(a) After payment default by the lien debtor, the lien claimant may foreclose on a lien created by this chapter in the following manners:

(1) The lien claimant may foreclose in an action to recover the reasonable or agreed charges for feed and materials delivered. In such an action, the final judgment may be enforced pursuant to Title 9 (commencing with Section 680.010) of Part 2 of the Code of Civil Procedure.

(2) Provided that the lien claimant provides concurrent notice to the lien debtor and the parties set forth in subdivision (e) of Section 57405, the lien claimant may notify any person obligated on any proceeds subject to the lien created under this chapter to make payment to, or otherwise render performance to or for the benefit of, the lien claimant, provided that the lien claimant may not demand that payment or performance be made at any time prior to 15 calendar days following the date of notice.

(3) The lien claimant may enforce the obligations of any person obligated on any proceeds subject to the lien created under this chapter and exercise the rights of the lien debtor with respect to the proceeds and any property that secures the right to the proceeds subject to the lien created under this chapter.

(b) A lien claimant that receives proceeds pursuant to a notice provided pursuant to paragraph (2) of subdivision (a) shall account to, and pay the lien debtor for, any surplus, and the lien debtor shall be liable for any deficiency.

(c) Nothing in this chapter shall prohibit a lien claimant from applying pursuant to Title 6.5 (commencing with Section 481.010) of Part 2 of the Code of Civil Procedure for a right to attach order and a writ of attachment, or temporary protective order, by filing an application for the order, writ, or temporary protective order with the court in which the action is brought.

(d) Notwithstanding the receipt of a notice pursuant to paragraph (2) of subdivision (a), a person obligated on any proceeds subject to a lien created under this chapter shall have no liability to a lien claimant for failure to comply with that notice to the extent that the person obligated on the proceeds pays the proceeds subject to the notice as follows:

(1) To a person holding a lien or security interest that is prior to the lien of the lien claimant issuing the notice.

(2) In satisfaction of a contractual assignment or valid notice provided pursuant to Section 9607 of the Commercial Code has been received from the person obligated on the proceeds prior to the receipt of the notice pursuant to paragraph (2) of subdivision (a).

(e) A person obligated on any proceeds subject to the lien created under this chapter and who makes payment pursuant to the notice required by paragraph (2) of subdivision (a) shall not be deemed, to the extent of that payment, to be in violation of the applicable provisions of law relating to failure to pay the amounts to the lien debtor and shall not be deemed to have engaged in an unlawful trade practice.

(f) A lien debtor may secure a release of a lien created under this chapter by doing one of the following:

(1) Paying the amount secured by the lien.

(2) Depositing with the Secretary of Food and Agriculture a surety bond that is executed by the lien debtor as principal and by a surety company that is qualified and authorized to do business in this state as a surety in an amount that equals the current amount secured by the lien. If the lien debtor fails to pay the claims, up to the amount of the bond, of the lien claimant within 35 days after entry of final judgment in favor of the lien claimant, the surety shall pay all lawful claims that are covered by the amount of the lien, up to the amount of the bond, if an action is filed on the bond.

(Amended by Stats. 2012, Ch. 309, Sec. 7. (SB 592) Effective January 1, 2013.)