Montana Code 30-9A-408. Restrictions on assignment of promissory notes, health-care-insurance receivables, and certain general intangibles ineffective
30-9A-408. Restrictions on assignment of promissory notes, health-care-insurance receivables, and certain general intangibles ineffective. (1) Except as otherwise provided in subsection (2), a term in a promissory note or in an agreement between an account debtor and a debtor that relates to a health-care-insurance receivable or a general intangible, including a contract, permit, license, or franchise, and that prohibits, restricts, or requires the consent of the person obligated on the promissory note or the account debtor to, the assignment or transfer of, or the creation, attachment, or perfection of a security interest in, the promissory note, health-care-insurance receivable, or general intangible is ineffective to the extent that the term:
Terms Used In Montana Code 30-9A-408
- Account debtor: means a person obligated on an account, chattel paper, or general intangible. See Montana Code 30-9A-102
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Collateral: means the property subject to a security interest or agricultural lien. See Montana Code 30-9A-102
- Contract: A legal written agreement that becomes binding when signed.
- Debtor: means :
(i)a person having a property interest, other than a security interest or other lien, in the collateral, whether or not the person is an obligor;
(ii)a seller of accounts, chattel paper, payment intangibles, or promissory notes; or
(iii)a consignee. See Montana Code 30-9A-102
- General intangible: means any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter-of-credit rights, letters of credit, money, and oil, gas, or other minerals before extraction. See Montana Code 30-9A-102
- Health-care-insurance receivable: means an interest in or claim under a policy of insurance that is a right to payment of a monetary obligation for health care goods or services provided. See Montana Code 30-9A-102
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Payment intangible: means a general intangible under which the account debtor's principal obligation is a monetary obligation. See Montana Code 30-9A-102
- Person: includes a corporation or other entity as well as a natural person. See Montana Code 1-1-201
- Promissory note: means an instrument that:
(i)evidences a promise to pay a monetary obligation;
(ii)does not evidence an order to pay; and
(iii)does not contain an acknowledgment by a bank that the bank has received for deposit a sum of money or funds. See Montana Code 30-9A-102
- Secured party: means :
(i)a person in whose favor a security interest is created or provided for under a security agreement, whether or not any obligation to be secured is outstanding;
(ii)a person that holds an agricultural lien;
(iii)a consignor;
(iv)a person to which accounts, chattel paper, payment intangibles, or promissory notes have been sold;
(v)a trustee, indenture trustee, agent, collateral agent, or other representative in whose favor a security interest or agricultural lien is created or provided for; or
(vi)a person that holds a security interest arising under 30-2-401, 30-2-505, 30-2-711(3), 30-2A-508(5), 30-4-208, or 30-5-118. See Montana Code 30-9A-102
- Statute: A law passed by a legislature.
(a)would impair the creation, attachment, or perfection of a security interest; or
(b)provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the promissory note, health-care-insurance receivable, or general intangible.
(2)Subsection (1) applies to a security interest in a payment intangible or promissory note only if the security interest arises out of a sale of the payment intangible or promissory note, other than a sale pursuant to a disposition under 30-9A-610 or an acceptance of collateral under 30-9A-620.
(3)A rule of law, including a provision in a statute or governmental rule or regulation, that prohibits, restricts, or requires the consent of a government, governmental body or official, person obligated on a promissory note, or account debtor to the assignment or transfer of, or creation of a security interest in, a promissory note, health-care-insurance receivable, or general intangible, including a contract, permit, license, or franchise between an account debtor and a debtor, is ineffective to the extent that the rule of law, statute, or regulation:
(a)would impair the creation, attachment, or perfection of a security interest; or
(b)provides that the assignment or transfer or the creation, attachment, or perfection of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the promissory note, health-care-insurance receivable, or general intangible.
(4)To the extent that a term in a promissory note or in an agreement between an account debtor and a debtor that relates to a health-care-insurance receivable or general intangible or a rule of law described in subsection (3) would be effective under law other than this chapter but is ineffective under subsection (1) or (3), the creation, attachment, or perfection of a security interest in the promissory note, health-care-insurance receivable, or general intangible:
(a)is not enforceable against the person obligated on the promissory note or the account debtor;
(b)does not impose a duty or obligation on the person obligated on the promissory note or the account debtor;
(c)does not require the person obligated on the promissory note or the account debtor to recognize the security interest, pay or render performance to the secured party, or accept payment or performance from the secured party;
(d)does not entitle the secured party to use or assign the debtor’s rights under the promissory note, health-care-insurance receivable, or general intangible, including any related information or materials furnished to the debtor in the transaction giving rise to the promissory note, health-care-insurance receivable, or general intangible;
(e)does not entitle the secured party to use, assign, possess, or have access to any trade secrets or confidential information of the person obligated on the promissory note or the account debtor; and
(f)does not entitle the secured party to enforce the security interest in the promissory note, health-care-insurance receivable, or general intangible.
(5)Subsections (1) and (3) do not apply to the assignment or transfer or the creation, attachment, or perfection of a security interest in:
(a)a claim or right to receive compensation for injuries or sickness as described in 26 U.S.C. § 104(a)(2);
(b)a claim or right to receive benefits under a special needs trust as described in 42 U.S.C. § 1396p(d)(4).
(6)This section prevails over any inconsistent provisions of other statutes or rules.