§25-9-628. Nonliability and limitation on liability of secured party; liability of secondary obligor

(a)        Limitation of liability of secured party for noncompliance with Article. - 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 Article; and

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

(b)        Limitation of liability based on status as secured party. - 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)        Limitation of liability if reasonable belief that transaction not a consumer-goods transaction or consumer transaction. - 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)       Limitation of liability for statutory damages. - A secured party is not liable to any person under G.S. 25-9-625(c)(2) for its failure to comply with G.S. 25-9-616.

(e)        Limitation of multiple liability for statutory damages. - A secured party is not liable under G.S. 25-9-625(c)(2) more than once with respect to any one secured obligation.

(2000-169, s. 1.)