Nonliability and limitation on liability of secured party — liability of secondary obligor.

1. Limitation of liability of secured party for noncompliance with article. Subject to subsection 6 , 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: a. 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 b. the secured party’s failure to comply with this Article does not affect the liability of the person for a deficiency. 2. Limitation of liability based on status as secured party. Subject to subsection 6 , a secured party is not liable because of its status as secured party: a. to a person that is a debtor or obligor, unless the secured party knows: (1) that the person is a debtor or obligor; (2) the identity of the person; and (3) how to communicate with the person; or b. to a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows: (1) that the person is a debtor; and (2) the identity of the person. 3. 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: a. a debtor’s representation concerning the purpose for which collateral was to be used, acquired, or held; or b. an obligor’s representation concerning the purpose for which a secured obligation was incurred. 4. Limitation of liability for statutory damages. A secured party is not liable to any person under section 554.9625, subsection 3 , paragraph “b” , for its failure to comply with section 554.9616 . 5. Limitation of multiple liability for statutory damages. A secured party is not liable under section 554.9625, subsection 3 , paragraph “b” , more than once with respect to any one secured obligation. 6. Exception: limitation of liability under subsections 1 and 2 does not apply. Subsections 1 and 2 do not apply to limit the liability of a secured party to a person if, at the time the secured party obtains control of collateral that is a controllable account, controllable electronic record, or controllable payment intangible or at the time the security interest attaches to the collateral, whichever is later: a. the person is a debtor or obligor; and b. the secured party knows that the information in subsection 2 , paragraph “a” , subparagraph (1), (2), or (3), relating to the person is not provided by the collateral, a record attached to or logically associated with the collateral, or the system in which the collateral is recorded. 2000 Acts, ch 1149, §126, 187 ; 2022 Acts, ch 1117, §37, 38 ; 2024 Acts, ch 1023, §105, 106 Referred to in §554.9625 , 554.9626