D R A F T
FOR DISCUSSION ONLY
ASSET
FREEZING ORDERS
___________________________________________________
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS
___________________________________________________
For November 11-12,
2011 Drafting Committee Meeting
With Prefatory Note and
Comments
Copyright © 2011
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS
______________________________________________________________________________
The ideas and conclusions
set forth in this draft, including the proposed statutory language and any
comments or reporter=s notes, have not been passed upon by the National
Conference of Commissioners on Uniform State Laws or the Drafting
Committee. They do not necessarily
reflect the views of the Conference and its Commissioners and the Drafting
Committee and its Members and Reporter.
Proposed statutory language may not be used to ascertain the intent or
meaning of any promulgated final statutory proposal.
October 19, 2011
DRAFTING COMMITTEE ON ASSET
FREEZING ORDERS
The Committee
appointed by and representing the National Conference of Commissioners on
Uniform State Laws in drafting this Act consists of the following individuals:
MICHAEL B. GETTY, 430 Cove Towers Dr., #503, Naples, FL 34110, Chair
LEVI J. BENTON, 440
Louisiana St., Suite 2350, Houston, TX 77002
CAROLINE N. BROWN,
University of North Carolina School of Law, CB #3380, Chapel Hill, NC 27599-3380
ROBERT BUTKIN,
University of Tulsa College of Law, 3120 E. 4th Pl., Tulsa, OK 74104
SIDNEY S. EAGLES, JR.,
P.O. Box 27525, Raleigh, NC 27611
BARRY H. EVENCHICK,
5 Becker Farm Rd., Roseland, NJ 07068
DON HOLLADAY, 204 N.
Robinson Ave., Suite 1550, Oklahoma City, OK 73102
PETER F. LANGROCK,
P.O. Drawer 351, Middlebury, VT 05753-0351
STEVEN N. LEITESS,
10451 Mill Run Cir., Suite 1000, Baltimore, MD 21117
JOHN T. MCGARVEY,
601 W. Main St., Louisville, KY 40202
LANE SHETTERLY, 189
SW Academy St., P.O. Box 105, Dallas, OR 97338
JOAN ZELDON,
District of Columbia Superior Court, 515 Fifth St. NW, Room 219, Washington, DC 20001
JOHN L. CARROLL,
Cumberland School of Law, Samford University, 800 Lakeshore Dr., Birmingham, AL 35229, Reporter
MICHAEL HOUGHTON, P.O. Box 1347, 1201 N.
Market St., 18th Floor, Wilmington, DE 19899, President
STEVEN N. LEITESS,
10451 Mill Run Cir., Suite 1000, Baltimore, MD 21117, Division Chair
AMERICAN BAR ASSOCIATION
ADVISORS
KATHLEEN J. HOPKINS,
1326 5th Ave., Suite 654, Seattle, WA 98101-2655, ABA Advisor
STEVEN M. RICHMAN, Route
70 E, Cherry Hill, NJ 09003, ABA Advisor
JOHN A. SEBERT, 111
N. Wabash Ave., Suite 1010, Chicago, IL 60602, Executive Director
Copies of this Act may be obtained from:
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS
111 N. Wabash Ave., Suite 1010
Chicago, Illinois 60602
312/450-6600
ASSET FREEZING ORDERS
TABLE OF CONTENTS
SECTION 4. ASSET
FREEZING ORDER ISSUED WITH NOTICE.
SECTION 5. ASSET
FREEZING ORDER ISSUED WITHOUT NOTICE.
SECTION 6. OBLIGATION
OF NON-PARTY SERVED WITH ASSET FREEZING
ORDER.
SECTION 8.
RECOGNITION OF ASSET FREEZING ORDER ISSUED BY OTHER
COURT.
SECTION
9. ENFORCEMENT OF ASSET FREEZING ORDER.
SECTION
11. UNIFORMITY OF APPLICATION AND
CONSTRUCTION
SECTION
12. RELATION TO ELECTRONIC SIGNATURES IN
GLOBAL AND NATIONAL COMMERCE ACT.
ASSET FREEZING ORDERS
Prefatory Note
Background
This Act creates a uniform process
for the issuance of asset freezing orders which are in personam orders freezing
the assets of a defendant and imposing collateral restraint on non-parties such
as the defendant’s bank in order to preserve assets from dissipation pending
judgment. Asset freezing orders have been part of the fabric of civil procedure
in England since 1975 and are viewed in other common law countries as valuable
tools for use in the appropriate case. Their value is magnified in the modern
world of technology where assets can be transferred by the simple stroke of a
computer key.
In the United States, the primary
remedy against asset dissipation has traditionally been an in rem order
prohibiting the transfer of assets. However, prior to 1999, both federal and
state courts would issue in personam asset freezing orders, prior to judgment,
in appropriate cases to prevent dissipation of assets in order to insure that
there would be assets to satisfy a judgment.
In 1999, the United States Supreme
Court in a 5-4 opinion concluded that federal courts lacked the power to issue
in personam asset freezing orders. The majority opinion in the case, Grupo Mexicano de Desarrollo, S.A. v.
Alliance Bond Fund, Inc. 527 U.S. 308 (1999), written by Justice Scalia,
determined that federal courts lacked jurisdiction to issue such orders because
they were not part of the common law at the time the federal court system was
created. Judge Scalia concluded his opinion by noting that the decision whether
to allow an in personam order freezing assets is one that should be made by the
legislature and not the courts.
Although the Grupo Mexicano decision
involved the jurisdiction of federal courts, some state courts concluded, in
the wake of that decision, that they lacked the inherent authority to issue
asset freezing orders. Another state court concluded that the decision had no
effect on it because the decision was based on federal law. The Grupo Mexicano decision thus created
confusion and a lack of uniformity among states which this act will remedy.
This Act
An asset freezing orders is, by its
very nature, an extraordinary remedy with potentially significant impact on the
debtor who assets are frozen and on third-parties holding those assets.
Accordingly, it is extremely important that there be rigorous standards which
must be met before such an order can be issued. Those standards appear in
Sections 4, 5 and 7. The standards
contained in those sections borrow heavily from the procedural protections
found in two well- developed sources - the already existing law relating to
asset freezing orders in England and Canada and the already existing law in the
United States relating to the issuance of Temporary Restraining Orders and
Preliminary Injunctions. As the language of section 4 makes clear, an asset
freezing order can be issued only if the moving party establishes that there is
a substantial likelihood that the assets of a party will be dissipated and that
the moving party will be unable to receive satisfaction of the judgment. In
order to prove that a party is dissipating assets, according to the definition
found in Section 2, the moving party must establish that the party against
which the order is sought is selling, removing or otherwise dealing with the
asset with the asset for the purpose of defeating satisfaction of any judgment
that might be entered.
Section 4 also contains an important
provision protecting the party against which an asset freezing order is entered
by making it clear that the party is entitled to an order allowing the use of
assets to meet normal living or business expenses and the cost of defending the
claim.
Since asset freezing orders also
impact non-parties, it is important that the obligations of non-parties be set
out with specificity. Those obligations are set out in Section 6.
Lastly, the act must contain a
mechanism for recognition and enforcement of asset freezing orders issued by
other states and from courts outside the United States. Those mechanisms appear
in Sections 8 and 9. The recognition and enforcement mechanism borrows heavily
from the Uniform Foreign Country Money Judgments Recognition Act.
It is important to note that while an asset freezing order is a valuable
procedural tool, it is just that – a procedural tool to be used to prevent a
party from dissipating assets prior to judgment. The existence of an asset freezing order does
not alter any rights or interests which predate the issuance of the order or
create any new rights or interests on behalf of the party which has obtained
the order. For example, a party which obtains an asset freezing order does not
acquire any sort of proprietary interest in the assets enjoined and is not
given any preference over other creditors in the event of the insolvency of the
party against which the asset freezing order has been issued.
ASSET FREEZING ORDERS
SECTION 1. SHORT TITLE. This [act] may be cited as
the Asset Freezing Order Act.
SECTION 2. DEFINITIONS. In this [act]:
(1) “Asset” means anything that may be the subject of
ownership, whether real or personal, tangible or intangible, legal or equitable
or any interest therein, which is not exempt from execution [under the laws of
this state or the state in which the asset is located, as determined by
applicable law ][pursuant to Section 3(c)].
(2) “Asset freezing order” means an in personam order
restraining or enjoining a party directly or indirectly from dissipating an
asset
(3) “Dissipating” means taking any of the actions set out
in (A), (B) or (C) with regard to an asset if the purpose of the action is to
defeat satisfaction of judgment:
(A) selling, removing, alienating,
transferring, assigning, encumbering, or similarly dealing with an asset of
that party, wherever situated;
(B) instructing, requesting, counseling,
demanding, or encouraging any other person to take an action described in
subparagraph (A); or
(C) facilitating, assisting in, aiding,
abetting, or participating in any act described in subparagraphs (A) and (B) the
effect of which is to do so.
(3) “State” means a state of the United States, the
District of Columbia, Puerto Rico, United States Virgin Islands or any
territory or insular possession subject to the jurisdiction of the United
States.
(4) “Party” means a person that brings an action or
against which an action is brought, whether or not service has been made or
notice given.
(5) “Person” means an individual, corporation, business
trust, estate, partnership, limited liability company, association, joint
venture or any other legal or commercial entity.
(6) “Record” means information that is inscribed on a
tangible medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
(7) “Consumer Debt” means a debt which was incurred
primarily for personal, family, or household purposes, whether or not such
obligation has been reduced to judgment.
(8) “Debtor” means the party that allegedly owes money to
another party.
(a) This
[act] does not apply:
(1)
in an action against a debtor for a
consumer debt;
(2)
in a [domestic relations] case; or
(3)
to any order entered in a [Family Law,
Domestic Relations, Other (cite statutory provision)] case.
(b) This [act] does not prevent recognition and enforcement
of an asset freezing order under comity.
(c) This [act] does not apply or limit remedies available
to any person other than the debtor to the extent that:
(1) a statute, regulation, or treaty of the
United States preempts this [act];
(2) another statute of this state or another
state, foreign country, or governmental
unit of another state or foreign country expressly governs the creation,
perfection, priority, or enforcement of a security interest, judgment lien, or
lien on real property, wherever such property is located, or permits the
exercise of common law rights of set-off, recoupment or rights of other parties
pursuant to contract to the extent they are seeking to enforce rights or
remedies that existed prior to [the date of the asset freezing
order][commencement of the action in which the asset freezing order is
obtained].
Comment
This section is
designed to clarify the scope of this act. Section 3(a) makes clear that this
[act] does not apply to actions against consumer debtors. Such actions would include actions relating
to bankruptcy, collection and foreclosure actions. For example, a party seeking
to collect on a credit card debt could not use the provisions of this act to
attempt to freeze the assets of the debtor.
The [act] also does not apply in domestic
relations cases which would include actions for divorce, child custody and
child support. A wife in a divorce action, for example, could not use the provisions
of this act to attempt to freeze the assets of her husband. Likewise, this act
could not be used to enforce an asset freezing order in a divorce action issued
by a court outside the United States. The decision to exempt these kinds of
cases from this [act] was made by the Scope and Programs Committee.
Section 3(b) also
makes clear that this [act] does not prevent a court from recognizing an asset
freezing order from a court of another state or a court outside the United
States as matter of comity.
Section 3(c)
reinforces the notion that this [act] is not intended to limit or supersede any
currently existing remedies that a secured creditor or lienholder may have. The
asset freezing order does not establish any liens, choate or inchoate, in the property
which is the subject of the asset freezing order. The purpose of the asset
freezing order is the prevention of wrongful voluntary conveyances of any
interest in the subject property. Absent fraud or collusion with the party
against whom the asset freezing order is issued, it would not prevent other
creditors of that party from obtaining involuntary liens against the subject
property.
The issuance of an
asset freezing order would not prevent a secured creditor or lienholder from commencing, continuing or
completing any available remedies to realize its collateral. It would not, for
example, affect a creditor’s right to foreclose on its mortgage or other
security interest. It would not prevent, inhibit or affect the validity of a
subsequent sale of the property which was the subject of the secured creditor’s
enforcement action. It would also not prevent an unrelated person from
initiating a lawsuit against a party which is the subject of an asset freezing
order and obtaining a judgment against that party’s assets.
By way of example, it
would not prevent involuntary seizures of the debtor’s property to the extent
that a party wishes to pursue an action on contract, seek an attachment, seek
to enforce a judgment, or seek to enforce common law rights of set-off or
recoupment, or their contractual equivalent in certain circumstances such as
“netting” in financial instruments. However, once the asset freezing order is
in place, any person with notice of the order could not cooperate with the
debtor to place a new mortgage on an asset, or enter into a new contract
containing rights of set-off. If the mortgage or contract were in place prior
to [the date of the asset freezing order][the commencement of the action in
which the asset freezing order is obtained], then efforts to enforce those
rights, as involuntary acts against the debtor are excluded.
(a) A court may issue an asset freezing order on motion
with notice and an expedited opportunity to be heard if the court finds that:
(1) there is a substantial likelihood that the
party seeking the order will prevail on the merits of the action;
(2) there is a substantial likelihood that
the assets of the party against which the order is sought will be dissipated and
a substantial likelihood that the moving
party will be unable to receive satisfaction of a judgment in the action
because of the dissipation of assets if
the order is not granted;
(3) any
harm the party against which the order is sought may suffer through having to
comply with the order is clearly outweighed by the risk of injustice to the
moving party if the order is not issued; and
(4) the order if issued would not be adverse
to the public interest.
(b) An asset freezing order must be served in compliance
with [cite applicable rules or statutes of this state for service appropriate
to this type of order] within [] days of the issuance of the order.
(c) A party against which an asset freezing order is
issued may be relieved of the obligations imposed under the order by posting a
bond, or other security, in the amount of the damages sought or in an amount
determined by the court.
(d) A party against which an asset freezing order is
issued may apply for an order, on at least 24 hour notice to the party that has
obtained the order, specifying the amount the party is entitled to spend on
ordinary living expenses and/or business expenses, and legal representation.
The court shall have discretion, based on all the facts and circumstances, to determine
if the asset freezing order should be limited to a certain amount of assets,
and may issue appropriate accounting requirements to ensure compliance.
(e) An asset freezing order remains in effect until
vacated by the court, dissolved by agreement of the parties or resolved by
application of law or a judgment entered against the party against which the
order was entered is satisfied.
Comment
Section 4(a) mirrors the standard
for the issuance of a preliminary injunction under currently existing law. All of
the requirements of section 4 must be met before asset freezing order
can be issued. Sections 4(c) and (d) provide a mechanism for a party against
which an asset freezing order has been issued to immediately obtain full or
partial relief from the order. These sections mitigate the potentially harmful
effects of an asset freezing order.
Under Section 4(d), the party
against which an asset freezing order is issued is entitled to an order
allowing the use of assets to meet normal living expenses and business expenses
including the payment of currently existing debts and the costs of defending
the claim. That party bears the burden of establishing the amount of those
expenses.
An asset freezing order cannot
normally be applied to assets which are owned by a non-party. However, where
the assets are owned jointly by a non-party and a party against which an asset
freezing order has been entered, the order also applies to the non-party. In
that situation, the non-party may apply to the court for an order removing the
asset from the scope of the order.
(a) The court may issue an asset freezing order without
notice only if specific facts in an affidavit or verified pleading offered in
support of the motion to freeze assets clearly show, by clear and convincing
evidence, that the moving party is entitled to the order under Section 4(a).
(b) Counsel for the moving party must disclose all
material facts in the affidavit or verified pleading presented in support of a
motion to have an asset freezing order issued without notice, including any
material facts favorable to the non-moving party which the moving party knows
or reasonably should know.
(c) The moving party must also certify to the court in a
record all efforts to give notice or the reasons why notice should not be
required.
(d) If an asset freezing order is issued without notice,
the order expires at the date set by the court, not to exceed 14 days after the
issuance of the order, unless before that time:
(1) the court, for good cause, extends the
order and states in the order of extension the reasons for the extension; or
(2) the non-moving party consents, in a
record, to an extension.
(e) If an asset freezing order is issued without notice,
the party against which the order is issued may appear and move to dissolve or
modify the order on notice and may apply for the relief provided by 4(c) and
(d). The court shall hear and decide the motion on an expedited basis.
Comment
This section provides for the issuance of an asset freezing order
without notice. A party seeking an asset
freezing order without notice must satisfy the requirements for issuance of the
order contained in Section 4(a) and the additional requirements set forth in this
section
Sections 5(a) and (c)-(e) reflect
currently existing law for the issuance of a temporary restraining order issued
without notice in both state and federal court. Section 5(b) is an extremely
important provision drawn from English and Canadian law and reflects the
heightened disclosure obligation imposed on a party who seeks an asset freezing
order without notice. This section
imposes a duty on counsel to make reasonable inquiry to ascertain all material
facts relating to the asset freezing issue and to disclose to the court facts
favorable to the party against which the order is sought. The English courts
define the duty of disclosure as follows:
(a)
the
party seeking the order must make a full and fair disclosure of all of the material facts;
(b)
materiality
is to be decided by the court, not by the movant or his legal advisers;
(c)
proper
inquiries must be made before making the application and the duty of disclosure
applies not only to facts known by the claimant but to those which he would
have known if he had made proper inquiries;
(d)
the
extent of the inquiries which are necessary must depend on the nature of the
case, the probable effect of the order on the defendant, the degree of
legitimate urgency and the time available for making inquiries.
(a) If the court issues an asset freezing order, the order may
be served on a non-party that holds assets of the party against which the order
is issued. If the party that obtained the order serves a non-party with the
order, the party shall notify all parties of record in the action within [] days
of the name and address of the non-party served.
(b) A non-party served with an asset freezing order promptly
shall freeze the assets of the party against which the order is issued which
are held in any account or on credit on behalf of the party until further order
of the court.
(c) A party obtaining an asset freezing order shall give
notice, without unnecessary delay, to a non-party that was served with the order
if the order is vacated or modified.
(d) A non-party served with an asset freezing order
violates the order only if it knowingly and intentionally acts or fails to act
with the result that the order is undermined or if it knowingly and
intentionally aids or abets the person against which the order is issued in
violating the order.
(e) A non-party which is served with an asset freezing
order may appear and move to dissolve or modify the order on [ ] days notice.
The court shall hear and decide the motion on an expedited basis.
(f) For purposes of this [act], a person that holds a
joint ownership interest in any asset also owned by the debtor shall be deemed a
non-party. Nothing in this [act] affects any exemptions in this [state] based
on tenancy by the entirety.
Comment
This section recognizes that an
asset freezing order applies in personam to the party against whom it is issued
but also has in rem aspects as it applies to non-parties who hold the assets of
that party. This section draws on currently existing English and Canadian law.
Section 6(b) is a self-executing
provision which requires a non-party in a state that has adopted this [act] to
comply with the asset freezing order without the need for further action. If the non-party is in a state which has not
adopted this [act], the non-party is not required to comply with the order
unless and until the party on whose behalf the asset freezing order has been
issued has obtained an order recognizing the asset freezing order from the
jurisdiction where the non-party is located.
English law relating to makes clear
that an asset freezing order is simply an order which does not confer any
proprietary rights on successful applicants. English Civil Procedure texts
emphasize the following points:
(a)
the
freezing injunction was not intended to rewrite the law of insolvency;
(b)
a
claimant who obtains a freezing injunction does not acquire a proprietary
interest in the assets enjoined and is
not given any preference over other creditors in the event of the defendant’s
insolvency;
(c)
a
non-party can apply to have his pre-existing debt discharged by the defendant;
(d)
a
freezing injunction does not prevent a party from honoring its contractual
obligations to other parties;
(e)
a
freezing injunction cannot be applied to property which is owned by a
non-party;
(f)
a
freezing injunction does affect the interest of a non-party in two ways – (1)
where the property is jointly owned by the defendant and a non-party and (2)
where the non-party as acquired the property from the defendant in suspicious
circumstances. In all situations, the non-party can apply to the court for an
order removing the property from the scope of the injunction.
During the discussion at the 2011
annual meeting, a helpful comment was made from the floor that UCC §4-303 be
referenced in the comments to this section. That provision of the UCC would
apply to a non-party bank served with an asset freezing order. Under the
provisions of UCC § 4-303 a bank is given a reasonable time to act on an asset
freezing order which runs from the time the asset freezing order is “received
or served.”
(a) The court shall determine whether security must be given
by a party on whose behalf an asset freezing order has been issued. If the court
determines that security must be given, it shall require the party to give
security in an amount the court considers proper to pay for costs and damages
sustained by the party against which the order is issued if the order is later
found to have been granted improvidently.
(b) A party on whose behalf an asset freezing order is
issued shall indemnify a non-party for the reasonable costs of compliance with
the order or compensate for any loss caused by the order whether or not the
motion for the asset freezing order was properly granted.
Comment
This section authorizes a court to require a party on whose behalf an
asset freezing order has been issued to provide security for a party against
whom the order has been issued and any non-party served with the order. The
security is for damages sustained as the result of an order later found to have
been improvidently granted. Section 7(b) also requires a party on whose behalf
an asset freezing order has been issued to indemnify a non-party for the
reasonable costs of compliance.
This section is intended to draw on
currently existing law relating to the provision of security. The court, for
example, could accept a personal bond or surety bond as security.
(a) A court of this state shall recognize an asset
freezing order issued by a court in another state unless;
(1) recognition would violate the public
policy of this state; or
(2) the order was issued without notice and the issuing
court did not use procedures substantially similar to those provided in Section
5.
(b) Except as otherwise provided in subsection (c), a
court of this state shall recognize an asset freezing order issued by a court
outside the United States.
(c) A court of this state shall not recognize an asset
freezing order issued by a court outside the United States if:
(1) the order was rendered under a judicial
system that does not provide impartial tribunals or procedures compatible with
the requirements of due process of law;
(2) the issuing court did not have
personal jurisdiction over the party against which the order was issued;
(3) the issuing court did not have
jurisdiction over the subject matter;
(4) the order was issued without notice to
the party against which the order was issued and the issuing court did not
utilize procedures substantially similar to those provided in Section 5.
(5) the party against which the order was entered
in the proceeding outside the United
States did not receive notice of the proceeding in sufficient time to allow the
order to be modified or dissolved and the interest of justice requires a
hearing to determine this issue;
(6) the order was obtained by fraud;
(7) the claim for relief is repugnant to the public
policy of this state or the United States;
(8) the proceeding in the issuing court was
contrary to an agreement between the parties under which the dispute in question
was to be determined;
(9) the order was issued in circumstances
that raise substantial doubt about the integrity of the issuing court with
respect to the order;
(10) the specific proceedings in the issuing
court leading to the issuance of the order were not compatible with the
requirements of due process of law.
(d) A party resisting recognition of an asset freezing
order issued by a court outside the United States has the burden of establishing
that a ground for nonrecognition stated in subsection (c) exists.
Comment
This section concerns the recognition of asset freezing orders issued
by courts in other states and countries. Because asset freezing orders are not
final judgments, there is a lack of uniformity in the present law concerning
their recognition. Section 8(a) relates to the recognition of asset freezing
orders issued by courts in other states and 8(b) - (d) relate to the
recognition of asset freezing orders issued by courts outside the United .
Sections 8(b)-(d) borrow freely from the architecture and language of section 4
of the Uniform Foreign-Country Money Judgments Recognition Act.
SECTION 9. ENFORCEMENT OF ASSET FREEZING ORDER. An asset freezing order
issued or recognized by a court of this state is valid and enforceable
in the same manner as a judgment.
Comment
Some courts have
refused to recognize and enforce asset freezing orders because they are not
final. This section read in conjunction with Section 8 will require that an
appropriately issued or recognized asset freezing order be enforceable like a
judgment.
SECTION 10.
APPEAL. The [insert name of appropriate
appellate court] shall have jurisdiction of an appeal from an order granting,
continuing, modifying, refusing or dissolving an asset freezing order.
Comment
This
provision provides for an appeal as of right from a court order relating to an
asset freezing order. Because asset freezing orders are really a form of
preliminary injunctive relief, the language of this section tracks the language
of the federal statute creating appellate jurisdiction over appeals from orders
relating to preliminary injunctive relief. Similar language exists in state
statutes and rules governing appeals relating to injunctive relief.
SECTION 11. UNIFORMITY OF APPLICATION AND CONSTRUCTION. In
applying and construing this uniform act, consideration must be given to the
need to promote uniformity of the law with respect to its subject matter among
the states that enact it.
SECTION 12. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL
AND NATIONAL COMMERCE ACT. This [act] modifies, limits
and supersedes the federal Electronic Signatures in Global and National
Commerce Act, 15 U.S.C. Section 7001, et seq., but does not modify, limit, or
supersede Section 101(c) of that act, 15 U.S.C. Section 7001(c), or authorize
delivery of any of the notices described in Section 103(b) of that act, 15
U.S.C. Section 7003(b).
SECTION 13. SEVERABILITY. If any provision of this [act] or its application to
any person or circumstance is held invalid, the invalidity does not affect
other provisions or applications of this [act] which can be given effect
without the invalid provision or application, and to this end, the provisions
of this [act] are severable.
Legislative Note: Include this section only if this state lacks
a general severability statute or a decision by the highest court stating a
general rule of severability.
SECTION 14. SAVINGS CLAUSE. This [act] does not prevent the exercise of
other remedies not inconsistent with this [act].
SECTION 15. EFFECTIVE DATE. This [act] takes effect…