Request By:
Mr. Donald R. Todd
Assistant Fayette County Attorney
145 Market Street
Lexington, Kentucky 40507
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
You ask whether or not there is any conflict between KRS 186.045(5) and KRS 355.9-404. We do not think so. One involves a criminal offense for violation, the other a civil debt.
KRS 186.045(5) provides in part that where a security interest has been discharged, other than by default proceedings, the secured party must, within 15 days thereafter, deliver a termination statement in the manner required by KRS 355.9-404 to the county clerk of the county in which the financing statement is filed. Under KRS 186.990(1), any secured party who fails to deliver the termination statement to the proper county clerk within the above time limitations shall be fined not less than $10 nor more than $100 for each offense. KRS 186.045(5) relates exclusively to motor vehicles normally required to be registered at a county clerk's office. Where that subsection applies, the secured party must, regardless of whether the debtor requests it or not, deliver the termination statement to the county clerk.
KRS 355.9-404(2) reads:
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"(2) In the absence of a demand by the debtor for a statement of termination, and within fifteen (15) days after a secured transaction evidenced by record in the county clerk's office has terminated, the secured party shall send to the clerk a statement that he no longer claims a security interest under the financing statement or other instrument, which shall be identified by file number and date filed. If the actual secured party wilfully fails to send such a termination statement within fifteen (15) days after he no longer claims a security interest, he shall be liable to the debtor for twenty-five dollars ($25.00) and in addition for any loss caused to the debtor by such failure."
KRS 355.9-404(1) and (2) provide that where the secured party does not send the termination statement when due to the debtor and clerk, respectively, the secured party shall be liable civily to the debtor in certain amounts of money.
Your specific question is: What effect would KRS 355.9-404 have on a criminal warrant obtained under KRS 186.045(5)? The answer is none. The criminal warrant obtainable for violation of KRS 186.045(5) would have to relate exclusively to a motor vehicle. But importantly in this context, KRS 355.9-404 treats only the matter of the manner of delivering a termination statement to the county clerk and debtor and of a civil debt created in the debtor's favor where the secured party fails to deliver such statement to the debtor or clerk. No criminal offense is spelled out in KRS 355.9-404. Moreover, the fact of the existence of the civil liability involved in KRS 355.9-404(1) and (2) could not be used in defense of subject criminal warrant issued for violation of KRS 186.045(5).