8.9A-628 - A-628. Nonliability and limitation on liability of secured party; liability of secondary obligor.

§ 8.9A-628. Nonliability and limitation on liability of secured party;liability of secondary obligor.

(a) Limitation of liability of secured party for noncompliance with title.Unless a secured party knows that a person is a debtor or obligor, knows theidentity of the person, and knows how to communicate with the person:

(1) the secured party is not liable to the person, or to a secured party orlienholder that has filed a financing statement against the person, forfailure to comply with this title; and

(2) the secured party's failure to comply with this title does not affect theliability of the person for a deficiency.

(b) Limitation of liability based on status as secured party. A secured partyis not liable because of its status as secured party:

(1) to a person that is a debtor or obligor, unless the secured party knows:

(A) that the person is a debtor or obligor;

(B) the identity of the person; and

(C) how to communicate with the person; or

(2) to a secured party or lienholder that has filed a financing statementagainst a person, unless the secured party knows:

(A) that the person is a debtor; and

(B) the identity of the person.

(c) Limitation of liability if reasonable belief that transaction not aconsumer-goods transaction or consumer transaction. A secured party is notliable to any person, and a person's liability for a deficiency is notaffected, because of any act or omission arising out of the secured party'sreasonable belief that a transaction is not a consumer-goods transaction or aconsumer transaction or that goods are not consumer goods, if the securedparty's belief is based on its reasonable reliance on:

(1) a debtor's representation concerning the purpose for which collateral wasto be used, acquired, or held; or

(2) an obligor's representation concerning the purpose for which a securedobligation was incurred.

(d) Limitation of liability for statutory damages. A secured party is notliable to any person under § 8.9A-625 (c) (2) for its failure to comply with§ 8.9A-616.

(e) Limitation of multiple liability for statutory damages. A secured partyis not liable under § 8.9A-625 (c) (2) more than once with respect to any onesecured obligation.

(2000, c. 1007.)