409.109 Scope.

(1) General scope of chapter. Except as otherwise provided in subs. (3) and (4), and s. 16.63 (4) on transactions involving tobacco settlement revenues, this chapter applies to:

(a) A transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract;

(b) An agricultural lien;

(c) A sale of accounts, chattel paper, payment intangibles, or promissory notes;

(d) A consignment;

(e) A security interest arising under s. 402.401, 402.505, 402.711 (3), or 411.508 (5), as provided in s. 409.110; and

(f) A security interest arising under s. 404.210 or 405.118.

(2) Security interest in secured obligation. The application of this chapter to a security interest in a secured obligation is not affected by the fact that the obligation is itself secured by a transaction or interest to which this chapter does not apply.

(3) Extent to which chapter does not apply. This chapter does not apply to the extent that:

(a) A statute, regulation, or treaty of the United States preempts this chapter;

(b) Another statute of this state expressly governs the creation, perfection, priority, or enforcement of a security interest created by this state or a governmental unit of this state;

(c) A statute of another state, a foreign country, or a governmental unit of another state or a foreign country, other than a statute generally applicable to security interests, expressly governs creation, perfection, priority, or enforcement of a security interest created by the state, country, or governmental unit; or

(d) The rights of a transferee beneficiary or nominated person under a letter of credit are independent and superior under ch. 405.

(4) Inapplicability of chapter. This chapter does not apply to:

(a) A landlord's lien, other than an agricultural lien;

(b) A lien, other than an agricultural lien, given by statute or other rule of law for services or materials, but s. 409.333 applies with respect to priority of the lien;

(c) An assignment of a claim for wages, salary, or other compensation of an employee;

(cm) An assignment of a claim or right to receive compensation for injuries or sickness under a worker's compensation or worker's disability statute of any state;

(d) A sale of accounts, chattel paper, payment intangibles, or promissory notes as part of a sale of the business out of which they arose;

(e) An assignment of accounts, chattel paper, payment intangibles, or promissory notes which is for the purpose of collection only;

(f) An assignment of a right to payment under a contract to an assignee that is also obligated to perform under the contract;

(g) An assignment of a single account, payment intangible, or promissory note to an assignee in full or partial satisfaction of a preexisting indebtedness;

(h) A transfer of an interest in or an assignment of a claim under a policy of insurance, other than an assignment by or to a health-care provider of a health-care-insurance receivable and any subsequent assignment of the right to payment, but ss. 409.315 and 409.322 apply with respect to proceeds and priorities in proceeds;

(i) An assignment of a right represented by a judgment, other than a judgment taken on a right to payment that was collateral;

(j) A right of recoupment or setoff, but:

1. Section 409.340 applies with respect to the effectiveness of rights of recoupment or setoff against deposit accounts; and

2. Section 409.404 applies with respect to defenses or claims of an account debtor;

(k) The creation or transfer of an interest in or lien on real property, including a lease or rents thereunder, except to the extent that provision is made for:

1. Liens on real property in ss. 409.203 and 409.308;

2. Fixtures in s. 409.334;

3. Fixture filings in ss. 409.501, 409.502, 409.512, 409.516, and 409.519; and

4. Security agreements covering personal and real property in s. 409.604;

(L) An assignment of a claim arising in tort, other than a commercial tort claim, but ss. 409.315 and 409.322 apply with respect to proceeds and priorities in proceeds; or

(m) An assignment of a deposit account in a consumer transaction, but ss. 409.315 and 409.322 apply with respect to proceeds and priorities in proceeds.

History: 2001 a. 10, 64.

There is a real difference between a claim from which proceeds arise and the proceeds themselves. Public policy does not prohibit the assignment of potential proceeds in a malpractice claim as a payment intangible. Concluding otherwise would contravene the clear meaning of provisions of ch. 409 and could be seen as favoring lawyers against whom legal malpractice claims are filed. Attorney's Title Guaranty Fund, Inc. v. Town Bank, 2014 WI 63, 355 Wis. 2d 229, 850 N.W.2d 28, 11-2774.