§ 28-9-628 — NONLIABILITY AND LIMITATION ON LIABILITY OF SECURED PARTY — LIABILITY OF SECONDARY OBLIGOR

(a) Unless a secured party knows that a person is a debtor or obligor, knows the identity 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 or lienholder that has filed a financing statement against the person, for failure to comply with this chapter; and
(2) The secured party’s failure to comply with this chapter does not affect the liability of the person for a deficiency.
(b) A secured party is 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 statement against a person, unless the secured party knows:
(A) that the person is a debtor; and
(B) the identity of the person.
(c) A secured party is not liable to any person, and a person’s liability for a deficiency is not affected, because of any act or omission arising out of the secured party’s reasonable belief that a transaction is not a consumer goods transaction or a consumer transaction or that goods are not consumer goods, if the secured party’s belief is based on its reasonable reliance on:
(1) A debtor’s representation concerning the purpose for which collateral was to be used, acquired or held; or
(2) An obligor’s representation concerning the purpose for which a secured obligation was incurred.
(d) A secured party is not liable to any person under section 28-9-625 (c)(2) for its failure to comply with section 28-9-616.
(e) A secured party is not liable under section 28-9-625 (c)(2) more than once with respect to any one (1) secured obligation.

Legislative History

[28-9-628, added 2001, ch. 208, sec. 2, p. 796.]