You are here: / / Requirements for Preservation of Collateral (Security for a Promissory...
,

Requirements for Preservation of Collateral (Security for a Promissory Note) Explained

In an action alleging the failure to preserve collateral which secured a promissory note, the Second Department determined summary judgment on the underlying promissory note should not have been granted because plaintiffs raised a question of fact about the commercial reasonableness of the handling of the collateral:

“Under both the common law and the Uniform Commercial Code, a secured party has a duty to exercise reasonable care in the custody and preservation of collateral in its possession. The obligation remains the same regardless of whether the secured party came into possession of the property before or after the debtor’s default” … .

“After default, a secured party may sell, lease, license or otherwise dispose of any or all of the collateral in its present condition or following any commercially reasonable preparation or processing” (UCC 9-610[a]). “Every aspect of a disposition of collateral, including the method, manner, time, place, and other terms, must be commercially reasonable” (UCC 9-610[b]). A secured party that disposes of collateral under section 9-610 is required to send to, among others, the debtor and any secondary obligor, notification of disposition (see UCC 9-611[b], [c]). Nugent v Hubbard, 2015 NY Slip Op 06226, 2nd Dept 7-22-15

 

You might also like
WHERE PLAINTIFF HAS FAILED TO FILE A NOTE OF ISSUE BY A COURT-ORDERED DEADLINE, RESTORATION TO THE ACTIVE CALENDAR IS AUTOMATIC WHERE NO 90-DAY NOTICE HAD BEEN SERVED AND THERE HAD BEEN NO COURT-ORDERED DISMISSAL (SECOND DEPT). ​
POWERS GRANTED TO THE GUARDIAN FOR AN INCAPACITATED PERSON SHOULD NOT HAVE EXCEEDED THOSE RECOMMENDED BY THE COURT APPOINTED EVALUATOR (SECOND DEPT).
AFFIRMATIVE DEFENSE WHICH ARISES FROM THE ACTION BROUGHT IS NOT TIME-BARRED (SECOND DEPT).
THE BREACH OF CONTRACT CAUSE OF ACTION ALLEGING DEFENDANT ATTORNEY OVERBILLED SHOULD HAVE SURVIVED THE MOTION TO DISMISS DESPITE THE DISMISSAL OF THE LEGAL MALPRACTICE CAUSE OF ACTION (SECOND DEPT).
Children’s Out-Of-Court Statements May Corroborate One Another
THE AFFIDAVIT RELIED UPON BY PLAINTIFF IN THIS FORECLOSURE ACTION TO PROVE DEFENDANT’S DEFAULT DID NOT IDENTIFY OR ATTACH THE RELEVANT BUSINESS RECORDS AND THEREFORE THE AFFIDAVIT HAD NO PROBATIVE VALUE (SECOND DEPT).
THE MOTION TO INTERVENE BY AN INSURER SEEKING SUBROGATION FOR A CLAIM ALREADY PAID IN THIS VEHICLE-ACCIDENT CASE WAS TIMELY UNDER THE RELATION-BACK DOCTRINE; THE PAID CLAIM STEMMED FROM THE ACCIDENT WHICH IS THE SUBJECT OF THE ONGOING LITIGATION; THE MOTION TO INTERVENE SHOULD HAVE BEEN GRANTED (SECOND DEPT).
Elements of Constructive Trust Not Demonstrated 

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

The Treatment of Pre-Answer Motions to Dismiss an Action for a Declaratory Judgment... General Obligations Law Prohibition of Indemnification Agreements Which Exempt...