, or rule.
30 678.5101 Rights of purchaser of security entitlement
31 from entitlement holder.--
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1 (1) An action based on an adverse claim to a financial
2 asset or security entitlement, whether framed in conversion,
3 replevin, constructive trust, equitable lien, or other theory,
4 may not be asserted against a person who purchases a security
5 entitlement, or an interest therein, from an entitlement
6 holder if the purchaser gives value, does not have notice of
7 the adverse claim, and obtains control.
8 (2) If an adverse claim could not have been asserted
9 against an entitlement holder under s. 678.5021, the adverse
10 claim cannot be asserted against a person who purchases a
11 security entitlement, or an interest therein, from the
12 entitlement holder.
13 (3) In a case not covered by the priority rules in
14 chapter 679, a purchaser for value of a security entitlement,
15 or an interest therein, who obtains control has priority over
16 a purchaser of a security entitlement, or an interest therein,
17 who does not obtain control. Purchasers who have control rank
18 equally, except that a securities intermediary as purchaser
19 has priority over a conflicting purchaser who has control
20 unless otherwise agreed by the securities intermediary.
21 678.5111 Priority among security interests and
22 entitlement holders.--
23 (1) Except as otherwise provided in subsections (2)
24 and (3), if a securities intermediary does not have sufficient
25 interests in a particular financial asset to satisfy both its
26 obligations to entitlement holders who have security
27 entitlements to that financial asset and its obligation to a
28 creditor of the securities intermediary who has a security
29 interest in that financial asset, the claims of entitlement
30 holders, other than the creditor, have priority over the claim
31 of the creditor.
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1 (2) A claim of a creditor of a securities intermediary
2 who has a security interest in a financial asset held by a
3 securities intermediary has priority over claims of the
4 securities intermediary's entitlement holders who have
5 security entitlements with respect to that financial asset if
6 the creditor has control over the financial asset.
7 (3) If a clearing corporation does not have sufficient
8 financial assets to satisfy both its obligations to
9 entitlement holders who have security entitlements with
10 respect to a financial asset and its obligation to a creditor
11 of the clearing corporation who has a security interest in
12 that financial asset, the claim of the creditor has priority
13 over the claims of entitlement holders.
14 Section 6. Subsection (6) of section 679.103, Florida
15 Statutes, is amended to read:
16 679.103 Perfection of security interests in multiple
17 state transactions.--
18 (6) INVESTMENT PROPERTY.--
19 (a) This subsection applies to investment property.
20 (b) Except as otherwise provided in paragraph (f),
21 during the time that a security certificate is located in a
22 jurisdiction, perfection of a security interest, the effect of
23 perfection or nonperfection, and the priority of a security
24 interest in the certificated security represented thereby are
25 governed by the local law of that jurisdiction.
26 (c) Except as otherwise provided in paragraph (f),
27 perfection of a security interest, the effect of perfection or
28 nonperfection, and the priority of a security interest in an
29 uncertificated security are governed by the local law of the
30 issuer's jurisdiction as specified in s. 678.1101(4).
31
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HB 1083, First Engrossed
1 (d) Except as otherwise provided in paragraph (f),
2 perfection of a security interest, the effect of perfection or
3 nonperfection, and the priority of a security interest in a
4 security entitlement or securities account are governed by the
5 local law of the securities intermediary's jurisdiction as
6 specified in s. 678.1101(5).
7 (e) Except as otherwise provided in paragraph (f),
8 perfection of a security interest, the effect of perfection or
9 nonperfection, and the priority of a security interest in a
10 commodity contract or commodity account are governed by the
11 local law of the commodity intermediary's jurisdiction. The
12 following rules determine a commodity intermediary's
13 jurisdiction for purposes of this paragraph:
14 1. If an agreement between the commodity intermediary
15 and commodity customer specifies that it is governed by the
16 law of a particular jurisdiction, that jurisdiction is the
17 commodity intermediary's jurisdiction.
18 2. If an agreement between the commodity intermediary
19 and commodity customer does not specify the governing law as
20 provided in subparagraph 1., but expressly specifies that the
21 commodity account is maintained at an office in a particular
22 jurisdiction, that jurisdiction is the commodity
23 intermediary's jurisdiction.
24 3. If an agreement between the commodity intermediary
25 and commodity customer does not specify a jurisdiction as
26 provided in subparagraph 1. or subparagraph 2., the commodity
27 intermediary's jurisdiction is the jurisdiction in which is
28 located the office identified in an account statement as the
29 office serving the commodity customer's account.
30 4. If an agreement between the commodity intermediary
31 and commodity customer does not specify a jurisdiction as
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HB 1083, First Engrossed
1 provided in subparagraph 1. or subparagraph 2. and an account
2 statement does not identify an office serving the commodity
3 customer's account as provided in subparagraph 3., the
4 commodity intermediary's jurisdiction is the jurisdiction in
5 which is located the chief executive office of the commodity
6 intermediary.
7 (f) Perfection of a security interest by filing,
8 automatic perfection of a security interest in investment
9 property granted by a broker or securities intermediary, and
10 automatic perfection of a security interest in a commodity
11 contract or commodity account granted by a commodity
12 intermediary are governed by the local law of the jurisdiction
13 in which the debtor is located. UNCERTIFICATED
14 SECURITIES.--The law (including the conflict of laws rules) of
15 the jurisdiction of organization of the issuer governs the
16 perfection and the effect of perfection or nonperfection of a
17 security interest in uncertificated securities.
18 Section 7. Paragraphs (e), (h) and (i) of subsection
19 (1) and subsections (2) and (3) of section 679.105, Florida
20 Statutes, are amended to read:
21 679.105 Definitions and index of definitions.--
22 (1) In this chapter unless the context otherwise
23 requires:
24 (e) "Deposit account" means a demand, time, savings,
25 passbook, or like account maintained with a bank, savings and
26 loan association, credit union, or like organization, other
27 than an account evidenced by a transferrable certificate of
28 deposit that is an instrument within this article;
29 (h) "Goods" includes all things which are movable at
30 the time the security interest attaches or which are fixtures
31 (s. 679.313), but does not include money, documents,
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1 instruments, investment property, accounts, chattel paper,
2 general intangibles, or minerals or the like (including oil
3 and gas) before extraction. "Goods" also includes standing
4 timber which is to be cut and removed under a conveyance or
5 contract for sale, the unborn young of animals, and growing
6 crops;
7 (i) "Instrument" means a negotiable instrument
8 (defined in s. 673.1041), or a certificated security (defined
9 in s. 678.102), or any other writing which evidences a right
10 to the payment of money and is not itself a security agreement
11 or lease and is of a type which is in ordinary course of
12 business transferred by delivery with any necessary
13 indorsement or assignment, however, the term does not include
14 investment property;
15 (2) Other definitions applying to this chapter and the
16 sections in which they appear are:
17 "Account," s. 679.106.
18 "Attach," s. 679.203.
19 "Commodity contract," s. 679.115.
20 "Commodity customer," s. 679.115.
21 "Commodity intermediary," s. 679.115.
22 "Consumer goods," s. 679.109(1).
23 "Control," s. 679.115.
24 "Equipment," s. 679.109(2).
25 "Farm products," s. 679.109(3).
26 "Fixtures," s. 679.313.
27 "General intangibles," s. 679.106.
28 "Inventory," s. 679.109(4).
29 "Investment property," s. 679.115.
30 "Lien creditor," s. 679.301(3).
31 "Proceeds," s. 679.306(1).
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1 "Purchase money security interest," s. 679.107.
2 "United States," s. 679.103.
3 (3) The following definitions in other chapters apply
4 to this chapter:
5 "Broker," s. 678.1021.
6 "Certificated security," s. 678.1021.
7 "Check," s. 673.1041.
8 "Clearing corporation," s. 678.1021.
9 "Contract for sale," s. 672.106.
10 "Control," s. 678.1061.
11 "Delivery," s. 678.3011.
12 "Entitlement holder," s. 678.1021.
13 "Financial asset," s. 678.1021.
14 "Holder in due course," s. 673.3021.
15 "Note," s. 673.1041.
16 "Sale," s. 672.106.
17 "Securities intermediary," s. 678.1021.
18 "Security," s. 678.1021.
19 "Security certificate," s. 678.1021.
20 "Security entitlement," s. 678.1021.
21 "Uncertified security," s. 678.1021.
22 Section 8. Section 679.106, Florida Statutes, is
23 amended to read:
24 679.106 Definitions: "account"; "general
25 intangibles."--"Account" means any right to payment for goods
26 sold or leased or for services rendered which is not evidenced
27 by an instrument or chattel paper whether or not it has been
28 earned by performance. "General intangibles" means any
29 personal property (including things in action) other than
30 goods, accounts, chattel paper, documents, instruments,
31 investment property, and money. All rights to payment earned
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1 or unearned under a charter or other contract involving the
2 use or hire of a vessel and all rights incident to the charter
3 or contract are accounts.
4 Section 9. Section 679.115, Florida Statutes, is
5 created to read:
6 679.115 Investment property.--
7 (1) In this chapter:
8 (a) "Commodity account" means an account maintained by
9 a commodity intermediary in which a commodity contract is
10 carried for a commodity customer.
11 (b) "Commodity contract" means a commodity futures
12 contract, an option on a commodity futures contract, a
13 commodity option, or other contract that, in each case, is:
14 1. Traded on or subject to the rules of a board of
15 trade that has been designated as a contract market for such a
16 contract pursuant to the federal commodities laws; or
17 2. Traded on a foreign commodity board of trade,
18 exchange, or market, and is carried on the books of a
19 commodity intermediary for a commodity customer.
20 (c) "Commodity customer" means a person for whom a
21 commodity intermediary carries a commodity contract on its
22 books.
23 (d) "Commodity intermediary" means:
24 1. A person who is registered as a futures commission
25 merchant under the federal commodities laws; or
26 2. A person who in the ordinary course of its business
27 provides clearance or settlement services for a board of trade
28 that has been designated as a contract market pursuant to the
29 federal commodities laws.
30 (e) "Control" with respect to a certificated security,
31 uncertificated security, or security entitlement has the
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1 meaning specified in s. 678.1061. A secured party has control
2 over a commodity contract if by agreement among the commodity
3 customer, the commodity intermediary, and the secured party,
4 the commodity intermediary has agreed that it will apply any
5 value distributed on account of the commodity contract as
6 directed by the secured party without further consent by the
7 commodity customer. If a commodity customer grants a security
8 interest in a commodity contract to its own commodity
9 intermediary, the commodity intermediary as secured party has
10 control. A secured party has control over a securities account
11 or commodity account if the secured party has control over all
12 security entitlements or commodity contracts carried in the
13 securities account or commodity account.
14 (f) "Investment property" means:
15 1. A security, whether certificated or uncertificated;
16 2. A security entitlement;
17 3. A securities account;
18 4. A commodity contract; or
19 5. A commodity account.
20 (2) Attachment or perfection of a security interest in
21 a securities account is also attachment or perfection of a
22 security interest in all security entitlements carried in the
23 securities account. Attachment or perfection of a security
24 interest in a commodity account is also attachment or
25 perfection of a security interest in all commodity contracts
26 carried in the commodity account.
27 (3) A description of collateral in a security
28 agreement or financing statement is sufficient to create or
29 perfect a security interest in a certificated security,
30 uncertificated security, security entitlement, securities
31 account, commodity contract, or commodity account whether it
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1 describes the collateral by those terms, or as investment
2 property, or by description of the underlying security,
3 financial asset, or commodity contract. A description of
4 investment property collateral in a security agreement or
5 financing statement is sufficient if it identifies the
6 collateral by specific listing, by category, by quantity, by a
7 computational or allocational formula or procedure, or by any
8 other method, if the identity of the collateral is objectively
9 determinable.
10 (4) Perfection of a security interest in investment
11 property is governed by the following rules:
12 (a) A security interest in investment property may be
13 perfected by control.
14 (b) Except as otherwise provided in paragraphs (c) and
15 (d), a security interest in investment property may be
16 perfected by filing.
17 (c) If the debtor is a broker or securities
18 intermediary, a security interest in investment property is
19 perfected when it attaches. The filing of a financing
20 statement with respect to a security interest in investment
21 property granted by a broker or securities intermediary has no
22 effect for purposes of perfection or priority with respect to
23 that security interest.
24 (d) If a debtor is a commodity intermediary, a
25 security interest in a commodity contract or a commodity
26 account is perfected when it attaches. The filing of a
27 financing statement with respect to a security interest in a
28 commodity contract or a commodity account granted by a
29 commodity intermediary has no effect for purposes of
30 perfection or priority with respect to that security interest.
31
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1 (5) Priority between conflicting security interests in
2 the same investment property is governed by the following
3 rules:
4 (a) A security interest of a secured party who has
5 control over investment property has priority over a security
6 interest of a secured party who does not have control over the
7 investment property.
8 (b) Except as otherwise provided in paragraphs (c) and
9 (d), conflicting security interests of secured parties each of
10 whom has control rank equally.
11 (c) Except as otherwise agreed by the securities
12 intermediary, a security interest in a security entitlement or
13 a securities account granted to the debtor's own securities
14 intermediary has priority over any security interest granted
15 by the debtor to another secured party.
16 (d) Except as otherwise agreed by the commodity
17 intermediary, a security interest in a commodity contract or a
18 commodity account granted to the debtor's own commodity
19 intermediary has priority over any security interest granted
20 by the debtor to another secured party.
21 (e) Conflicting security interests granted by a
22 broker, a securities intermediary, or a commodity intermediary
23 which are perfected without control rank equally.
24 (f) In all other cases, priority between conflicting
25 security interests in investment property is governed by s.
26 679.312(5), (6), and (7). Section 679.312(4) does not apply to
27 investment property.
28 (6) If a security certificate in registered form is
29 delivered to a secured party pursuant to agreement, a written
30 security agreement is not required for attachment or
31 enforceability of the security interest, delivery suffices for
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1 perfection of the security interest, and the security interest
2 has priority over a conflicting security interest perfected by
3 means other than control, even if a necessary indorsement is
4 lacking.
5 Section 10. Section 679.116, Florida Statutes, is
6 created to read:
7 679.116 Security interest arising in purchase or
8 delivery of financial asset.--
9 (1) If a person buys a financial asset through a
10 securities intermediary in a transaction in which the buyer is
11 obligated to pay the purchase price to the securities
12 intermediary at the time of the purchase, and the securities
13 intermediary credits the financial asset to the buyer's
14 securities account before the buyer pays the securities
15 intermediary, the securities intermediary has a security
16 interest in the buyer's security entitlement securing the
17 buyer's obligation to pay. A security agreement is not
18 required for attachment or enforceability of the security
19 interest, and the security interest is automatically
20 perfected.
21 (2) If a certificated security, or other financial
22 asset represented by a writing which in the ordinary course of
23 business is transferred by delivery with any necessary
24 indorsement or assignment is delivered pursuant to an
25 agreement between persons in the business of dealing with such
26 securities or financial assets and the agreement calls for
27 delivery versus payment, the person delivering the certificate
28 or other financial asset has a security interest in the
29 certificated security or other financial asset securing the
30 seller's right to receive payment. A security agreement is not
31 required for attachment or enforceability of the security
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1 interest, and the security interest is automatically
2 perfected.
3 Section 11. Subsection (1) of section 679.203, Florida
4 Statutes, is amended to read:
5 679.203 Attachment and enforceability of security
6 interest; proceeds, formal requisites.--
7 (1) Subject to the provisions of s. 674.2101 on the
8 security interest of a collecting bank, ss. 679.115 and
9 679.116 on security interests in investment property, s.
10 678.321 on security interests in securities and s. 679.113 on
11 a security interest arising under the chapter on sales, a
12 security interest is not enforceable against the debtor or
13 third parties with respect to the collateral and does not
14 attach unless:
15 (a) The collateral is in the possession of the secured
16 party pursuant to agreement, the collateral is investment
17 property and the secured party has control pursuant to
18 agreement, or the debtor has signed a security agreement which
19 contains a description of the collateral and in addition, when
20 the security interest covers crops growing or to be grown or
21 timber to be cut, a description of the land concerned; and
22 (b) Value has been given; and
23 (c) The debtor has rights in the collateral.
24 Section 12. Paragraph (d) of subsection (1) of section
25 679.301, Florida Statutes, is amended to read:
26 679.301 Persons who take priority over unperfected
27 security interests; right of "lien creditor."--
28 (1) Except as otherwise provided in subsection (2), an
29 unperfected security interest is subordinate to the rights of:
30 (d) In the case of accounts, investment property, and
31 general intangibles, a person who is not a secured party and
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HB 1083, First Engrossed
1 who is a transferee to the extent that he or she gives value
2 without knowledge of the security interest and before it is
3 perfected.
4 Section 13. Subsection (1) of section 679.302, Florida
5 Statutes, is amended to read:
6 679.302 When filing is required to perfect security
7 interest; security interests to which filing provisions of
8 this chapter do not apply.--
9 (1) A financing statement must be filed to perfect all
10 security interests except the following:
11 (a) A security interest in collateral in possession of
12 the secured party under s. 679.304(1) or s. 679.305;
13 (b) A security interest temporarily perfected in
14 instruments, certificated securities, or documents without
15 delivery under s. 679.304 or in proceeds for a 10-day period
16 under s. 679.306;
17 (c) A security interest created by an assignment of a
18 beneficial interest in a decedent's estate;
19 (d) A purchase money security interest in consumer
20 goods; but filing is required for a fixture under s. 679.313;
21 (e) An assignment of accounts which does not alone or
22 in conjunction with other assignments to the same assignee
23 transfer a significant part of the outstanding accounts of the
24 assignor;
25 (f) A security interest of a collecting bank (s.
26 674.2101) or in securities (s. 678.321) or arising under the
27 chapter on sales (see s. 679.113) or covered in subsection (3)
28 of this section;
29 (g) An assignment for the benefit of all the creditors
30 of the transferor, and subsequent transfers by the assignee
31 thereunder; or.
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1 (h) A security interest in investment property which
2 is perfected without filing under s. 679.115 or s. 679.116.
3 Section 14. Subsection (1) of section 679.303, Florida
4 Statutes, is amended to read:
5 679.303 When security interest is perfected;
6 continuity of perfection.--
7 (1) A security interest is perfected when it has
8 attached and when all of the applicable steps required for
9 perfection have been taken. Such steps are specified in ss.
10 679.115, 679.302, 679.304-679.306. If such steps are taken
11 before the security interest attaches, it is perfected at the
12 time when it attaches.
13 Section 15. Subsections (1), (4), and (5) of section
14 679.304, Florida Statutes, are amended to read:
15 679.304 Perfection of security interest in
16 instruments, documents, and goods covered by documents;
17 perfection by permissive filing; temporary perfection without
18 filing or transfer of possession.--
19 (1) A security interest in chattel paper or negotiable
20 documents may be perfected by filing. A security interest in
21 money or instruments (other than certificated securities or
22 instruments which constitute part of chattel paper) can be
23 perfected only by the secured party's taking possession,
24 except as provided in subsections (4) and (5) of this section
25 and subsections (2) and (3) of s. 679.306 on proceeds.
26 (4) A security interest in instruments, (other than
27 certificated securities,) or negotiable documents is perfected
28 without filing or the taking of possession for a period of 21
29 days from the time it attaches to the extent that it arises
30 for new value given under a written security agreement.
31
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HB 1083, First Engrossed
1 (5) A security interest remains perfected for a period
2 of 21 days without filing where a secured party having a
3 perfected security interest in an instrument, (other than a
4 certificated security), a negotiable document, or goods in
5 possession of a bailee other than one who has issued a
6 negotiable document therefor:
7 (a) Makes available to the debtor the goods or
8 documents representing the goods for the purpose of ultimate
9 sale or exchange or for the purpose of loading, unloading,
10 storing, shipping, transshipping, manufacturing, processing,
11 or otherwise dealing with them in a manner preliminary to
12 their sale or exchange but priority between conflicting
13 security interests in the goods is subject to s. 679.312(3);
14 or
15 (b) Delivers the instrument or certificated security
16 to the debtor for the purpose of ultimate sale or exchange or
17 of presentation, collection, renewal or registration of
18 transfer.
19 Section 16. Section 679.305, Florida Statutes, is
20 amended to read:
21 679.305 When possession by secured party perfects
22 security interest without filing.--A security interest in
23 letters of credit and advices of credit (s. 675.116(2)(a)),
24 goods, instruments, money, negotiable documents, or chattel
25 paper may be perfected by the secured party's taking
26 possession of the collateral. If such collateral other than
27 goods covered by a negotiable document is held by a bailee,
28 the secured party is deemed to have possession from the time
29 the bailee receives notification of the secured party's
30 interest. A security interest is perfected by possession from
31 the time possession is taken without relation back and
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HB 1083, First Engrossed
1 continues only so long as possession is retained, unless
2 otherwise specified in this chapter. The security interest
3 may be otherwise perfected as provided in this chapter before
4 or after the period of possession by the secured party.
5 Section 17. Subsections (1) and (3) of section
6 679.306, Florida Statutes, are amended to read:
7 679.306 "Proceeds"; secured party's rights on
8 disposition of collateral.--
9 (1) "Proceeds" includes whatever is received upon the
10 sale, exchange, collection, or other disposition of collateral
11 or proceeds. Insurance payable by reason of loss or damage to
12 the collateral is proceeds, except to the extent that it is
13 payable to a person other than a party to the security
14 agreement. Any payments or distributions made with respect to
15 investment property collateral are proceeds. Money, checks,
16 deposit accounts, and the like are "cash proceeds." All other
17 proceeds are "noncash proceeds."
18 (3) The security interest in proceeds is a
19 continuously perfected security interest if the interest in
20 the original collateral was perfected, but it ceases to be a
21 perfected security interest and becomes unperfected 10 days
22 after receipt of the proceeds by the debtor unless:
23 (a) A filed financing statement covers the original
24 collateral and the proceeds are collateral in which a security
25 interest may be perfected by filing in the office or offices
26 where the financing statement has been filed and, if the
27 proceeds are acquired with cash proceeds, the description of
28 collateral in the financing statement indicates the types of
29 property constituting the proceeds; or
30 (b) A filed financing statement covers the original
31 collateral and the proceeds are identifiable cash proceeds; or
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1 (c) The original collateral was investment property
2 and the proceeds are identifiable cash proceeds; or
3 (d)(c) The security interest in the proceeds is
4 perfected before the expiration of the 10-day period.
5
6 Except as provided in this section, a security interest in
7 proceeds can be perfected only by the methods or under the
8 circumstances permitted in this chapter for original
9 collateral of the same type.
10 Section 18. Section 679.309, Florida Statutes, is
11 amended to read:
12 679.309 Protection of purchasers of instruments,
13 documents, and securities.--Nothing in this chapter limits the
14 rights of a holder in due course of a negotiable instrument
15 (s. 673.3021) or a holder to whom a negotiable document of
16 title has been duly negotiated (s. 677.501) or a protected
17 bona fide purchaser of a security (s. 678.3031 s. 678.302),
18 and such holders or purchasers take priority over an earlier
19 security interest even though perfected. Filing under this
20 chapter does not constitute notice of the security interest to
21 such holders or purchasers.
22 Section 19. Subsections (1) and (7) of section
23 679.312, Florida Statutes, are amended to read:
24 679.312 Priorities among conflicting security
25 interests in the same collateral.--
26 (1) The rules of priority stated in other sections of
27 this part and in the following sections shall govern when
28 applicable: s. 674.2101 with respect to the security
29 interests of collecting banks in items being collected,
30 accompanying documents, and proceeds; s. 679.103 on security
31 interests related to other jurisdictions; s. 679.114 on
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1 consignments; s. 679.115 on security interests in investment
2 property.
3 (7) If future advances are made while a security
4 interest is perfected by filing, the taking of possession, or
5 under s. 679.115 or s. 679.116 on investment property s.
6 678.321 on securities, the security interest has the same
7 priority for the purposes of subsection (5) or s. 679.115(5)
8 with respect to the future advances as it does with respect to
9 the first advance. If a commitment is made before or while
10 the security interest is so perfected, the security interest
11 has the same priority with respect to advances made pursuant
12 thereto. In other cases, a perfected security interest has
13 priority from the date the advance is made.
14 Section 20. Paragraph (d) of subsection (2) of section
15 671.105, Florida Statutes, is amended to read:
16 671.105 Territorial application of the code; parties'
17 power to choose applicable law.--
18 (2) When one of the following provisions of this code
19 specifies the applicable law, that provision governs; and a
20 contrary agreement is effective only to the extent permitted
21 by the law (including the conflict-of-laws rules) so
22 specified:
23 (d) Applicability of the chapter on investment
24 securities. (s. 678.1061 s. 678.106)
25 Section 21. Subsection (2) of section 671.206, Florida
26 Statutes, is amended to read:
27 671.206 Statute of frauds for kinds of personal
28 property not otherwise covered.--
29 (2) Subsection (1) of this section does not apply to
30 contracts for the sale of goods (s. 672.201) nor of securities
31
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HB 1083, First Engrossed
1 (s. 678.1131 s. 678.319) nor to security agreements (s.
2 679.203).
3 Section 22. Paragraph (f) of subsection (1) of section
4 674.104, Florida Statutes, is amended to read:
5 674.104 Definitions and index of definitions.--
6 (1) In this chapter, unless the context otherwise
7 requires, the term:
8 (f) "Documentary draft" means a draft to be presented
9 for acceptance or payment if specified documents, certificated
10 securities (s. 678.1021 s. 678.102) or instructions for
11 uncertificated securities (s. 678.1021 s. 678.308), or other
12 certificates, statements, or the like are to be received by
13 the drawee or other payor before acceptance or payment of the
14 draft.
15 Section 23. Subsection (2) of section 675.114, Florida
16 Statutes, is amended to read:
17 675.114 Issuer's duty and privilege to honor; right to
18 reimbursement.--
19 (2) Unless otherwise agreed when documents appear on
20 their face to comply with the terms of a credit but a required
21 document does not in fact conform to the warranties made on
22 negotiation or transfer of a document of title (s. 677.507) or
23 of a certificated security (s. 678.1081 s. 678.306) or is
24 forged or fraudulent or there is fraud in the transaction:
25 (a) The issuer must honor the draft or demand for
26 payment if honor is demanded by a negotiating bank or other
27 holder of the draft or demand which has taken the draft or
28 demand under the credit and under circumstances which would
29 make it a holder in due course (s. 673.3021) and in an
30 appropriate case would make it a person to whom a document of
31 title has been duly negotiated (s. 677.502) or a bona fide
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HB 1083, First Engrossed
1 purchaser of a certificated security (s. 678.3021 s. 678.302);
2 and
3 (b) In all other cases as against its customer, an
4 issuer acting in good faith may honor the draft or demand for
5 payment despite notification from the customer of fraud,
6 forgery or other defect not apparent on the face of the
7 documents but a court of appropriate jurisdiction may enjoin
8 such honor.
9 Section 24. (1) This act does not affect an action or
10 proceeding commenced before this act takes effect.
11 (2) If a security interest in a security is perfected
12 at the date this act takes effect, and the action by which the
13 security interest was perfected would suffice to perfect a
14 security interest under this act, no further action is
15 required to continue perfection. If a security interest in a
16 security is perfected at the date this act takes effect but
17 the action by which the security interest was perfected would
18 not suffice to perfect a security interest under this act, the
19 security interest remains perfected for a period of 4 months
20 after the effective date and continues perfected thereafter if
21 appropriate action to perfect under this act is taken within
22 that period. If a security interest is perfected at the date
23 this act takes effect and the security interest can be
24 perfected by filing under this act, a financing statement
25 signed by the secured party instead of the debtor may be filed
26 within that period to continue perfection or thereafter to
27 perfect.
28 Section 25. Sections 610.011, 610.021, 610.031,
29 610.041, 610.051, 610.061, 610.071, 610.081, 610.091, 610.101,
30 and 610.111, Florida Statutes, paragraph (b) of subsection (2)
31 of section 671.304, Florida Statutes, and sections 678.102,
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HB 1083, First Engrossed
1 678.103, 678.104, 678.105, 678.106, 678.107, 678.108, 678.201,
2 678.202, 678.203, 678.204, 678.205, 678.206, 678.207, 678.208,
3 678.301, 678.302, 678.303, 678.304, 678.305, 678.306, 678.307,
4 678.308, 678.309, 678.310, 678.311, 678.312, 678.313, 678.314,
5 678.315, 678.316, 678.317, 678.318, 678.319, 678.320, 678.321,
6 678.401, 678.402, 678.403, 678.404, 678.405, 678.406, 678.407,
7 and 678.408, Florida Statutes, are hereby repealed.
8 Section 26. Paragraphs (e) and (g) of subsection (1)
9 of section 680.1031, Florida Statutes, are amended to read:
10 680.1031 Definitions and index of definitions.--
11 (1) In this chapter, unless the context otherwise
12 requires:
13 (e) "Consumer lease" means a lease that a lessor
14 regularly engaged in the business of leasing or selling makes
15 to a lessee who is an individual and who a natural person and
16 takes under the lease primarily for a personal, family, or
17 household purpose if the total payments to be made under the
18 lease contract, excluding payments for options to renew or
19 buy, do not exceed $25,000.
20 (g) "Finance lease" means a lease with respect to in
21 which:
22 1. The lessor does not select, manufacture, or supply
23 the goods;
24 2. The lessor acquires the goods or the right to
25 possession and use of the goods in connection with the lease;
26 and
27 3. One of the following occurs Either:
28 a. The lessee receives a copy of the contract by which
29 the lessor acquired the goods or the right to possession and
30 use evidencing the lessor's purchase of the goods on or before
31 signing the lease contract;
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1 b. The lessee's approval of the contract by which the
2 lessor acquired the goods or the right to possession and use
3 evidencing the lessor's purchase of the goods is a condition
4 to effectiveness of the lease contract;
5 c. The lessee, before signing the lease contract,
6 receives an accurate and complete statement designating the
7 promises and warranties, and any disclaimers of warranties,
8 limitations or modifications of remedies, or liquidated
9 damages, including those of a third party, such as the
10 manufacturer of the goods, provided to the lessor by the
11 person supplying the goods in connection with or as part of
12 the contract by which the lessor acquired the goods or the
13 right to possession and use of the goods; or
14 d. If the lease is not a consumer lease, the lessor,
15 before the lessee signs the lease contract, informs the lessee
16 in writing:
17 I. Of the identity of the person supplying the goods
18 to the lessor, unless the lessee has selected that person and
19 directed the lessor to acquire the goods or the right to
20 possession and use of the goods from that person.
21 II. That the lessee is entitled under this chapter to
22 the promises and warranties, including those of any third
23 party, provided to the lessor by the person supplying the
24 goods in connection with or as part of the contract by which
25 the lessor acquired the goods or the right to possession and
26 use of the goods.
27 III. That the lessee may communicate with the person
28 supplying the goods to the lessor and receive an accurate and
29 complete record of the goods; and a complete statement of
30 those promises and warranties, including any disclaimers and
31 limitations of them or of remedies.
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1 c. The lease contract discloses all warranties and
2 other rights provided to the lessee by the lessor and supplier
3 in connection with the lease contract and informs the lessee
4 that there are no warranties or other rights provided to the
5 lessee by the lessor and supplier other than those disclosed
6 in the lease contract; or
7 d. Only if the lease is not a consumer lease, on or
8 before the signing of the lease contract by the lessee the
9 lessor:
10 I. Informs the lessee in writing of the identity of
11 the supplier unless the lessee has selected the supplier and
12 directed the lessor to purchase the goods from the supplier;
13 II. Informs the lessee in writing that the lessee may
14 have rights under the contract evidencing the lessor's
15 purchase of the goods; and
16 III. Advises the lessee in writing to contact the
17 supplier for a description of any such rights.
18 Section 27. Section 680.1041, Florida Statutes, is
19 amended to read:
20 680.1041 Leases subject to other statutes.--
21 (1) A lease, although subject to this chapter, is also
22 subject to any applicable:
23 (a) Statute of the United States;
24 (b) Certificate-of-title statute of this state:
25 chapter 319 or chapter 328;
26 (b)(c) Certificate-of-title statute of another
27 jurisdiction (s. 680.1051); or
28 (c)(d) Consumer protection statute of this state or
29 final consumer protection decision of a court of this state
30 existing on the effective date of this chapter.
31
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1 (2) In case of conflict between the provisions of this
2 chapter, other than ss. 680.1051, 680.304(3), and 680.305(3),
3 and a any statute or decision referred to in subsection (1),
4 the provisions of that statute or decision controls control.
5 (3) Failure to comply with an any applicable law
6 statute has only the effect specified therein.
7 Section 28. Section 680.303, Florida Statutes, is
8 amended to read:
9 680.303 Alienability of party's interest under lease
10 contract or of lessor's residual interest in goods; delegation
11 of performance; transfer assignment of rights.--
12 (1) As used in this section, "creation of a security
13 interest" includes the sale of a lease contract that is
14 subject to chapter 679.
15 (2) Except as provided in subsections (3) and (4), a
16 provision in a lease agreement which:
17 (a) Prohibits the voluntary or involuntary transfer,
18 including a transfer by sale, sublease, creation or
19 enforcement of a security interest, or attachment, levy, or
20 other judicial process, of an interest of a party under the
21 lease contract or of the lessor's residual interest in the
22 goods; or
23 (b) Makes such a transfer an event of default, gives
24 rise to the rights and remedies provided in subsection (5),
25 but a transfer that is prohibited or is an event of default
26 under the lease agreement is otherwise effective.
27 (3) A provision in a lease agreement which:
28 (a) Prohibits the creation or enforcement of a
29 security interest in an interest of a party under the lease
30 contract or in the lessor's residual interest in the goods; or
31
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1 (b) Makes such a transfer an event of default, is not
2 enforceable unless, and then only to the extent that, there is
3 an actual transfer by the lessee of the lessee's right of
4 possession or use of the goods in violation of the provision
5 or an actual delegation of a material performance of either
6 party to the lease contract in violation of the provision.
7 Neither the granting nor the enforcement of a security
8 interest in the lessor's interest under the lease contract or
9 the lessor's residual interest in the goods is a transfer that
10 materially impairs the prospect of obtaining return
11 performance by, materially changes the duty of, or materially
12 increases the burden or risk imposed on, the lessee within the
13 purview of subsection (5) unless, and then only to the extent
14 that, there is an actual delegation of a material performance
15 of the lessor.
16 (1) Any interest of a party under a lease contract and
17 the lessor's residual interest in the goods may be transferred
18 unless:
19 (a) Except as provided in paragraph (a) of subsection
20 (3), the transfer is voluntary and the lease contract
21 prohibits the transfer; or
22 (b) Except as provided in paragraph (c) or paragraph
23 (d) of subsection (3), the transfer materially changes the
24 duty of or materially increases the burden or risk imposed on
25 the other party to the lease contract, and within a reasonable
26 time after notice of the transfer the other party demands that
27 the transferee comply with subsection (2) and the transferee
28 fails to comply.
29 (2) Within a reasonable time after demand pursuant to
30 paragraph (1)(b), the transferee shall:
31
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1 (a) Cure or provide adequate assurance that he or she
2 will promptly cure any default other than one arising from the
3 transfer.
4 (b) Compensate or provide adequate assurance that he
5 or she will promptly compensate the other party to the lease
6 contract and any other person holding an interest in the lease
7 contract, except the party whose interest is being
8 transferred, for any loss to that party resulting from the
9 transfer.
10 (c) Provide adequate assurance of future due
11 performance under the lease contract.
12 (d) Assume the lease contract.
13 (3)(a) No prohibition upon transfer of any interest of
14 a party under a lease contract or the lessor's residual
15 interest in the goods shall invalidate the creation or
16 enforcement of a security interest in any interest of the
17 lessor under a lease contract or the lessor's residual
18 interest in the goods.
19 (b) Demand pursuant to paragraph (1)(b) is without
20 prejudice to the other party's rights against the transferee
21 and the party whose interest is transferred.
22 (c) Paragraph (b) of subsection (1) shall not apply
23 to:
24 1. The creation of a security interest in the interest
25 of the lessor under the lease contract or the lessor's
26 residual interest in the goods; or
27 2. The exercise of rights as a secured party pursuant
28 to the security interest other than a transfer of the interest
29 of the lessor under the lease contract or the lessor's
30 residual interest in the goods pursuant to s. 680.504 or s.
31 680.505.
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1 (d) Paragraph (b) of subsection (1) shall not affect
2 the validity of a provision in a lease contract obligating the
3 lessee to keep the lessee's interest in the lease contract or
4 the goods free from liens or encumbrances.
5 (4)(6) A provision in a lease agreement which:
6 (a) Prohibits a transfer of a right to damages for
7 default with respect to the whole lease contract or of a right
8 to payment arising out of the transferor's assignor's due
9 performance of the transferor's his or her entire obligation;
10 or can be assigned despite agreement otherwise.
11 (b) Makes such a transfer an event of default, is not
12 enforceable, and such a transfer is not a transfer that
13 materially impairs the prospect of obtaining return
14 performance by, materially changes the duty of, or materially
15 increases the burden or risk imposed on, the other party to
16 the lease contract within the purview of subsection (5).
17 (5) Subject to subsections (3) and (4):
18 (a) If a transfer is made which is made an event of
19 default under a lease agreement, the party to the lease
20 contract not making the transfer, unless that party waives the
21 default or otherwise agrees, has the rights and remedies
22 described in s. 680.501(2);
23 (b) If paragraph (a) is not applicable and if a
24 transfer is made that is prohibited under a lease agreement or
25 materially impairs the prospect of obtaining return
26 performance by, materially changes the duty of, or materially
27 increases the burden or risk imposed on, the other party to
28 the lease contract, unless the party not making the transfer
29 agrees at any time to the transfer in the lease contract or
30 otherwise, then, except as limited by contract, the transferor
31 is liable to the party not making the transfer for damages
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1 caused by the transfer to the extent that the damages could
2 not reasonably be prevented by the party not making the
3 transfer and a court having jurisdiction may grant other
4 appropriate relief, including cancellation of the lease
5 contract or an injunction against the transfer.
6 (6)(4) A transfer An assignment of "the lease" or of
7 "all my rights under the lease" or a transfer an assignment in
8 similar general terms is a transfer of rights, and unless the
9 language or the circumstances, as in a transfer an assignment
10 for security, indicate the contrary, the transfer assignment
11 is a delegation of duties by the transferor assignor to the
12 transferee. assignee and Acceptance by the transferee assignee
13 constitutes a promise by the transferee him or her to perform
14 those duties. The This promise is enforceable by either the
15 transferor assignor or the other party to the lease contract.
16 (7)(5) Unless otherwise agreed by the lessor and the
17 lessee, a no delegation of performance does not relieve
18 relieves the transferor assignor as against the other party of
19 any duty to perform or of any liability for default.
20 (8)(7) In a consumer lease, to prohibit the transfer
21 of an interest of a party under the a lease contract or to
22 make a transfer an event of default, the language of
23 prohibition must be specific, by a writing, and conspicuous.
24 Section 29. Subsection (1) of section 680.304, Florida
25 Statutes, is amended to read:
26 680.304 Subsequent lease of goods by lessor.--
27 (1) Subject to the provisions of s. 680.303, a
28 subsequent lessee from a lessor of goods under an existing
29 lease contract obtains, to the extent of the leasehold
30 interest transferred, the leasehold interest in the goods that
31 the lessor had or had power to transfer and, except as
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1 provided in subsection (2) and s. 680.527(4), takes subject to
2 the existing lease contract. A lessor with voidable title has
3 power to transfer a good leasehold interest to a good faith
4 subsequent lessee for value, but only to the extent set forth
5 in the preceding sentence. If When goods have been delivered
6 under a transaction of purchase, the lessor has that power
7 even though:
8 (a) The lessor's transferor was deceived as to the
9 identity of the lessor;
10 (b) The delivery was in exchange for a check which is
11 later dishonored;
12 (c) It was agreed that the transaction was to be a
13 "cash sale"; or
14 (d) The delivery was procured through fraud punishable
15 as larcenous under the criminal law.
16 Section 30. Subsections (2) and (3) of section
17 680.307, Florida Statutes, are amended to read:
18 680.307 Priority of liens arising by attachment or
19 levy on, security interests in, and other claims to goods.--
20 (2) Except as otherwise provided in subsections (3)
21 and (4) of this section and in ss. 680.306 and 680.308, a
22 creditor of a lessor takes subject to the lease contract
23 unless:
24 (a) Unless The creditor holds a lien that attached to
25 the goods before the lease contract became enforceable;
26 (b) Unless The creditor holds a security interest in
27 the goods and the lessee did not give value and receive
28 delivery of the goods without knowledge of the security
29 interests and the lessee did not give value and receive
30 delivery of the goods without knowledge of the security
31 interest; or
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1 (c) Unless The creditor holds a security interest in
2 the goods which that attached and was perfected (s. 679.303)
3 before:
4 1. the lease contract became enforceable.;
5 2. The lessee gave value and received delivery of the
6 goods; or
7 3. In the case of a purchase money security interest,
8 the date that is 15 days after the date that the lessor
9 received possession of the goods or the date that the lessee
10 received possession of the goods, whichever is earlier.
11 (3) A lessee in the ordinary course of business takes
12 the leasehold interest free of a security interest in the
13 goods created by the lessor even though the security interest
14 is perfected (s. 679.303) and the lessee knows of its
15 existence.
16 Section 31. Subsections (6), (7), (8), and (9) of
17 section 680.309, Florida Statutes, are amended to read:
18 680.309 Lessor's and lessee's rights when goods become
19 fixtures.--
20 (6) Notwithstanding paragraph (a) of subsection (4)(a)
21 but otherwise subject to subsections (4) and (5), the interest
22 of a lessor of fixtures including the lessor's residual
23 interest, is subordinate to the conflicting interest of an
24 encumbrancer of the real estate under a construction mortgage
25 recorded before the goods become fixtures if the goods become
26 fixtures before the completion of the construction. To the
27 extent given to refinance a construction mortgage, the
28 conflicting interest of an encumbrancer of the real estate
29 under a mortgage has this priority to the same extent as the
30 encumbrancer of the real estate under the construction
31 mortgage.
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1 (7) In cases not within the preceding subsections,
2 priority between the interest of a lessor of fixtures,
3 including the lessor's residual interest, and the conflicting
4 interest of an encumbrancer or owner of the real estate who is
5 not the lessee is determined by the priority rules governing
6 conflicting interests in real estate.
7 (8) If the interest of a lessor of fixtures, including
8 the lessor's residual interest, has priority over all
9 conflicting interests of all owners and encumbrancers of the
10 real estate, the lessor or the lessee may, on default,
11 expiration, termination, or cancellation of the lease
12 agreement by the other party but subject to the provisions of
13 the lease agreement and this chapter, or if necessary to
14 enforce his or her other rights and remedies of the lessor or
15 lessee under this chapter, remove the goods from the real
16 estate, free and clear of all conflicting interests of all
17 owners and encumbrancers of the real estate, but the lessor or
18 lessee he or she must reimburse any encumbrancer or owner of
19 the real estate who is not the lessee and who has not
20 otherwise agreed for the cost of repair of any physical injury
21 but not for any diminution in value of the real estate caused
22 by the absence of the goods removed or by any necessity of
23 replacing them. A person entitled to reimbursement may refuse
24 permission to remove until the party seeking removal gives
25 adequate security for the performance of this obligation.
26 (9) Even though the lease agreement does not create a
27 security interest, the interest of a lessor of fixtures,
28 including the lessor's residual interest, is perfected by
29 filing a financing statement as a fixture filing for leased
30 goods that are or are to become fixtures in accordance with
31 the relevant provisions of chapter 679.
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1 Section 32. Section 680.32, Florida Statutes, is
2 created to read:
3 680.32 Priority subject to subordination.--Nothing in
4 this chapter prevents subordination by agreement by any person
5 entitled to priority.
6 Section 33. Subsection (5) of section 680.501, Florida
7 Statutes, is amended to read:
8 680.501 Default: procedure.--
9 (5) If the lease agreement covers both real property
10 and goods, the party seeking enforcement may proceed under
11 this part as to the goods, or under other applicable law as to
12 both the real property and the goods in accordance with that
13 party's her or his rights and remedies in respect of the real
14 property, in which case this part does not apply.
15 Section 34. Section 680.503, Florida Statutes, is
16 amended to read:
17 (Substantial rewording of section. See
18 s. 680.503, F.S., for present text.)
19 680.503 Modification or impairment of rights and
20 remedies.--
21 (1) Except as otherwise provided in this chapter, the
22 lease agreement may include rights and remedies for default in
23 addition to or in substitution for those provided in this
24 chapter and may limit or alter the measure of damages
25 recoverable under this chapter.
26 (2) Resort to a remedy provided under this chapter or
27 in the lease agreement is optional unless the remedy is
28 expressly agreed to be exclusive. If circumstances cause an
29 exclusive or limited remedy to fail of its essential purpose,
30 or provision for an exclusive remedy is unconscionable, remedy
31 may be had as provided in this chapter.
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1 (3) Consequential damages may be liquidated under s.
2 680.504, or may otherwise be limited, altered, or excluded
3 unless the limitation, alteration, or exclusion is
4 unconscionable. Limitation, alteration, or exclusion of
5 consequential damages for injury to the person in the case of
6 consumer goods is prima facie unconscionable but limitation,
7 alteration, or exclusion of damages where the loss is
8 commercial is not prima facie unconscionable.
9 (4) Rights and remedies on default by the lessor or
10 the lessee with respect to any obligation or promise
11 collateral or ancillary to the lease contract are not impaired
12 by this chapter.
13 Section 35. Subsection (1) of section 680.507, Florida
14 Statutes, is amended to read:
15 680.507 Proof of market rent; time and place.--
16 (1) Damages based on market rent (s. 680.519 or s.
17 680.528) are determined according to the rent for the use of
18 the goods concerned for a lease term identical to the
19 remaining lease term of the original lease agreement and
20 prevailing at the times specified in s. 680.519 or s. 680.528
21 time of the default.
22 Section 36. Subsections (1) and (3) of section
23 680.508, Florida Statutes, are amended to read:
24 680.508 Lessee's remedies.--
25 (1) If a lessor fails to deliver the goods in
26 conformity to the lease contract (s. 680.509) or repudiates
27 the lease contract (s. 680.402), or a lessee rightfully
28 rejects the goods (s. 680.509) or justifiably revokes
29 acceptance of the goods (s. 680.517), then with respect to any
30 goods involved, and with respect to all of the goods if under
31 an installment lease contract the value of the whole lease
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1 contract is substantially impaired (s. 680.51), the lessor is
2 in default under the lease contract; and the lessee may:
3 (a) Cancel the lease contract (s. 680.505(1)).
4 (b) Recover so much of the rent and security as has
5 been paid and , but in the case of an installment lease
6 contract the recovery is that which is just under the
7 circumstances.
8 (c) Cover and recover damages as to all goods
9 affected, whether or not they have been identified to the
10 lease contract (ss. 680.518 and 680.52), or recover damages
11 for nondelivery (ss. 680.519 and 680.52).
12 (d) Exercise any other rights or pursue any other
13 remedies provided in the lease contract.
14 (3) If a lessor is otherwise in default under a the
15 lease contract pursuant to subsection (1) or subsection (2) or
16 is otherwise in default under the lease contract, the lessee
17 may exercise any of the rights and pursue the remedies
18 provided for in the lease contract, which may include a right
19 to cancel the lease, and in s. 680.519(3) this chapter if not
20 effectively excluded or modified by the lease contract, or any
21 rights and remedies effectively provided for in the lease
22 contract.
23 Section 37. Sections (3), (4), and (5) of section
24 680.516, Florida Statutes, are amended to read:
25 680.516 Effect of acceptance of goods; notice of
26 default; burden of establishing default after acceptance;
27 notice of claim or litigation to person answerable over.--
28 (3) If a tender has been accepted:
29 (a) Within a reasonable time after the lessee
30 discovers or should have discovered any default,
31
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1 1. the lessee shall notify the lessor and the
2 supplier, if any, or be barred from any remedy against the
3 party not notified. lessor, and in addition;
4 2. In the case of a finance lease, the lessee shall
5 notify the supplier or be barred from any remedy against the
6 supplier.
7 (b) Within a reasonable time after the lessee receives
8 notice of litigation for infringement or the like (s.
9 680.211), the lessee shall notify the lessor or be barred from
10 any remedy over for liability established by the litigation.
11 (c) The burden is on the lessee to establish any
12 default.
13 (4) If a lessee is sued for breach of a warranty or
14 other obligation for which a lessor or a supplier is
15 answerable over, the following apply:
16 (a) The lessee may give the lessor or the supplier, or
17 both, written notice of the litigation. If the notice states
18 that the person notified lessor or the supplier may come in
19 and defend and that if the person notified lessor or the
20 supplier does not do so that person he or she will be bound in
21 any action against that person him or her by the lessee by any
22 determination of fact common to the two litigations, then
23 unless the person notified lessor or the supplier after
24 seasonable receipt of the notice does come in and defend that
25 person he or she is so bound.
26 (b) The lessor or the supplier may demand in writing
27 that the lessee turn over control of the litigation including
28 settlement if the claim is one for infringement or the like
29 (s. 680.211) or else be barred from any remedy over. If the
30 demand states that the lessor or the supplier agrees to bear
31 all expense and to satisfy any adverse judgment, then unless
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1 the lessee after seasonable receipt of the demand does turn
2 over control the lessee is so barred.
3 (5) The provisions of Subsections (3) and (4) apply to
4 any obligation of a lessee to hold the lessor or the supplier
5 harmless against infringement or the like (s. 680.211).
6 Section 38. Subsections (1) and (2) of section
7 680.518, Florida Statutes, are amended to read:
8 680.518 Cover; substitute goods.--
9 (1) After default by a lessor under the lease contract
10 of the type described in (s. 680.508), or, if agreed, after
11 another default by the lessor, the lessee may cover by making
12 any purchase or lease of or contract to purchase or lease
13 goods in substitution for those due from the lessor.
14 (2) Except as otherwise provided with respect to
15 damages liquidated in the lease agreement (s. 680.504) or
16 otherwise determined pursuant to by agreement of the parties
17 (ss. s. 671.102(3) and 680.503), if a lessee's cover is by
18 lease agreement substantially similar to the original lease
19 agreement and the new lease agreement is made in good faith
20 and in a commercially reasonable manner, the lessee may
21 recover from the lessor as damages:
22 (a) The present value, as of the date of the
23 commencement of the term of the new lease agreement, of the
24 difference between the total rent under for the lease term of
25 the new lease agreement and applicable to that period of the
26 new lease term which is comparable to the then remaining term
27 of the original lease agreement minus the present value as of
28 the same date of the total rent for the then remaining lease
29 term of the original lease agreement; and.
30 (b) Any incidental or consequential damages, less
31 expenses saved in consequence of the lessor's default.
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1 Section 39. Subsections (1), (3), and (4) of section
2 680.519, Florida Statutes, are amended to read:
3 680.519 Lessee's damages for nondelivery, repudiation,
4 default, or breach of warranty in regard to accepted goods.--
5 (1) Except as otherwise provided with respect to
6 damages liquidated in the lease agreement (s. 680.504) or
7 otherwise determined pursuant to by agreement of the parties
8 (ss. s. 671.102(3) and 680.503), if a lessee elects not to
9 cover or a lessee elects to cover and the cover is by lease
10 agreement, whether or not the lease agreement qualifies for
11 treatment under s. 680.518(2), or is by purchase or otherwise,
12 the measure of damages for nondelivery or repudiation by the
13 lessor or for rejection or revocation of acceptance by the
14 lessee default by the lessor (s. 680.508) is the present
15 value, as of the date of the default, of the difference
16 between the then market rent minus the present value as of the
17 same date of and the original rent, computed for the remaining
18 lease term of the original lease agreement, together with
19 incidental and consequential damages, less expenses saved in
20 consequence of the lessor's default.
21 (3) Except as otherwise agreed, if the lessee has
22 accepted goods and given notification (s. 680.516(3)), the
23 measure of damages for nonconforming tender or delivery or
24 other default by a lessor is the loss resulting in the
25 ordinary course of events from the lessor's default as
26 determined in any manner that is reasonable together with
27 incidental and consequential damages, less expenses saved in
28 consequence of the lessor's default.
29 (4) Except as otherwise agreed, the measure of damages
30 for breach of warranty is the present value at the time and
31 place of acceptance of the difference between the value of the
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1 use of the goods accepted and the value if they had been as
2 warranted for the lease term, unless special circumstances
3 show proximate damages of a different amount, together with
4 incidental and consequential damages, less expenses saved in
5 consequence of the lessor's default or breach of warranty.
6 Section 40. Section 680.523, Florida Statutes, is
7 amended to read:
8 680.523 Lessor's remedies.--
9 (1) If a lessee wrongfully rejects or revokes
10 acceptance of goods or fails to make a payment when due or
11 repudiates with respect to a part or the whole, then, with
12 respect to any goods involved, and with respect to all of the
13 goods if under an installment lease contract the value of the
14 whole lease contract is substantially impaired (s. 680.51),
15 the lessee is in default under the lease contract; and the
16 lessor may:
17 (a) Cancel the lease contract (s. 680.505(1));
18 (b) Proceed respecting goods not identified to the
19 lease contract (s. 680.524);
20 (c) Withhold delivery of the goods and take possession
21 of goods previously delivered (s. 680.525);
22 (d) Stop delivery of the goods by any bailee (s.
23 680.526); or
24 (e) Dispose of the goods and recover damages (s.
25 680.527), or retain the goods and recover damages (s.
26 680.528), or in a proper case recover rent (s. 680.529); or.
27 (f) Exercise any other rights or pursue any other
28 remedies provided in the lease contract.
29 (2) If a lessor does not fully exercise a right or
30 obtain a remedy to which the lessor is entitled under
31 subsection (1), the lessor may recover the loss resulting in
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1 the ordinary course of events from the lessee's default as
2 determined in any reasonable manner, together with incidental
3 damages, less expenses saved in consequence of the lessee's
4 default.
5 (3)(2) If a lessee is otherwise in default under a the
6 lease contract pursuant to subsection (1) or is otherwise in
7 default under the lease contract, the lessor may exercise any
8 of the rights and pursue the remedies provided for in this
9 chapter if not effectively excluded or modified by the lease
10 contract, or any rights and remedies effectively provided for
11 in the lease contract, which may include a right to cancel the
12 lease. In addition, unless otherwise provided in the lease
13 contract:
14 (a) If the default substantially impairs the value of
15 the lease contract to the lessor, the lessor may exercise the
16 rights and pursue the remedies provided in subsection (1) or
17 subsection (2); or
18 (b) If the default does not substantially impair the
19 value of the lease contract to the lessor, the lessor may
20 recover as provided in subsection (2).
21 Section 41. Subsection (1) of section 680.524, Florida
22 Statutes, is amended to read:
23 680.524 Lessor's right to identify goods to lease
24 contract.--
25 (1) After default by the lessee under the lease
26 contract of the type described in s. 680.523(1) or s.
27 680.523(3)(a) or, if agreed, after other default by the
28 lessee, the lessor A lessor aggrieved under s. 680.523 may:
29 (a) Identify to the lease contract conforming goods
30 not already identified if at the time the lessor learned of
31
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1 the default they were in the lessor's or the supplier's
2 possession or control; and
3 (b) Dispose of goods (s. 680.527(1)) that demonstrably
4 have been intended for the particular lease contract even
5 though those goods are unfinished.
6 Section 42. Subsections (2) and (3) of section
7 680.525, Florida Statutes, are amended to read:
8 680.525 Lessor's right to possession of goods.--
9 (2) After a The lessor has on default by the lessee
10 under the lease contract of the type described in s.
11 680.523(1) or s. 680.523(3)(a) or, if agreed, after other
12 default by the lessee, the lessor has the right to take
13 possession of the goods. If the lease contract so provides,
14 the lessor may require the lessee to assemble the goods and
15 make them available to the lessor at a place to be designated
16 by the lessor which is reasonably convenient to both parties.
17 Without removal, the lessor may render unusable any goods
18 employed in trade or business and may dispose of goods on the
19 lessee's premises (s. 680.527).
20 (3) The lessor may proceed under subsection (2)
21 without judicial process if it that can be done without breach
22 of the peace, or the lessor may proceed by action.
23 Section 43. Subsections (1) and (2) of section
24 680.527, Florida Statutes, are amended to read:
25 680.527 Lessor's rights to dispose of goods.--
26 (1) After a default by a lessee under the lease
27 contract of the type described in (s. 680.523(1) or s.
28 680.523(3)(a)) or after the lessor refuses to deliver or takes
29 possession of goods (s. 680.525 or s. 680.526), or, if agreed,
30 after other default by a lessee, the lessor may dispose of the
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HB 1083, First Engrossed
1 goods concerned or the undelivered balance thereof by lease,
2 sale, or otherwise.
3 (2) Except as otherwise provided with respect to
4 damages liquidated in the lease agreement (s. 680.504) or
5 otherwise determined pursuant to by agreement of the parties
6 (ss. s. 671.102(3) and 680.503), if the disposition is by
7 lease agreement substantially similar to the original lease
8 agreement and the new lease agreement is made in good faith
9 and in a commercially reasonable manner, the lessor may
10 recover from the lessee as damages:
11 (a) Accrued and unpaid rent as of the date of the
12 commencement of the term of the new lease agreement;
13 (b) The present value, as of the same date, of the
14 commencement of the term of the new lease agreement of the
15 difference between the total rent for the then remaining lease
16 term of the original lease agreement minus the present value,
17 as of the same date, and the total rent for the lease term of
18 the rent under the new lease agreement applicable to that
19 period of the new lease term which is comparable to the then
20 remaining term of the original lease agreement; and
21 (c) Any incidental damages allowed under s. 680.53,
22 less expenses saved in consequence of the lessee's default.
23 Section 44. Subsection (1) of section 680.528, Florida
24 Statutes, is amended to read:
25 680.528 Lessor's damages for nonacceptance or
26 repudiation.--
27 (1) Except as otherwise provided with respect to
28 damages liquidated in the lease agreement (s. 680.504) or
29 otherwise determined pursuant to by agreement of the parties
30 (ss. s. 671.102(3) and 580.503), if a lessor elects to retain
31 the goods or a lessor elects to dispose of the goods and the
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1 disposition is by lease agreement that for any reason does not
2 qualify, whether or not the lease agreement qualifies for
3 treatment under s. 680.527(2), or is by sale or otherwise, the
4 lessor may recover from the lessee as damages a default of the
5 type described in s. 680.523(1) or s. 680.523(3)(a), or if
6 agreed, for other default of for default by the lessee (s.
7 680.523):
8 (a) Accrued and unpaid rent as of the date of default
9 if the lessee has never taken possession of the goods, or, if
10 the lessee has taken possession of the goods, as of the date
11 the lessor repossesses the goods or an earlier date on which
12 the lessee makes a tender of the goods to the lessor obtained
13 possession of the goods or such earlier date as the lessee has
14 made an effective tender of possession of the goods back to
15 the lessor.
16 (b) The present value as of the date determined under
17 paragraph (a) of the difference between the total rent for the
18 then remaining lease term of the original lease agreement
19 minus the present value as of the same date of and the market
20 rent on the date determined under paragraph (a) and at the
21 place where the goods were located on that date computed for
22 the same lease term.
23 (c) Any incidental damages allowed under s. 680.53,
24 less expenses saved in consequence of the lessee's default.
25 Section 45. Subsections (1), (4), and (5) of section
26 680.529, Florida Statutes, are amended to read:
27 680.529 Lessor's action for the rent.--
28 (1) After default by the lessee under the lease
29 contract of the type described in (s. 680.523(1) or s.
30 680.523(3)(a) or, if agreed, after other default by the
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HB 1083, First Engrossed
1 lessee), if the lessor complies with subsection (2), the
2 lessor may recover from the lessee as damages:
3 (a) For goods accepted by the lessee and not
4 repossessed by or effectively tendered back to the lessor and
5 for conforming goods lost or damaged after risk of loss passes
6 to the lessee (s. 680.219):
7 1. Accrued and unpaid rent as of the date of entry of
8 judgment in favor of the lessor.
9 2. The present value as of the same date determined
10 under subparagraph 1. of the rent for the then remaining lease
11 term of the lease agreement.
12 3. Any incidental damages allowed under s. 680.53,
13 less expenses saved in consequence of the lessee's default.
14 (b) For goods identified to the lease contract if
15 where the lessor has never delivered the goods or has taken
16 possession of them or the lessee has effectively tendered them
17 back to the lessor, if the lessor is unable after reasonable
18 effort to dispose of them at a reasonable price or the
19 circumstances reasonably indicate that such an effort will be
20 unavailing:
21 1. Accrued and unpaid rent as of the date of entry of
22 judgment in favor of the lessor.
23 2. The present value as of the same date determined
24 under subparagraph 1. of the rent for the then remaining lease
25 term of the lease agreement.
26 3. Any incidental damages allowed under s. 680.53,
27 less expenses saved in consequence of the lessee's default.
28 (2) Except as provided in subsection (3), the lessor
29 shall hold for the lessee for the remaining lease term of the
30 lease agreement any goods that have been identified to the
31 lease contract and are in the lessor's control.
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1 (4) Payment of the judgment for damages obtained
2 pursuant to subsection (1) entitles the lessee to the use and
3 possession of the goods not then disposed of for the remaining
4 lease term of and in accordance with the lease agreement,
5 provided that the lessee complies with all other terms and
6 conditions of the lease agreement.
7 (5) After a default by the lessee under the lease
8 contract of the type described in s. 680.523(1) or s.
9 680.523(3)(a) or, if agreed, after other default by the lessee
10 has wrongfully rejected or revoked acceptance of goods, has
11 failed to pay rent then due, or has repudiated (s. 680.402), a
12 lessor who is held not entitled to rent under this section
13 must nevertheless be awarded damages for nonacceptance under
14 ss. 680.527 and 680.528.
15 Section 46. Section 680.532, Florida Statutes, is
16 amended to read:
17 680.532 Lessor's rights to Lessor recovery for loss of
18 residual interest.--In addition to any other recovery
19 permitted by this chapter, the lessor may shall be entitled to
20 recover from the lessee an amount that will fully compensate
21 the lessor for any loss of or damage to the lessor's residual
22 interest in the goods caused by the default of the lessee.
23 Section 47. This act does not apply to any lease
24 contract entered into before the effective date of this act
25 unless the parties thereto specifically agree in writing that
26 the lease contract as expanded, amended, modified, renewed, or
27 supplemented shall be governed by applicable law as
28 supplemented or amended by this act. Absent such specific
29 agreement, transactions validly entered into before that date
30 and the rights, duties, and interests flowing from them remain
31 valid thereafter and may be terminated, completed,
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1 consummated, or enforced as though this act had not taken
2 effect.
3 Section 48. Section 679.111, Florida Statutes, is
4 hereby repealed.
5 Section 49. This act shall take effect October 1 of
6 the year in which enacted.
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