Colorado § 4-9-628 - Nonliability and limitation on liability of secured party - liability of secondary obligor.

§ 4-9-628. Nonliability and limitation on liability of secured party - liability of secondary obligor.

(a) Subject to subsection (f) of this section, 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) Subject to subsection (f) of this section, 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 record authenticated by the debtor concerning the purpose for which collateral was to be used, acquired, or held, or indicating that collateral is not a consumer deposit account; or

(2) A record authenticated by the obligor concerning the purpose for which a secured obligation was incurred.

(d) (1) A secured party is not liable under section 4-9-625 (c)(2) for its failure to comply with section 4-9-616.

(2) Repealed.

(e) A secured party is not liable under section 4-9-625 (c)(2) more than once with respect to any one secured obligation.

(f) Subsections (a) and (b) of this section 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:

(1) The person is a debtor or obligor; and

(2) The secured party knows that the information in subsection (b)(1)(A), (b)(1)(B), or (b)(1)(C) of this section 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.

Source: L. 2001: Entire article R&RE, p. 1421, § 1, effective July 1. L. 2002: (d)(2) repealed, p. 939, § 9, effective August 7. L. 2023: IP(a) and IP(b) amended and (f) added, (SB 23-090), ch. 136, p. 568, § 88, effective August 7.

Editor's note - Colorado legislative change: Colorado substituted the phrase "A record authenticated by the debtor" for the phrase "A debtor's representation" and added the phrase "or indicating that collateral is not a consumer deposit account" in subsection (c)(1), substituted the phrase "A record authenticated by the obligor" for the phrase "An obligor's representation" in subsection (c)(2), and did not adopt subsection (d) of the uniform act. The uniform act's subsection (e) states: "A secured party is not liable under section 4-9-625(c)(2) more than once with respect to any one secured obligation."